Current decisions of the federal labour court (BAG): Right of termination

By Dr. Catharina Klumpp, Dr. Artur-Konrad Wypych, Julia Gottinger, Karina Bischoff, Marnie Plehn

06-2020

During the last few months, the BAG has addressed the issue of evergreen termination.

BAG - Ruling dated December 5, 2019 - 2AZR 107/19

Dismissal for alleged criticism

The employee was hired as a nanny by the employer. She was dismissed without notice, alternatively, with due notice at the beginning of 2017. The reason given for the termination was a statement by a third party in which the employer was criticised in her role as a mother. The employee objected to the termination and claimed that the employer’s termination behaviour was immoral, arguing that the potential fabrication of reasons for termination should indicate the immoral attitude of the employer. As such, the employee argued that the ordinary termination was null and void.

The BAG did not accept this reasoning, and concluded that a dismissal is not immoral and unfair (and thus null and void) simply because it is based on information which was brought to the attention of the employer from an outside source or third party. The BAG noted that there is no general obligation to clarify the "true facts", and held that it was understandable that an employer would not wish to continue an employment relationship if an employee spread negative facts or information about them.

Breach of good faith

An employer-side dismissal only breaks the principle of § 242 BGB (German Civil Code) if it violates good faith for reasons that are not covered by § 1 KSchG (Dismissal Protection Act). The violation of morality and good faith is far more severe than the principles of social considerations. For a claim of violation to succeed, a reprehensible motive of the person giving notice of the dismissal will be required. In summary, if the content of a neutral notice of termination does not already violate the fundamental values of the legal or moral order, personal conduct of the acting person must be added.

Invalidity according to the Dismissal Protection Act

If the requirements for the invalidity of the termination (according to § 1 KSchG or § 626 BGB) are met, there is no need to determine that the termination is immoral.

BAG - Ruling dated December 5, 2019 - 2AZR 240/19

Conduct-based dismissal and scope of freedom of expression

In this case, the parties also disputed the validity of an ordinary termination. As a result of various incidents, a commercial employee felt that she had been discriminated against by her superior on the grounds of sex and origin. In e-mails addressed to the Chairman of the Board of Management, she claimed that she had found "blatant xenophobia and misogyny" in the company and implied that she would express her feelings to the American press. She further claimed that "no Jew in this country has ever had to suffer such mental anguish as [herself]" and drew a comparison between her current work situation and the plot in the film "The Godfather". In another e-mail, the employee declared her supervisor unfit for leadership and implied that he did not even understand "the difference between cost and price".

Following encouragement from the employer, the employee partially distanced herself from the statements, but remained insistent about the misogynistic behaviour of her superior. As a result, the employer terminated the employment relationship and argued that the employee had seriously violated her contractual obligation to show consideration.

Social justification of the termination and (alleged) abusive criticism

Threatening behaviour from an employee to the employer designed to achieve the fulfilment of his own demands can justify a termination in some circumstances, as the employee's duty of consideration may be violated.

Whilst employers do not have to tolerate abuse by employees, employers should determine whether the statement contains and/or is based on a factual reference, as the basic right to freedom of expression must then be considered. A defamatory criticism (which is not covered by the protection of Article 5 of the Basic Law) will only be established if defamation of a person is at the forefront of the statement and any objective concerns are ancillary to the personal insult. Even where a criticism is excessive, abusive and unseemly (as in the present case), attention must be paid to whether any statements relate to the personal situation of the person making the statement. In this case, the BAG held that the employee’s statements were not primarily made to insult her superior, and instead noted that she wanted to express subjective feelings by evaluating and thematizing her circumstances. Further, if an employer requires an employee to respond, this may also constitute an unacceptable interference with the negative freedom of expression.

Freedom of expression at the workplace

A clear distinction must be drawn between statements taken as a basis for dismissals and references to experiences and fabrications - subjective statements must be distinguished from superficial defamation. Employers should also be aware that sharp or exaggerated statements are covered by the fundamental right of freedom of opinion (cf. BVerfG 28.11.2011 - 1 BvR 917/09). Whilst insults regarding the employer or its representatives which imply a violation of honour and may constitute a significant violation of the employee's duty of consideration, employers must carefully consider the specific circumstances to determine whether the employee’s conduct is covered by the right of freedom to opinion. Although the presence of subjective feelings may mean that defamation can be ruled out, we also note that any statements may constitute a reason for termination if there is planned disturbance of the industrial peace.

BAG - Ruling dated December 5, 2019 - 2AZR 147/19

Termination on behalf of a GbR (partnership under civil law)

This decision addressed the employer’s termination behaviour as opposed to the reason for termination. In this case, the employee worked for a property management company and provided services for this and three other companies. She was dismissed by means of a letter of termination signed by a partner of a GbR, but a power of attorney was not attached to the letter of termination. The employee rejected the termination pursuant to § 174 BGB due to the lack of a power of attorney.

Invalidity of the notice of termination in the absence of a power of attorney

The BAG held that there was no need for four separate notices of termination to be sent by the employer (i.e. one in respect of each company). However, the BAG noted that § 174 BGB is to be applied analogously if a joint power of representation is extended to a sole power of representation by authorizing a single board member. Insofar as the company does not act through all its shareholders in accordance with the basic legal rule of §§ 709, 714 BGB, a situation corresponding to § 174 BGB will exist when a GbR participates in legal transactions. This will also apply to GmbHs (limited liability companies) if they are not represented by one but by several managing directors. In all such cases, the company must ensure that all managing directors/partners jointly sign a power of attorney,or that a corresponding power of attorney exists for the managing directors/partners signing alone.

Powers of termination - practical tips

1. Written form

Please note that the power of attorney must be duly signed.

2. Provide the original

When handing over the notice of termination, the original power of termination must be presented at the same time. If this is not done, the employee can immediately reject the termination.

3. Identify special positions

Authorised signatories should make their position clear by adding a corresponding addendum (ppa) when signing.

4. Powers of termination in the employment contract

Define who is entitled to terminate the contract in the employment contract. The name(s) of any individuals and their position(s) in the company should be specifically outlined.

Practical consequences in termination law

Employer dismissals and the protection of employees against dismissal have a decisive influence on the highest court rulings on labour law. In accordance with the above decisions, employers are reminded to weigh up the individual options carefully when making decisions on dismissal and to meticulously monitor their resulting decisions. A high degree of sensitivity on the part of the employer will be particularly important where the limits of the employee's freedom of opinion need to be considered, and a statement hastily interpreted as an abusive criticism could be turned into a ground for invalidity of a pronounced dismissal. As outlined above, it is also important to consider the necessity of so-called termination behaviour of the employer (keyword: enclosure of power of attorney).