Severance Pay in the Public Sector: TVöD & TV-L

Is there an entitlement to severance pay in the public sector?

The short answer: no, at least not automatically. As in the private sector, the same applies in the public sector: there is no general statutory entitlement to severance pay under employment law. Neither the Protection Against Dismissal Act nor TVöD or TV-L gives you a payment entitlement simply because you have been dismissed. Severance pay almost always comes about through negotiation: in a termination agreement (Aufhebungsvertrag), in a court settlement, via an offer under § 1a KSchG, or via a social plan (Sozialplan) in the event of restructuring.

One important distinction up front: this page is aimed at employees covered by collective agreements, in other words staff in the public sector employed under TVöD (federal government and local authorities) or TV-L (states). Civil servants (Beamte) are not in an employment relationship and, in employment-law terms, cannot be dismissed, civil service law and separate procedures apply to them. Everything below concerns only employees covered by collective agreements.

So why is this topic still worth your attention, especially in the public sector? Because your negotiating position there is often stronger than in the private sector: long notice periods under the collective agreement, a Protection Against Dismissal Act that applies almost without exception, and, after long service, protection from ordinary dismissal under § 34 (2) TVöD. If an employer can hardly dismiss you, it has to buy your departure. That is exactly what this page is about.

Protection against dismissal for employees under collective agreements: the KSchG applies as usual

For public sector employees covered by collective agreements, the Protection Against Dismissal Act applies under the same conditions as in any private company: more than 6 months of service and an organisation with, as a rule, more than 10 employees. That headcount threshold is practically always met at authorities, local councils, hospitals or state-owned enterprises. An ordinary dismissal must then be socially justified, meaning it must be based on operational, conduct-related or personal grounds (§ 1 KSchG).

What this means for you: you can challenge a dismissal in the public sector with an unfair dismissal claim (Kündigungsschutzklage) just as you would any other dismissal. Common grounds for challenge include a flawed social selection (Sozialauswahl), incomplete involvement of the staff council (Personalrat, the public sector equivalent of works council consultation), a missing warning notice (Abmahnung) before a conduct-related dismissal, or an inadequate prognosis in the case of a dismissal on health grounds.

The most important deadline applies here too: you must file a claim with the labour court within 3 weeks of receiving the written notice of dismissal (§ 4 KSchG). After that, the dismissal generally counts as valid, even if it was flawed. To see exactly how many days you have left, use our deadline calculator for the unfair dismissal claim.

A first estimate in 2 minutes: Use our severance pay calculator to work out what is realistic in your case.

Notice periods under § 34 (1) TVöD: up to 6 months to the end of the quarter

Instead of the statutory scale under § 622 BGB, employees under collective agreements are, as a rule, subject to the notice periods set out in their collective agreement. Under § 34 (1) TVöD, these depend on length of service and, after the first year of employment, run to the end of a calendar quarter, that is, 31 March, 30 June, 30 September or 31 December. For a comparison with the statutory scale, see our article on the notice period.

The link to the end of the quarter often makes the notice period longer in practice than the table suggests. Example: if you receive a dismissal in early April and the 6-month tier applies, your employment relationship can end at the earliest on 31 December, that is almost 9 months of continuing salary. The collective agreement that applies to you is always decisive, TV-L and special rules for particular sectors can differ. It is therefore always worth checking your employment contract and the collective provisions it refers to.

Protection from ordinary dismissal under collective agreement: § 34 (2) TVöD

The most important feature of the public sector for severance negotiations is set out in § 34 (2) TVöD: in the western pay area (Tarifgebiet West), the employment relationship of staff who have reached more than 15 years of service and have turned 40 can, as a rule, only be terminated for good cause. This is referred to as protection from ordinary dismissal under the collective agreement.

What does this mean in practice? An ordinary dismissal, for example for operational reasons due to job cuts or restructuring, is then generally excluded. What remains available to the employer is essentially an extraordinary dismissal for good cause, which is subject to very high hurdles, in certain constellations also an extraordinary dismissal with a social notice period, or a change notice (Änderungskündigung) to adjust working conditions. "Protected from ordinary dismissal" therefore does not mean "cannot be dismissed under any circumstances", but the bar is set very high.

Two caveats are part of a fair assessment: first, this rule applies in this form in the western pay area (Tarifgebiet West), partly different rules apply in the eastern pay area (Tarifgebiet Ost) and under other collective agreements. Second, everything depends on the applicable collective agreement and on correctly calculated length of service, for example if you have changed employer within the public sector. Whether you actually fall under the protection of § 34 (2) TVöD should therefore always be checked in your individual case.

What protection from ordinary dismissal means for your severance pay

This is where things get financially interesting. Severance pay is always the price an employer pays to end an employment relationship safely and without the risk of litigation. That price rises with the employer's risk, and in the public sector that risk is structurally high: long notice periods, full protection against dismissal, staff council involvement. For employees protected from ordinary dismissal, there is the added factor that, without good cause, the employer has no way at all to end the relationship unilaterally.

If an authority or a local public enterprise nevertheless wants to part ways with you, for example because a post is being cut or a facility is being closed, the route runs practically only through your consent: a termination agreement (Aufhebungsvertrag). And anyone who needs your consent has to pay for it. That is exactly why results for employees protected from ordinary dismissal are often above the usual rule of thumb, more on this under termination agreement and severance pay.

The flip side: because the employer knows this, gentle pressure is often applied in the public sector ("the post is going to disappear anyway", "better an amicable solution now than a dispute later"). Do not let yourself be rushed into signing quickly. Every week you take for yourself works in your favour, because your salary keeps being paid and your legal position does not weaken.

Before you go into a discussion about a termination agreement: work out your personal negotiating basis with the severance pay calculator.

The typical routes to severance pay in the public sector

Even without a statutory entitlement, there are five established routes by which severance pay comes about in the public sector:

• Termination agreement (Aufhebungsvertrag): the most common route, especially for employees protected from ordinary dismissal. You and your employer end the employment relationship by mutual agreement in exchange for a payment, often combined with arrangements on your reference (Zeugnis), release from work (Freistellung) and outstanding leave. Before you sign, you should check the benefit suspension period, the supplementary pension and tax implications, more on this below. You can find an annotated termination agreement template with us.
• § 1a KSchG in the case of dismissal for operational reasons: if your employer dismisses you for operational reasons, it can offer you severance pay of 0.5 months' salary per year of service in the letter of dismissal, provided you let the claim deadline pass (§ 1a KSchG). Whether accepting or filing a claim is the better choice depends on the individual case, details under dismissal for operational reasons and severance pay.
• Court settlement: the classic route after an unfair dismissal claim. Many parties already agree on a termination in exchange for severance pay at the conciliation hearing, usually just a few weeks after the claim is filed. The shakier the dismissal, the better your negotiating outcome tends to be.
• Application for dissolution under §§ 9, 10 KSchG: if the dismissal is invalid but continuing the employment relationship is unreasonable for you, the court can dissolve the employment relationship on application and order the employer to pay severance (§ 9 KSchG). Under § 10 KSchG, the amount is up to 12 months' salary, or up to 15 or 18 months' salary for older employees with long service. In practice this is the exceptional route, but an important source of leverage.
• Social plan in the event of restructuring: if facilities are merged, privatised or closed down, the staff council or works council often negotiates a social plan (Sozialplan) with severance formulas, often alongside a reconciliation of interests (Interessenausgleich) or offers such as a transfer company (Transfergesellschaft). Social plan severance amounts set a floor, not a ceiling: individually, more can often be negotiated.

Which route is right for you depends on whether a dismissal has already been issued, whether you fall under § 34 (2) TVöD, and what you actually want: to stay, or to leave on good terms. Both are legitimate, but the strategy differs significantly.

Worked example: the 0.5 rule of thumb in the public sector

As a guide to the amount of severance pay, the public sector also uses the rule of thumb of 0.5 gross monthly salaries per year of service. It is not an entitlement, but a negotiating anchor that draws in part on § 1a KSchG. What influences the amount in detail is covered under severance pay amount.

Example: Sabine is 52 years old and has worked for a city council in the western pay area (Tarifgebiet West) for 20 years. As an example gross monthly salary we assume 4,200 €, roughly in the range of pay group E9b at a higher pay step (the actual table values change with every collective bargaining round, your payslip is what matters). Her department is being restructured, and the council offers her a termination agreement.

The decisive point: with more than 15 years of service and having turned 40, Sabine meets, as a rule, the requirements for protection from ordinary dismissal under the collective agreement. The council can practically not dismiss her by ordinary notice. If Sabine says no, everything stays as it is, and that is precisely why a factor above 0.5 here is not wishful thinking, but a realistic negotiating goal. These figures are an example, not a promise. How long service generally plays out is also shown in our article severance pay after 20 years.

Work through your own example: the severance pay calculator shows you your personal reference figure in 2 minutes.

Special features in the public sector: supplementary pension and benefit suspension period

Supplementary pension (VBL): have it checked before you sign

Public sector employees under collective agreements usually have an occupational pension scheme through a supplementary pension fund, for federal employees and many states this is the VBL. This occupational pension is tied to your employment relationship and your contribution periods. An early end to the employment relationship through a termination agreement can therefore affect your later supplementary pension. How much depends on your individual contribution history and the relevant pension provider. Blanket statements are not possible here: get concrete information from your supplementary pension fund before you sign, and factor the consequences into the negotiation. This, too, is a point that can justify higher severance pay.

Benefit suspension period for unemployment benefit (§ 159 SGB III)

The second thing to check applies to every termination agreement, including in the public sector: anyone who ends their own employment relationship without good cause risks a benefit suspension period (Sperrzeit) of, as a rule, 12 weeks for unemployment benefit under § 159 SGB III, with the total entitlement period also being reduced. Under certain conditions the employment agency recognises good cause, for example if you are merely anticipating an otherwise imminent lawful dismissal and severance pay within the usual range is being paid. For employees protected from ordinary dismissal, however, this argument is tricky, because an ordinary dismissal is not actually imminent in the first place. How to minimise this risk is covered under benefit suspension period for unemployment benefit and termination agreement and unemployment benefit.

Practical consequence: a termination agreement in the public sector should be checked against these two points before you sign. Both can be shaped, through the termination date, the wording of the reason for termination and the amount of severance pay, but only for as long as you have not yet signed.

Already have an offer on the table? Check with the severance pay calculator whether the amount offered matches your negotiating position.

Tax: the one-fifth rule for your severance pay

Severance pay counts as taxable employment income, but is exempt from social security contributions: no contributions are deducted for pension, health, long-term care or unemployment insurance. For income tax, the one-fifth rule (Fünftelregelung) under § 34 EStG helps: the severance pay is notionally spread over five years, which softens the progressive tax effect of receiving it all at once. This generally requires the severance pay to be received as a lump sum within one calendar year.

Important since 2025: the one-fifth rule is no longer automatically applied by the employer as part of payroll tax deductions, it generally has to be claimed via your income tax return instead. The timing of payment is also a tax lever: if the severance pay is received in a year with lower other income, for example in January of the following year, the tax burden is often noticeably lower. You can find the details, with worked examples, under the one-fifth rule and severance pay and tax.

What you should do now

Whether you have already been dismissed or have been offered a termination agreement, the order of steps is the same:

1. Do not sign anything. No termination agreement, no "declaration of consent", even under time pressure. In the public sector, your legal position is not going to disappear on you.
2. Gather your documents. Your employment contract, the applicable collective agreement or the reference clause, your current payslip, evidence of your length of service, letters from your employer.
3. Check your length of service and protection from ordinary dismissal. Do you fall under § 34 (2) TVöD? That changes your entire negotiating strategy.
4. If you have been dismissed: keep to the 3-week deadline. Without a timely claim, even a dismissal that could be successfully challenged becomes valid. The first steps in detail: received a dismissal, what now?
5. Put a figure on your negotiating position. Calculate first, then talk: knowing your reference figure puts you in a better negotiating position.

How can we help you?

Are you employed in the public sector and facing a dismissal or an offered termination agreement? We review your case together with lawyers specialising in employment law: your length of service, protection from ordinary dismissal under the collective agreement, the consequences for the benefit suspension period and your pension, and we negotiate the best possible outcome for you.

We carry the risk: purely success-based, at no upfront cost. Start with an initial assessment using our severance pay calculator, it only takes 2 minutes.