Leadership Liability and Lost Licenses: Recent German Court Rulings Clarify Summary Dismissal Standards

Two May 2026 rulings show that summary dismissal is justified for senior misconduct or loss of essential qualifications, while strict deadlines apply to both employers and employees.

Germany’s labor courts continue to set high bars for employers seeking to terminate contracts without notice, but two recent decisions show that clear-cut cases of misconduct or incapacity can still justify the drastic step. The rulings, handed down in May 2026, offer contrasting examples of when a summary dismissal holds up and when it does not.

At the Berlin-Brandenburg Regional Labor Court (Landesarbeitsgericht), judges upheld the immediate firing of a former director of programming at the public broadcaster RBB. In October 2022, the executive had approved a €12,000 invoice plus value-added tax without adequate review. The court ruled that this constituted a “material reason” under §626(1) of the German Civil Code (BGB), adding that because she held a senior leadership position, no prior warning was required. The dismissal survived her legal challenge. The ruling (case reference 12 Sa 861/23) was issued at the end of May 2026; no further appeal was permitted.

Meanwhile, a travelling merchandiser who lost his driver’s license fared worse in a separate dispute. The Nordhausen Labor Court (Arbeitsgericht Nordhausen) dismissed his lawsuit on May 7, 2026 (case 3 Ca 1094/25). The employee, hired in 2018, had his license suspended for a year in summer 2025. His employer terminated his contract in November 2025 with effect from January 2026. The court held that a valid driving license was essential for the role and no milder alternatives for continued employment existed. Because the worker was objectively unable to perform, the employer also owed no remuneration for the period after notice.

Beyond cases of misconduct or lost qualifications, long-term illness remains a common ground for dismissal. German courts apply a three-step test: a negative health prognosis, followed by an assessment of whether continued employment is unreasonable for the employer, and finally a balancing of interests. Even employees protected by collective bargaining agreements can be dismissed with an extended notice period (außerordentliche Kündigung mit Auslauffrist) if the prognosis predicts no improvement within 24 months. A missing “Betriebliches Eingliederungsmanagement” (BEM) — a structured return-to-work program — does not automatically invalidate the dismissal, provided the employer can prove that even such a process would not have offered a viable alternative.

Strict deadlines govern both sides. Under §626(2) BGB, employers have two weeks to act once they learn of the relevant facts; mere suspicion or outdated infractions do not restart the clock. Employees, for their part, must file a dismissal protection lawsuit within three weeks of receiving the written notice. Failure to meet that deadline forfeits their right to contest the termination. If a court finds the dismissal unlawful but continued cooperation is impossible, it may dissolve the employment relationship under §9 of the Dismissal Protection Act (KSchG) and award severance.

While individual cases land in courtrooms, large corporations often pursue a more cooperative path. Specialty chemicals group Evonik is cutting roughly 1,850 positions by the end of 2026, but has ruled out compulsory redundancies in Germany until 2032. The reductions rely on severance agreements, early retirement, and part-time arrangements for older workers. The company has set aside millions in provisions to finance the voluntary downsizing.