Does a Removed GmbH Managing Director Have Protection Against Unfair Dismissal Under the KSchG?

Once you have been removed as managing director, termination of your service contract often follows. Whether the unfair dismissal protection of the KSchG applies then turns decisively on timing.

You were the managing director of a GmbH, the shareholders’ meeting removed you from office — and shortly afterwards the termination of your service contract lands on your desk. Now you are asking yourself: can I challenge it as an ordinary employee would, or am I, as a corporate officer, shut out from protection against dismissal? The answer is more nuanced than most guides suggest. The timing of your removal often decides everything.

In short

For as long as you are managing director, the Unfair Dismissal Act (KSchG) does not apply. Corporate officers are expressly excluded. Once you have been validly removed from office, that position changes in principle. If your office has already ended at the moment the termination reaches you, everything then turns on the nature of your service relationship. If it was, in substance, an employment relationship, you may well be entitled to protection against dismissal. Under the settled case law of the labour courts, it is precisely this point in time that is decisive for the distinction. How much this helps you in your particular case depends on the qualifying period, the size of the business and the sequence of events.

How I can help you

• I check whether your office as a corporate officer had already been validly ended by the time the termination reached you
• I assess whether your service contract was, in substance, an employment relationship or a pure contract for services
• I clarify the correct legal route (labour court or civil court) and make sure your claim is filed in time
• I negotiate over severance, garden leave, references and notice periods
• I examine claims arising from your service contract independently of any protection against dismissal

Why managing directors normally have no protection against dismissal

The reason lies in the legal structure of your position. A GmbH managing director occupies two legally distinct roles: there is the office (your appointment as the company’s statutory representative) and the service contract (the contractual basis for your work and your remuneration). These are two separate legal levels. They can be brought to an end separately: the shareholders’ meeting can remove you from office without the service contract automatically ending — and vice versa.

§ 14(1) no. 1 KSchG expressly excludes “members of the body responsible for the statutory representation of the legal person” from protection against dismissal. Complementing this, § 5(1) sentence 3 ArbGG provides that anyone appointed to represent a legal person by operation of law, by its articles or by the partnership agreement does not count as an employee. The consequence: the court with jurisdiction is then, as a rule, not the labour court but the ordinary civil court — that is, the regional court (Landgericht). This double exception applies to you for as long as you remain, formally, a corporate officer. And it applies regardless of how dependent you were, in practice, on the shareholders’ instructions.

The decisive moment: removal before or after the termination arrives

This is the heart of the matter — and it is where most cases are won or lost. What matters is not whether you were at some point a corporate officer. What is decisive is whether you still are one at the moment the termination reaches you.

• The termination arrives while you are still managing director: the exception in § 14(1) KSchG applies. There is no protection against dismissal. That holds regardless of how the termination is justified.
• The removal takes effect first, and termination of the service contract follows afterwards: the officer exception falls away as at that moment. Whether you then enjoy protection against dismissal depends in addition on your service relationship. What matters is whether, on an evaluative assessment, it was an employment relationship. That will be the case, for instance, where — despite your title of managing director — you were in fact bound by instructions and had no entrepreneurial latitude (an external managing director with no shareholding will typically stand closer to employee status here than a managing shareholder).

The removal itself takes effect with the shareholders’ resolution, not only upon entry in the commercial register. Registration has merely declaratory effect. What counts for the sequence is the actual date of the resolution and the moment the notice of termination reaches you — not formalities in the register.

Legal route: labour court or regional court?

This point of departure affects you in very practical terms. It determines where you must bring your claim at all. As long as your office still subsists when the termination reaches you, the regional court (Landgericht) has jurisdiction in principle — not the labour court. It is different where the removal precedes the termination in time: the labour courts may then have jurisdiction. That additionally requires you to be able to rely on an actual employment relationship. The courts will then examine whether your submissions on employee status are coherent. If those submissions suffice, that alone opens the route to the labour court. Whether they hold good on the merits only emerges later in the proceedings.

In practice, this distinction is one of the most common sources of error. Anyone who brings a claim in the wrong court loses valuable time. And the limitation period keeps running in the meantime.

Requirements and time limit where the route to the KSchG is open

Even where the officer exception falls away, protection against dismissal is not automatic. The same requirements apply as for any other employee:

• Qualifying period: under § 1(1) KSchG, the employment relationship must have existed without interruption for longer than six months in the same establishment or undertaking. In the calculation, the time spent as managing director is usually counted as well — provided that, beforehand, there was a continuous employment relationship which merely converted into the office of managing director.
• Size of the business: under § 23(1) KSchG, general protection against dismissal in principle applies only where more than ten employees are, as a rule, employed. This applies to employment relationships established after 31 December 2003. Part-time staff are counted pro rata.
• Time limit for the claim: if you wish to challenge the termination, you must, under § 4 KSchG, bring your claim within three weeks of receiving the written notice of termination. Otherwise the termination is deemed valid from the outset — even if it would in fact have been invalid. This time limit runs regardless of whether the labour court or the regional court ultimately has jurisdiction.

An example from practice

An external managing director with no shareholding of his own is removed by the shareholders’ meeting with immediate effect. Two weeks later he receives notice terminating his service contract on ordinary notice, effective at the end of the quarter. Reading between the lines, a picture emerges: throughout his tenure he had no entrepreneurial freedom of decision. He was strictly bound by the parent company’s directives and integrated into its organisation like a senior employee. The removal preceded the termination in time, and, on an evaluative assessment, his contract was structured much like that of an employee. For that reason, an unfair dismissal claim before the labour court came into consideration — with all that this entails for time limits, the burden of proof and a possible severance negotiation.

Common mistakes

• Letting the three-week time limit slip by: people wait to see whether protection against dismissal even exists. But that period runs on regardless. When in doubt, file the claim as a precaution.
• Bringing the claim in the wrong court and thereby losing time while the limitation period keeps running.
• Relying on the commercial register entry rather than on the actual date of the removal resolution.
• Overlooking the separation between office and service contract and failing to challenge a termination separately: many assume that, once removed, “it’s all over anyway”.
• Not documenting your own subjection to instructions. That is precisely what can prove decisive later in relying on an employment relationship.

Frequently asked questions

As a managing director, am I automatically not an employee?

For as long as you hold office as a corporate officer, you do not count as an employee under § 5(1) sentence 3 ArbGG. Under § 14(1) KSchG you are then also excluded from protection against dismissal. After a valid removal, that can change if your contractual relationship corresponds, in substance, to an employment relationship.

Does time spent as managing director count towards the six-month qualifying period?

If you were previously already an employee in the same undertaking and were then appointed managing director without a break, that time is usually counted as well. The requirement is that there was no legal interruption in the employment. This has to be assessed on the facts of the individual case.

What happens if I bring my claim in the wrong court?

The court refers the dispute to the court with jurisdiction, either on application or of its own motion. That, however, costs time. And the time limit under § 4 KSchG keeps running in the meantime. That is why getting the classification right from the outset is important.

Would a termination agreement help me instead of a claim?

That depends on your negotiating position. Where protection against dismissal is a serious possibility, this often improves your position in negotiations over severance, garden leave and references. That holds true even if, in the end, you decide against bringing a claim.

Does the same apply to management board members of an AG?

The basic structure is comparable: management board members, too, are covered as corporate officers by the exception in § 14(1) KSchG. The details differ, however — not least because appointment under company law carries a fixed term of office.

Your next step

If you are now holding a notice terminating your service contract, one thing above all counts: time. Whether you are ultimately entitled to protection against dismissal has to be clarified. But the three-week time limit for bringing a claim runs on in parallel. It does not wait until that question is resolved. I explain exactly how this time limit is calculated on the page dealing with the time limit for challenging a dismissal. There you will also find out what you need to do now — so that you do not miss the deadline. Get in touch, and I will assess your situation concretely in an initial consultation: the timing of your removal, the way your service contract is structured, the court with jurisdiction. I will then set out the right course of action for you. You will find more on this area of law under Employment Law.

This article provides general information and is no substitute for legal advice in an individual case. Last updated: 2026-08-31.

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