A personenbedingte Kündigung — dismissal for personal grounds — targets not what you did, but what you (allegedly) can no longer do: long-term illness, loss of a driving licence, imprisonment, an expired work permit. Because no fault is involved, no warning (Abmahnung) is required — but the substantive bar is high. The employer must pass a strict three-stage test, and in illness cases must additionally have offered a proper BEM procedure — a step so frequently skipped or botched that it decides a large share of these cases in the employee’s favour.
The three-stage test
Where the KSchG applies, every personal-grounds dismissal is measured against three cumulative requirements developed by the Federal Labour Court. The employer bears the burden of proof at each stage.
Stage 1: Negative prognosis
At the moment the notice is received, objective facts must support the forecast that the impairment will continue. For illness: that further significant absence or permanent incapacity is to be expected. The look is forward, not backward — past sick days matter only as evidence for the future. If a treating physician expects recovery, or the underlying cause (a since-completed operation, a resolved workplace conflict) has fallen away, the prognosis fails. In litigation, the employee’s release of doctors from confidentiality at the right tactical moment is often the turning point.
Stage 2: Substantial impairment of operational or economic interests
The predicted incapacity must significantly burden the business: serious disruption of workflows that cannot be bridged by reorganisation or temporary staff, or — in frequent-short-absence cases — extraordinary sick-pay costs, typically meaning more than six weeks of continued pay (Entgeltfortzahlung) per year over several years. A well-functioning stand-in arrangement cuts against the employer here.
Stage 3: Interessenabwägung — weighing of interests
Finally the court weighs everything: length of service, age, family obligations, whether the illness is work-related, disability status, and above all whether a milder measure exists — part-time, a different role, workplace adjustments. Dismissal must be the last resort (ultima ratio). Long service and a work-caused condition weigh heavily for the employee.
Illness: the two classic patterns
Long-term illness
One continuous incapacity of many months. The employer must typically show that recovery is not foreseeable within a horizon the case law generally frames around 24 months of uncertainty, and that the position cannot be bridged until then. An employee expected back within a reasonable, determinable period is hard to dismiss lawfully.
Frequent short absences
Repeated shorter illnesses over several years. Here the prognosis is built statistically: the employer points to the pattern and claims it will continue. But the pattern only carries if the underlying causes persist — absences from a cured condition, an accident, or pregnancy-related illness must be stripped out of the calculation. In practice, employers routinely aggregate everything, which is attackable.
BEM: the practical prerequisite (§ 167(2) SGB IX)
Where an employee has been unable to work for more than six weeks within a year — continuously or cumulatively — the employer must offer a betriebliches Eingliederungsmanagement (BEM): a structured, voluntary process exploring how the incapacity can be overcome and the job preserved. The BEM duty applies to every such employee, not only those with a disability.
A missing or defective BEM does not void the dismissal automatically — but it shifts the burden of proof dramatically: the employer must then demonstrate that a BEM could not possibly have produced any milder alternative (a changed workplace, reduced hours, redeployment, rehabilitation measures). That negative proof rarely succeeds. Typical defects we see: no BEM invitation at all, an invitation without the required information on data use and voluntariness, a token meeting without genuine exploration, or a BEM conducted after the dismissal decision had already been made.
Other personal grounds
Loss of a driving licence
For professional drivers, losing the licence removes the core of the job — but even here dismissal is not automatic. Courts ask how long the loss will last, whether other duties exist, whether accrued holiday or unpaid leave can bridge the period, and whether the employer previously tolerated similar situations. A short revocation with a fixed end date often fails the prognosis stage.
Imprisonment
Custody prevents performance. The case law broadly tolerates bridging expectations for shorter sentences; as a rule of thumb from the BAG, a sentence of more than about two years without realistic early-release or open-prison (Freigänger) prospects can justify dismissal, while shorter interruptions frequently do not. The facts of the individual enforcement plan matter.
Loss of a work permit
If your residence or work permit lapses, the legal ability to work falls away — a personal ground. But the prognosis stage again bites: where a renewal application is pending with reasonable prospects, an immediate dismissal is typically premature. For third-country nationals the interaction between dismissal and immigration status cuts both ways — see our guide to the residence permit after job loss before making any move.
Personal grounds vs. behavioural grounds
The distinction has real consequences. Personal grounds concern inability without fault — hence no Abmahnung is needed, but the three-stage test applies in full. Behavioural grounds concern conduct the employee could change — hence a prior warning is usually mandatory. Employers sometimes mislabel to dodge requirements: dismissing an allegedly “unable” employee to avoid issuing warnings, or framing illness-related absence as misconduct. The court is not bound by the employer’s label, and a mismatch between the asserted category and the facts is a classic winning argument. The same is true of alcohol dependence: as an illness it belongs in the personal-grounds framework (usually requiring an offer of therapy first), not the behavioural one.
Worked example
Warehouse team lead near Cologne, gross salary €4,100 per month, 14 years of service, aged 52. After a back operation he is continuously off sick for 9 months. The employer dismisses him ordinarily on personal grounds (“permanent incapacity for warehouse work”), with the correct six-month notice period. No BEM was ever offered, although he had exceeded six weeks of absence in each of the last two years.
We file the Kündigungsschutzklage on day 12. His surgeon projects a return to work within 4–5 months with a lifting restriction — undermining the negative prognosis. The missing BEM forces the employer to prove that no adjustment could have helped; yet the site has a vacant dispatcher desk role he could fill immediately. After 14 years, the Interessenabwägung also leans his way.
Outcome at the chamber hearing: the employer, facing likely defeat and accrued back-pay risk, offers reinstatement into the dispatcher role — which he declines, preferring exit. Settlement: severance of 1.1 monthly salaries per year of service (~€63,100), salary through the full six-month notice period as garden leave (€24,600), an agreed Grade-2 reference, and a Sperrzeit-protective clause. Starting point of the employer’s first offer had been €20,000.
Frequently asked questions
Can I be dismissed while on sick leave?
Yes — Germany has no ban on dismissal during illness, only strict requirements for dismissal because of illness. The notice can validly be delivered to your home while you are off sick, and the three-week deadline runs normally. Arrange for your mail to be checked.
Do I have to disclose my diagnosis to the employer?
No. You owe notification of incapacity and its expected duration, not the diagnosis. In litigation, however, contesting the negative prognosis usually means releasing your doctors from confidentiality for targeted questions — a tactical decision to take with counsel, not preemptively with HR.
I never received a BEM invitation. Does that kill the dismissal?
Not automatically, but it comes close in practice. The employer must then prove a BEM would have been pointless under every conceivable alternative — a burden that fails far more often than it succeeds. Always check the BEM history first in an illness case.
Does severe disability change the picture?
Substantially. With a recognised severe disability (or equal status), dismissal additionally requires prior consent of the Integrationsamt, and the works council and representative body for severely disabled employees must be involved. A dismissal issued without Integrationsamt consent is invalid from the start.
Is severance standard in illness dismissal cases?
There is no automatic entitlement, but because these dismissals are so demanding to defend — prognosis, BEM, milder means — settlement multiples in practice often land at or above the customary 0.5 monthly salaries per year of service. See severance calculation for the framework and the factors that move the number.