A Cancellation is not a nice thing, although unfortunately it is more common than we think. A Cancellation always stands for a negative relationship between employer and employee. Reasons for this are classified in three different categories:
Personal reasons for dismissal, behavioral reasons for dismissal or operational reasons for dismissal. Operational reasons for dismissal Cancellation are deemed to exist if it is necessary for urgent operational reasons that the employee can no longer be employed by the employer and operational reasons prevent this continued employment, cf. § 1 II KSchG.
The reasons themselves can be divided into internal reasons and external reasons:
External reasons exist if the circumstances are not directly attributable to the employer. In most cases, an internal reason is derived from an external reason. For example, a lack of orders or the rationalization of jobs are well-known reasons for dismissal for operational reasons.
Should the reasons for the operational Cancellation actually be for reasons outside the company, the employer must provide evidence to this effect in case of doubt. However, even in the case of an internal reason Cancellation the employer has a certain duty of proof with regard to an exemplary decline in orders or a slump in sales. The employer can provide such evidence by means of an evaluation, e.g. from its business management circumstances. It should be noted here that a certain reason given by the employer for its operationally-related Cancellation is also essential for the decrease in demand of its employees. In the context of the presentation of evidence, this is never to be interpreted to the disadvantage of the employee.
The sole burden of proof in this case lies with the employer. Thus, the demonstrable connection between a decline in sales and the non-requirement of existing employees is difficult to establish, however, as mentioned, this must not be to the disadvantage of the employee.
It is not uncommon for an operational decision to result in the loss of jobs. This is particularly the case in the age of digitalization. For example, activities that required a qualified employee in his day are now performed by a computer. These decisions are made by an employer mostly in the case of economic thinking and cost optimization.
This can be a simple reason that an employee is simply no longer needed. A reduced need for personnel is thus the consequence. However, it should again be noted here that the employer's desire to save on wage or salary costs alone is not a "business decision" that would justify a termination for operational reasons. Cancellation can justify. For such a decision to be present in the specific case, a certain construct must exist alongside the decision as to which measures will still be taken to implement the decision to save costs or which measures will still be specifically forthcoming.
In doing so, the employer must also check whether he cannot transfer the employee to another job before dismissing him. This would be a milder means which the employee can be expected to accept. It is therefore preferable to direct dismissal for operational reasons. Even if such an intra-company transfer is not always possible, the employer must nevertheless prove that it has attempted to find a milder means for the employee to be dismissed.
However, a transfer to the other job is linked to the fact that the employee must have the qualifications relating to the new job. Therefore, he/she is not entitled to a higher quality job. At the most, the employee is entitled to a job of equal or lesser value, provided that he/she has the same knowledge or professional qualifications.
In summary, it can therefore be emphasized that the employer, before pronouncing the operational Cancellation must check whether the employee can be reassigned to another job in the company's own or another company, or to changed working conditions (important: with the employee's consent) or after a new reasonable retraining or possible further training.
Looking at the case law of the Federal Labor Court, the legality of a termination for operational reasons is measured against a three-stage structure. This is the existence of an entrepreneurial decision that leads to the elimination of one or more jobs, possible reasons that stand in the way of continued employment (the lack of other employment opportunities) and the implementation of a proper social selection.
If several employees lose their jobs instead of one, the employer has the obligation to carry out a social selection. This is mandatory for the employer according to § 1 III KSchG and must follow certain steps in which it must carry out the social selection. The employer must initially determine the group of addressees who are eligible for a redundancy program. Cancellation would be eligible. This group of employees must be comparable with each other. Thus, these employees would even be interchangeable with each other in the best case.
Therefore, only those workplaces are to be compared that are on one and the same level of the company hierarchy. In the second step, the employer must comply with the Dismissal Protection Act further note.
This specifies the circumstances that the employer must take into account when making a social selection. In some cases, the length of service, age, maintenance obligations and severe disability of the employee are of importance. A consideration and weighing of these points may not be waived in any case. However, the employer is free to add further points to these existing ones and to add his own further criteria for social selection. However, it must be ensured that criteria are not added which make social selection unnecessary from the outset and that the criteria treat other employees too disadvantageously.
The end result is one that allows the employer to specifically filter out an employee who is least in need of protection. However, the employer must consider whether exemptions from the § 1 III 2 KSchG exist that allow the employee to be excluded from the social selection. This is conceivable if the employee possesses knowledge and skills or provides services that are of high importance to the company or if continued employment is in the particular interest of the employer. This interest also exists if a certain personnel structure is to be maintained within the company. What is important in the case of operational Cancellation the consultation of the works council.
Even though there is no obligation to establish or exist a works council, employees are free to establish a works council. For this, only five employees must be employed in the company and three of them must be eligible for election. If a works council exists in the company, it must be consulted before an employee is dismissed for operational reasons. This is required in § 102 BetrVG recorded. When hearing the works council, the employer shall inform the works council of the reasons for termination.
If this hearing has not taken place and the employee is nevertheless dismissed, a notice of termination for operational reasons issued in this manner shall be Cancellation ineffective. Even if consultation of the works council is mandatory, a possible decision of the works council against the Cancellation of the employee unfortunately did not notify the employer prior to pronouncement of the operational Cancellation. If the works council does not comment on the intention to terminate the employment contract within one week, this is automatically deemed to be consent. It should therefore be noted that it is not directly the "for" or "against" of the works council that is relevant, but the hearing of the termination itself.
At first glance, a works council hearing may seem pointless, but there are advantages. The primary purpose of the hearing is to give the works council a comprehensive picture of the employer's measures and to ensure that the employer does not act indiscriminately. This is also of importance if the works council is not in agreement with the employer. Cancellation in an orderly and timely manner and the employee additionally submits a Legal action against dismissal the employee has a right to continued employment. Thus, the employer must continue to employ the terminated employee under unchanged conditions until the legal dispute is resolved.
In the context of the litigation and the Termination process the employer has a graduated burden of presentation and proof. Firstly, it is sufficient if the employer conclusively demonstrates that it has made a business decision that makes it impossible to continue employing the employee. This argument can be substantiated, for example, by a statement or written decision by the management. Furthermore, the employer is obliged to prove that the necessary need for employees has actually decreased as a result of the operational implementation.
The employee must then be able to explain conclusively why and to what extent they see themselves and an opportunity to continue working for the company. The explanation does not have to go into the smallest detail. It is sufficient if the employee states the type of employment or indicates in which area or department he/she should and can be employed. It is also not necessary to name a direct vacant position. If there is therefore a conclusive subject matter of the dispute for the court, these initial presentation and evidence steps result in a concrete presentation and presentation of evidence regarding the non-existence of continued employment by the employer.
Thereupon, the court concludes and finds that a previously existing job is not or just the same has been dissolved. What is problematic, on the other hand, is the fact that after a legal dispute and the intention to terminate the Employer the relationship between him and the employer may be very disrupted. The court then determines that the employee cannot reasonably be expected to continue the employment relationship. Finally, the court dissolves the existing employment relationship at the employee's request and obliges the employer to pay an appropriate severance payment.
Likewise, upon the employer's request, the court shall terminate the employment relationship if there are reasons why the employer and the employee can no longer be expected to work together for the purposes of the business. An out-of-court agreement between employer and employee is also not inconceivable. For example, the employee could negotiate with the employer that, in the event of a compulsory Cancellation by the employer through a corresponding severance payment to the levying of a Legal action against dismissal waived. The least the employer can do for the employee normally frequent must offer is half a month's salary per year of the employee's employment.
A period of more than six months shall be rounded up to a full year, cf. § 1a KSchG. The right to severance pay in the event of termination for operational reasons may result from a customary right of the employees (if the employer always pays severance pay in the event of this type of termination), if the collective bargaining agreement so provides, the provision on severance pay has been regulated in the works agreement or the social plan provides for severance pay.
Example:
An employee has been employed by the employer for three years and eight months at the end of the notice period and has earned € 3,000.00 per month. The employer may also be entitled to a Christmas bonus of € 1,200.00 at the end of the year. This Christmas bonus can be calculated pro rata for the month, resulting in a monthly claim of € 3,100.00. The remaining eight months are rounded up to one year, resulting in a claim for (4 * € 3,100.00) * 0.5 factor. The result is a severance payment of € 6,200.00. Of this severance pay, no contributions to pension, health or nursing care and unemployment insurance have to be paid, but the severance pay is classified as "extraordinary income according to § 34 EStG taxed.
If a severance payment is not offered and dismissal for operational reasons has been announced, the employee only has the option of defending themselves against this. The employee must therefore submit a Legal action against dismissal to the competent local labor court. This is recommended in any case if the employer has not offered severance pay, as it is not the employee's fault that their job has been lost.
It is only important to clarify the costs in advance. If the settlement is too low, this can often be offset by the costs of court and Lawyer be put in the shade. Because even if you win the instances before the labor court, you bear your costs for the Lawyer in a Labor dispute itself, cf. § 12a ArbGG.
Special features in relation to the Protection against dismissal also result for small businesses and Temporary employment agency. For small businesses, the Dismissal Protection Act only applies if there are at least ten employees. If there are fewer than this number, the law does not apply and no social selection must have taken place before the dismissal for operational reasons is announced. Only in very few cases has the Federal Labor Court affirmed a social selection in small companies. However, this has only been in cases where a failure to carry out a social selection has blatantly violated social interests and the existing minimum level of social consideration.
Ultimately, therefore, no general claim to the implementation of social selection in a small company can be asserted from this case law either.
The consideration of temporary employment is not significantly less important, as the principles of social selection also apply to dismissals of employees who have been loaned to another company by a temporary employment agency and are therefore employed by an external company or another company. This is due to the principle that social selection must be carried out on a company-specific basis. This means that the company not only includes employees who are not on assignment, but also those who are.
Even in the case of a temporary employment agency, those employees who are objectively comparable with one another in terms of the workplace must be included in the social selection. The only exclusion criterion is if the employer has concluded a contractual agreement with the hirer that makes it impossible for the hirer to replace or exchange the employee from the temporary employment agency with a more vulnerable employee from the social selection.
There are also stricter requirements for employees on parental leave in the context of dismissals for operational reasons. For example, an employee on parental leave can only be dismissed for operational reasons if there is no other possibility of reinstating the employee after parental leave. This does not depend directly on the time of dismissal, when no job is available, but rather on the time of return. Accordingly, in the event of termination, the employer must ensure that there are no further employment opportunities until then.
Formally, the termination for operational reasons has the requirement that the termination must be signed and the signatory was also authorized to do so. Employees who are listed in the commercial register as representatives of the company are entitled to give notice of termination. However, a personnel manager also counts. A deputy of the personnel manager can only sign the termination for operational reasons if he or she has been granted a specific power of attorney to do so. This power of attorney should be sent directly with the notice of termination in order to directly eliminate any possible formal misunderstandings regarding the termination.
The termination for operational reasons itself may not be verbal, but must be issued in writing on paper. This is stipulated in Section 623 of the German Civil Code (BGB). Termination by text message, email or fax is not permitted. The notice period for termination is based on the regulations for ordinary termination if there is no provision in the employment contract, collective agreement or federal law. The statutory notice periods are the minimum requirements.
If an employer wishes to dismiss several employees in one fell swoop as part of a compulsory redundancy, they must submit a mass redundancy notification to the employment agency. If the employer forgets to do this, there is a risk that the dismissals may be invalid. The purpose of this notification to the employment agency is to be able to take measures in good time to place the affected employees in new employment. The works council, if one exists, must also be involved in the procedure. Employers are obliged to make this notification if there are more than 20 but fewer than 60 employees in the company and more than five of these employees are to be made redundant.
If there are more than 60 but fewer than 500 employees, at least 25 employees or one tenth would have to be made redundant. If there are more than 500 employees, more than 30 employees must be made redundant at the same time. "At the same time" means within 30 calendar days. The obligation to give notice of collective redundancies is set out in § 17 KSchG (Dismissal Protection Act).
As a result, it can be stated that the outcome of a dismissal for operational reasons will be very individual, especially when considering the social selection. In most cases, the employee will no longer have confidence in the employer and vice versa. A attorney Advice is therefore essential and an important prerequisite for asserting personal interests, especially when filing an action for unfair dismissal.
Main office - Kerpen
Mr. Patrick Baumfalk, attorney at law
Main street 147
50169 Kerpen
Germany
Branch office - Witten
Mr. Patrick Baumfalk, attorney at law
Berlin street 4
58452 Witten
Germany
Our cooperation partner in the USA, FL, Merritt Island, Spacecoast and Miami, USA:
Mr. Alexander Thorlton, Esq. - German American Real Estate & Immigration Law Center, LLC
Web design & SEO from Baumfalk Services
English 
Deutsch 
Français 
Español 
Türkçe 
Italiano 
Polski 
Nederlands 
Svenska 
Română 
Български 
Русский