Commented Federal Labor Court decision: Dismissal letters can be signed before the mass dismissal notification has been received by the Federal Employment Agency

Federal Labor Court, Ruling of June 13, 2019 (File no. 6 AZR 459/18)

In June 2019, the Federal Labor Court ruled that the mass dismissal notification to the Federal Federal Employment Agency  required under sec. 17 (1) of the German Dismissal Protection Act is also effective if the employer has already made the decision to terminate the employment relationship at the time the notification is received by the competent Federal Employment Agency.

Facts of the case:

On June 26, 2017, the mass dismissal notification submitted by the employer was received by the competent Federal Employment Agency (Bundesagentur für Arbeit) employment agency together with an attached balance of interest agreement. The employer had already signed 45 dismissal letters  dated June 26, 2017. The plaintiff received his dismissal letter on June 27, 2019. In the course of thelitigation against the dismissal, the plaintiff argued that the mass dismissal notification had to be received by the Federal Employment Agency before the employer takes a decision to dismiss  an employee. Accordingly, the employer can only sign the dismissal  letters after the mass dismissal notification has been filed to and received by the Federal Employment Agency . The Baden-Württemberg State Labor Court had originally agreed with the plaintiff’s view that the notification had to be received by the Federal Employment Agency  before the employer made the decision to dismiss the employee—a timeline, which had to be reflected in the date on the notice letter. The court hence upheld the complaint.

Decision:

The Federal Labor Court did however not share the view of the State Labor Court of Baden- Württemberg. The Federal Labor Court justified its decision by stating that the consultation procedure pursuant to sec. 17 (2) of the German Dismissal Protection Act and the notification procedure pursuant to sec. 17 (1) of the Dismissal Protection Act were parallel proceedings independent of each other. The Federal Employment Agency  should be informed of an imminent mass dismissal in due time in order to prepare for the dismissal of a larger number of employees and to be able to adjust their placement efforts accordingly. According to the Federal Labor Court, this mandates that the employer has already determined how many and which employees are to be dismissed. Unlike the works council in a consultation procedure, the Federal Employment Agency  neither wants to influence the employer’s intent to dismiss the employees nor should it do that. Notice of termination must however only be given to the employee once the mass dismissal notification has been received by the responsible Federal Employment Agency .

Based on the current facts and findings, the Federal Labor Court was not able to determine whether in this case the plaintiff received the notice of termination after receipt of the mass dismissal notification by the Federal Employment Agency . Therefore, the Federal Labor Court referred the complaint back to the State Labor Court.

Practical advice from Ogletree Deakins:

As always, the employer should exercise great care when planning mass dismissals. Employers should in particular observe the strict legal requirements and, above all, report the mass dismissal in due time and in full to the responsible Federal Employment Agency.

The Federal Labor Court decision does however clarify a few points previously still in dispute:

The employer is allowed to prepare and sign the dismissal letters already before submission of the mass dismissal notification  to  the competent Federal Employment Agency. This is particularly helpful in the case of a large number of dismissals or in cases in which the dismissal must be signed by a person abroad.

However, employers  should wait until the confirmation of receipt has been received from the responsible Federal Employment Agency before dismissal letters are handed over or delivered to employees. The dismissal letter must be received by the employees concerned only after receipt of the notification of mass dismissal by the Federal Employment Agency.

It is still important that the employer adheres to this chronological to secure that the dismissals are ineffective already for formal reasons.