Executive Employees

Executives with independent personnel or decision-making responsibility – in particular Prokuristen and holders of a general power of attorney – who hold a senior position within the company under § 5 (3) Betriebsverfassungsgesetz.

Executive employees are subject to special rules: the Works Constitution Act applies only partially; their interests are represented by a separate spokesperson committee (Sprecherausschuss). They benefit from general dismissal protection, but under § 14 (2) Kündigungsschutzgesetz the employer can ask the labour court to dissolve the employment relationship in exchange for severance, without having to give reasons.

In practice this special status regularly leads to complex severance negotiations. On top of that come the usual flashpoints: bonus and profit-sharing arrangements, post-contractual non-compete clauses, contractual compensation for non-compete periods. Specialised legal support is essential to structure executive exit packages efficiently from both a legal and a tax perspective.