Munich or Madrid? Employers are allowed to transfer employees abroad

What was the subject of the court’s decision? From Nuremberg to Bologna!

The parties disputed whether the employer may transfer the employee, a pilot, abroad.

In 2017, the claimant, who was married and had to support a child, concluded an employment contract with the legal predecessor of the defendant, an internationally acting airline. In his employment as a pilot, the claimant was stationed at the home base at Nuremberg Airport. The legal predecessor informed the claimant in December 2019 that the home base at Nuremberg Airport would be shut down at the end of March 2020.

At the beginning of 2020, the employment relationship was transferred to the defendant, who is party to a collective wage agreement and a collective social plan agreed into with the pilots' union Cockpit e.V. In the collective social plan, the process for dealing with a pilot surplus in Germany resulting from a permanent closure or restriction of the stationing location is regulated in five stages. In case that a surplus of personnel remains after stages 1 to 3, the defendant may, at stage 4, assign pilots of the affected stationing location to another stationing location within Germany or in EU countries by transfer. Pilots who are transferred to a foreign stationing location will then continue to be employed under the working conditions applicable there in accordance with the collective agreement applicable at the new stationing location. Especially, this includes the respective salaries of the pilots.

The defendant transferred the claimant to its home base at Bologna Airport/Italy with effect from 1 May 2020 by letter dated 20 January 2020. The claimant defended himself against the transfer by filing a complaint with the competent German labour court on 17 February 2020, claiming that the transfer was invalid, and that the employment relationship continued on unchanged terms.

He was of the opinion that the transfer was invalid, as neither the employment contract nor the collective agreement allowed for a transfer abroad. In particular, the transfer abroad was not covered by the employer's right to issue instructions. It was unfair to change the claimant's entire living environment and to reduce his salary. Overall, his interests had been completely disregarded in the transfer and he would suffer considerable disadvantages.

The defendant was of the opinion that sec. 106 sentence 1 Trade Regulation Act (Gewerbeordnung - GewO) also covered a transfer abroad. The exercise of the right to issue instructions was in accordance with equitable discretion.

No restriction of the right of direction to Germany - pilots must be flexible

After the claimant had already been unsuccessful in the previous instances, the BAG has now also confirmed that the transfer of the claimant to the defendant's home base at Bologna airport was effective according to sec. 106 sentence 1 GewO.

"The employer may, on the basis of his right of direction under the employment contract, instruct the employee to work at a place of work of the enterprise abroad, if nothing to the contrary has been expressly agreed in the employment contract or impliedly according to the circumstances."

The BAG explained that under sec. 106 GewO, the employer determines the content, place and time of work performance at its reasonable discretion, unless these working conditions are stipulated in the employment contract, a works agreement, an applicable collective agreement or by law. The right to issue instructions under sec. 106 GewO serves to specify the contractually agreed work task and is the employer's means of implementing his entrepreneurial objectives by means of the employees. If the employment contract does not contain any specification, the place of work performance can in principle be determined unilaterally by the right to issue instructions.

The BAG stated that the right to issue instructions was not limited to the territory of the Federal Republic of Germany, as such a limitation of the place of work cannot be inferred from the wording of the GewO. In principle, the specification of the employment relationship or the place of work goes beyond the borders of the Republic.

However, the exercise of the right to issue instructions was limited by an equitable control in each individual case and was subject to equitable discretion within the meaning of sec. 315 (3) German Civil Code (Bürgerliches Gesetzbuch – BGB). Therefore, the essential circumstances of each individual case had to be weighed and the interests of both parties had to be adequately taken into account. A regulation which unilaterally enforced the interests of the employer without considering the interests of the employee was no longer in accordance with equitable discretion. When issuing instructions, the fundamental rights of the employees as well as the reasonableness of the transfer abroad for the employee had to be considered.

A new homebase is not unfair

In the provided case of the BAG, the transfer was in accordance with equitable discretion and stood up to the exercise control.

In its decision, the court took into account in favor of the claimant that he was forced to change his place of residence, that additional rent and travel costs were incurred and that his remuneration was reduced as a result of the transfer due to the remuneration system applicable at the homebase in Bologna.

However, the defendant had complied with the procedure agreed in the collective social plan. As a result of the abandonment of the home base at Nuremberg airport, the possibility of the claimant being stationed there had ceased to exist. There were no vacancies at another domestic airport and a deployment as a mobile pilot was not possible. All pilots stationed at Nuremberg airport had been transferred to Italy and the claimant would continue to be employed. There was no change in the contract, the claimant only lost the higher pay because the scope of the collective pay agreement was limited to pilots stationed in Germany. In addition, the collective agreement provided for a clause that pilots who continued to work at a foreign airport were to be treated according to the collective agreement applicable at that location. In the provided case, it was not inequitable if the defendant does not compensate the claimant financially for disadvantages associated with the transfer to a greater extent than provided for in the collective social plan.

A look at the employment contract can be worthwhile for the employer

In a dynamic, international working world with corporations and companies operating across borders worldwide, the framework conditions are constantly changing. A company must adapt flexibly to the new conditions in order to be competitive.

Whether the transfer of an employee can be done unilaterally by the employer by exercising the right of direction depends on the content of the employment contract. The broader the performance obligation is specified in the employment contract, the broader is the employer's unilateral power of direction. The mere fact that the employee has performed his or her work at a certain place for years does not mean that the work is only to be performed at this place. According to the new decision of the BAG, the place of work can also be moved abroad by international employers according to operational necessity. If - as in the present case - no specific place of work (e.g. Nuremberg) has been agreed upon in the employment contract, the right to issue instructions also includes, in principle, the transfer to a foreign place of work. However, it must always be ensured that the interests of the employee are considered sufficiently in the respective individual case decisions.