Ineffective termination in spite of frequent short term absences due to illness

On 7 March 2017, the Higher Labour Court (LAG Mecklenburg-Western Pomerania, docket number 2 Sa 158/16) decided that a termination can be ineffective even though the employee’s absences due to illnesses are frequent and significant. The illness must fulfill the requirements of the negative prognosis that the employee will not come back to work for the foreseeable future.

The parties were in dispute about the social justification of a termination due to illness. The plaintiff worked for the defendant, who runs a production operation, since 2003 as a machine operator. From August 2011 until the end of September 2014  the plaintiff was frequently and significantly absent from work. She suffered from several diseases such as a pinched nerve in her elbow, bronchitis and an urinary tract infection. In addition to that, she went through a divorce from her husband and suffered an accompanying life crisis. From 2011 until 2014 she was absent on 301 working days. In October 2015, after the plaintiff was absent six times (for 37 working days), the defendant decided to give her a notice. In the first instance court the plaintiff’s claim was successful.

The Higher Labour Court decided as second instance that the termination was not effective as per sec. 1 of the Dismissal Protection Act (KSchG) because it could not be justified under social aspects. There could be no negative forecast regarding the plaintiff’s absence from work in the future.

The specific illness has to be included in the negative prognosis: A pinched nerve does not fulfill these requirements because injuries of the skeleton or tissue heal in normal cases. There was no evidence for the assumption that the other diseases are chronic. Furthermore, the plaintiff’s physical reaction and life crisis as a result of her divorce are insufficient for a negative prognosis. Based on general experience it can be assumed that a life crisis can be overcome.

A negative prognosis could only be based on the plaintiff’s morbidity if a judicial assessment would conclude that the number and length of the plaintiff’s diseases are above the average of other employees’ comparable diseases.



Age discrimination within the recruitment process and the burden of proof of justification

By judgment of 15 December 2016  (BAG, docket number 8 AZR 454/15), the Federal Labour Court has ruled that the employer bears the burden of proof for justification within the meaning of sec. 3 para 2 half sentence 2 of the General Equal Treatment Act (Allgemeines Gleichbehandlungsgesetz, AGG) .

In the present case, the plaintiff claimed compensation due to age discrimination in the recruitment process. The defendant is a company who runs a web portal and employs about 400 employees with an average age of 27. It published a job advertisement, looking for a “Junior Consultant for the Accounts payable department (m/f)” and searched for a “person who has just finished commercial training”. The 36 year old applicant had a corresponding level of education as an industrial clerk and had worked as an accountant for more than 10 years but his application was rejected by the defendant. The plaintiff claimed EUR 2.750,00  compensation cf. sec. 15 para 2 of the General Equal Treatment Act. In the first instance the Labour Court allowed the plaintiff’s claim. The higher court agreed with the Labour Court and therefore rejected the defendant’s appeal.

The Federal Labour Court confirms the decision of the Labour Court that the plaintiff was indirectly discriminated against by not being employed, according to sec. 3 para 2 of the General Equal Treatment Act. However, the Federal Labour Court stated that the requirement, as described in the job advertisement, also directly discriminated against older persons, like the plaintiff, compared with younger persons in terms of sec. 3 para 1 of the General Equal Treatment Act.

In case of a presumption of discrimination the other party bears the burden of proof for justification, that there is no breach of the principle of equal treatment. The defendant neither disproved this presumption nor explained why direct discrimination according to sec. 8 para 1, 10 of the General Equal Treatment Act would be permitted. The requirement for a “person who  has just finished commercial training” discriminates against older persons. In general, applicants with longer professional work experience are typically older than job starters. The requirement would indirectly impact on age and is not justified in accordance with sec. 3 para. 2 of the General Equal Treatment Act. The defendants’ general statement that the requirement ensures a good atmosphere in the workplace as a person who has just finished commercial training contributes to a “better relationship of subordination and flexibility”, is not sufficient.

In order to avoid  compensation claims against the employer, job advertisements always needs to be drafted in a gender and age neutral manner.

Determination of a termination with change of terms of employment

By judgment of 1 January 2017 (BAG, docket number 2 AZR 68/16), the Federal Labour Court ruled that a contract offer communicated by a termination with change of terms of employment has to be as precise as possible so that the employee can readily accept the contract offer.

The parties were in dispute about a change of terms of employment. After a serious accident the plaintiff, an electrical engineer, suffered from serious head injuries. After a special test, the defendant assumed that the plaintiff was no longer able to do complex programming operations for the company. Therefore, the defendant offered him a termination with change of terms of employment, under which he would still work as an electrical engineer but his task field would no longer include the creation of software but would be “all work in the warehouse”. In addition to that, the plaintiff would agree to “working on construction sites”. His hourly wage should be 8,50 € gross (instead of 2.709 € gross/month as before).The plaintiff accepted the offer under the condition of the social justification of the change of the working conditions. The Labour Court (Arbeitsgericht) and the Higher Labour Court (Landesarbeitsgericht) rejected the employee’s claim regarding the lack of social justification for the change.

The plaintiff’s appeal to the Federal Labor Court was successful. According to the ruling, the changes to the plaintiff’s working conditions were not socially justified. The termination with change of terms of employment was not  as precise as possible so that the employee could readily accept the contract offer, because the plaintiff could not know what his duties under the contract would be. In addition, the plaintiff could not extrapolate from the offered hourly wage to a particular occupation.

Leaving the workplace to take care of a sick dog can lead to termination

The Higher Labour Court Nuremberg (Landesarbeitsgericht Nürnberg, docket number 5 Sa 59/17) ruled on 21 July 2016, that leaving the workplace to take care of a sick dog can lead to termination. The Higher Labour Court confirmed the respective decision of the Labour Court Nürnberg (Arbeitsgericht).

The defendant as an employer operates a pipe cleaning company and employed the plaintiff. The parties agreed a 6-month probationary period from 1 April 2015 until 30 September 2015.

At the beginning of July 2015 the plaintiff’s dog suffered a stroke. As a result the plaintiff called the manager of the defendant and asked for one day’s holiday for the next day. The manager did not grant the day off. The next day, the plaintiff did not come to work and did not submit a certificate of disability (Arbeitsunfähigkeitsbescheinigung) to work for that day. The defendant terminated the employment agreement within the probationary period based on an unexcused absence from work.

The plaintiff alleged that the dismissal violated Sec. 616 German Civil Code (Bürgerliches Gesetzbuch). This provision allows an absence from work, if it is based on a reason to do with the person of the employee, e.g. doctor’s appointments during working hours.

The Higher Labour Court ruled that Sec. 616 German Civil Code also covers cases where the employee has to take care of his or her pet, if the pet needs medical attention. However, the employee needs to demonstrate and prove, that this is the case. Therefore the employee needs to inform his employer about the pet’s illness, the medical attention and, in this case, that there was no other possibility to take care of the dog either by a third person or at another time. The plaintiff’s explanation – that he could not attend work because of his dog’s sickness- was, according to the court ruling, not sufficient. The termination was therefore valid.


New legislation on Act on Part-Time Work and Fixed-Term Employment postponed

In the course of assembling a parliamentary majority after the 2013 federal elections in Germany, the CDU and SPD parties agreed in their coalition agreement on adopting legislation on increasing flexibility for employees. One of the proposals provides for the employee’s right to return to full-time work after a fixed period of part-time work. As the current session of the Bundestag comes to a close, the Federal Ministry of Labor and Social Affairs recently submitted a draft to address this objective.

The draft deals with the introduction of an employee’s right to return to full-time work after a certain period of part-time work. At the moment, the Part-Time and Temporary Employment Act allows any employee in a company with more than 15 employees to have his work schedule reduced to part-time work, yet there is no right to have full-time work reinstated as the employer may refer to important operational reasons that constitute an obstacle to the reinstatement of full-time work.

With the proposed change to the existing law the employer would have to prove that there is no suitable position available or that the employee is not suitable for any available position in order to ward off the employee’s claim. This change will especially affect medium-sized businesses as the minimum size of a company to be affected is set at only 15 employees.

It seems unlikely that the changes proposed by the German Ministry of Labor and Social Affairs will pass the Bundestag prior to the elections which will be held in September as the draft appears to be stuck in the coalition committee and the window for the whole legislative process will close soon. However, should the parties of CDU, CSU, and SPD form another “great coalition”, this might be one of the first legislative acts to follow.

Industrial action may take place in an employer’s parking lot

In a judgment dated 30 March 2017, the Higher Regional Labour Court Berlin-Brandenburg held that a trade union may take industrial action on an employer’s premises (docket number: 24 Sa 979/16).

In this case, the trade union Ver.di had planned to picket in the company parking lot of a large online retailer. Its goal was to pressure the employer to apply the local collective bargaining agreements applicable to the retail sector. By choosing the company parking lot, the trade union hoped to reach as many employees as possible. While the court of first instance had held that the employer did not have to accept industrial action on its premises, this decision was reversed on appeal. According to the court, the right to take industrial action allowed limitations on the employer’s property rights. Due to the location of the employer’s site, it considered the parking lot to be the most appropriate and effective location for the trade union’s measures, which it found did not affect the employer’s business activities. The court, however, also underlined that the employer was not required to provide other means to support the industrial action.

Due to the general importance of the legal issues involved, the court has allowed an appeal to the Federal Labour Court for review.


Update on reforms of the Maternity Protection Act

Following up on one of our blog posts last May, the German Parliament approved reforms of the Maternity Protection Act on 30 March 2017. The reforms are, however, still subject to the approval of the German Federal Council. One of the key changes will be an extension of the scope of protection, as a result of which schoolgirls, interns and students will also be entitled to statutory protection. The period of protection of mothers after giving birth will be extended to 12 weeks (instead of 8 weeks) if the child was born with a disability. In all other cases, the periods of protection will remain the same, i.e. mothers are not obliged to work six weeks before and eight weeks after giving birth. The reform also provides for special dismissal protection for a period of 4 months following a miscarriage after the first trimester. Following the reform, prohibitions on working will no longer be enforced against a mother’s wishes. Employers will be primarily obliged to make accommodations in order to avoid any dangers for mother and child. Working time restrictions for mothers-to-be will also be loosened, subject to the mothers’ consent.

The majority of the changes will come into force on 1 January 2018, while the prolonged protection period for mothers with children with disabilities and the dismissal protection rights in case of a miscarriage will enter into force once the law has been passed.


Employer may not issue polemic reference letter as coercive measures may follow

While an employee’s enforceable claim to have a reference letter issued generally only covers the formal and substantial minimum requirements of such a letter, this does not apply if the employee is issued a reference letter which is stated in such a polemical and ironic way that its submission by the employee to a potential employer would expose the employee to ridicule. This decision was made by the Cologne State Employment Court in a decision dated 14 February 2017 (LAG Köln, docket no. 12 Ta 17/17). Employers who issue such polemical reference letters risk coercive measures such as penalty payments or imprisonment.

The legal dispute started with the dismissal of a housekeeper. In a settlement it was agreed that the employer would issue a benevolent and extended reference letter. As the employer did not issue the promised reference letter, the local employment court set a penalty payment in the amount of EUR 500 and, by way of substitute, imprisonment. While another dispute arose about the employer’s statement that he was unable to send the reference letter to the employee’s address, the employer issued a reference letter which referred to, among other matters, the housekeeper’s gender-dependent popularity and her inclination to take breaks whenever she felt the urge to.

During its examination of the claim, the court generally does not validate the content of the reference letter – this is subject to the general court proceeding and not the compulsory execution of a claim which has already been confirmed by the court. However, the State Employment Court held that the issuing of a grossly personal, polemical and ironic reference letter which exposes the employee to ridicule does not fulfill the minimum requirements which any detailed reference letter is subject to. For this reason, the “reference letter” issued by the employer did not constitute any fulfillment of the employee’s claim. A detailed reference letter violating these minimum requirements may rather be compared to a reference letter which contains no evaluation of performance at all – therefore, it may not fulfill the minimum requirements of a detailed reference letter.

Shortened notice period during probationary period requires clear language

German law allows a short notice period of two weeks during a probationary period, which can be agreed for up to six months. However, if the employment contract generally provides for a longer notice period, without making clear that this longer notice period only applies after the end of the probationary period, that longer notice period will also apply during the probationary period. Following this judgment by the Federal Labour Court dated 23 March 2017 (docket number: 6 AZR 705/15), employment contracts should therefore clearly specify the circumstances under which an extended notice period shall apply.

In this case, the employee had worked as a flight attendant for the employer since April 2014. Sec. 3 of his employment contract specified that the first six months of the employment relationship was a probationary period. Sec. 8 of the contract included a notice period of six weeks to the end of the month, without distinguishing between employment during and after the probationary period. The employer issued a dismissal letter on 5 September 2014, providing for a termination date of 20 September 2014. The employee subsequently successfully challenged the dismissal, which therefore only became effective on 31 October 2104.

Employer May Ban Employees From Wearing Headscarves

In a recent ruling made on March 14, 2017, the European Court of Justice (ECJ) decided (docket nos. C-157/15, C-188/15) that employers may prohibit staff from wearing Islamic headscarves under certain circumstances. The ECJ held that such prohibitions do not constitute “direct discrimination”; instead, limits on visible religious wear shall be considered permitted under EU law as long as all such items would be covered by a company policy. Any ban would thus need to cover crucifixes, kippahs and turbans too.

The court, however, additionally stated that such internal regulations would constitute indirect discrimination if employees of certain beliefs would be especially affected by the policy. Such a determination would need to be based on the employer’s desire to show clients that the employer’s company as a whole pursues the goal of religious neutrality. However, indirect discrimination is permissible if it is objectively justified by a legitimate aim. If the means of achieving it are appropriate and necessary, a company’s neutrality policy may thus remain in effect.

The decision followed the dismissal of two employees in Belgium and France who refused to remove their headscarves. The Belgian woman worked as a receptionist for a company that had an internal policy prohibiting the wearing of any religious attire. The French claimant, a design engineer, was dismissed after she refused to stop wearing the headscarf after a client had complained about her attire. Following the referral back to the French Court of Cassation, this court must now establish whether the employer’s policy was a genuine and determining occupational requirement.

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