Germany’s coalition unveiled a 2026 labor reform package that would let employers use no-cause fixed-term contracts for up to 48 months and six extensions for hires made through 2030.
From Jan. 1, 2027, the package would also let employers seek court-ordered dissolution for workers earning above 1.75 times the pension ceiling—about €177,450 in 2026—without proving continued cooperation is unworkable.
Those cases would still require a dismissal challenge and a dissolution application, with courts setting severance that generally caps at 12 months’ pay, rising to 15 or 18 months for some older long-serving staff.
The reforms also propose tax breaks on severance for workers who quickly take new jobs, abolish the written-form requirement for fixed-term contracts from 2027, and end telephone-based sick leave certificates while requiring medical proof from day one.