Revocation of Home-Office Policy: Limits on Employer’s Right to Issue Instructions

Given these opposing interests, it is unsurprising that the number of legal disputes surrounding the topic of working from home has increased. In a recent decision the Regional Labor Court of Cologne (judgment of July 11, 2024 – Ref.  6 Sa 579/23), ruled that the revocation of a long-standing home office permit and the associated transfer to a workplace 500 kilometers away was inadmissible, as the employer exceeded the bounds of reasonable discretion.

Background

With the consent of his employer, an automotive supplier, a 55-year-old project manager, had been working 80% from home and the rest of the time on site at customer’s premises.  His employment contract defined a flexible work location within the entire corporate group. Following the closure of his home site, the employer revoked the home office permit and transferred him to a location 500 kilometers away, alternatively issuing a notice of change.

The employee disagreed with the change in his work location and filed a lawsuit challenging the transfer and the notice of change. From the plaintiff’s perspective, the transfer was unnecessary and therefore not proportionate. A relocation of the center of his life would not be possible at such short notice for private reasons. Finding suitable accommodation in relatively short time was unmanageable, and the employer’s unwillingness to cover at least temporary hotel and travel costs made the order unacceptable in his opinion. The employer claimed that due to the closure of the site, there were no available positions either on-site or in a home office. The company emphasized that working together in person is part of their corporate culture, and that temporary home office arrangements were only necessary due to the pandemic. The employer based the notice of change on urgent operational reasons, citing the closure of the entire location where the plaintiff was previously assigned.

Court Decision

The Regional Labor Court upheld the decision of the Labor Courtand declared both the transfer and the alternatively issued notice of change invalid.

Employers generally have the right to issue unilateral instructions to employees in accordance with Section 106 of the German Trade Regulation Act (GewO). The right to give instructions includes the right to determine the content, place and time of work. However, this right must be exercised reasonably, taking into account the employee’s interests in an appropriate manner.

In this case, the court concluded that the transfer exceeded the bounds of reasonable discretion. According to the court’s findings, the revocation of the home office permit was not justified by the employer’s overriding objective interests. Instead, the chamber emphasized that the plaintiff’s concerns prevailed and that he had a significant “interest in continuance and location” due to his roots. In addition, both the search for accommodation and the very high hotel and travel costs weighed against a transfer.

The notice of change, which, due to the plaintiff’s refusal, is to be classified as a termination notice, is not socially justified. Urgent operational reasons could not be presented by the employer. The chamber found that the defendant did not sufficiently specify how the need for the plaintiff’s employment had ceased and why working from home was no longer possible.

Photo: shutterstock / Miljan Zivkovic