What is a severance payment (Abfindung)? A severance payment in employment law is a one-off cash payment from the employer to the employee. The occasion is the termination of the employment relationship. The money is paid as a kind of compensation for the loss of the job. If the employer terminates the employee, they are generally not obliged to pay severance. When a claim to severance arises is explained in the following section.
Who has a right to severance?
The question of whether you have a claim to severance cannot be answered universally. It typically depends on whether you can successfully challenge the dismissal in the labour court — at which point the employer often prefers to pay severance to a defending employee rather than risk reinstatement. Other paths to severance: § 1a of the Dismissal Protection Act (KSchG) if the employer explicitly offers it; a social plan (Sozialplan) in mass dismissals; or a termination agreement (Aufhebungsvertrag).