Thankfully, the German economy is purring along at the moment and unemployment is at record low levels. This means that the usual reasons for mass layoffs, such as companies cutting budgets out of fear for the future, aren’t there.

Nonetheless, the Air Berlin bankruptcy last year showed that even in the best of times, badly run businesses can still go belly up.

That's why we are bringing you the rules that you need to know if you are told by your employer that you won’t be needed anymore.  

You have three weeks to appeal your sacking

If you think that your dismissal has breached the terms of your contract, then you have three weeks to file a legal complaint. This complaint, known as a Kündigungsschutzklage, must be made at your local labour court. If you don’t appeal within that time frame, then it’s too late.

You should also remember that the termination of your contract is only valid if it comes in writing. If your boss is like Donald Trump and likes to fire people via Twitter, don't worry – that's not legally valid.

Your dismissal needs to come on official company paper and be signed by your boss, otherwise for all legally relevant purposes you can ignore it.

Knowing how your contract has been terminated

There are several ways you can be sacked in Germany. You could receive a Kündigung (dismissal) that is either personenbedingt, verhaltensbedingt or betriebsbedingt.

If your termination is personenbedingt, it means that your employer judges that you can no longer perform a key requirement of the job. For example, if you need to be able to drive for your work but lose your licence, this could be grounds for a personenbedingte Kündigung.

If your termination is verhaltensbedingt, your employer believes that you have broken the terms of your contract though improper conduct.

Lastly, a betriebsbedingte Kündigung is justified through imperatives of the company – basically they can’t afford to keep you anymore.

Photo: DPA

Knowing your Frist

If you read your contract you will come across the key words Kündigungsfrist. This will tell you the amount of notice your employer needs to give you when they sack you.

Three months is a standard length of a Frist, but the Frist generally becomes longer the longer you have been employed by the company. Thus, if you have worked for a firm for ten years, you have the right to a Frist of four months, whereas if you have been there 20 years you have a right to seven months.

You should note, though, that if you are still in your Probezeit (trial period), your employer only needs to give you two weeks' notice. The maximum length of a Probezeit is six months.

Signing on for welfare

If you lose your job, you need to let the Federal Employment Agency (BA) know about it within a day of receiving an official letter of dismissal. It is vital that you tell them the day on which you will become unemployed.

Failure to do so may result in them delaying your first payment and reducing the payment you receive. When you first inform the BA that you have lost your job, you can do so via email or on the phone.

But you also have to go to your local BA office in person on a second occasion, and you need to do this at the latest on your first day of unemployment.

Why you have to inform them once on the phone and once in person is a mystery. But, as is the case with most German bureaucracy, you just have to bite the bullet and do it.

Knowing what Arbeitslosengeld is

The silver lining to the cloud of dismissal is that you are entitled to a fairly decent amount of money over the next year.

As someone in full-time employment, you have been paying into joblessness insurance and you have a right to withdraw this over a 12-month period.

The only requirement for receiving this money is that you have been in a job which is subject to compulsory insurance payments for 12 of the last 24 months. There are also allowances made if you have had to take time off work to care for a newborn child or because you were sick.

In plain English, if you have had a regular job for at least one of the past two years and that job pays more than a mini-job, you have a right to Arbeitslosengeld.

Photo: DPA

Knowing how much you get

The BA will start paying you Arbeitslosengeld from the first day of your unemployment and it normally amounts to 60 percent of your last after-tax salary.

If you have children, you will get 67 percent of your post-tax salary. There are other variables which affect the size of your joblessness payments. Luckily the BA has a handy calculator which allows you to work out how much you are entitled to.

Germany also recognizes that for some people – particularly parents – receiving two thirds of one’s salary isn’t enough to cover all your expenses.

For that reason they allow you to work a Nebenjob (side job) for a maximum of 14 hours and 59 minutes per week. They stress though that anyone who works a single minute longer completely loses their right to Arbeitslosengeld.

Doing a Nebenjob could also affect how much joblessness money you are entitled to, so it definitely makes sense to talk it through with your case worker at the BA first.

Being sacked also opens up opportunities for developing your skills. You can get the BA to pay for a course that will help your job prospects. For foreigners this could mean doing a German course to take your language skills up to the next level.

Knowing how long you get payments for

You generally have a right to these payments for 12 months, but this is also partly dependant on how long you were in employment beforehand.

It is also important to note here that you have a right to Arbeitslosengeld for nine months if you quit your job, but you have to wait three months for the payments to begin. 

The BA also warns that, if you lost your job because of your behaviour (a verhaltensbedingt Kündigung), they can block payments for up to 12 weeks.

If you have still not found a job after 12 months, you lose your right to receive Arbeitslosengeld. The BA then starts to pay you Hartz IV, which is a paltry €419 a month.

Your obligations during joblessness

There are certain things that the BA requires you to do when you are in the first 12 months of unemployment. But these are fairly lax in comparison with the strict requirements they place on the long-term unemployed.

The BA threatens on its website that it will block your payments if you do not take on a job that they have found for you, do not participate in training courses they put on, or do not prove that you are trying to find a job.

In practice, you have to show them that you have applied for five jobs every month. As many qualified people will want to wait for the right job to come along, the reality is that you will end up sending out applications just to jump through this hoop. 

You also have to go into your local BA office for three meetings through the 12-month period.

You don’t need to be in Germany

A particularly important rule of joblessness for readers of The Local to know about is that you don’t have to be in Germany when you receive your payments.

The BA states that EU citizens can still receive the payments as long as they are looking for employment in other EU countries or in Switzerland.

All you need to do to be eligible for this is to register as jobless in Germany in the normal way and to officially inform the BA that you are going to be looking for work abroad.

You can delay picking up your first payment

If you feel like taking time off, you can delay picking up your joblessness money.

As mentioned above, a requirement for being eligible for payments is that you have been in a compulsory insurance-based job for 12 months in the past two years. That means that if you were employed for a full year before you lost your job, you can take a year to do whatever you want. When you come back you still have a right to 12 months of payments.

FIND A JOB: Browse thousands of English-language vacancies in Germany