Mass redundancies: Second dismissal requires second notification of the Federal Labour Office

On 20 January 2016 the Federal Labour Court (Bundesarbeitsgericht, BAG) ruled that a notification of the Federal Labour Office (Bundesagentur für Arbeit) in case of a mass dismissal only applies to the concrete dismissals included in the notification. Further and later dismissals require additional notification. It also clarified the process stipulated by the law in the event of a mass dismissal.

In the relevant case the employer shut down an operational unit as a result of insolvency proceedings. After giving prior notification to the Federal Labour Office the employer dismissed the relevant employee for operational reasons. Eleven days later the employer revoked the dismissal back, claiming that the notice period was wrong, and simultaneously issued a second dismissal. The employee challenged the second dismissal, claiming that the second dismissal was invalid as no second notification was filed with the Federal Labour Office.

The Federal Labour Court ruled that the second dismissal was invalid as no prior notification to the Federal Labour Office had taken place. According to the court, the notification shall enable the Federal Labour Office to stabilize the job market with regard to mass redundancies and reduce the consequences for the individual employee. As the notification filed referred to the first dismissal only the employer needed to additionally notify the Federal Labour Office of the second dismissal. This also aims to prevent employers from giving precautionary notifications.

Furthermore, the Federal Labour Court ruled that section 17 of the German Special Protection Against Dismissal Act contains two separate processes which both need to be carried out in cases of mass redundancies. First, the employer needs to give prior notice to the Federal Labour Office. Second, the employer needs to inform the works council. The employer must observe both requirements in respect of mass dismissals. However, the employee must claim a violation of this obligation; otherwise he will be excluded from relying on it. Claiming that a second notification had to be filed does not prevent the exclusion with regard to other potential reasons for invalidity of the dismissal.

With this decision the Federal Labour Court confirms the requirements which must be met by the employer in case of mass redundancies. However, at the same time, the Court also stresses the legal requirements employees must meet in order to challenge the validity of a dismissal.