10-29-2019  | Update Employment Law November 2019

Federal Labor Court: Notice of dismissal in mass dismissal proceedings




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Federal Labor Court, June 13, 2019 - 6 AZR 459/18

In its August 21, 2018 judgment (file no.12 Sa 17/18), which is dogmatically difficult to justify and therefore heavily criticized in literature, the Higher Labor Court Baden-Württemberg decided that a letter of dismissal may only be signed after the (required) mass dismissal notification has been received by the Federal Employment Agency, since the signing of the letter constitutes dismissal. Due to the fundamental legal importance of the question whether Section 17(1) of the German Protection Against Dismissal Act refers to the issuing or receipt of the notice of dismissal, the Higher Labor Court allowed the appeal to the Federal Labor Court. The appeal before the 6th Senate of the Federal Labor Court was successful and the legal dispute was remitted to the Higher Labor Court.

Initial facts of the case

After insolvency proceedings had been initiated, the insolvency administrator, the defendant in the proceedings, negotiated a reconciliation of interests with the works council and filed a mass dismissal notification. The relevant mass dismissal notification was received by the Federal Employment Agency on the same day on which the defendant signed the plaintiff’s letter of dismissal. After receiving the letter of dismissal one day later, the plaintiff challenged the validity of his dismissal in court.

Higher Labor Court: Decision on termination is made by signing the letter of dismissal

While the complaint was dismissed in the first instance, the plaintiff’s appeal was successful. The Higher Labor Court Baden-Württemberg held that the dismissal was invalid under Section 134 German Civil Code in conjunction with Section 17(1) German Protection Against Dismissal Act. In the case of dismissals which require notification under Section 17(1) German Protection Against Dismissal Act, the mass dismissal notification must be received by the employment agency prior to the employer making the decision to dismiss. While a dismissal only becomes effective upon its receipt, the respective decision of the employer to terminate the employment had already been made beforehand by signing the letter of dismissal.

Federal Labor Court: The receipt of the letter of dismissal counts

The 6th Senate of the Federal Labor Court ruled that the mass dismissal notification required under Section 17(1) German Protection Against Dismissal Act may still be effectively filed even if the employer has already decided on the dismissal at the time the employment agency receives the notification. The Senate creates a reliable legal dogma by expressly stating that dismissals in mass dismissal proceedings are effective – subject to meeting other conditions for dismissal – if the competent employment agency receives the notification prior to the employee having received the letter of dismissal in accordance with Section 130(1) German Civil Code.

Practical tips

In mass dismissal proceedings it is irrelevant at what time a notice of dismissal was signed, the only condition being that the mass dismissal notification has been received prior to the employee receiving the letter of dismissal in accordance with Section 130(1) German Civil Code. This is the welcome core message of the 6th Senate’s decision, by which it reverses the appeal ruling of Higher Labor Court Baden-Württemberg, which had been dogmatically difficult to substantiate, thus contributing to greater legal certainty by precise statements on the conditions for effectiveness of dismissal in mass dismissal proceedings.

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