German industry restructuring leads to job cuts and rising labor disputes

job cuts labor law German economy employment disputes workplace transfers

The German economy is undergoing restructuring, with major companies such as Volkswagen, Bosch, and BMW implementing job cuts. According to the Ifo Institute, many companies in the industrial and retail sectors continue to plan workforce reductions. This trend has led to a significant rise in labor law disputes; for instance, ARAG reported a 63 percent increase in labor law cases since 2021, with a 33 percent rise in dismissal protection lawsuits in 2025.

Legal experts highlight several key areas of concern for employees, including the legality of workplace transfers and the use of transfer companies. A transfer company can help employees avoid immediate unemployment by providing retraining and job placement services for up to twelve months. Regarding workplace transfers, an employer can generally mandate a change in location or role if it is covered by a transfer clause in the employment contract and remains reasonable, but consent is required if the new duties significantly alter the quality or scope of work outside the original contract.

Additionally, economic pressures are driving a rise in 'polyworking,' where individuals hold multiple jobs to manage living costs. A survey by Academized.com found that 54 percent of German millennials engage in secondary employment, the highest rate in Europe.

Entities

ARAG · Association of German Labor Law Lawyers · BMW · Bosch · Ifo Institute · Volker Görzel · Volkswagen

Claims

What the coverage asserts, and how many sources carry each claim.

[● 5 SOURCES] A transfer that is incompatible with the existing contract requires employee consent and is treated as a contract amendment.
[● 5 SOURCES] Employee consent is only required if a transfer involves a change in quality or scope of duties outside the employment contract.
[● 3 SOURCES] Companies with a works council must involve them in decisions if a transfer is planned for more than four weeks or involves significant changes to working conditions.
[● 2 SOURCES] Works council consent is required even if the employee has already agreed to the transfer.
[● 5 SOURCES] An employer can unilaterally determine a transfer if it is covered by a transfer clause in the contract, the pay grade remains the same, and the role is reasonable.