Transfer as a Dismissal within the Meaning of Collective Redundancies

CJEU, 4 June 2026 – C-907/24

Can a unilateral relocation of the place of work constitute a dismissal within the meaning of the Collective Redundancies Directive? The CJEU has answered this question in the affirmative in a far-reaching landmark judgment, with considerable practical consequences for employers planning site relocations and restructurings.

A. Facts

An Italian company decided to discontinue production at its site in Southern Italy and to relocate it entirely to a site in Sardinia more than 600 kilometres away. The trade unions represented in the company were informed of the decision to relocate. The notice of transfer was served on the affected employees about one week later. The transfers were to take effect just two weeks after that.

The eight affected employees did not report to the new site in Sardinia. The employer initiated disciplinary proceedings against all of them for unexcused absence of more than 30 days and terminated their employment one month later. The employees took legal action and argued that the relocation decision amounted to a collective redundancy, which is why a consultation procedure with the trade unions should have been carried out beforehand pursuant to Italian Law No. 223/1991.

The court of first instance, the Tribunal of Naples North, had already found the transfer decision unlawful in interim proceedings. In the main proceedings, it then declared the dismissals unlawful and ordered the reinstatement of the employees. The Court of Appeal of Naples, however, had doubts as to whether the transfers at issue and the subsequent terminations fell within the concept of so-called "indirect dismissal" within the meaning of Directive 98/59/EC, and referred a total of four questions to the CJEU for a preliminary ruling on the interpretation of Article 1(1) of the Collective Redundancies Directive.

B. Questions Referred

In essence, the referring court wanted to know the following:

1. Does the termination of an employment contract by the employer, after the employee has refused to comply with a unilateral relocation of the place of work to a distant site, fall within the concept of dismissal within the meaning of Article 1(1), first subparagraph, letter (a) of Directive 98/59/EC? [Summary of questions 1–3]

2. Is it compatible with the Directive for a Member State to disregard such terminations entirely when calculating the thresholds for collective redundancies?

C. Decision of the CJEU

1. Terminations following a refused site relocation as a "dismissal"

The Court answered the first three questions together and clarified: the termination of an employment contract for one or more reasons not related to the individual employee, effected by the employer after the employee has refused to submit to the employer's unilateral decision to relocate the place of work to a place far removed from the original place of work, falls within the concept of dismissal within the meaning of Article 1(1), first subparagraph, letter (a) of Directive 98/59/EC.

The CJEU emphasised that the concept of dismissal must be given an autonomous EU-law interpretation and may not be construed narrowly, since, according to its second recital, the Directive is intended to strengthen the protection of workers in the event of collective redundancies. Furthermore, a "dismissal" within the meaning of the Directive covers any termination of the employment contract not desired by the employee, i.e. without his or her consent (with reference to CJEU, judgment of 4 September 2025 – C-249/24, Ineo Infracom, margin number 39).

The Directive is further to be interpreted as meaning that a significant change to essential elements of the employment contract, made unilaterally by the employer to the detriment of the employee for reasons not related to the individual employee, falls within the concept of dismissal (likewise with reference to Ineo Infracom, margin number 41).

In the specific case, the CJEU then examined whether the place of work is an essential element of the contract and whether its relocation constitutes a "significant change". In this regard, it found that any change of the place of work may have significant economic and organisational consequences for the employee concerned, and that the place of work may therefore constitute an essential element of the employment contract. The significance of the change depends in particular on whether the change is temporary or permanent, how great the distance between the original and the new place of work is, and whether compensatory measures are provided for.

In the case at hand, the relocation was permanent (definitive closure of the site in Campania), the distance was more than 600 kilometres and the sites were separated by the sea – circumstances which, in the CJEU's view, point to a significant change to an essential element of the contract. The Court did, however, leave the final assessment to the referring national court.

The CJEU clarified that the formal classification of the terminations as a disciplinary measure for "unexcused absence" does not preclude their classification as a dismissal, provided that the employees were not contractually obliged to accept the transfer. Whether such an obligation existed is, in turn, a matter for the national court to determine.

2. Inclusion in the thresholds

On the fourth question referred, the CJEU ruled equally unequivocally: Article 1(1), first subparagraph, letter (a) of the Directive precludes such terminations from being disregarded when calculating the number of dismissals relevant to the thresholds. If such terminations were excluded from the calculation merely because the national implementing legislation provides for a lower threshold than the Directive, the employees concerned would be deprived of the protection guaranteed by the Directive, which would be incompatible with the objective of strengthening worker protection.

D. Implications for the Legal Situation in Germany

1. Concept of dismissal under Section 17 KSchG

Sections 17 et seqq. of the German Protection Against Dismissal Act (KSchG) transpose the Collective Redundancies Directive into national law. According to the settled case law of the Federal Labour Court (BAG) and the CJEU, the concept of dismissal used therein must be interpreted in conformity with the Directive. Already under existing German law, so-called „Änderungskündigungen“ – i. e. terminations combined with an offer of continued employment on changed terms – are counted as "dismissals" within the meaning of Section 17 KSchG (cf. BAG, judgment of 20 February 2014 – 2 AZR 346/12).

The judgment discussed here, however, goes beyond dismissals with an offer of changed terms: it covers constellations in which the employer does not even issue such a dismissal, but instead relocates the place of work unilaterally, for example by way of its right to issue instructions (Section 106 of the German Trade Regulation Act, GewO), and declares the subsequent termination a measure taken due to the employee’s conduct. According to the CJEU's standards, such terminations are to be classified as dismissals within the meaning of the Directive if the employee was not contractually obliged to accept the transfer and the change of the place of work is significant.

For German law, this means that terminations in the context of a unilateral, significant relocation of the place of work must also mandatorily be counted when calculating the thresholds of Section 17(1) KSchG.

2. Notification obligation and consultation procedure

If the thresholds of Section 17(1) KSchG are reached (in establishments normally employing more than 20 and fewer than 60 employees, this is already the case if there are more than 5 dismissals within 30 calendar days), the employer is obliged to consult the works council pursuant to Section 17(2) KSchG and to file a collective redundancy notification with the Federal Employment Agency pursuant to Section 17(1) and (3) KSchG. Pursuant to Section 18 KSchG, the dismissals may only take effect after the expiry of a blocking period of one month following receipt of the notification.

A breach of these obligations has serious consequences: an omitted or defective collective redundancy notification renders the dismissals invalid (BAG, judgments of 1 April 2026 – 6 AZR 157/22 and 6 AZR 152/22; previously: CJEU, judgment of 30 October 2025 – C-134/24 and C-402/24). An incorrect notification cannot be cured by a subsequent submission; the employer must file a proper notification and then issue the dismissals anew.