Conflict resolution in labor law

27.05.2025 – Conflicts in the workplace are unavoidable, especially when an employment relationship ends. A termination is not only an organizational step, but usually also an emotional break for both sides. For employers, it is often the necessary consequence of business decisions: whether due to restructuring, loss of performance or economic pressure. For employees, on the other hand, it can be a deep breach of trust. The parties quickly find themselves facing each other not only objectively, but also emotionally.

In Germany, however, employment law offers a clever instrument for de-escalation: the conciliation meeting. It is a statutory component of every action for protection against dismissal and serves to resolve conflicts at an early stage by mutual agreement before a judgment is passed. Many companies underestimate its importance. It can not only save costs and time, but also prevent damage to the company’s image and lay the foundations for professional conflict management.

How does a conciliation hearing even come about?

A conciliation hearing takes place as part of an action for protection against dismissal. An employee brings this action if they dispute the validity of their dismissal. Provided they are protected by the Dismissal Protection Act. This applies in companies with more than ten full-time employees. The complaint must be submitted to the competent labor court no later than three weeks after receipt of the dismissal.

As soon as the court receives the complaint, a conciliation hearing is scheduled promptly, usually within two to three weeks. The aim is to reach an amicable agreement between the employer and employee as quickly as possible. The appointment is much less formal than a main hearing. Only the presiding judge appears, without the other members of the chamber, and listens to both sides. He then gives an initial legal assessment and checks whether a settlement is possible.

Recognize opportunities: Using the conciliation hearing cleverly to de-escalate

The conciliation hearing is a great opportunity for employers in particular. Not only to be proven right, but also to bring the proceedings to an objective level. After all, it is often not just about the dismissal itself, but also about hurt vanities, a lack of communication or misunderstandings. The conciliation meeting provides the space to address these conflicts in a structured and moderated manner.

In many cases, judges suggest a severance solution on their own initiative. This is particularly the case if the legal situation is unclear or the continuation of the employment relationship seems unrealistic anyway. If an agreement is reached, a written settlement is concluded and the proceedings are concluded.

No obligation to hire a lawyer – but smart representation pays off

In purely formal terms, a lawyer is not necessary. Nevertheless, most employers opt for legal representation because the conciliation hearing can be strategically challenging. In addition to the legal assessment, it is often also about negotiating skills, experience and tact. A competent legal advisor can help to avoid mistakes and achieve an economically sensible solution.

Financially, however, if an agreement is reached, the court costs are divided proportionately between both parties. Each party bears their own legal fees. This is a cost risk that can be minimized by reaching an agreement at an early stage.

Mediation or conciliation hearing – or both?

The conciliation hearing is very similar to mediation: both procedures aim to reach an amicable solution. However, while the conciliation hearing is organized by the court, mediation is a voluntary, out-of-court procedure accompanied by a neutral third party. Mediation is particularly useful in employment law conflicts if tensions are identified at an early stage, for example before a dismissal. It enables solution-oriented communication and, in the best-case scenario, can even prevent dismissals.

However, if notice of termination has already been given, the conciliation meeting is the quickest way to find a solution within the statutory deadlines. Mediation is then more suitable as a supplementary or preparatory measure, for example in the case of pent-up conflicts that have put a massive strain on the collaboration prior to the separation.

This is how the conciliation hearing works

Both parties appear at the hearing, if necessary with their lawyers. The presiding judge begins with a brief summary of the claim and then gives both sides the opportunity to comment. As a rule, the judge then makes an initial legal assessment, which is not binding, but often has a guiding effect.

Negotiations then take place: What conditions would be acceptable to the employee? Is a severance payment conceivable? Are there any outstanding vacation entitlements, bonuses or a favorable reference? The more openly both sides think along, the greater the chance of a viable settlement. If this is achieved, the dispute ends here and without further court instances, without the press, without lengthy pleadings.

And if no agreement can be reached?

Of course, not every conciliation hearing is successful. If the fronts are too hardened or the claims are too far apart, the proceedings are continued. This is followed by the so-called chamber hearing, the main hearing with a full bench of judges. Now it is a matter of taking evidence, hearing witnesses and intensive legal argumentation. This is where the effort and costs increase significantly.

It is important to know that an agreement can be reached at any time, even during or after the main hearing. The idea of reaching an amicable agreement is a recurring theme throughout the entire employment law procedure.

Why the quality date is so relevant for companies

For companies, the conciliation meeting is more than just a legal obligation. It is an expression of modern management culture. Those who show themselves to be professional and willing to compromise signal their ability to deal with conflict, leadership skills and responsibility. Especially in times of a shortage of skilled workers, employer branding and increasing transparency through rating portals, dealing with separations is also gaining strategic importance.

A fair and respectful approach to the termination process can prevent future reputational damage, both internally and externally. At the same time, unnecessary escalations can be avoided, which are not only expensive but also have a negative impact on the working atmosphere.

Smart conflict resolution instead of protracted legal disputes

The conciliation hearing is not an annoying compulsory event, but a central key to successful conflict resolution in employment law. If you take it seriously at an early stage and prepare strategically, you can not only significantly reduce costs and risks, but also present yourself professionally and confidently.

Conflicts are part of everyday business life for employers. The decisive factor is not whether they occur, but how professionally and solution-oriented they are dealt with. The conciliation meeting offers the opportunity to shape this approach consciously and constructively in order to promote trust, stability and credibility in the long term. CenaCom supports companies as an experienced consultant with the aim of developing strategically clever, amicable and economically sustainable solutions.