Course of Labour Court Proceedings — First Instance
Rejin Sherzad Ahmed, Sun 27 September 2026
Labour court proceedings at first instance follow a clear sequence. After the claim is filed and the written preparatory stage, there is usually first a conciliation hearing (Gütetermin) and — if no agreement is reached — a chamber hearing (Kammertermin). The aim is often an amicable solution; if that fails, the court decides by judgment. Because many cases move to a hearing quickly, it is worth keeping both the procedure and the cost consequences in view from the outset.
Conciliation hearing (Gütetermin)
The conciliation hearing is intended to settle the dispute amicably. It typically takes place before the presiding judge alone, i.e. before one professional judge without the honorary judges. The court discusses the facts and the issues in dispute, points to settlement options and examines whether an agreement is possible.
In practice, many cases already end here — often by a settlement (Vergleich). The court may also put forward a settlement proposal. If conciliation fails, the case continues; the court then usually sets a date for the contested hearing.
Settlement (Vergleich)
A settlement is an agreed arrangement between the parties that ends the dispute. It can be concluded at the conciliation hearing or later at the chamber hearing. Typical contents include termination of the employment relationship on a specific date, a severance payment, garden leave, reference arrangements or the disposal of further claims.
A court settlement is enforceable and creates clear legal consequences for both sides. Cost issues are often addressed as well — for example who bears the court costs and how the parties deal with lawyer fees.
Chamber hearing (Kammertermin)
If no agreement is reached at the conciliation hearing, the court usually sets a date for the contested hearing — the chamber hearing. Here the labour court’s chamber decides. It consists of three judges: the presiding judge (professional judge) and two honorary judges, one from the employees’ side and one from the employers’ side.
At the chamber hearing the case is argued orally; evidence issues may be discussed and witnesses heard. A settlement remains possible here as well. If the hearing ends without agreement, the chamber decides — often immediately after deliberation — by judgment.
Judgment (Urteil)
If no settlement is concluded, the court decides by judgment. The judgment is given after deliberation by the chamber and is pronounced or served on the parties. Against judgments of the labour court, an appeal to the higher labour court is available under the statutory conditions. Time limits and formal requirements must be observed strictly.
Costs in first-instance labour court proceedings
Alongside the procedural steps, both sides face cost questions early on: court costs and lawyer fees.
Lawyer fees — each party bears its own costs
Labour court proceedings have a specific rule: under § 12a ArbGG, the costs of out-of-court and in-court representation by a lawyer are, as a rule, not recoverable at first instance. That means each party bears its own lawyer fees — regardless of the outcome of the case. The winning party therefore normally cannot recover its own lawyer fees from the other side.
This differs markedly from ordinary civil proceedings. The rule applies to both sides and should be factored in from the start when deciding whether to bring or defend a claim. Different cost-recovery rules apply on appeal before the higher labour court.
In practice, the amount of lawyer remuneration is often based on the German Lawyers’ Remuneration Act (RVG) and the value in dispute (Streitwert). Individual fee agreements are also possible. The value in dispute reflects the economic interest in the subject matter — for example, in unfair dismissal claims typically a quarter of annual remuneration, and in payment claims the sum claimed.
Court costs — how they are determined
Court costs are governed by the Court Costs Act (GKG) and the fixed value in dispute. The higher the value in dispute, the higher the court fees. Liability for court costs usually depends on the outcome: the losing party bears them; where each side partly succeeds and fails, they are shared proportionately. In a settlement, the parties may agree differently on court costs.
Importantly: the special rule on lawyer fees (§ 12a ArbGG) does not change the fact that court costs can still be allocated under the general cost rules. Court costs and lawyer fees must therefore be considered separately.
Detailed summary
At first instance, the conciliation hearing before one professional judge often takes centre stage. Many cases already end there by settlement. If settlement fails, the chamber hearing with three judges follows (one professional judge and two honorary judges). If the case does not end by settlement, the court decides by judgment; an appeal may be available under the statutory conditions.
On costs at first instance: each party bears its own lawyer fees, win or lose (§ 12a ArbGG). Court costs are based on the value in dispute and are usually allocated according to the outcome. Anyone bringing or defending labour court proceedings should therefore weigh not only the prospects of success, but also these cost consequences early on.
tags: #Employment Law #labourlaw #en
