Dismissal with new terms: what you can do now and which deadlines apply

What is a dismissal with new terms?

An employment contract can only be changed by mutual agreement. If your employer wants to change working hours, pay, duties or place of work and can do so neither through its right to give instructions (Weisungsrecht) nor through an agreement with you, the dismissal with new terms remains: it terminates the entire employment and, in connection with the dismissal, offers you the chance to continue it on altered working conditions (Sec. 2 sentence 1 KSchG).

Typical changes are:

• a move to another location, for example after a branch closes,
• fewer or different working hours, for example part-time instead of full-time, or shift work,
• a different, often lower-paid job,
• removal of allowances or lower pay.

The word "Änderungskündigung" does not have to appear in the letter. What matters is that the dismissal and the offer belong together. As a rule, the employer cannot terminate individual parts of the contract on their own, for example only the Christmas bonus, unless the contract validly grants it this right. That is why a dismissal with new terms always affects the entire contract.

Dismissal with new terms, transfer, amendment agreement: the difference

Not every change requires a dismissal. The employer can specify the content, place and time of work in more detail at its reasonable discretion (billiges Ermessen), as long as the employment contract, a works agreement, a collective agreement or a statute does not lay them down (Sec. 106 GewO). Only if it wants to go beyond that does it have to ask you or give notice.

Feature	Transfer (right to give instructions)	Amendment agreement (Änderungsvertrag)	Dismissal with new terms
Basis	Sec. 106 GewO, employment contract	agreement of both sides	dismissal plus offer, Sec. 2 KSchG
Your consent needed?	no	yes	no, but you decide on the offer
What can be changed	only what the contract leaves open	everything you agree on	everything, if the change is justified
Your job at risk?	no	no	yes, if you do not accept
Review by the court	reasonable discretion	usually none, a contract is a contract	social justification, if the KSchG applies

In practice: Employers often present an amendment agreement first. If you sign, the change is agreed and can hardly be challenged in court later. If you refuse, a dismissal with new terms often follows. So have an amendment agreement checked before you sign.

Your 4 options with a dismissal with new terms

People often speak of 3 options: accept, reject, accept subject to a reservation. When rejecting, however, you have to distinguish between two routes, because whether or not you file a claim changes everything.

Your reaction	What happens	Risk	Deadline
1. Accept without reservation	The new terms apply after the notice period expires	You can no longer challenge the change later	acceptance period set by the employer
2. Reject, no claim	The employment ends when the notice period expires	job gone, no severance, possible consequences for unemployment benefit	none
3. Reject and file an unfair dismissal claim (Kündigungsschutzklage)	If you win, everything stays as before	If you lose, the job is gone; you can then no longer accept the offer	claim within 3 weeks (Sec. 4 sentence 1 KSchG)
4. Accept subject to a reservation and file a claim against the new terms (Änderungsschutzklage)	You continue working, the court reviews the change	If you lose, the new terms apply, the job remains	reservation and claim within 3 weeks (Sec. 2 sentence 2, Sec. 4 sentence 2 KSchG)

Accept without reservation

You declare that you agree to the new terms. After the notice period expires, the employment continues on the altered terms. This rules out a legal dispute. This is a good fit if the change is acceptable for you or you wanted it anyway.

Reject without filing a claim

You do not accept the offer and do not file a claim. The dismissal is then deemed valid from the outset (Sec. 7 KSchG), and your employment ends. This can make sense if you want to move on anyway. In that case, negotiate severance and a reference beforehand, because afterwards you no longer have any leverage.

Reject and file an unfair dismissal claim

You challenge the dismissal as a whole. If you win, your employment continues on the old terms. If you lose, it is terminated, and the offer to change the terms has usually long since lapsed. This is an all-or-nothing route. How the claim works is explained in our guide to the unfair dismissal claim.

Accept subject to a reservation and file a claim against the new terms

You accept the offer subject to the reservation that the change in working conditions is not socially unjustified (Sec. 2 sentence 1 KSchG), and you file a claim for a declaration that the change is socially unjustified or invalid for other reasons (Sec. 4 sentence 2 KSchG). This is the claim against the new terms. For many employees, this is the route without risk to their job, because the job is preserved in any case.

Acceptance subject to a reservation: how it works

The reservation is a declaration to your employer. Sec. 2 KSchG does not prescribe any particular form. Nevertheless, declare it in writing and in a way that lets you prove receipt, for example by registered mail delivered to the letterbox (Einwurf-Einschreiben) or by handing it over against an acknowledgement of receipt.

The delivery trap: The deadline is only met if the reservation reaches the employer in time. You can also declare the reservation in the statement of claim. However, the court only serves the claim on the employer later. If you file the claim on the last day, the reservation arrives too late. So declare the reservation separately and early.

What applies during the proceedings: After the notice period expires, you work on the new terms until the court has decided. There are then two outcomes:

• You win: The dismissal with new terms is deemed invalid from the outset (Sec. 8 KSchG). The old terms apply again.
• You lose: The new terms remain. However, your employment continues.

If you miss the deadline for the claim, the reservation lapses (Sec. 7 KSchG). The new terms then apply permanently.

Deadlines for a dismissal with new terms

With a dismissal with new terms, several deadlines run at the same time. The most important ones start with receipt of the dismissal letter, i.e. the day on which it lands in your letterbox or is handed to you.

What	Deadline	Basis	If you miss it
Declare the reservation	within the notice period, no later than 3 weeks after receipt	Sec. 2 sentence 2 KSchG	acceptance subject to a reservation no longer possible
File a claim	3 weeks after receipt of the written dismissal	Sec. 4 sentences 1 and 2 KSchG	dismissal is deemed valid, reservation lapses (Sec. 7 KSchG); late admission only in exceptional cases (Sec. 5 KSchG)
Accept the offer	set by the employer	Sec. 147, 148 BGB	offer lapses; a period that is too short is said to be extended to 3 weeks
Objection to the works council (Betriebsrat) (voluntary)	1 week after the dismissal	Sec. 3 KSchG	no loss of rights, the deadline for the claim runs independently
Register as a jobseeker if you reject	3 months before the end, if the time is shorter, 3 days after you learn of it	Sec. 38 (1) SGB III	benefit suspension (Sperrzeit) for unemployment benefit possible

How long do you have to think it over? Legally, until the end of the shortest deadline that applies to you. If your notice period is longer than 3 weeks, which by law is usually the case outside a probationary period (at least 4 weeks, Sec. 622 (1) BGB; collective agreements and, for temporary help in the first 3 months, employment contracts may also provide for shorter periods, Sec. 622 (4) and (5) BGB), it is 3 weeks from receipt. If it is shorter, for example 2 weeks during probation (Sec. 622 (3) BGB), you must declare the reservation within this shorter period (Sec. 2 sentence 2 KSchG). Do not wait until the last day. More on the deadline for the claim can be found in the guide Unfair dismissal claim: deadline.

When is a dismissal with new terms valid?

The same rules apply to a dismissal with new terms as to any dismissal, plus its own requirements for the offer.

1. Written form: The dismissal must be in writing with a handwritten signature; an email is not enough (Sec. 623 BGB). The offer is also subject to the written form requirement and should be contained in the dismissal letter itself.
2. Specific offer: You must be able to see which terms are to apply and from when. An unclear offer makes the dismissal with new terms open to challenge.
3. Notice period: The new terms may only apply after the ordinary notice period has expired. Which period applies to you is explained in the guide Notice periods for employees.
4. Works council: If there is a works council, it must be consulted before the dismissal, otherwise the dismissal is invalid (Sec. 102 (1) BetrVG). If the change involves a transfer or a regrading (Umgruppierung), the employer in companies with more than 20 employees entitled to vote also needs the works council's consent (Sec. 99 (1) BetrVG).
5. Social justification: If the Protection Against Dismissal Act applies, the change must be justified by one of the three grounds for dismissal (Sec. 1 (2) KSchG).
6. Proportionality: The employer may only change what the reason requires, and the change must be reasonable for you.

The three grounds with examples

• Operational reasons: The branch in Bremen is closing. The employer offers sales assistant Lena the same job in the branch in Oldenburg. Here the court mainly examines whether the business decision is actually implemented and whether less drastic offers were possible. If there are several comparable employees, social selection also applies (Sec. 1 (3) KSchG). More on this in the guide Dismissal for operational reasons.
• Personal reasons: According to a medical certificate, warehouse worker Murat may permanently no longer lift heavy loads. The employer offers him a position in goods receiving, with a different pay grade.
• Conduct-related reasons: Field sales representative Jonas repeatedly submits incorrect travel claims despite a formal warning. The employer offers him a position in the office. As with a dismissal ending the employment (Beendigungskündigung), a prior formal warning is usually required.

The employer bears the burden of proof for the grounds (Sec. 1 (2) sentence 4 KSchG). How ordinary dismissal works in general is explained in the guide Ordinary dismissal.

Can the employer cut your pay with a dismissal with new terms?

In principle yes, in practice only under strict conditions. According to case law, a dismissal with new terms intended solely to reduce pay is only permissible if, without the cut, further losses threaten that the business can no longer absorb and that would foreseeably lead to job cuts or closure, and if there is a comprehensive restructuring plan that exhausts all less drastic means. The wish to save costs is not enough.

The situation is different if the cut is the consequence of another justified change: if you are given a different job because your position has ceased to exist, pay is based on the new position. The same applies accordingly to a reduction in working hours.

Short-time work: Without a basis in a collective agreement, a works agreement or the employment contract, the employer cannot order short-time work (Kurzarbeit) unilaterally. A dismissal with new terms is possible, but only takes effect after the notice period expires and therefore often comes too late.

When is a dismissal with new terms not permitted?

Some groups of employees are specially protected. A dismissal with new terms is a dismissal, so special protection against dismissal also applies to it.

Group	Protection	Basis
Works council members, election candidates, electoral board	ordinary dismissal not permitted (exception: closure of the business or of a department, Sec. 15 (4) and (5) KSchG), extraordinary dismissal only with the works council's consent or its substitution by the court	Sec. 15 KSchG, Sec. 103 BetrVG
Pregnant women and women after childbirth (until the end of the protection period, at least 4 months)	dismissal not permitted if the employer knows of it or learns of it within 2 weeks of receipt; exception only with a declaration of admissibility from the state authority	Sec. 17 MuSchG
Employees on parental leave	dismissal not permitted from the request for parental leave (at the earliest 8 or 14 weeks beforehand) and during parental leave, exception only with a declaration of admissibility	Sec. 18 BEEG
Severely disabled people	prior consent of the Integration Office (Integrationsamt, the authority responsible for severely disabled employees) required	Sec. 168 SGB IX

If the dismissal requires the consent of an authority, the 3-week deadline for the claim only runs from the date the decision is notified to you (Sec. 4 sentence 4 KSchG).

Employees who cannot be dismissed: If ordinary dismissal is excluded by a collective agreement or the employment contract, for example after long service in the public sector, only an extraordinary dismissal with new terms remains. It requires good cause (Sec. 626 (1) BGB), and as a rule a run-off period (Auslauffrist) must be granted that corresponds to the notional ordinary notice period. On protection from dismissal in the public sector, see the guide Notice periods under the TVöD. Summary dismissal in general is explained in the guide Summary dismissal.

Small business and first 6 months: Protection against socially unjustified dismissals only applies once your employment has lasted more than 6 months (Sec. 1 (1) KSchG) and the business regularly has more than 10 employees (Sec. 23 (1) KSchG; part-time staff count proportionately, and for employment relationships that began before 2004 a threshold of 5 may apply). Before that, the employer does not have to socially justify the change. The dismissal can still be challenged on other grounds, for example lack of written form, special protection against dismissal or discrimination, and the 3-week deadline applies to these too (Sec. 23 (1) sentences 2 and 3, Sec. 4 to 7 KSchG). Whether you can accept subject to a reservation in this situation is not clear: according to the wording of Sec. 23 (1), Sec. 2 KSchG does not apply in a small business, but Sec. 4 sentence 2 KSchG refers to it.

Severance for a dismissal with new terms

You have no statutory right to severance with a dismissal with new terms. If you accept the offer, with or without a reservation, your employment continues. Severance is then not an issue, and your length of service continues to run.

Severance mainly comes into consideration if you reject the offer and challenge the dismissal in court. Employers and employees then often negotiate an end to the employment in return for a payment during the proceedings, as with any other dismissal. How high severance payments usually are is explained in the guide Severance by years of service. In the case of a dismissal for operational reasons, the employer can also offer severance of 0.5 monthly earnings per year of employment if you let the deadline for the claim pass (Sec. 1a KSchG).

If you would rather leave with severance, you should check whether a termination agreement is the better solution. Pay attention to the consequences for unemployment benefit.

Unemployment benefit: what happens if you reject?

If you reject the offer, your employment ends through the employer's dismissal. You should then register as a jobseeker with the employment agency (Agentur für Arbeit): no later than 3 months before the end, and if less than 3 months lie between learning of it and the end, within 3 days (Sec. 38 (1) SGB III). This also applies if you challenge the dismissal in court.

A benefit suspension for giving up work requires that you terminated the employment yourself or gave cause for the dismissal through conduct in breach of contract (Sec. 159 (1) sentence 2 no. 1 SGB III). Whether the employment agency treats rejecting a reasonable offer to change the terms as terminating the employment depends on the individual case. Clarify this before you reject.

What employers need to consider

For employers, the dismissal with new terms is not just a tool but often an obligation. The law expressly names possible continued employment on altered working conditions as a reason why a dismissal can be socially unjustified, linked there to an objection by the works council and the employee's consent (Sec. 1 (2) sentences 2 and 3 KSchG). According to case law, the priority of the dismissal with new terms also applies without an objection: if you do not offer a vacant, suitable position, you risk the dismissal ending the employment failing.

Before giving notice, as an employer you should check:

• Is the right to give instructions under Sec. 106 GewO sufficient, or is an amendment agreement possible?
• Is the offer specific enough to make clear what applies from when?
• Has the ordinary notice period been observed and an acceptance period of at least 3 weeks been granted?
• Has the works council been consulted under Sec. 102 BetrVG and, in the case of a transfer or regrading, involved under Sec. 99 BetrVG?
• Is there special protection against dismissal, and has the necessary consent been obtained?
• Does the change go no further than the reason requires?

An employment lawyer advises you in writing on drafting and reviewing a dismissal with new terms, at a fixed price.