Employment Reference After Dismissal: Right & Grade

Your Right to an Employment Reference (§ 109 GewO)

After a dismissal, the focus is usually on your severance pay (Abfindung), and the employment reference (Arbeitszeugnis) often takes a back seat. This is a mistake: a good reference plays a part in deciding your next job, and your right to one is protected by law.

Under § 109 of the German Trade Regulation Act (GewO), you have a right to a written reference when your employment ends, regardless of who gave notice and for what reason. This right also applies to summary dismissal, during your probationary period, and under a termination agreement (Aufhebungsvertrag).

Two principles shape every reference: it must be truthful (duty of truthfulness) and, at the same time, worded benevolently so that it does not unnecessarily hinder your career progress. These two principles are in tension with each other: truthfulness takes priority, so there is no right to an inaccurately favourable reference. Since 1 January 2025, with your consent, the reference can also be issued electronically with a qualified electronic signature (§ 109 (3) GewO); without your consent, it remains in paper form.

Simple or Qualified Reference?

The law distinguishes between two levels:

• Simple reference: This is limited to the type and duration of your role, meaning which position you held and for how long.
• Qualified reference: At your request, it also covers your performance and conduct during your employment. Only this type of reference contains the assessment that matters for job applications.

In practice, you should almost always request the qualified reference: a simple reference says nothing about your performance and tends to look unfavourable in job applications.

Reference Grades and the Crucial Question of the Burden of Proof

References rarely state grades openly. Instead, the assessment is encoded through what is known as the satisfaction formula. The following scale is common, although it is not set out in law:

• "... always to our fullest satisfaction" = very good (grade 1)
• "... always to our full satisfaction" = good (grade 2)
• "... to our full satisfaction" (without "always") = satisfactory (grade 3)
• "... to our satisfaction" = sufficient (grade 4)
• "... on the whole to our satisfaction" = poor (grade 5)

The decisive factor is the burden of proof. In its landmark ruling of 18 November 2014 (case no. 9 AZR 584/13), the Federal Labour Court set out a clear allocation: the benchmark is the middle grade of "satisfactory".

• If you want a grade better than "satisfactory" (that is, "good" or "very good"), you must prove that your performance was above average.
• If your employer wants to give a grade worse than "satisfactory", it must prove that your performance was below average.

Important: the Federal Labour Court does not take into account the fact that, in practice, many references turn out "good" or "very good". The legal starting point remains "satisfactory": the statistical distribution of grades does not shift the burden of proof. That is why it is wise to document good performance during your employment (appraisals, achieved targets, praise by email).

Prohibited Hidden Signals and Coded Phrases

Under § 109 (2) GewO, a reference must be worded clearly and understandably and must not contain any features or phrases intended to convey a meaning other than what the wording states. Hidden negative messages, the notorious "hidden signals", are therefore not permitted.

In reference language, the following phrases, among others, are considered covertly negative (though interpretation in individual cases is disputed and depends on the overall picture):

• "He made an effort to meet the requirements", which implies a lack of success.
• "Her sociability contributed to improving the working atmosphere", which is considered a hint at alcohol consumption.
• If only obvious basics are praised (e.g. punctuality), there is often a lack of substantive recognition.

A special case is the closing formula (thanks, regret at your departure, good wishes for the future): according to case law from the Federal Labour Court, there is generally no enforceable right to it. If it is missing, this still tends to work against you in practice, which is exactly why it is almost always expressly included in settlements.

Reference Incorrect or Too Poor? Correction and Legal Action

If your reference is incomplete, untruthful, or contains hidden negative signals, you can demand a correction or reissue. If your employer does not respond, you can sue at the labour court (a claim for issuing or correcting the reference). The same allocation of the burden of proof described above applies to disputes over the grade.

Deadlines: There is no fixed statutory deadline for the reference itself, unlike the three-week deadline for an unfair dismissal claim (Kündigungsschutzklage). But be careful:

• Collective agreement or employment contract exclusion periods (often three months) can cause the right to lapse.
• The right can be lost through forfeiture (Verwirkung) if you wait too long.
• The general limitation period is three years.

So act promptly. And keep the two matters separate: you must challenge the dismissal itself within three weeks by way of an unfair dismissal claim. This deadline is strict and can only be extended in rare exceptional cases.

The Reference in a Settlement or Termination Agreement

In practice, the reference is almost never fought over on its own; instead, it is negotiated as part of a package together with the severance pay. If unfair dismissal proceedings end in a settlement, the following are typically agreed there:

• the amount of your severance pay (Abfindung),
• the termination date, garden leave, and remaining holiday entitlement,
• the overall grade of the reference (e.g. "good" or "very good"),
• the formula of thanks, regret, and good wishes for the future,
• and often the right to draft the reference text yourself (with your employer then just signing it off).

Because the grade can be disputed anyway and a good reputation costs the employer very little, the reference is a strong negotiating lever, especially combined with a termination agreement or settlement negotiation.

This is exactly where we come in: Team Abfindung is a litigation funder that works with lawyers specialising in employment law. We fund your case and carry the risk, purely success-based, at no upfront cost. This is how we secure both your severance pay and your reference for you together.