Termination with change of contract – How you can protect your rights!

You have a Notice of change and don't know how to respond? Don't worry—you're not alone, and you've come to the right place. In this article, you'll learn what a change of notice means legally, what consequences it can have, and what specific options you have now.

We explain to you clearly and understandably:

• When is a change of notice actually effective,
• What deadlines must you absolutely meet,
• and how can you take action against the change of notice with or without a lawyer.

As an experienced Specialist lawyers for employment law We know how stressful this situation can be for employees. That's why we'll show you step by step how you can protect your rights – whether through a conditional acceptance, filing a wrongful termination suit, or negotiating a severance package.

Read on to find out how best to proceed now – legally and with a clear head.

What is a change of notice?

A change of contract notice is an employment law instrument that allows the employer to continue an existing employment relationship under modified working conditions rather than completely terminating it. While a normal termination is aimed at terminating the employment relationship, the legal situation is somewhat different with a change of contract notice. Strictly speaking, a change of contract notice contains two legal declarations:

(1) On the one hand, the change of notice is intended to terminate the existing employment relationship with the employee. finishIn this respect, the notice of termination with change of terms is similar to the “normal” notice of termination.

(2) On the other hand, the employer shall offer the employee the Conclusion of a new employment relationship to changing working conditions.

A change of contract notice is therefore clearly different from a "normal" termination notice, in which the employment relationship is terminated without an offer of continued employment. It is also distinct from a mere transfer, in which the employment contract remains unchanged, but the performance of the duties within the framework of the existing contract is changed.

Important: A change of notice is clearly different from the so-called Partial terminationWhile a change of contract terminates the entire employment relationship and simultaneously offers a new contract, a partial termination would only change individual terms—such as remuneration or working hours—without terminating the entire contract. Such partial terminations are generally inadmissible.

Practical significance of the change of notice

In practice, termination with a change of terms plays a role primarily when company restructuring, economic difficulties, or organizational changes make it necessary to adjust existing employment contracts – for example, through a change in working hours, a transfer to another location, or a reduction in salary. For employers, it is an important tool for responding flexibly to changing circumstances. For employees, however, it can pose a challenge, as it often involves a deterioration of existing working conditions.

When is a change of notice effective?

For a change of notice to be effective, certain legal requirements must be met. In principle, the same requirements apply to a change of notice as to a regular termination under the Protection Against Dismissal Act (Consumer Protection Act), provided that the employment relationship falls within its scope.

The employment relationship falls under the protection of the KSchG under two conditions: Firstly, the employer more than 10 full-time employees (part-time employees are included in the calculation of the number of employees). On the other hand, the specific employment relationship longer than 6 months have passed (general waiting period). The length of the probationary period is irrelevant.

Essentially, the following provisions of protection against dismissal are important:

• The notice of change must be based on the Termination of the employment relationship be directed
• she must in written form be sufficiently specific (or determinable) and may not, in principle, be made subject to a condition
• It must not violate mandatory collective bargaining law or mandatory statutory provisions
• The Notice period must be observed. The regular notice periods according to the German Civil Code (BGB) or the employment contract or collective agreement apply. In cases of long-term employment, the notice period may be several months (Section 622 para. 2 German Civil Code).
• The Works council must be heard and involved beforehand (Section 102 para. 1 Works Constitution Act and Section 99 Works Constitution Act)
• The Approval from authorities In the case of special protection against dismissal, this must be available beforehand
• A personal, behavioral or operational-related Reason for termination There must be a reason that precludes continued employment if the Dismissal Protection Act applies. Social justification for the termination and the change in working conditions is required.
• The change of notice may not be based on a violation of Selection guidelines after Section 95 Works Constitution Act be socially unacceptable.
• In the case of dismissal for operational reasons, no further employment opportunities under the previous conditions.
• The desired changes must relatively and be reasonable for the employee. This means that they must not discriminate against the employee unreasonably or violate fundamental labor law principles. A significant salary reduction that is not justified by an equivalent reduction in working hours or by the company's financial hardship is often considered disproportionate.
• Finally, a comprehensive balancing of interests This process takes place. The employer's interest in changing the working conditions is weighed against the employee's interest in maintaining the existing contractual conditions. Criteria may include length of service, the employee's family circumstances and maintenance obligations, career development opportunities, and the employer's operational requirements. Only if the outcome of this balancing exercise favors the employer is the termination with a change in terms of employment socially justified.

Social justification for a change of notice

Like any ordinary termination, a termination with a change of terms is subject to the standard of social justification under Section 1 of the German Dismissal Protection Act (KSchG). This means that it is only valid if it is justified by personal, behavioral, or operational reasons, and if the proposed changes are appropriate and reasonable in the specific case.

Reasons for termination according to Section 1 KSchG for a change of notice can be the following:

Personal reasonsThese arise when the employee is no longer able to perform their previous duties as agreed for personal reasons – for example, due to long-term illness, lack of qualifications, or the revocation of their driver's license. In such cases, a change of contract may be aimed at a different, easier job.

Behavioral reasons: This concerns the employee's breach of contract, necessitating a change in working conditions. This may be the case, for example, if the employee repeatedly violates company rules and a transfer with modified duties is considered a more lenient means of avoiding termination.

Operational reasons: These arise when urgent operational requirements make continued employment under the current conditions impossible. This can occur, for example, in the context of restructuring, rationalization, relocation, or due to economic pressure. In such cases, the employer can use a change of contract notice to adjust working hours or change areas of responsibility.

More about Dismissal for operational reasons You can find out more in this article.

This is how the change offer must be designed

In addition, the change offer must also meet certain requirements, in particular with regard to the Certainty and Determinability Regarding the change of notice, the Federal Labor Court (BAG) states:

This offer must, like any offer within the meaning of § 145 German Civil Code, clearly defined or at least determinable. According to general legal transaction theory, it must be worded so specifically that it can be accepted by the employee without further ado. It must be clear to the employee beyond any doubt which working conditions will apply in the future. Only in this way can the employee make an informed decision as to whether to accept or reject the offer. Since the employee is required by law to respond to the offer of change within a short period of time, it is in the interest of legal certainty that the offer of change must state the new conditions under which the employment relationship is to continue according to the employer's wishes. Any ambiguities are to the employer's detriment. They lead to the invalidity of the notice of change.

Federal Labor Court, judgment of 10 September 2009 – 2 AZR 822/07

Change of notice before termination notice

The change of notice is different from the termination notice fundamentally priorityTermination is always the last resort, and should only be used by the employer if the disadvantageous situation cannot be avoided by changing the terms of the contract. In individual cases, this means, for example:

• Dismissal for operational reasons: If the job is eliminated, the employer must offer the employee objectively possible and reasonable employment in a vacant position within the company under changed conditions. Federal Labor Court, judgment of 21 April 2005 – 2 AZR 132/04
• Termination for personal reasons: In the event of illness, the employer must, if necessary, offer the employee a job where the illness will have no or lesser effects.
• Dismissal for conduct reasons: If there are conflicts with other employees, the employer must check whether continued employment elsewhere is possible before issuing a termination notice (for example, after insults) and possibly issue a change of terms.

The employer must submit a change offer

The employer is obliged to provide the employee any available employment opportunity to offer a position for which the employee is suited based on their knowledge and skills. Such an offer may only be omitted in absolute exceptional cases, if the employer could not reasonably have expected the change offer to be accepted and the offer would be of an "insulting nature."

Federal Labor Court, judgment of 21 April 2005 – 2 AZR 132/04

However, outside of these extreme cases, the employer is obligated to make the employee a change offer. The employee is best placed to judge whether the working conditions are acceptable and reasonable for them. This applies even if, for example, they are offered significantly lower compensation.

Your contact for changes to the contract and termination agreements

Specialist lawyer Raphael Lugowski and lawyer Hamza Gülbas represent you with experience and assertiveness.

Whether it's a change of contract, a termination agreement, or a wrongful termination suit: We understand the scope for maneuver – and consistently utilize it for your benefit. Rely on genuine employment law expertise for your next decision.

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What can the employer offer the employee in the termination agreement?

Regarding the scope of the change offer, the employer must offer the employee what previous working conditions The existing working conditions should be maintained as far as possible in order to keep the disadvantages for the employee as low as possible. Only then can the dismissal be justified on social grounds according to Section 1 paragraph 2 KSchG be justified.

The offer of change must not place unnecessary burdens on employees

This means that a change of notice must be submitted to the so-called Principle of proportionality This applies both to the termination and to the proposed changes. This means that the changes must be suitable, for example, to remedy the employer's financial hardship. Furthermore, they must be necessary, for example, to adapt the employment contract to the changed employment opportunities. “The proposed changes must not deviate further from the current content of the employment relationship than is necessary to achieve the desired objective.”, according to the Federal Labor Court. The employee is mildest and least disruptive change offer to submit.

Federal Labor Court, judgment of March 2, 2017 – 2 AZR 546/16

In this context, case law asks whether the employee has accepted a proposed change in working conditions reasonably must accept.

Also worth reading in this context: Federal Labor Court, judgment of 10 April 2014 – 2 AZR 812/12

This is how the Federal Labor Court examines the effectiveness of a change of notice

The jurisprudence examines the social justification The change of notice therefore takes place in two steps:

(1) Is there a reason for termination that requires a change to the employment contract?

(2) Did the employer limit the notice of termination with changes to those changes that could reasonably be expected of the employee?

Incidentally, a dismissal with a change of terms is also disproportionate and ineffective if the employer could simply transfer the employee. "superfluous" Notice of change.

In a change of contract, several working conditions are often changed simultaneously. In this case, each individual change must be socially justified and proportionate.

Federal Labor Court, judgment of 10 September 2009 – 2 AZR 822/07

Options for employees in the event of a change in contract

After receiving a notice of termination with a change of employment, the employee is faced with the decision of how to deal with the employer's offer of change. three possible reactions, each of which has different legal and practical consequences. The right choice depends on various factors, in particular the reasonableness of the new conditions, the prospects of success of a wrongful termination claim, and the need for job security.

The following three options are available to employees:

1. You can Accept offer: This means that the employment relationship will continue under the new terms and conditions. An explicit declaration of acceptance is not required; even implied behavior can be considered consent, for example, continuing to work under the new terms and conditions without objection after the expiration of the notice period.
2. You can use the offer accept with reservationthat the change in notice of termination is not socially justified and file a suit for protection against the change.
3. Finally, you can Reject offer and within three weeks a Dismissal protection suit raise.
4. Theoretically, you also have the option of Rejection of the offer and the acceptance of the termination without filing a wrongful termination suit.

If you accept the offer without reservation, an amendment contract or a new employment contract This contract is then amended in the relevant points compared to the old employment contract.

Federal Labor Court, judgment of 27 March 2018 – 4 AZR 208/17

Acceptance with reservation in combination with an action for protection against changes

If you accept the change offer subject to the proviso that the change in notice is not invalid, you will then enter into a new employment contract with the employer under amended conditions.

However, there is a difference here to the unconditional acceptance of the change offer insofar as they file a suit for protection against changes and review the validity of the change in notice.

The change protection action can lead to two different results:

If the notice of termination with a change of terms turns out to be invalid, the notice of termination with a change of terms is cancelled, the reservation takes effect, and the old employment contract is reinstated. However, if you accept the reservation, you would have to work under the amended working conditions after the notice period has expired until a decision is made.

If the change in notice is effective and socially justified, the new conditions apply permanently to the employment relationship.

Rejection of the offer in combination with a dismissal protection suit

Finally, you also have the option of accepting the employer’s change offer to reject in its entiretyIn this case, no new employment contract is concluded between you and the employer. Instead, you have the opportunity to withdraw from the contract by submitting a Dismissal protection suit to take action against the change in the notice of termination. This would then be a standard unfair dismissal claim.

Federal Labor Court, judgment of 10 April 2014 – 2 AZR 812/12

The worst option is to reject the changes and accept the effect of the termination without filing a wrongful termination suit. This would then forfeit the potential judicial review of the validity and social justification of a change in the termination. Severance pay would also no longer be possible or achievable.

Everything about the topic severance pay Find out more here.

How you should decide on a change of contract

Whether you accept an offer of change (subject to reservation) depends entirely on your Interests Anyone who wishes to continue working but has doubts about the legality of the change should definitely declare a reservation in accordance with Section 2 of the German Employment Protection Act (KSchG) and file a lawsuit at the same time. This is especially useful if, if necessary, they are also willing to accept the (worse) working conditions. In this situation, we advise clients to file a change protection lawsuit while simultaneously accepting the change offer with reservations. Failure to take either of these two steps (declaring a reservation or filing a change protection lawsuit) will result in the legal recognition of the termination or the change – even if it was inadmissible.

If, however, the working conditions are absolutely unacceptable for an employee, then we must advise them to reject the change offer. Whether a wrongful termination suit – with the aim of returning to the old job or obtaining severance pay – makes sense in such a case, we base our assessment solely on the Prospects of success dependent.

Deadline and form of acceptance of the change offer

Good to know: To accept the change offer, you usually have three weeks after receipt. This is the same deadline as for filing a claim for modification or unfair dismissal. But be careful, the reservation declaration is also subject to the law. to declare within the notice periodIf this period is less than three weeks, you have less than three weeks to declare your reservation.

This is the case, for example, in the cleaning or construction industries, where very short notice periods apply. If the employer has given notice of termination for cause, there is no notice period. In this case, you must Declare reservation immediately. Immediately means within one week at the latest.

According to the Federal Labor Court, an effective acceptance of reservation also exists if it is submitted together with the lawsuit.

cf. for AGG claims Federal Labor Court, judgment of 22 May 2014 – 8 AZR 662/13

You can accept in writing, verbally, by email and also by fax There are no high requirements here, the assumption only has to be clearly and clear be. 

And another NoticeIf you continue to work under the proposed amended working conditions after the notice period has expired, this could be considered an unconditional acceptance of the change offer. We can help you if you need support in this regard. For example, we can also express the reservation in your lawsuit.

Conclusion

• A change of contract notice means that the employer terminates the existing employment relationship but simultaneously offers the employee the opportunity to continue the employment relationship under modified working conditions—for example, with different working hours, a different location, or reduced remuneration. This differs significantly from a termination notice and should not be confused with a mere transfer.
• Conditions for effectiveness: A change of contract is subject to the provisions of the German Dismissal Protection Act (KSchG), to the extent applicable. It is only effective if it is socially justified, i.e., if there is a personal, behavioral, or operational reason. Furthermore, formal requirements, notice periods, the involvement of the works council, and the proportionality of the change must be observed.
• Change of notice before termination notice: A change of contract is a less restrictive measure than a termination of employment and takes precedence. The employer is obligated to offer the employee reasonable alternatives to job loss, if available. Termination of employment may only be issued if reasonable continued employment is not possible.
• The offer of change must be clear and reasonable: The employer must clearly and understandably formulate the new working conditions that will apply. The offer must be specific enough for the employee to accept or reject it with a "yes" or "no" without further questioning. The changes must not go beyond what the circumstances require. Disproportionate offers—e.g., significant wage cuts without objective reason—will render the termination invalid.
• Employee's options for reactionAfter receiving the notice of change, the employee has three options:
  • Unconditional acceptance: new conditions apply permanently, no legal action is possible.
  • Acceptance with reservation and legal action: job is retained, change is subject to judicial review.
  • Rejection with unfair dismissal protection suit within three weeks: The labor court examines whether the dismissal is justified overall.
  • If no legal action is taken, the change is deemed to be effective – even if it was unlawful!
• Note important deadlines: The three-week deadline following receipt of the notice of termination is particularly important. Within this period, the employee must file a wrongful termination suit or a wrongful termination suit.
  • If the change offer is accepted with reservations, the reservation must also be declared within three weeks – in some cases even earlier (e.g. in the case of short notice periods or extraordinary terminations).
  • A delayed reaction usually leads to the final loss of rights.

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