The letter of notification in the event of a transfer of business does not have to inform non-tariff employees about collective agreements that do not apply to them

In the event of a business transfer, employees must be informed of the details of the business transfer (Sec. 613a para. 5 German Civil Code (BGB)). There is vast case law on the details of the required content of such information. If incorrect information is provided as is generally known, the employee may object to the transfer up to and including forfeiture.

The Federal Labor Court (BAG) recently ruled for the employer on a specific issue. It is correct that the notification must also contain the applicability of collective bargaining standards. However, this does not apply to collective agreements, which are not applicable to employment relationships either before or after the transfer.

Federal Labor Court, judgment dated June 29, 2023 - docket number 2 AZR 326/22, lower court LAG Düsseldorf, judgment dated July 26, 2022, docket number 8 Sa 68/20

Objection even well after the expiry of the one-month period  

The employee's employment relationship was indisputably transferred to another employer on February 1, 2017, by way of transfer of business. He was informed of the transfer in a letter in early December 2016. The employee did object to the transfer, but. only in May 2019. The objection period of one month after the information at the end of 2016 did not apply to him because the information was considered incorrect. In particular, there was no information as to whether certain collective bargaining provisions would apply to his employment relationship under individual or collective law.

LAG: Letter of notification incorrect

The Düsseldorf Higher Labor Court still considered that the letter of notification had been incorrect and had not triggered the one-month objection period. Even after nearly two and a half years, the court saw no reason to forfeit the objection. The letter is incorrect because it does not state whether or not the collective bargaining agreement that is partially in effect in the company applies. In any case, it presumably applied to unionized employees and those whose employment contracts contained a corresponding reference clause. The employee was indisputably a non-tariff employee not covered by a collective bargaining agreement. However, the court did not rule out the possibility that the collective bargaining agreement could be applied to non-tariff employees on the basis of a voluntary commitment by the company.

BAG: No information about non-applicable collective bargaining agreement to employees not covered by collective bargaining agreement

The BAG reversed the decision of the LAG and restored the decision of the Labor Court dismissing the action. It held that an employer is not obliged to inform the non-tariff employee of a collective agreement that does not apply to him, either to the seller of the business or to the acquirer of the business, by means of a standard or a reference clause. It is true that the employer must inform the employee which collective bargaining regulations are applicable or, if applicable, how they are superseded at the acquirer. In the present case, however, the facts according to which the collective bargaining agreement could not be excluded were missing for the LAG to speculate. If, due to the above reasons (as already in the case of the seller), no collective bargaining agreement applies to the employment relationship, this does not need to be pointed out. In addition, the content of the notification letter is generally based on the state of knowledge at the time it is issued to the employee. Employers are not obligated to make speculative notifications.  

Conclusion

Notification letters regarding the transfer of a business are extremely prone to errors. Among other things, they must provide information about the (expected) transfer date, the reason for the transfer, its legal, economic and social consequences for the employees, and any upcoming measures. In addition, there are other details that have been decided in extensive case law. It is a ray of hope, however, that some judgments, such as the one discussed here, also indicate that there are limits to the content of the notification.

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