German Federal Labour Courtroom: The deliberate change of path of the Sixth Senate
In its resolution of December 14, 2023 in case 6 AZR 157/22 (B), the Sixth Senate of the German Federal Labour Courtroom, which is chargeable for insolvency issues, introduced that it could depart from current case legislation pursuant to which a dismissal within the context of a collective redundancy pursuant to Part 17 (1) of the German Dismissal Safety Act (Kündigungsschutzgesetz – KSchG) is held to be invalid the place a notification pursuant to Part 17 (1), (3) KSchG is lacking or incorrect on the time of its declaration. Nonetheless, deviating from this case legislation would contradict the established case legislation of the Second Senate of Germany’s Federal Labor Courtroom, which holds that each one notifiable dismissals are invalid within the occasion of errors within the mass dismissal notification process.
Consequently, the Sixth Senate within the above-mentioned proceedings requested the Second Senate whether or not it could adhere to its authorized opinion and so stayed the proceedings till the query was answered. The authorized query additionally involved different proceedings 6 AZR 155/21 (B) and 6 AZR 121/22 (B), which have been due to this fact additionally stayed.
Background:
- The place an employer intends to cut back the variety of employees above the thresholds set out in Part 17 (1) KSchG and dismiss a corresponding variety of staff inside 30 calendar days, it’s obliged to adjust to obligations set out within the laws, corresponding to informing the works council in accordance with Part 17 (2) KSchG (the session process) and notifying the competent employment company of the meant redundancies in accordance with Part 17 (1), (3) KSchG (mass redundancy notification).
- Implementing these necessities has repeatedly proved to be error-prone and dangerous for employers. That is notably vital as, in keeping with established case legislation of the Federal Labor Courtroom, errors within the session process or within the mass redundancy notification will typically end result within the dismissals being held invalid. There are exceptions primarily solely the place the error within the session process originates from the works council or errors within the collective redundancy notification relate to data which isn’t obligatory (Part 17 (3) sentence 5 KSchG).
- In Could 2023, the Sixth Senate of the Federal Labor Courtroom expressed doubts about this technique of sanctions developed by case legislation. Basically, sanctions for violations of legal guidelines inside the which means of Part 134 of the German Civil Code (Bürgerliches Gesetzbuch – BGB) should fulfill varied rules. For instance, a sanction shall primarily have a deterrent impact and supply efficient authorized safety (effet utile). As well as, it should not fall in need of measures that the legislation offers for comparable conditions (precept of equivalence). Lastly, a sanction have to be proportionate, i.e. specifically mandatory to attain its objective. This isn’t the case if the severity of an infringement and its authorized penalties usually are not of equal weight.
- Primarily based on these rules, the Sixth Senate of the Federal Labour Courtroom had doubts as as to whether the sanctions in such a dispute was in keeping with the system of mass redundancy safety as conveyed by the Mass Redundancy Directive (MERL) or whether or not it was disproportionate, (resolution of Could 2023 – 6 AZR 157/22 (A) in addition to inside the proceedings 6 AZR 482/21, 6 AZR 115/22 and 6 AZR 121/22). These proceedings concerned errors within the redundancy notification process (not session process) and have been (partially) stayed till the choice of the European Courtroom of Justice (ECJ) in case C-134/22.
- On July 13, 2023, the ECJ gave its ruling, clarifying that the availability of Artwork. 2 (3) subpara. 2 MERL (in Germany: Part 17 (3) sentence 1 KSchG) was not meant to offer particular person safety for workers affected by collective redundancies. The transmission of knowledge to the competent authority supplied for on this provision was for data and preparatory functions solely.
At the moment, it remained unclear whether or not the ECJ’s resolution may very well be thought-about to have any additional significance concerning the scope of particular person/collective safety or the scope of safety to be assured by nationwide legislation. The Sixth Senate of the Federal Labor Courtroom answered this query for itself in December 2023 by asserting its intention to deviate from the earlier place, however requested the Second Senate whether or not it could uphold its earlier interpretation of the legislation. The Second Senate has “answered” fairly shortly, however the content material was totally different than anticipated.
European Courtroom of Justice: Uncertainty of the Second Senate and request for preliminary ruling
On February 1, 2024 (2 AS 22/23), the Second Senate of the German Federal Labour Courtroom took the chance to ask the ECJ to reply questions on the interpretation of the Collective Redundancies Directive and to droop the inquiry proceedings of the Sixth Senate till a call had been reached.
In its resolution of February 1, 2024, the Second Senate set out the next:
- Agreeing with the Sixth Senate, the Second Senate considers it doable {that a} dismissal being declared void the place there was a failure within the notification of mass dismissal pursuant to Part 134 BGB constitutes a disproportionate authorized consequence. Nonetheless, it couldn’t itself decide whether or not or not Artwork. 4 MERL requires the “irrevocable” invalidity of the termination in such a case – therefore its request for a preliminary ruling below Artwork. 267 TFEU.
- Within the opinion of the Second Senate, a distinction is required between conditions the place the employer utterly shunned issuing the required mass dismissal notification and people the place it incorrectly issued such a notification.
- The Second Senate assumes that the employment of an worker dismissed in the midst of a mass dismissal can solely be terminated as soon as ban on dismissals pursuant to Part 18 KSchG has expired. This provision stipulates that notifiable dismissals don’t change into efficient till one month after receipt of the notification. The ECJ should due to this fact resolve whether or not an (error-free) mass dismissal notification is required to set off the beginning of this dismissal ban. As well as, the Second Senate seeks readability as as to whether the ban on dismissals might be ended retroactively by a subsequent appropriate notification of mass dismissal.
- The Second Senate can be of the opinion that solely the competent employment company ought to have the ability to overview whether or not a mass dismissal notification has been accurately submitted by the employer and so decide the tip of the dismissal ban that applies within the particular case. An worker shouldn’t be in a position to contest any such dedication and it must also be thought-about binding by the labor courts.
Conclusion
So as soon as once more it’s a case of “wait and see” – this time for a call from the ECJ. Hope stays, nevertheless, that the ECJ will have the ability to present remaining and complete readability on the difficulty of German mass dismissals.