Any employee, who has been working for a German company with more than 10 employees for a period longer than six months, enjoys protection against dismissal under the German Protection against Unfair Dismissal Act. This means that dismissals are subject to more stringent requirements. In particular, there must be a reason for the dismissal tied to either the person of the employee, a specific misconduct, or to operational circumstances.
Dismissal as a last resort
The last mentioned “dismissal for operational reasons” is in most cases related to a loss of jobs due to a shutdown, a decline in orders, or organizational restructurings. In any event, a dismissal may never be anything but an employer’s last resort.
In case of a dismissal for operational reasons, the employer will therefore have to offer the employee concerned an alternative vacant job if available and requested by the employee. However, only equivalent jobs come into consideration. The employee will neither be entitled to be promoted nor obliged to accept a transfer to a subordinate department either.
Vacancy in another company
The vacant alternative position (or upcoming vacant position) does not necessarily need to be in the same establishment. In fact, all vacancies available to the company even in other establishments have to be taken into account. However, until recently, it was unclear whether said establishment could also be located abroad.
Only establishments in Germany covered
Recently, the Federal Labor Court (BAG) had to decide whether or not an employee, whose job had been transferred to the Czech Republic, ought to have been offered a job in that establishment. In this respect, the Court explained that the provisions of the German Protection against Unfair Dismissal Act only applied to Germany. Hence, the term “establishment” only referred to a company’s German establishments. As a consequence, positions available abroad did not come into consideration in case of a dismissal for operational reasons.
Our attorneys specializing in labor law provide comprehensive advice on protection against dismissal. We will be pleased to assist you.
BAG, Judgement of 08/29/2013, File Ref. 2 AZR 809/12