A wave of new regulations and court rulings is set to reshape workplace obligations in Germany from next year, with changes covering everything from mandatory doctor’s notes for sick leave to stricter requirements for mass redundancies. Business leaders and employee representatives are already clashing over the scope and impact of the reforms.
Mass Layoffs: Strict Notification Rules Now a Legal Minefield
The Federal Labour Court (BAG) handed down two rulings in early 2026 — one on 19 March and another on 1 April — that sharply raised the bar for employers conducting mass dismissals. The judges affirmed that any termination issued without a properly submitted mass-dismissal notification is legally void. Under European law, a block on dismissals takes effect, and the court explicitly ruled out the possibility of repairing a faulty notification after the fact. For companies navigating major restructurings, the message is clear: procedural precision is non-negotiable.
In a separate decision last September, the BAG also clarified when the appointment of matrix managers counts as a transfer requiring works council approval. Meanwhile, the Düsseldorf Regional Labour Court weighed in on the legal pathway for claims over untaken holiday payouts.
Sick Leave: Government Pushes for Doctor’s Note from Day One
The coalition government is planning deep cuts into the Continued Remuneration Act and the Part-Time and Fixed-Term Employment Act. The most contentious element: a requirement for a medical certificate of incapacity for work (AU) starting on the first day of illness — effectively scrapping the phone-based sick note introduced during the pandemic.
Criticism has been swift. An official from the CDU’s workers’ wing called the plan “a signal of distrust” toward employees. Labour law experts warn of a paradoxical effect: mandating an in-person doctor’s visit might actually extend absences, since physicians are less likely to issue a single-day certificate when a patient has made the journey to the practice. The chairwoman of a major health insurance fund dismissed the proposal outright as “pure symbolic politics.”
Working Time Recording: Mandatory, but How Is Up for Negotiation
Since a BAG decision in September 2022, employers have been required to systematically log the start, end, and duration of each employee’s daily working hours — with no transition period. While the obligation itself is settled, the method of recording remains open. Under Section 87(1) No. 7 of the Works Constitution Act (BetrVG), works councils have a strong say in shaping the implementation. They lack, however, the right to initiate a recording system on their own.
Flexible working time models (Vertrauensarbeitszeit) are still permitted, provided the documentation requirement is satisfied. A draft law to further specify the rules is expected before the current legislative term ends.
Broader Changes: Fixed-Term Contracts, Unfair Dismissal, and Sunday Work
The reforms extend well beyond sick leave:
- Fixed-term contracts: Untethered fixed-term contracts could be extended to up to 48 months — double the current limit.
- Unfair dismissal protection: Employees earning roughly €177,000 or more in gross annual income may lose ordinary protection against dismissal.
- Severance payments: The government plans to make them tax-advantaged.
- Sunday work: From January 2027, bakeries and confectioneries may operate for eight hours on Sundays instead of the current three; libraries could open for up to six hours.
Holiday Entitlements and Sick-Note Disputes: Daily Pitfalls
Even routine HR issues carry hidden risks. The BAG ruled that holiday leave applies only to days with an obligation to work (Case No. 9 AZR 216/24). Blanket limits on how much consecutive leave an employee can take are legally precarious, experts caution.
When an employer suspects a sick note is fraudulent, simple intuition does not suffice — concrete indications of abuse are required. Home visits to check on an employee are legally permissible, but the worker is not obliged to let the employer inside. In ambiguous cases, the medical service of the health insurers (Medizinischer Dienst) can be called in to review.
