German Courts Tighten Rules on Gradual Return to Work: No Travel Costs, No Accident Cover, No Sick Pay Loopholes

Employees in Germany navigating the phased return to work after long-term illness face a series of legal barriers, according to three recent court rulings. From denied travel reimbursements to missing accident insurance coverage, the judgments send a clear message: the “Hamburg Model” of gradual reintegration is not a safety net for all costs.

The Landessozialgericht Chemnitz ruled that health insurers do not have to reimburse travel costs for commuting between home and the workplace during a staged return to work (case reference L 1 KR 365/20). The court reasoned that gradual reintegration is not a medical rehabilitation service under the Social Code. Even though the employee remains classified as unfit for work during this phase, the measure is designed primarily to test resilience on the job. Only when specific rehabilitation services are a direct component of the process do exceptions apply. Typically, the individual must cover the expenses out of pocket.

Separately, the Bundessozialgericht ruled on 16 June that participation in intensified rehabilitation aftercare (IRENA) does not qualify as an insured event under statutory accident insurance (case B 2 U 3/24 R). An accident on the way home from an IRENA appointment is therefore not considered a workplace accident. The court classified IRENA as an independent aftercare service, not as outpatient medical rehabilitation.

While these rulings tighten the boundaries of employer liability in Germany, UK employers face their own compliance risks under the Health and Safety at Work Act. Missing risk assessments, checklists, or training records can lead to costly penalties and increased accident exposure. A free, ready-to-use Health & Safety Toolkit provides all the essential templates to keep your business compliant and your employees protected. Download the free Health & Safety Toolkit

Employers also retain the right to veto a return-to-work plan. The Bundesarbeitsgericht clarified (case 8 AZR 530/17) that employers do not have to approve every proposal. If justified doubts exist — especially regarding severely disabled employees — that the employee's health status does not permit the intended activity, the employer may refuse. In such cases, no compensation claim arises.

Since 10 June 2021, employees have a statutory right to bring a confidant — including a lawyer — to the Betriebliches Eingliederungsmanagement (BEM) process. If the invitation fails to mention this right, the entire BEM is considered defective, raising the bar for a subsequent dismissal based on illness.

For employees currently in the gradual return phase or still sick, sick pay (Krankengeld) remains a crucial financial lifeline. The benefit equals 70 percent of gross income, capped at 90 percent of net pay. The maximum daily amount is €135.63, calculated from the monthly contribution assessment ceiling of €5,812.50. The entitlement lasts up to 78 weeks within any three-year period for the same illness. Crucially, the one-week deadline for submitting a follow-up sick note starts the day after issuance, not on the day of issuance itself (Sozialgericht Düsseldorf).

Finally, the Bundessozialgericht ruled on 5 March 2026 (case B 11 AL 4/24 R) that the seamless transition rule does not exempt claimants from the requirement of subjective availability. Anyone who states in application forms that they fundamentally no longer wish to work loses entitlement to unemployment benefits — even if a pension application is still pending. Clear signals of willingness to take up work within remaining capacity must be communicated to the Federal Employment Agency.

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