Notices of termination may not be signed before mass dismissal notification has been submitted

With its judgment dated 21 August 2018, the Higher Regional Labour Court of Baden-Wurttemberg (Landesarbeitsgericht Baden-Württemberg) decided that the dismissal of an employee as part of a mass redundancy is invalid if the notice of termination is signed prior to receipt of the mass dismissal notification to the authority. The time of the receipt of notice of termination by the employee is irrelevant (docket number: 12 Sa 17/18).

Under German law, the Employment Office must be notified prior to dismissals as part of a mass redundancy. This reflects obligations under the Directive 98/59/EC.

The termination at issue was issued as part of a shutdown of an operation. The employer had previously consulted with the works council on the planned shutdown and had entered into a balance of interests on 22 June 2017. Subsequently but on the same day, the employer drafted a mass dismissal notification which the Employment Office received on 26 June 2017. On 27 June, the employee received the termination letter, which was dated 26 June.

According to the Court, a mass dismissal notification must reach the employment agency before the employer reaches the final decision to terminate the employment relationship and before signing the termination letter. Even though the termination letter does not take effect before it has been received by the employee, the employer has already made the underlying termination decision at an earlier point in time, at the latest when signing the letter. The court held, however, that in the specific case it could not be established that the defendant had signed the dismissal notice of 26 June 2017 after the mass dismissal notification had been received by the Employment Agency on the same day. The dismissal was therefore held to be invalid.

Due to the fundamental impact of this judgment, the right to appeal to the Federal Labour Court has been expressly granted.

Appointment of a Conciliation Committee dealing with the subject of a No Smoking Policy

Under German law, works councils have so-called co-determination rights on certain subjects. This means that an employer must reach an agreement with the works council on these matters, such as rules and policies for employee conduct. Works council co-determination is, however, excluded if there are binding and final statutory provisions dealing with a certain matter. If no agreement can be reached through negotiations between the works council and the employer, a so-called conciliation committee will be established which can either reach an agreement or render a decision. The conciliation committee can be set up by mutual agreement, but it can also be established by a court order upon request by one party.

In a case decided by the Higher Regional Labour Court of Rhineland Palatinate on 20 September 2018, docket number 5 TaBV 13/18, an employer planned to implement a no smoking policy in its operation. It had previously agreed with its Joint Works Council on such a policy for its various operations. Under this existing policy, smoking was permitted indoors in designated areas as well as in specific locations outside. However, following a hazard assessment for one operation, in which it had been advised that smoking must be prohibited indoors, the employer planned to prohibit smoking indoors altogether. The works council objected and argued that the employer must first negotiate and honor the works council’s co-determination rights. As the employer refused negotiations, the works council requested the establishment by a conciliation committee through a court order.

The court granted the request, and in its order covered the following basic principles of works council co-determination rights:

  • The primary responsibility for works council co-determination rights is with the local works council. Therefore, absent specific circumstances, the local works council was free to exercise its rights and the works agreement entered into with the Joint Works Council did not provide a final agreement.
  • Even if there was a statutory provision that prohibited smoking inside or stipulated such a prohibition, the works council was not barred from exercising co-determination rights. The court held that even in such a case, the employer might still have leeway to provide rules regarding when and where the employees were allowed to smoke outside.

Based on these two key issues, the court established the conciliation committee. The committee will, after its establishment, assess its responsibility for the subject at hand and will then need to find a solution to implement a policy.

Right of part-time employees to return to full-time

The German parliament has recently passed a law which amends the current Part-Time and Fixed-Term Act and will likely enter into force on 1 January 2019. Under the new law (so-called bridge-part-time-work), employees have the right to work part-time for a period of one to five years (“Part-Time-Period”) and return to full-time after the Part-Time-Period has expired. This right only applies if (i) at the time of the application the employee has been employed by his current employer for more than six months and (ii) the employer (e.g. the respective employing entity) employs more than 45 employees in Germany in total. Employers with more than 45 and not more than 200 employees may reject the employee’s claim if (i) one in 15 employees has already been granted bridge-part-time-work or (ii) operational reasons do not allow the (preliminary) reduction of the working time. Employers with more than 200 employees may only reject the claim to part-time work if operational reasons do not allow the (preliminary) reduction of working time. The employee must apply for the reduction in working time and the extent of the reduction at least three months prior to commencement of the Part-Time-Period. The right to return to full time is not contingent upon special personal circumstances, e.g. children below a certain age etc.

Co-determination right if the employer sets up and operates a Twitter account

In a judgment dated 13 September 2018 the Higher Labour Court of Hamburg (docket number 2 TaBV 5/18) ruled that if the employer operates a Twitter account, at least on the basis of the reply function, the (general) works council has a co-determination right according to section 87 para. 1 no. 6 Works Council Constitution Act (Betriebsverfassungsgesetz). The co-determination right does not require that the technical facility is designed to monitor the performance and behaviour of employees. It suffices that the possibility exists.

Twitter is an American online news and social networking service on which users post and interact with messages known as “tweets”. Users can join conversations by replying to others and by mentioning them in their own tweets. In addition, users can share a tweet publicly with their followers. The employer’s tweets are visible to everyone, including non-registered users, on the website belonging to the employer’s Twitter account. The replies from registered users to tweets by the employer are visible to the employer and, if it is not a protected answer, at least to all Twitter users. The employer cannot delete any reply himself. In addition, the Twitter’s reply function cannot be deactivated by the employer (in contrast to the comment function on a Facebook page).

Following the publication of the judgment of the Federal Labour Court (13 December 2016 – docket number 1 ABR 7/15) regarding co-determination if the employer operates a Facebook page with a comment function, the (general) works council took the decision to initiate the decision-making procedure regarding the deactivation of the employer’s Twitter account. The employer refused to deactivate the Twitter account.

The application of the (general) works council to prevent the operation of the Twitter account until his consent or a decision of the conciliation committee replacing his consent has been obtained, did not succeed in front of the local labour court. The appeal in front of the Higher Labour Court, however, was successful. The appeal to the Federal Labour Court was admitted and the procedure is pending (docket number 1 ABR 40/18).

The plaintiff’s injunctive relief follows the employer’s violation of co-determination by setting up and operating a Twitter account. The (general) works council has to be involved in the operation of a technical facility intended to monitor the behaviour and the performance of employees. The right to co-determination is aimed to protect employees from any impairment of their personal rights by using technical monitoring devices that are not justified and disproportionate in the light of the concerns of the employer. Because of the visibility of the replies to both the employer and the Twitter users, depending on the content of the reply, the employer may assign it by name and situation to a specific employee and use it for behavioural and performance control.

The fact that these are replies to employer tweets does not justify a different assessment. Monitoring performance already includes the collection of data that contains statements on the behaviour and performance of employees. Whether the employer intends to evaluate and further process the data is irrelevant. It is sufficient that an assessment remains possible.

Also, the fact that the replies to tweets of the employer remain on the accounts of the respondents and cannot be deleted by the employer does not justify any other assessment because the location is irrelevant to the purpose of employee protection. Rather, it is the question of who the news/answer is for. The fact that the answers cannot be deleted also increases the monitoring pressure for the employee.

The current decision shows that co-determination depends on the individual circumstances of the internet presence of the employer. Thus an employer presence without the possibility of interaction usually does not trigger any co-determination rights. Insofar as an interaction is permissible and it is possible to influence the behaviour and performance of individual employees as a result the co-determination rights of the works council will intervene.

No Automatic Expiration of Holiday Entitlement Due to Missing Holiday Request

Judgments

With judgments dated 6 November 2018 (docket number: C-619/16; C-684/16), the European Court of Justice (Europäischer Gerichtshof, EuGH) decided that an employee’s entitlement to paid holiday must not automatically expire due to a missing holiday request. Rather, the holiday entitlement should only expire if the employer is capable of approving that the employee voluntarily waived the holiday after being put in the actual position to take holiday in due time. Therefore the employer has the obligation to provide information to employees.

 

Facts

In the first legal proceedings, the plaintiff (C-619/16), who completed his legal preparatory service as an article clerk at the District Court of Berlin, did not take paid annual holiday during the last months of his service. Therefore he requested compensation for the holidays not taken, which the Court rejected. The plaintiff of the second legal proceedings (C-684/16) was employed by Max Planck Society for the Advancement of Science (Max-Planck-Gesellschaft zur Förderung der Wissenschaften, MPG), which asked the plaintiff two months prior to the end of the employment relationship to take his remaining holiday. However, the Society did not require the plaintiff to take holiday at a preset time. Since the plaintiff took only two days holiday, he requested for remuneration of the remaining holiday. The Society rejected his remuneration request.

 

Argument/Statement

At the competent courts’ request for interpretation of Union law, the European Court declared that it was violating Union law if an employee’s entitlement to paid holiday expired automatically in cases where an employee’s holiday request is missing. Being the weaker party and therefore worth protecting, employees might be frightened to explicitly assert their rights towards their employers in general, since their demand might result in measures unfavourable for their employment relationships.

 

Practice Note

In the opinion of the European Court, however, the expiration of the holiday and compensation entitlement cannot be challenged if the employer is able to approve that the employee was put in an actual position of taking holiday in due time, but nevertheless waived the holiday. Furthermore it was the only possible interpretation to be combined with the basic idea of paid holiday, namely the creation of an actual period of leave to guarantee an effective protection of the employee’s safety and health. Additionally the stated principles are applicable to public as well as private employers.

 

 

Occupational pensions: No claim for employee to terminate an employee-funded direct life insurance policy

By judgment of 26 April 2018 (docket number: 3 AZR 586/16) the Federal Labour Court has ruled that an employee has no claim against his employer to terminate an employee-funded direct life insurance policy (deferred compensation /salary conversion) in order to receive the surrender value.

The employee (plaintiff) concluded a deferred compensation agreement with the employer in 2001. According to that agreement, the employer – as policyholder – was obliged to pay an annual amount of approximately 1,000.00 euros to an insurance company for the purpose of funding the insurance policy. The insurance policy was concluded in favour of the employee. In 2009 the insurance policy was amended so that contributions no longer had to be paid. In 2013 the employee informed his employer that he had terminated the insurance policy in order to receive the surrender value due to financial distress. The employer refused both to approve this termination and to terminate the insurance policy by himself.

The Federal Labour Court dismissed the case. The Court holds that the employee does not have a right to terminate the insurance policy or have a legitimate interest to demand the termination. Since the employee was not a concluding party of the insurance policy, the employer’s approval would have been necessary to terminate the policy. The purpose of the option to convert salary (deferred compensation) as stated in the German Occupational Pension Act (Betriebsrentengesetz) is – at least partly – to secure the employee’s standard of living in old age. It is the legislator`s intention to prevent vested entitlements being paid out before retirement. The saved capital shall not be used for consumption or to settle debts.

The ruling creates legal certainty. According to the Federal Labour Court there is normally no right to terminate the insurance policy if it is funded via salary conversion (deferred compensation). However, the court points out that in specific cases – such as substantial financial distress, which must be concretely presented to the court and not, as it was in this case, only abstractly – the legal situation could be judged differently.

Remuneration of travel time for international assignments

I. Judgment

With its judgment dated 17 October 2018, the Federal Labour Court (Bundesarbeitsgericht, BAG) decided that in cases of an employee’s temporary international assignment the employer must remunerate the time required for outward and return travel as work (docket number: 5 AZR 553/17)

II. Facts

The plaintiff, who is employed by the defendant as a technical assistant, has a contractual obligation to work on domestic and foreign construction sites. Therefore the plaintiff was sent to a construction site in China from 10 August to 30 October 2015. At the plaintiff’s request, the defendant booked an outward and return flight in Business Class with a stopover in Dubai instead of a direct flight in Economy Class. However, for the four days of travel, the defendant paid the plaintiff the remuneration agreed in the employment agreement for eight hours each. By his action, the plaintiff claims remuneration for a further 37 hours, maintaining that the entire travelling time from his home to the external place of work and back should be remunerated as work.

III. Argumentation/Statement

According to the Court, journeys to and from the external workplace in cases where the employer temporarily sends an employee abroad (international assignment) are exclusively made in the employer’s interest and  therefore must be generally remunerated as work. In principle, the travel time required for a flight in Economy Class is decisive. Due to the absence of required sufficient findings by the State Labour Court on the extent of the plaintiff’s travel time, the responsible senate of the Federal State Court was unable to reach a final decision on the matter, so the case was remanded.

IV. Practice Note

The exact basis for the judges’ decision that remuneration is payable for overtime hours caused by business travel hours will become apparent in the judgment’s written grounds. Due to remission, however, it is obvious that the significance of the decision will be limited to the special collective agreement regulation in para. 7 no. 4.3 of the Federal Framework Collective Agreement for the Construction Industry (Bundesrahmentarifvertrag für das Baugewerbe, BRTV) and will not initiate a reverse from the Court’s previous case-law. Outside a special employment or collective agreement regulation, overtime in the context of business trips must therefore probably continue to be subject to general regulation of sec. 612 para. 1 German Civil Code (Bürgerliches Gesetzbuch, BGB) which stipulates that remuneration shall be deemed tacitly agreed if the circumstances of a service indicate that the service can only be expected in return for remuneration. The Federal State Court has repeatedly rejected the existence of a legal rule determining that travel time should always or at least regularly be remunerated. An expectation of remuneration should always be assessed on the basis of an objective standard, taking common usage as well as the individual case into account. Accordingly, remuneration of a part of the travel time can also be considered.

Judgement of the Federal Labor Court Regarding Dismissal due to Frequent Short Illnesses

With its judgment dated 25 April 2018, the Federal Labor Court (Bundesarbeitsgericht, BAG) has maintained its constant jurisdiction, deciding that a disruption relevant for dismissal exists if, according to the employee’s health prognosis, costs for continued remuneration exceeding six weeks within one year are expected in future (docket number: 2 AZR 6/18).

 

The court had to decide under which conditions the extraordinary dismissal of an employee, whose contract cannot be ordinarily terminated under a collective agreement, due to frequent short illnesses can be justified. The plaintiff, who was born in 1966, has been employed by the defendant as a nursing assistant since 1992. Since 2011, he has been repeatedly incapacitated for work – predominantly due to illnesses of the “psychiatric form circle” -, mostly for shorter periods of up to ten working days. He is recognised as a disabled person with a degree of disability of 40%, but is not equated with severely disabled persons.

 

On the basis of contractual reference, the Collective Agreement for Public Service of the States (Tarifvertrag für den öffentlichen Dienst der Länder, TV-L) is applicable to the employment relationship, whereby the plaintiff is not ordinarily terminable in accordance with sec. 34 para. 2. Consequently the defendant extraordinarily terminated the employment relationship on 22 August 2016 with a social expiry date of 31 March 2017 due to frequent short illnesses. However, in order to avoid an objection to the valuation it is urgent that the employee observe a phase-out period corresponding to the fictitious ordinary qualifying period. Additionally, the standard of review must take into account the high requirements to be met for extraordinary dismissal pursuant to sec. 626 para. 1 German Civil Code (BGB).

 

The Federal Labour Court and the State Labour Court in Cologne have upheld the dismissal protection suit. The claim will now be referred back to court for a new hearing and decision.

 

In the judgment’s official directive it is said that, according to sec. 34 para. 2 of the Collective Agreement for Public Service of the States (Tarifvertrag für den öffentlichen Dienst der Länder, TV-L), an important reason for extraordinary dismissal with a necessary expiration period of an employment relationship that cannot be terminated in accordance with sec. 34 para. 2 sentence 1 of the relevant Collective Agreement may exist, if it is to be expected that the employer will have to continue paying remuneration in the event of illness for more than one third of the annual working days, whereby a comprehensive weighing of interests in individual cases is required.

 

 

Employee data protection: Notification of private mobile phone number to employer

The Higher Labor Court of Thuringia decided that the processing of an employee’s private mobile phone number against his will is an extremely serious interference with the employee’s personal rights and was not justified in the specific case (decision on 16 May 2018 – docket number 6 Sa 442/17). Therefore, the warning issued in this context was ineffective.

The employee works for the district in the area of hygiene and infection protection. In the employee’s area of responsibility, hazards could arise which make it necessary to act outside working hours. Until the end of 2016, this was ensured and organized by on-call duty. Pre-defined employees were assigned to on-call duty 24 hours a day, seven days a week. A business mobile phone was made available for the necessary contact. In addition, the employees received additional remuneration for on-call duty.

With the purpose of saving costs, the employer decided to reorganize the coverage of necessary activities outside working hours. From January 2017, on-call duty was limited to weekends and public holidays. Outside these times in the event of an emergency, the control centre should try to contact one of the seven employees in the area of hygiene and infection protection by any means. It was left to chance which employee was contacted. For the implementation of this concept, the employer requested notification of the employee’s mobile phone number.

The employee refused to give his mobile phone number and therefore received the warning.

With reference to the national data protection law, the court decided that the refusal of the employee was not a breach of duty. The mobile phone number was not necessary for the performance of the employment relationship or for the purpose of personnel deployment. The processing of such data is only permissible in exceptional cases if the employer, is unable to perform a legitimate task for which the employee is employed, or is unable to perform it in full or in a lawful manner, without knowledge of the mobile phone number. Additionally, it must be impossible or unreasonable to organize the performance of the task by other means.

The employer’s interests in determining work processes and work organisation within the framework of his entrepreneurial freedom did not prevail over the employee’s right of personality and did not comply with the principle of proportionality. The interference in the personal right of the employee is the collecting of the mobile number and thus the possibility of contacting the employee at any time and in any place. The employer wants to have the mobile number only and exclusively to contact the employee in his spare time.

Within a detailed weighing of interests, the court decided, that it is particularly important to consider that the employer has intentionally chosen to change his organisation of processes. The employer no longer wants to decide beforehand who he wants to use for work performance, but leaves this to chance with the result of interference in the employees’ leisure time. In addition to that, the court held that the employer wanted the personal mobile number to cover basic tasks and not just emergencies.

The decision makes clear that employers are not allowed to contact employees arbitrarily during their free time. Even if the court refers here to the data protection law, it is also unlawful under German labour law to make use of the employee outside working hours and to demand from him a permanent readiness. However, the fact that the decision is based on data protection law emphasizes its important role in employment related matters. Employers should carefully proof whether it is necessary to ask the employee to give the private mobile phone number or if there are alternative means to perform the task in question. If employees voluntarily provide their private mobile number to the employer, the use of it shall be in line with the purpose for which the private mobile phone number was provided.

Occupational health and safety standards as a limit to the employer’s right to issue instructions

The allocation of a job which does not meet the requirements of Sec. 618 para. 1 German Civil Code (Bürgerliches Gesetzbuch, BGB) in conjunction with the public occupational health and safety standards may nevertheless correspond to the employer’s equitable discretion if it concerns only minor or short-term infringements which cannot cause lasting damage.

This is what the German Federal Labor Court (Bundesarbeitsgericht, BAG) decided in its judgement of 28 June 2018, docket number 2 AZR 436/17.

The parties disputed the existence of an employment relationship. Since 2006, the plaintiff (former employee) had been employed by the defendant (the employer) as head of the “Technical Documentation” department. There were on-going conflicts between the plaintiff and other employees. In November 2012, the plaintiff’s employer withdrew the line of responsibility from the plaintiff. In February 2014, five employees in the department requested a transfer of the plaintiff to a different location. In their view the plaintiff sought conflicts and did not maintain an appropriate distance. As a result, many employees avoided entering common rooms in order to avoid the plaintiff. In May 2014, the employer commissioned the plaintiff to draw up a “building book” and transferred her away to the respective building to be examined. There were no other offices in this building. The plaintiff received a workroom with a desk and a simple wooden chair. The plaintiff also received the order to furnish her workplace with the necessary IT and communication equipment as well as any additional furniture. In the absence of a time stamp clock, she was to document her working hours by hand and send an e-mail for checking purposes at the start and end of her duties. The plaintiff refused the job due to the assignment of non-contractual duties and insufficient office equipment. After repeated warnings, the employer terminated the plaintiff’s employment with extraordinary immediate effect. The Labor Court Munich granted the dismissal protection action. The appeal was unsuccessful.

The BAG clearly indicated that the allocation of specific job duties for reasons of efficient completion of work tasks and because of the objective of protecting the remaining employees from further contact with the plaintiff corresponded in principle to equitable discretion. In the opinion of the BAG, merely minor or short-term violations of occupational health and safety standards that cannot cause lasting damage do not make the workplace unacceptable. The same applies to the instruction to the plaintiff to set up its own workplace. This one-off additional work represents at most a temporary “inferior” activity. Furthermore, the Court stressed that the plaintiff had not been completely isolated from other employees and had not been spun off from the operational organisation. Rather, the plaintiff had remained assigned to its previous operational unit and had had contact with other employees through its networked workplace.

The BAG thus clarifies that the mere possibility of a health hazard from a transfer is not yet sufficient to make the transfer violate the principle of equitable discretion because of a breach of the employer’s duty of care. Accordingly, there is no right of retention in the employment relationship in favour of the employee pursuant to Sec. 273, 618 BGB in the event of only minor or short-term violations of occupational health and safety obligations by the employer. If an employee nevertheless refuses his or her obligation to work because he or she believes that he or she is entitled to do so because of an unfair instruction, he or she shall bear the risk that his or her opinion may prove to be wrong. In case of doubt, employees should therefore be advised to follow such allegedly unreasonable instructions.

It is also noteworthy that the BAG considers the protection of other employees from the plaintiff to be a valid reason for transferring the plaintiff. The court referred here to its jurisdiction in “mobbing cases”. In those cases the question arose whether measures of the employer violate the personality right of the plaintiff employee. In the present judgment, the right of personality of the remaining employees now serves as a possible justification for measures against the plaintiff employee.

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