Social selection (Sozialauswahl) in German redundancy dismissals – who has to go first?

When must the employer carry out a social selection?

Social selection is mandatory for every dismissal for operational reasons that falls under the Protection Against Dismissal Act (Kündigungsschutzgesetz, KSchG). The Act applies in establishments with, as a rule, more than ten employees (section 23 (1) KSchG) and to employees whose employment has lasted more than six months (section 1 (1) KSchG). Under section 1 (3) sentence 1 KSchG, the dismissal is socially unjustified and therefore invalid if, when choosing the employee to be dismissed, the employer did not consider, or did not sufficiently consider, length of service, age, maintenance obligations and severe disability.

Only dismissals based on urgent operational requirements are covered (section 1 (2) sentence 1 KSchG): job cuts, outsourcing, falling orders. Social selection plays no role in dismissals for personal reasons or misconduct. The starting point is the entrepreneurial decision to reduce staff, which the labour court does not review for expediency but only for obvious lack of objectivity, unreasonableness or arbitrariness. Only once jobs really disappear does the question arise which employee has to leave.

In a small establishment with up to ten employees the KSchG does not apply, but the employer is not entirely free either. In its judgment of 21 February 2001 (2 AZR 15/00) the BAG derived from good faith (section 242 BGB) and the freedom of occupation (Article 12 of the Basic Law) that even a small employer must observe a minimum degree of social consideration (Mindestmaß an sozialer Rücksichtnahme). An employer who, without an objective reason, dismisses the employee who is evidently more in need of protection than a comparable colleague acts in bad faith, and the dismissal is invalid.

Step 1: Who belongs to the comparison group?

The social selection covers all employees of the establishment who are interchangeable with the holder of the job that is being cut. Job-related criteria decide: an employee is comparable if, after a short period of familiarisation, they could do the other person’s work (interchangeability by qualification) and if the employer could assign them that job by instruction alone, without changing the employment contract (contractual interchangeability). So the BAG in its judgment of 5 June 2008 (2 AZR 907/06). The comparison is horizontal: a foreman is not compared with a helper, and a helper is not compared with a higher position, because the KSchG is meant neither to force promotions nor to trigger a race to the bottom.

The selection is establishment-related (betriebsbezogen), not company-wide. It covers the whole establishment, not just the department where the job disappears, but not other establishments of the same company or group. The BAG confirmed this in its judgment of 2 June 2005 (2 AZR 158/04) even for a contract containing a clause allowing transfers to other establishments. The only exception: an entrepreneurial decision whose sole purpose is to circumvent the social selection is arbitrary and is disregarded.

The relevant point in time is the receipt of the notice of dismissal, taking into account developments that will occur with sufficient certainty by the end of the notice period (BAG, judgment of 21 April 2005, 2 AZR 241/04). Employees whose ordinary dismissal is excluded by statute drop out of the comparison group: works council members (section 15 KSchG), pregnant women and new mothers (section 17 of the Maternity Protection Act, MuSchG) and employees on parental leave (section 18 BEEG). Severely disabled employees remain in the group. Their disability is one of the four criteria, and their dismissal additionally requires the consent of the integration office (section 168 SGB IX).

Step 2: The four criteria and the points scheme

Section 1 (3) sentence 1 KSchG lists four criteria exhaustively: length of service (Betriebszugehörigkeit), age (Lebensalter), maintenance obligations (Unterhaltspflichten) and severe disability (Schwerbehinderung). Other circumstances such as nationality, illness, housing situation or prospects on the labour market may not be taken into account at this step. No criterion has statutory priority. The employer has a margin of assessment (Wertungsspielraum) in weighting them, which is why only an employee who is clearly more in need of protection than the person retained can successfully challenge the selection (BAG, judgment of 5 December 2002, 2 AZR 549/01).

In practice employers use points schemes. The BAG accepted, for example, a scheme awarding 1 point for each year of age (up to the age of 55), 1 point for each year of service during the first ten years and 2 points from the eleventh year, 3 points for each dependent child, 4 points for marriage and 5 points for a disability of 50 per cent or more plus 1 point for each further 10 per cent (judgment of 9 November 2006, 2 AZR 812/05). Example: fitter A is 48, has 15 years of service, a wife and two children: 48 + 10 + 10 + 4 + 6 = 78 points. Fitter B is 30, has 4 years of service and is single: 30 + 4 = 34 points. If one of the two jobs is cut, B has to go.

If a collective agreement or a works agreement under section 95 of the Works Constitution Act (BetrVG) lays down how the criteria are weighted against each other (selection guideline), the court reviews the weighting only for gross error (section 1 (4) KSchG). The points scheme remains a tool, however: it does not relieve the employer of collecting the data carefully. Wrongly calculated points, such as a disability that does not exist or an overlooked child, are the most frequent source of dispute before the labour court.

Step 3: The exception for key employees and the age structure

The employer may exclude from the selection employees whose continued employment is in the legitimate interest of the establishment, in particular because of their knowledge, skills and performance or to secure a balanced staff structure (section 1 (3) sentence 2 KSchG). This is the exception to the rule of selection by social criteria and must be justified specifically. General usefulness or good appraisals are not enough. What is needed is a genuine operational interest in this particular person, for example a qualification that is indispensable in the job and cannot be replaced at short notice.

The staff structure allows the employer to form age groups and to dismiss proportionately within each group so that the average age of the workforce does not rise. The BAG permitted this in its judgment of 20 April 2005 (2 AZR 201/04) and tightened the requirements in its judgment of 19 July 2012 (2 AZR 352/11): age groups are permissible only if they actually preserve the existing structure, and where the dismissals reach the thresholds of section 17 KSchG the legitimate operational interest is presumed. In that case a 52-year-old secretary employed since 1978, with 102 social points, was dismissed while a 26-year-old colleague with four years of service and 29 points stayed because of her English skills. The BAG required an examination of whether the communication needs really justified this, and held that forming three age groups for only two dismissals could not preserve the structure, because the average age of the department fell by 3.3 years.

The list of names in the reconciliation of interests

If, in the case of an operational change (section 111 BetrVG), the employees to be dismissed are named in a reconciliation of interests (Interessenausgleich) between employer and works council, it is presumed that the dismissal is based on urgent operational requirements, and the social selection can be reviewed only for gross error (section 1 (5) sentences 1 and 2 KSchG). The presumption falls away if the situation has changed materially after the reconciliation of interests was concluded (section 1 (5) sentence 3 KSchG).

According to the BAG, the selection is grossly erroneous in the case of “einer evidenten, ins Auge springenden erheblichen Abweichung von den Grundsätzen des § 1 Abs. 3 KSchG” (judgment of 19 July 2012, 2 AZR 352/11, BAGE 142, 339), that is, an obvious, glaring and substantial departure from the principles of social selection. The error must also affect the outcome for the employee bringing the claim. For the employee this means a higher hurdle: one overlooked point is not enough, but dismissing an employee with 30 years of service and three children while keeping a childless colleague with one year of service is grossly erroneous even with a list of names.

How do you check whether the selection was correct? Right to information and burden of proof

At the employee’s request the employer must state the reasons that led to the social selection (section 1 (3) sentence 1 second half-sentence KSchG). Formally the employee bears the burden of proving that the selection was flawed (section 1 (3) sentence 3 KSchG), but the BAG applies a graduated burden of pleading (abgestufte Darlegungslast). An employee who does not know the colleagues’ data meets their burden by challenging the selection and requesting information. The employer must then disclose the comparison group and the social data, and only afterwards does the employee have to name specifically who was less in need of protection (judgment of 18 May 2006, 2 AZR 245/05).

According to the BAG, the purpose of the information is to enable the employee to assess the prospects of a dismissal protection claim and to provide the proof of selection errors that section 1 (3) sentence 3 KSchG imposes on them. In practice, the request for information should be made in writing immediately after receipt of the dismissal and repeated in the claim. Anyone who does not substantiate the complaint after receiving the data loses, like the claimant in case 2 AZR 245/05, who had 49 points and did not name a single colleague less in need of protection.

Does an error concerning another employee save my dismissal?

Not always. The BAG used to apply the domino theory: a single selection error could bring down the dismissals of everyone affected. In its judgment of 9 November 2006 (2 AZR 812/05) the BAG abandoned this line. If the employer carries out the social selection solely by applying a permissible points system, the employer may object that the alleged error had no effect on the decision because the employee would have been selected for dismissal anyway. The official headnote reads:

“Nimmt der Arbeitgeber die Sozialauswahl allein durch Vollzug eines zulässigen Punktesystems vor, so kann er auf die Rüge nicht ordnungsgemäßer Sozialauswahl mit Erfolg einwenden, der gerügte Auswahlfehler habe sich auf die Kündigungsentscheidung nicht ausgewirkt, weil der Arbeitnehmer nach der Punktetabelle ungeachtet des Auswahlfehlers zur Kündigung angestanden hätte.”

“If the employer carries out the social selection solely by applying a permissible points system, it may successfully object to the complaint of an improper social selection that the alleged selection error did not affect the dismissal decision because, under the points table, the employee would have been due for dismissal regardless of the error.”

BAG, judgment of 9 November 2006 – 2 AZR 812/05, BAGE 120, 137, official headnote – our translation

In that case the employer had dismissed 55 of 595 industrial employees, and the claimant argued that a colleague had received 5 points for a severe disability although his degree of disability was only 30. The lesson for the employee: it is not enough to find any error in the table. You must show that, calculated correctly, you yourself would have stayed and someone else would have had to go.

What to do after a dismissal for operational reasons?

The deadline is decisive: the dismissal protection claim (Kündigungsschutzklage) must be filed with the labour court within three weeks of receipt of the written notice (section 4 sentence 1 KSchG). After that the dismissal is deemed valid from the outset, even if the social selection was obviously flawed (section 7 KSchG). If the employer offered a severance payment in the notice letter in return for not suing, it is due after the deadline at 0.5 monthly salaries per year of employment (section 1a KSchG). It is worth calculating beforehand whether a flawed selection promises more, because severance payments negotiated in court are often higher.

In court the employer must show not only the selection but also that there was no vacant position in this or another establishment of the company where the employee could have continued working (section 1 (2) KSchG). If a works council exists, it must be heard before every dismissal (section 102 (1) BetrVG). If it objects because of a flawed social selection, the employee is entitled to continued employment until the end of the proceedings (section 102 (3) and (5) BetrVG). We explain the court procedure in a separate article, and you can check the length of your notice period in our text on notice periods.

Frequently asked questions

What is social selection (Sozialauswahl) in Germany?
A mandatory step of every dismissal for operational reasons in establishments covered by the KSchG: the employer compares the interchangeable employees by length of service, age, maintenance obligations and severe disability and dismisses the one least in need of protection (section 1 (3) KSchG). A flawed selection makes the dismissal socially unjustified and invalid.

Can my employer dismiss me because my German is weaker or because I am from abroad?
Nationality is not a selection criterion and must not determine the selection. Language skills can justify keeping another person only as a legitimate operational interest (section 1 (3) sentence 2 KSchG) if they are genuinely indispensable in the job. That is exactly what the BAG had examined in the case of the secretary dismissed despite 102 points (2 AZR 352/11).

How many points do I get for service, age and children?
The Act gives no figures. The BAG accepted a scheme of 1 point per year of age up to 55, 1 point per year of service for ten years and 2 points per further year, 3 points per child, 4 points for marriage and 5 points for a disability of 50 per cent or more plus 1 point per further 10 per cent (2 AZR 812/05). Other schemes are permissible as long as they are not grossly unbalanced.

Can I demand the data of the colleagues who stay?
Yes. On request the employer must state the reasons for the selection (section 1 (3) sentence 1 second half-sentence KSchG) and disclose the comparison group with the social data in court if the employee does not know them (BAG 2 AZR 245/05). Only then must the employee name a specific person less in need of protection.

Does social selection apply in a small business?
In establishments with up to ten employees the KSchG does not apply, but the employer must observe a minimum degree of social consideration (section 242 BGB, BAG 2 AZR 15/00). Dismissing an evidently more vulnerable employee without an objective reason is invalid.

How much time do I have to file a claim?
Three weeks from receipt of the written notice (section 4 sentence 1 KSchG). After that the dismissal is deemed valid (section 7 KSchG), and at most the severance under section 1a KSchG remains, if the employer offered it.

Basis of this article: BAG judgments of 21 February 2001 – 2 AZR 15/00, 5 December 2002 – 2 AZR 549/01, 20 April 2005 – 2 AZR 201/04, 21 April 2005 – 2 AZR 241/04, 2 June 2005 – 2 AZR 158/04, 18 May 2006 – 2 AZR 245/05, 9 November 2006 – 2 AZR 812/05, 5 June 2008 – 2 AZR 907/06 and 19 July 2012 – 2 AZR 352/11. Provisions: sections 1, 1a, 4, 7, 15, 17, 23 KSchG, sections 95, 102, 111 BetrVG, section 17 MuSchG, section 18 BEEG, section 168 SGB IX, section 242 BGB, Article 12 of the Basic Law. Legal position: September 2026. This article is for general information and does not replace legal advice in an individual case.

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