Release from work: what applies to pay, holiday and dismissal?

What does release from work mean?

With release from work, your obligation to work no longer applies. The employment contract remains in place, with all other rights and obligations: salary (if paid), holiday entitlement, confidentiality, non-compete obligation. Being "released" is therefore something different from being "dismissed". A dismissal ends the employment on a certain date; release from work only governs whether you still have to work until then. The two often come together: the employer dismisses you and at the same time releases you until the end of the notice period.

Release from work is a legal intervention because of your right to be employed (Beschäftigungsanspruch). According to the case law of the Federal Labour Court (Bundesarbeitsgericht, BAG), during an existing employment you are in principle entitled to actual employment in line with your contract. The court bases this on Sec. 611a (1) sentence 1 and Sec. 613 BGB in conjunction with good faith (Treu und Glauben, Sec. 242 BGB), given substance by the fundamental rights in Art. 1 and 2 of the Basic Law (GG) (BAG, judgment of 12 February 2025, 5 AZR 127/24). So the employer must not only pay you but also let you work, as long as their interest in not employing you does not outweigh yours.

The types of release from work at a glance:

Distinction	Variant A	Variant B	What matters
Pay	paid: salary continues	unpaid: no salary	agreement or law; unilaterally by the employer only paid
How it comes about	unilaterally by the employer	by mutual consent (agreement, termination agreement, settlement)	unilaterally only if the employer's interest outweighs yours
Withdrawal	revocable: the employer can call you back	irrevocable: final until the agreed end	decides on offsetting of holiday and ability to plan
Legal basis	entitlement under the law (e.g. holiday, care leave)	decision of the employer or agreement	the employer cannot refuse statutory entitlements if the requirements are met; for holiday, they may set a different time for urgent operational reasons (Sec. 7 (1) BUrlG)

Paid or unpaid release from work: the difference

Whether you receive money during this time depends on the reason: some releases are paid by law, some are unpaid by law, and for the rest the agreement applies.

Reason	Paid?	Basis
Annual leave	yes	Sec. 1 BUrlG
Incapacity for work due to illness	yes, for up to 6 weeks, then sickness benefit (Krankengeld)	Sec. 3 (1) EntgFG
Release by the employer, for example after a dismissal	yes	Sec. 615 BGB, agreement
Time to look for a job after a dismissal	reasonable time on request; pay via Sec. 616 BGB	Sec. 629 BGB
Brief personal inability to work through no fault of your own	yes, for a "relatively insignificant period"	Sec. 616 BGB
Child ill (under 12 years or disabled and dependent on help)	by law only unpaid release, unless there is an entitlement to paid release for the same reason (for example Sec. 616 BGB); instead child sickness benefit (Kinderkrankengeld). 2026: up to 15 working days per child, single parents up to 30, in total no more than 35 or 70	Sec. 45 (2a), (3) SGB V
Acute care situation of a close relative	up to 10 working days; salary only if a law or an agreement provides for it; otherwise care support allowance (Pflegeunterstützungsgeld)	Sec. 2 PflegeZG, Sec. 44a (3) SGB XI
Care leave (Pflegezeit)	unpaid, up to 6 months per relative; entitlement only with more than 15 employees, notice 10 working days in advance in text form	Sec. 3, 4 PflegeZG
Parental leave (Elternzeit)	as a rule no salary, instead parental allowance (Elterngeld) where applicable; with part-time work during parental leave (up to 32 hours a week) salary for the work done	Sec. 15 (4) BEEG, details in the guide Holiday during parental leave
Works council work	yes, without reduction of pay	Sec. 37, 38 BetrVG
Special leave at your request	as a rule no	agreement

Unpaid release at the employee's request

For a sabbatical, a longer journey or further training, there is no general statutory entitlement to unpaid release. You need an agreement with your employer. Before you sign it, you should know three consequences:

1. No holiday for this period. If the main obligations are suspended by unpaid special leave, the period is counted as zero working days when calculating statutory holiday. If you are released without pay for an entire calendar year, you have no statutory holiday entitlement for that year (BAG, judgment of 19 March 2019, 9 AZR 315/17). If only part of the year is affected, the calculation is made by periods.
2. Social security for one month only. Employment without entitlement to pay is only deemed to continue for social security purposes for up to one month (Sec. 7 (3) sentence 1 SGB IV). After that, you have to arrange health and long-term care insurance yourself. The one-month limit does not apply, among other things, to parental leave, parental allowance, sickness benefit, care support allowance and care leave under Sec. 3 PflegeZG (Sec. 7 (3) sentences 3 and 4 SGB IV).
3. Arrange your return. Record in writing from when you will work again, in which position and whether you may return earlier.

May the employer release you unilaterally?

Only by way of exception. Because you have a right to be employed, the employer needs an interest worthy of protection for a release against your will, and it must outweigh your interest in working in the specific case. This also applies if they continue to pay your salary. Unpaid release against your will is all the more impossible, because the employer is obliged to pay the agreed remuneration (Sec. 611a (2) BGB) and is in default of acceptance if they refuse your work (Sec. 615 sentence 1 BGB).

As reasons that can justify unilateral, paid release, the case law typically names (BAG, judgment of 25 March 2026, 5 AZR 108/25):

• the strong suspicion of a criminal offence or a serious breach of duty, while it is being investigated,
• the specific risk that you take business secrets or customer data with you, for example when moving to a competitor,
• a lack of work to deploy you on, for example due to a lack of orders or a closure,
• a danger to colleagues or customers.

Example: A sales employee rejects a termination agreement. The employer then releases her "until further notice" on full pay to increase the pressure. There is no suspicion, no danger and no lack of work. This release is not permitted, even though the salary is paid. She can demand to be employed.

Release clause in the employment contract: BAG 2026

Many standard employment contracts contain a clause under which the employer may release you after a dismissal until the end of the notice period while continuing to pay your salary. The Federal Labour Court has declared such a clause invalid because it unreasonably disadvantages you (Sec. 307 (1) sentence 1 BGB). Your interest in being employed until the end, which is protected by fundamental rights, outweighs the employer's blanket interest, and the clause cuts off your ability to assert an increased interest in employment in the individual case. In the case decided, the employee had given notice himself; the clause applied "regardless of which side" gave notice (BAG, judgment of 25 March 2026, 5 AZR 108/25).

Important: the judgment does not mean that every release after a dismissal is impermissible. The court referred the case back to examine whether the employer had overriding interests worthy of protection in the specific case. So what counts is the reasons, not the clause. If you want to know which clauses your contract contains, you can have it checked: €259 fixed price, gross including VAT, review report within 24 hours.

Release from work without dismissal: for how long?

There is no fixed maximum duration. Unilateral release without dismissal is only justified for as long as the reason holds, for example until a suspicion has been cleared up. As long as you are fit for work and offer your work, your salary continues (Sec. 615 sentence 1 BGB). You do not have to accept permanent release without dismissal and without a reason.

Release from work after dismissal

Release after a dismissal is the most common case, no matter which side gave notice. The employer usually wants to prevent you from still having access to customer data in the last weeks. Legally, the same applies as above: your right to be employed also exists during the notice period (BAG, judgment of 12 February 2025, 5 AZR 127/24). Release is therefore permitted if you agree or if the employer has an overriding interest in the individual case. A contract clause alone is not enough.

What release from work does not change:

• The end of the employment. It ends on the date in the dismissal or the termination agreement. The periods are explained in the guide Notice period for employees.
• The deadline for a claim. If you want to challenge the dismissal, you must file a claim within three weeks of receipt (Sec. 4 sentence 1 KSchG). Release from work does not extend this deadline. More in the guide Deadline for an unfair dismissal claim. Whether a claim is worthwhile is clarified by our advice on the unfair dismissal claim, €169 fixed price, including VAT.
• Your obligation to register as a jobseeker. At the latest three months before the end, or within three days of learning of it if the period is shorter, even if you challenge the dismissal in court (Sec. 38 (1) SGB III).

You have no general entitlement to be released after a dismissal. There are two exceptions: after the dismissal from a permanent employment, the employer must give you reasonable time to look for a job on request (Sec. 629 BGB), and they should release you to register with the employment agency (Agentur für Arbeit) (Sec. 2 (2) sentence 2 no. 3 SGB III).

Release from work in a termination agreement or settlement

In a termination agreement, a settlement agreement (Abwicklungsvertrag) or a court settlement, release from work is agreed. It is therefore by mutual consent and permitted without difficulty. Make sure that four points are expressly regulated: paid until the end, irrevocable, offsetting of holiday and overtime, and whether you may work elsewhere. In separation negotiations, paid release is also a bargaining chip alongside severance.

Revocable or irrevocable release from work

With revocable release, the employer can call you back; you must remain reachable and ready for work. With irrevocable release, this is excluded. If the declaration is unclear, it is interpreted; if it does not expressly say "irrevocable", it is often understood as revocable.

Question	Revocable release	Irrevocable release
Can the employer call you back?	yes, with a reasonable period of notice	no
Salary?	continues	continues
Is remaining holiday used up by it?	no, it remains	yes, if it is clearly stated that the holiday is granted during this period
May you work elsewhere?	only in a way that allows you to return at any time	yes, if no non-compete obligation and no agreement stands in the way
Do you have to be reachable?	yes	no, unless agreed

Release from work and holiday: is remaining holiday offset?

Yes, but only under conditions. The Federal Labour Court requires that you can recognise that the employer is releasing you specifically to fulfil your holiday entitlement. This is possible through a release "with offsetting against holiday". However, a final release from the obligation to work is always necessary; a release subject to revocation does not fulfil the holiday entitlement (BAG, judgment of 10 February 2015, 9 AZR 455/13). With a summary dismissal combined with a precautionary release, there is a further point: holiday is only validly granted if the employer pays the holiday pay before it starts or promises it without reservation (ibid.).

If the holiday has not been validly granted, the employer must compensate it at the end, i.e. pay it out (Sec. 7 (4) BUrlG). How many days you are entitled to in the year of leaving and how the payment is calculated is set out in the guide Remaining holiday on dismissal.

Example: Your employment ends after a notice period of two months, and you still have 12 days of holiday. If the employer writes: "We release you irrevocably with immediate effect, offsetting your remaining holiday", the 12 days are settled with the release. If they only write: "You are released until further notice", the holiday remains and is paid out at the end.

If you fall ill during a release with holiday offset and prove this with a medical certificate, the days of illness are not counted against your holiday (Sec. 9 BUrlG). Something similar applies to overtime: if it is to be compensated by the release, the employer must expressly declare this, otherwise it must be settled at the end. More on this in the guide Overtime pay.

Illness, new job, company car: what applies during release from work

Even when released, you are an employee; only the obligation to work no longer applies.

Illness during release from work

Report an incapacity for work during release as well, without delay and with its expected duration (Sec. 5 (1) EntgFG). This is particularly important if holiday is offset (see above) or if the release is revocable. Sick pay is limited to six weeks (Sec. 3 (1) EntgFG); after that, the health insurance fund pays sickness benefit. Whether the employer must continue to pay after six weeks of illness with an agreed release "with continued payment of remuneration" depends on the wording; in case of doubt, only statutory sick pay is owed. More on continued pay in the guide Sick pay.

New job and non-compete obligation

Until the legal end of the employment, you may not compete with your employer. For commercial employees, this is set out in Sec. 60 (1) HGB; the case law applies the prohibition to all employees. The prohibition also applies during release from work, as long as the employer has not expressly waived it (BAG, judgment of 12 February 2025, 5 AZR 127/24). A job with a company that is not a competitor, on the other hand, is in principle possible if your contract does not require approval for secondary employment. If holiday falls within the release, you may not pursue any gainful activity during that time that runs counter to the purpose of the holiday (Sec. 8 BUrlG).

And what happens to your salary if you earn money elsewhere? If the employer has released you unilaterally, what you earn through other work is offset against it (Sec. 615 sentence 2 BGB). However, as a rule you do not have to look for a new job before the notice period expires in order to keep your salary. In the Federal Labour Court's case, the employer had sent 43 job offers and withheld the last monthly salary. The court: anyone who breaches their obligation to employ cannot demand to be relieved by the employee taking a new job (BAG, judgment of 12 February 2025, 5 AZR 127/24). With release by mutual consent, other earnings are only offset if this has been agreed.

Company car, laptop and mobile phone

The employer can only demand the return of work equipment used solely for business. A company car that may also be used privately is part of your remuneration; whether private use may be revoked in the event of release is governed by the contract. A revocation because of the release requires that the release is justified (BAG, judgment of 25 March 2026, 5 AZR 108/25). If you had to hand in the car because of an invalid release, compensation for loss of use may be considered; such a claim was also at issue in the BAG case of 25 March 2026.

Release from work, social security and unemployment benefit

With paid release, you remain in employment subject to social security. The central organisations of the social security system (GKV-Spitzenverband, Deutsche Rentenversicherung Bund, Federal Employment Agency) refer to the case law of the Federal Social Court (Bundessozialgericht, BSG), according to which employment subject to compulsory insurance also continues with release by mutual consent and irrevocable release (BSG, judgments of 24 September 2008, B 12 KR 22/07 R and B 12 KR 27/07 R, cited in the questions and answers catalogue of 13 April 2010). Special rules apply if a working time account or value credit (Wertguthaben) is being reduced (Sec. 7 (1a) SGB IV).

With unpaid release, employment is only deemed to continue for up to one month (Sec. 7 (3) sentence 1 SGB IV), with the exceptions mentioned above.

On unemployment benefit: as long as you receive or can claim salary, an entitlement to unemployment benefit is suspended (Sec. 157 (1) SGB III). The obligation to register early as a jobseeker (Sec. 38 (1) SGB III) still applies. Anyone who signs a termination agreement with release from work should clarify the consequences for unemployment benefit beforehand; notes on this are in the guide Termination agreement.

Released without justification: what you can do

If you consider the release to be impermissible, you have several options:

1. Ask for a written declaration. No law prescribes a form for release from work. Still ask for written confirmation so that nobody can later accuse you of unexcused absence.
2. Offer your work. Declare in writing that you are willing and able to work. The employer then owes your salary (Sec. 615 sentence 1 BGB).
3. Check your salary. If payments are missing, for example allowances, claim them. Observe exclusion periods in the contract or collective agreement.
4. Sue for employment. Possible options are a claim for employment in line with the contract and, in urgent cases, a preliminary injunction. Whether this is worthwhile depends on how long the release still has to run.
5. Meet the deadlines against the dismissal. If the release is combined with a dismissal, the three-week deadline for the unfair dismissal claim runs independently of it (Sec. 4 sentence 1 KSchG). Background in the guide Ordinary dismissal.

Checklist: checking a letter of release

Whether you receive a letter of release or agree on release in a termination agreement, check these points:

Release of works council members

A special case is the release of works council (Betriebsrat) members. They must be released from their professional duties without reduction of pay to the extent necessary for works council work (Sec. 37 (2) BetrVG). From 200 employees in the establishment, at least one member must be released, from 501 employees two, from 901 three; the scale continues upwards (Sec. 38 (1) BetrVG). Partial releases are possible (Sec. 38 (1) sentence 3 BetrVG); the works council chooses who is released (Sec. 38 (2) BetrVG).