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BAG: Notice of collective dismissal and effective termination

November 2019 - Employment . Legal Developments by MTR Rechtsanwalte.

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In the case of mass dismissals, an employer is allowed to go ahead and sign termination notices before the notice of collective dismissal has been received by Germany’s Federal Employment Agency, the Agentur für Arbeit. That was the verdict of the Bundesarbeitsgericht, Germany’s Federal Labor Court.

Employers need to make sure that termination notices are issued effectively. This is all the more important in the case of mass dismissals. We at the commercial law firm MTR Rechtsanwälte note that termination notices may be ineffective if the employer makes a mistake.

One aspect that has proven to be particularly problematic for employers is the short window between the required submission of the notice of collective dismissal to the Agentur fĂĽr Arbeit and the timely delivery of the termination notices. A ruling by the Bundesarbeitsgericht from June 13, 2019 relieves pressure on employers in this regard (Az.: 6 AZR 459/18). The BAG ruled that the employer is allowed to go ahead and sign the termination notices before the notice of collective dismissal has been received by the Agentur fĂĽr Arbeit. It went on to state that for termination to be effective within the framework of a collective dismissal process, it is sufficient for the Employment Agency to have received the notice before the termination letter reaches the employee.

In the instant case, the employer’s company became the subject of insolvency proceedings in June 2017. The Agentur für Arbeit received the notice of collective dismissal on June 26, 2017. In a letter written the same day, the employer issued its employees with ordinary notices of termination with effect from September 30, 2017. The termination notices were received by the employees on June 27, 2017.

One employee lodged an action for unfair dismissal. Citing the case law of the Court of Justice of the European Union, he argued that the employer had been obliged to first discharge its duty to notify the Employment Agency before reaching a decision on whether to terminate the employment relationship. Consequently, the termination letter should not have been signed until after the notice of collective dismissal reached the Employment Agency. The claim was successful before the Landesarbeitsgericht, i.e. the Regional Labor Court.

Yet the ruling was later overturned by the Bundesarbeitsgericht. It held that the notification procedure is designed to inform the Agentur für Arbeit of a pending notice of collective dismissal so that it can prepare itself accordingly; though it is not the Employment Agency’s place to influence the employer’s decision. The BAG noted, however, that the termination notice must not reach the employee until after the notice of collective dismissal has been received by the Employment Agency.

There are a number of legal pitfalls that one needs to be aware of when it comes to dismissals. Lawyers with experience in the field of employment and labor law can offer advice.

https://www.mtrlegal.com/en/legal-advice/employment-law.html