Occupational re-integration management - pain or gain?

When employees are repeatedly absent from work due to illness (either for short periods of time or permanently), employers often consider sickness-related dismissals. Such dismissals are not unfair in the eyes of the law per se, but the Federal Labour Court sets very strict criteria for employers to meet to ensure the fairness of such dismissals.

Regularly, “occupational re-integration management (Betriebliches Eingliederungsmanagement - "BEM2) plays a special role. During this formal process the interests of the employer and employee shall be considered and evaluated and both parties shall discuss and seek to create a framework for overcoming an existing incapacity to work as well as identify which aids can be offered and which practices can be prevented to avoid a renewed incapacity to work so that a job can be maintained.

The BEM

According to §84 Social Security Book IX (SGB IX), if an employee has been working for the employer for more than six months and falls ill for more than six weeks within one year (meaning a period of 365 days, not the calendar year), irrespective of whether the illness is long-term or recurrent, an occupational re-integration management process should take place evaluating the sickness period(s) and the options available to reintegrate the employee and prevent further absenteeism.

With respect to a potential future termination due to personal (illness) reasons, the invitation to the BEM would be an important step before considering a termination, especially so for companies that have over ten employees in Germany (as the Dismissal Protection Act "KSchG" applies).

If a BEM is to be carried out, the company doctor should be consulted, if existent, available and necessary. The existence of a works council is no prerequisite, but the works council must be involved if existent. In the case of severely disabled employees or employees with the same status as severely disabled employees (who can claim for a BEM, as it is mandatory in cases of severely disabled employees), the representation body for the severely disabled employees and, if applicable, the Integration Office must also be involved.

However, whilst there are certain frameworks for employers to follow when a BEM is conducted, employees are free to refuse them. In order to be able to make a well-founded decision, the employer must properly initiate the BEM by informing the employee in particular about the objectives of the BEM and the type and scope of the data collected and stored. Also employees should be made aware that refusal of a BEM can have disadvantageous results, especially when it comes to the justification of a termination of employment.

This means that it must be made clear to the employee that the fundamentals of his or her continued employment shall be discussed and that an open-ended procedure is to be carried out for this purpose, in which he or she can make suggestions. In addition, an explicit note on data collection and data use is required, clarifying that only data will be collected from those whose knowledge is necessary in order to conduct the BEM. For this purpose, the employee must be informed what data will be collected and stored as sensitive data and to what extent and for what purpose it is made accessible to the employer.

There can be various outcomes following a BEM, for example, it can lead to the obtaining of a medical opinion or to the transfer to or the creation of a workplace suitable for the employee in question. The BEM may also lead to the conclusion that the working time of the person concerned must be changed. It is also possible that there are no possible actions to overcome the incapacity to work or to avoid it in the future (a negative result). As mentioned above, it is also possible for the employee to refuse to take part in a BEM from the outset (in which case a decision regarding the employee's future employment could be made by the employer regardless).

If the BEM has led to a positive result and a corresponding change in continued employment appears possible, the employer is generally obliged to implement the recommended measure.

Dismissal Protection Claims following a BEM or other employment law measures (e.g. transfer/relocation)

In a legal dispute in which the effectiveness of a dismissal due to illness is challenged, the BEM is not, as is frequently assumed, a formal prerequisite for a dismissal due to illness, but rather has a decisive effect on the parties' burden of proof, depending on the outcome. Thus it does not stand against a termination notice that no BEM was accomplished.

As indicated, however, the burden of proof in the context of a possible dismissal protection lawsuit changes decisively. The BEM becomes particularly relevant in the concretization of the ultima ratio principle. This principle means that the termination of the employment relationship must always be the last resort and any milder measures must be carefully examined beforehand. If the employer has not carried out a BEM (which carefully evaluates possibilities for continued employment and possible changes to working conditions) or has not offered it, then they cannot rely on not being aware of any alternatives to termination.

However, if a proper BEM has led to a negative result (i.e. to the realisation that there are no appropriate, suitable employment opportunities for the employee), or if the employee has not agreed to the BEM offered in accordance with the rules, and subsequently challenges a later dismissal, the employer can rely on the BEM refusal and satisfy their burden of proof by making a general statement that there are no further employment opportunities. It is then for the employee to explain in detail that, contrary to the result of the BEM, there are further alternatives which either have not been dealt with despite being raised or have arisen only after its conclusion.

Recommendations and further notes

A BEM is not always necessary once problems occur in employment relationships due to or as a result of illness, although it is usually recommended. If an employer decides to carry out a BEM (in particular with regard to a dismissal), this should be done properly by including all relevant parties and by carefully examining the possible measures available. Each step should be thoroughly documented, because an employer cannot refer to an incorrectly accomplished BEM. Formalities and documentation need to be safeguarded as lack of compliance can have detrimental effects, for example, an incorrect letter of invitation (which does not refer to the data protection aspects of the collection and use of employee/sickness data) can invalidate the process and its findings, preventing its admissibility in later court proceedings.

A BEM should always be offered, especially before an intended dismissal due to illness. A BEM should not be confused with a return interview (after a period of sickness) and employers should distinguish them accordingly.

Offering a BEM can present an opportunity to make a disrupted employment relationship viable again or, ultimately, to lure an employee out of the reserve to the extent that the employee himself must explicitly point out possible alternatives within the framework of the BEM or, otherwise, it can be documented that there are no (more) suitable employment opportunities, assisting the employer in a possible dismissal scenario.

Irrespective of the employee's behavior, the offering of a BEM also makes it clear that the employer presents himself as an active and striving party and that all available options have been exhausted.

In addition, it is very common that an employer takes action once the employee has been on sick leave for more than six weeks in a year. The six week period can (besides the occupational reintegration management) be explained by the German Continuation of Remuneration Act - "Entgeltfortzahlungsgesetz, EFZG": German law stipulates that employees are entitled to continued remuneration for up to six weeks per year and per illness. This provides for a maximum of six weeks for one specific illness, however, overall sickness time could far exceed this if there are multiple illnesses. After the six week period employees receive sick pay via their health insurance instead of normal remuneration from the employer. Irrespective of the EFZG, actions are often taken after the six week period in cases of frequent absenteeism due to several different illnesses (in contrast to just one illness causing several periods or one long period of absenteeism).

Sickness-related termination under German employment law

In general, a termination based on illness needs to be justified in three steps:

1. The first step is a negative prediction/prognosis of the employee’s health status. The justified prognosis of further absenteeism due to sickness in relevant amounts is the first precondition. Absenteeism in the past may indicate further absenteeism, but there is no guarantee that a physician would always or still come to the same conclusion. Within a possible lawsuit one would have to describe every absence of the previous years (not as summary, but mentioning every individual date or period). Afterwards the employee may release his or her physician from the secrecy obligation and further prognosis would then be based on the physician's expert opinion, content of which cannot be predicted.
2. Furthermore, to justify a termination due to sickness, there must be significant economic impact and/or business related damages. Additionally, also the concrete problems/disruptions in daily work life (that must be explained and proved in a detailed way) are to be considered.
3. Should a termination be challenged, the last point of examination is an extensive balancing of interests made by the court. It is hard to predict the outcome of the court´s evaluation; however, courts usually take into account the employee´s seniority, age, disability status, costs and business impact, support obligations, marital status and comparison of sickness rate with colleagues etc.

In conclusion, one can state that a sickness-related termination in Germany is hard to justify, but careful preparations and the proper processing of a BEM may at least mitigate the existing risks and may add some leverage to potential negotiations with the employee concerned.