Change notice in Germany: What employees should know

With a change notice, the employer declares a dismissal and at the same time offers to continue the employment relationship on different terms.

Such changes may concern, for example:

• a different role

• a different place of work

• reduced working hours

• lower remuneration

• different duties or responsibilities

• changed working times

The key point is that the employer is not merely changing a minor detail of everyday work. The employer wants to change working conditions that were previously agreed in the employment contract.

Not every change in the employment relationship is a change notice. Employers may give instructions within certain limits. This is often referred to as the employer's right to issue instructions. For example, the employer may specify work tasks or organise work within the scope of the employment contract.

A change notice becomes relevant where the employer cannot impose the desired change unilaterally because it affects the employment contract itself. In that situation, a simple instruction is often not enough.

For employees, this distinction is important. If the employer could have implemented the change without a dismissal, the change notice may be disproportionate.

A change notice may, for example, be worded roughly as follows:

ÜWe hereby terminate your existing employment relationship with effect from the next possible date. At the same time, we offer to continue the employment relationship from the following day under changed conditions. In future, you will work at our Leipzig location. All other contractual conditions remain unchanged.⬝

This is only a simplified example for orientation. In practice, the exact wording, the proposed changes and the circumstances of the individual case are decisive.

The important point is this: if a dismissal is declared and new working conditions are offered at the same time, the letter should not be misunderstood as a mere invitation to discuss changes.

Employees who receive a change notice generally have several possible reactions.

1. Reject the offer

The employee may reject the offer of changed conditions. In that case, the dismissal remains effective. If the employee does not bring legal action in time, the employment relationship generally ends on the termination date.

If the employee brings a dismissal protection claim in time, the proceedings will usually focus on whether the dismissal ends the employment relationship. If the employee wins, the employment relationship continues under the previous conditions. If they lose, the employment relationship ends.

Rejecting the offer of changed conditions can therefore be riskier than accepting under reservation.

2. Accept the offer without reservation

The employee may accept the new conditions without reservation. The employment relationship then continues under the changed terms. A later legal review of the changes is usually much more difficult or no longer possible.

3. Accept the offer under reservation

In many cases, accepting under reservation is particularly important. The employee essentially says: I accept the offer for the time being, but only under the reservation that the change is legally justified.

The advantage is that the employment relationship initially continues. At the same time, the court can review whether the changed conditions may lawfully be imposed.

This is often the safer route if the employee does not want to risk losing their job entirely. The employment relationship continues for the time being while the court reviews whether the new conditions are legally justified.

Short deadlines apply after a change notice. Employees who want to challenge the change notice generally have to bring legal action before the labour court within three weeks after receiving the notice.

The acceptance under reservation must also be declared to the employer in time. It must reach the employer within the notice period, but no later than three weeks after receipt of the notice.

This is important: it may not be enough to file a claim with the court on the last day. The reservation must reach the employer in time. For that reason, employees should quickly clarify how to respond after receiving a change notice.

Check dismissal

If the employee accepts the offer under reservation and brings a change protection claim, the labour court does not only examine whether there is a reason for dismissal. It also reviews whether the proposed changes are necessary and reasonable.

The changes must not go further than required by the employer's objective. The employer cannot impose arbitrary new conditions. For example, if only an organisational change is necessary, an additional significant salary reduction may be problematic.

A change notice may be invalid or challengeable for various reasons. This may be the case, for example, if:

• the dismissal was not declared in original written form

• the proposed new conditions are unclear

• there is no sufficient reason for dismissal

• the change could have been achieved by a milder measure

• the change goes beyond what is necessary

• the works council was not properly involved

• special dismissal protection applies

• the notice period or end date is problematic

Whether such arguments apply depends heavily on the exact notice letter, the employment contract and the circumstances of the individual case.

This depends on how the employee responds to the change notice. If the employee accepts the offer under reservation, they will generally work under the changed conditions after the notice period has expired, as long as the court has not yet decided.

However, simply continuing to work without clearly declaring a reservation can be risky. In some cases, this behaviour may be interpreted as acceptance of the new conditions.

For that reason, employees should clarify early how they should respond after receiving a change notice.

A change notice is more than a normal offer to amend the employment contract. It contains a real dismissal and may have significant consequences for the job and the working conditions.

Employees should therefore not sign, reject or simply continue working without understanding the legal consequences. The three-week deadline, the option to accept under reservation and the question whether the proposed changes are legally justified are particularly important.