Summary Dismissal – Definition, Grounds & Legally Compliant Process

A summary dismissal terminates the employment relationship with immediate effect – without observing any notice period. Under German law, it is only permissible when there is "good cause" within the meaning of § 626 of the German Civil Code (BGB), and it must be issued within two weeks of the employer becoming aware of the grounds. For HR professionals, a legally compliant process is essential: formal errors or missed deadlines render the dismissal invalid – with costly consequences.

What is a Summary Dismissal?

A summary dismissal – in legal terms: extraordinary termination (außerordentliche Kündigung) – is governed by § 626 BGB. Both terms describe the same legal concept: the employment relationship ends upon receipt of the termination notice, with no notice period to be observed.

It differs fundamentally from ordinary termination (ordentliche Kündigung), which requires statutory or contractually agreed notice periods to be respected. Summary dismissal is the most severe instrument in employment law – and is therefore subject to strict requirements.

It can be issued by either party: by the employer in relation to employees, and vice versa.

Legal Basis: § 626 BGB

Good Cause as a Prerequisite

§ 626 para. 1 BGB sets out the core requirement: an employment relationship may be terminated without notice if facts exist that, taking into account all circumstances of the individual case and weighing the interests of both parties, make it unreasonable to expect the terminating party to continue the employment relationship until the expiry of the regular notice period.

The key factor is always the reasonableness assessment in the individual case. There is no exhaustive list of qualifying grounds. Courts ask: was continuing the employment relationship genuinely unreasonable – or would a milder measure (such as a formal warning) have sufficed?

The Two-Week Exclusion Period

§ 626 para. 2 BGB stipulates that the extraordinary termination must be issued within two weeks of the person entitled to terminate gaining knowledge of the grounds for termination.

The deadline does not begin upon mere suspicion, but only when the person authorised to terminate has reliable knowledge of the facts. Missing this deadline renders the dismissal invalid – regardless of how serious the incident was. The date on which knowledge was obtained should therefore always be documented.

Grounds for Summary Dismissal

By the Employer – Typical Grounds

The following conduct is generally recognised by courts as good cause:

• Theft, embezzlement or fraud to the detriment of the company or colleagues (even minor amounts may suffice)
• Physical assault or serious verbal abuse directed at supervisors or colleagues
• Sexual harassment in the workplace
• Persistent refusal to work – i.e. repeated refusal despite a prior formal warning
• Serious breach of confidentiality (e.g. disclosure of trade secrets)
• Feigning incapacity for work (fraudulent sick leave)
• Unauthorised absence from work over an extended period

Whether the grounds are sufficient in a given case is ultimately decided by the employment courts based on all relevant circumstances.

By the Employee – Typical Grounds

Employees may also issue a summary dismissal – § 626 BGB applies to both sides. Recognised grounds include:

• Persistent non-payment of wages despite demand
• Serious workplace bullying or physical assault by supervisors or colleagues
• Unreasonable working conditions that persist despite a request for remedy
• Serious violation of personal rights by the employer

Employees are equally bound by the two-week deadline under § 626 para. 2 BGB.

Formal Warning Before Summary Dismissal – When Is It Required?

A formal warning (Abmahnung) is not an automatic prerequisite – but in many cases it is required under the principle of proportionality.

No formal warning required if:

• The trust relationship has been irreparably destroyed by the conduct
• The grounds for termination are so serious that the prospect of repetition is irrelevant
• The conduct involves a property offence (e.g. theft)

Formal warning generally required if:

• The misconduct is less serious in nature
• A change in behaviour following a warning would be realistic
• There is no single, grave breach of duty

When in doubt: it is better to issue one warning too many than to omit a necessary one – courts scrutinise this closely.

Process: How to Carry Out a Summary Dismissal in a Legally Compliant Manner

Step 1: Document and Assess the Facts

Record the date and time at which knowledge of the incident was obtained in writing – the two-week deadline runs from this point. Clarify: does good cause exist? Is a formal warning required or dispensable? When in doubt, consult an employment law specialist.

Step 2: Consult the Works Council (§ 102 BetrVG)

If a works council (Betriebsrat) exists, it must be consulted before any dismissal – including summary dismissal. In the case of extraordinary termination, a shortened deadline applies: the works council has 3 days to respond (compared to 7 days for ordinary termination). A dismissal without prior consultation is invalid.

Step 3: Draft the Termination Letter (Formal Requirements)

Under § 623 BGB, written form is mandatory – a dismissal by email or verbal communication is legally ineffective. The letter must:

• Be signed by hand by the person authorised to terminate
• If signed by an authorised representative: include proof of authorisation (otherwise the recipient may reject it under § 174 BGB)
• Not necessarily state the reason for dismissal – although doing so is advisable to pre-empt queries

Step 4: Ensure and Document Receipt

The dismissal only takes effect upon receipt by the recipient. Recommended practice: personal delivery against a signed acknowledgement, or delivery by courier with a documented timestamp. Ordinary postal delivery does not provide sufficient proof.

Frequently Asked Questions on Summary Dismissal

What is the difference between a summary dismissal and an extraordinary termination?

Legally, the terms are identical: § 626 BGB refers to "extraordinary termination" (außerordentliche Kündigung). In everyday usage, "summary dismissal" is commonly used because no notice period applies. Both terms describe the same legal concept.

Does a formal warning always have to precede a summary dismissal?

No – not as a general rule. In the case of serious misconduct such as theft or physical assault, the trust relationship is usually irreparably destroyed; a formal warning is then dispensable. For less serious breaches of duty, courts generally require a prior warning in order to satisfy the proportionality principle.

What is the two-week deadline for summary dismissal?

Under § 626 para. 2 BGB, the dismissal must be issued within two weeks from the point at which the person authorised to terminate gained reliable knowledge of the facts – not from the point of mere suspicion. If the deadline is missed, the dismissal is invalid.

Does the works council have to be consulted before a summary dismissal?

Yes – § 102 BetrVG applies to extraordinary termination as well. The consultation period is 3 days (compared to 7 days for ordinary termination). A dismissal without prior consultation is invalid. The works council may object, but this does not prevent the dismissal from taking effect.

What formal requirements apply to a summary dismissal?

The dismissal must be in writing (§ 623 BGB) and signed by hand. If signed by an authorised representative, proof of authorisation must be enclosed – otherwise the recipient may reject the dismissal under § 174 BGB. The reason for dismissal does not have to be stated, but it is advisable to include it.

Can an employee challenge a summary dismissal?

Yes – by filing an unfair dismissal claim (Kündigungsschutzklage) with the employment court within three weeks of receiving the dismissal. The court will assess whether good cause existed, whether the two-week deadline was observed, and whether the works council was properly consulted. If the dismissal is found to be invalid, the employer may be required to reinstate the employee and pay outstanding wages. In practice, many proceedings are resolved by a severance settlement.

What happens if a summary dismissal is found to be invalid?

If the employment court declares the dismissal invalid, the employment relationship is treated as having never been terminated. The employer owes back pay for the entire period and may be required to reinstate the employee. Claims for damages may also arise. This illustrates why a legally compliant process is so important.

Can an employee also issue a summary dismissal?

Yes – § 626 BGB applies to both parties. Typical grounds include persistent non-payment of wages, serious incidents of bullying or harassment, or unreasonable working conditions despite an unsuccessful request for remedy. Employees must equally observe the two-week deadline.

Conclusion

Summary dismissal is the most severe instrument in employment law – and accordingly error-prone. HR professionals should keep three things in mind: carefully assess and document the grounds for dismissal, strictly observe the two-week deadline, and comply with all formal requirements (written form, works council consultation, proof of authorisation). When in doubt: seeking legal advice before issuing the dismissal is far less costly than defending an unfair dismissal claim afterwards.

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Sources

• § 626 BGB – Termination without notice for good cause. Federal Ministry of Justice, 2024. https://www.gesetze-im-internet.de/bgb/__626.html
• § 102 BetrVG – Consultation of the works council. Federal Ministry of Justice, 2024. https://www.gesetze-im-internet.de/betrvg/__102.html
• § 623 BGB – Written form requirement for termination. Federal Ministry of Justice, 2024. https://www.gesetze-im-internet.de/bgb/__623.html
• § 174 BGB – Rejection of unilateral legal acts. Federal Ministry of Justice, 2024. https://www.gesetze-im-internet.de/bgb/__174.html
• Federal Ministry of Labour and Social Affairs (BMAS): Employment Law – Overview for Employers. 2024. https://www.bmas.de/DE/Arbeit/Arbeitsrecht/arbeitsrecht.html