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ARTICLE · 27 JULY 2026

German Employment Law In Transition: Coalition Committee Agrees On Noteworthy Reforms

Littler Mendelson
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The German Coalition Committee has proposed sweeping employment law reforms that could fundamentally alter how companies manage their workforce, from introducing new termination options for high earners to expanding fixed-term employment flexibility. These changes, part of a comprehensive "Program for Growth and Employment," would impact everything from dismissal procedures and severance payments to sick leave documentation and working time regulations. Employers should closely monitor these developments as

GermanyEmployment and HR
Ulrike Schulke
Ulrike Schulke
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At a Glance

  • The German Coalition Committee has agreed to a draft package of political resolutions, including several that would impact employment law.
  • Proposed changes would amend the separation process for highly compensated employees, revise the law governing fixed-term employment, create preferential tax treatment for certain severance payments, abolish sick notes issued by telephone, and require the provision of a certificate of incapacity for work from the first day of illness, among others.

The German Federal Government, formed by the CDU/CSU (conservative political party union) and SPD (social democratic political party), has agreed in the Coalition Committee on a comprehensive “Program for Growth and Employment.” The package of measures includes a number of employment-law initiatives that employers should monitor closely over the coming months. Of particular relevance are new options for terminating employment relationships with high earners, the planned expansion of

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