Newsletter Employment Law I/2016

 

I/2016

The amendments to the German Temporary Employment Act (Arbeitnehmerüberlassungsgesetz,
AUG
) continue to take shape: On 17 February 2016 the German Federal Ministry of Labour and Social Affairs (Bundesministerium für Arbeit und Soziales, BMAS) presented a revised draft bill after the original draft had received heavy criticism. In this Newsletter we present these amendments as well as the most important findings from current case law in the field of employment law.

 

1. Current Case Law

 

1.1 Employers are entitled to analyse an employee’s browser history even without his consent
1.2 Employees have a full holiday claim only “after” and not already “with” the existence of the employment relationship for six months
1.3 Retroactive effect of the service of a complaint in case of collectively bargained limitation periods
1.4 Severability clause could remedy a void non-compete clause that does not contain a commitment to compensate for non-competition (Karenzentschädigungszusage)
1.5 Due form of the offer to carry out company integration management measures (“BEM”)
1.6 Flexibility in restructuring measures - bonus payments in return for waiving the right to file unfair dismissal actions and severance payments upon entering into a termination agreement
 
2. Legal Developments

 

2.1 Maximum duration of personnel leasing
2.2 Equal pay principle
2.3 Section 611a BGB-draft

 

 

1. Current Case Law
1.1 Employers are entitled to analyse an employee’s browser history even without his consent

 

By judgement dated 14 January 2016, the Regional Employment Court (Landesarbeitsgericht, LAG) of Berlin Brandenburg ruled that employers are entitled to analyse an employee’s browser history on a company computer, even without the employee’s consent, in order to establish facts upon which an employment relationship can be terminated (reference 5 Sa 657/15).
According to the press release (no. 9/16 dated 12 February 2016), which is all that is currently available, the court had to decide on the basis of the following facts:
The employer had provided the employee with a company computer to fulfil his employment duties. The employee was only allowed to use the internet privately if necessary in exceptional cases during work breaks. Following indications of the employee’s substantial private use of the internet, the employer analysed the browser history of the company computer without the employee’s consent. The employer subsequently terminated the employment relationship for good cause on grounds of the established excessive private use, which totalled approximately five days within a period of thirty working days.
The court decided that the unauthorised private use of the internet fundamentally established the right to cancel the employment relationship for good cause, and that the balancing of interests required during an extraordinary termination fell in the employer’s favour. The employer was also permitted to prove the infringement of the employment duties by analysing the browser history. In its statement of grounds the court declared that, although personal data was the subject matter of the analysis and the employee had not given his consent to its examination, the employer was allowed to analyse the data because the German Federal Data Protection Act (Bundesdatenschutzgesetz, BDSG) permits the storage and analysis of the browser history to check for abusive uses even without the employee’s consent. Furthermore, in the present case the employer had no other means of establishing and proving the extent of the unauthorised internet use, and thus of establishing and proving the facts underlying a termination. Therefore, any inadmissibility of evidence to the detriment of the employer did not apply.
The judgement of the LAG Berlin-Brandenburg is not yet final; the right to appeal was explicitly permitted in the judgement. How the Federal Employment Court (Bundesarbeitsgericht, BAG) will decide remains to be seen. Until a final decision has been reached, in comparable cases employers are advised to give notice of termination based on facts (Tatkündigung) as well as, alternatively, notice of termination based on assumed facts (Verdachtskündigung) on grounds of the suspected failure to work the contractually specified hours. Should the adjudicating court consider the conduct-based dismissal to be invalid in the absence of the admissibility of evidence (analysis of the browser history), the termination of the employment relationship could still be justified by way of the termination declared on the basis of assumed facts. However, as is well known, such a termination presupposes that the employee in question was granted a hearing prior thereto.
 

Jamilia Becker

 

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1.2 Employees have a full holiday claim only “after” and not already “with” the existence of the employment relationship for six months

 

An employee whose employment relationship is not established until 1 July of a year cannot, according to Section 4 of the German Federal Holiday Entitlement Act (Bundesurlaubsgesetz, BUrlG), acquire a full holiday claim in that same year. Consequently, the date of the expiry of the waiting period and the date of the accrual of the full holiday claim do not coincide. According to the facts underlying the decision of the Federal Employment Court (Bundesarbeitsgericht, BAG) (judgment dated 17 November 2015, reference 9 AZR 179/15), the claimant had been employed by the defendant from 1 July 2013 until 2 January 2014 and had worked a six-day week. Pursuant to the claimant’s written employment agreement, the Collective Wage Agreement for the Security Sector in North Rhine-Westphalia dated 8 December 2005 (MTV) applied to the employment relationship. In respect of the holiday entitlement, Section 5 MTV contains, inter alia, the following regulations:

“Leave shall be granted for 26 working days in each calendar year. Employees joining and/or leaving the company are granted the number of twelfths of the annual holiday to which they are entitled that is equal to the number of full months they have been employed in the current year. The division into twelve only takes place within the limits of Section 5 BUrlG; payment in lieu of holiday is only permissible if holiday can no longer be granted at the time the employee leaves the company.”

The claimant did not take any holiday during his employment relationship. After the termination of his employment agreement the defendant paid the claimant compensation in lieu of holiday for thirteen days’ leave. The claimant sued for compensation of a further thirteen days’ leave. The appeal on points of law was unsuccessful. According to the BAG, the claimant had no claim against the defendant to payment in lieu of the further thirteen days of leave since he did not have a full holiday claim pursuant Section 4 BUrlG. According to Section 4 BUrlG, the full holiday claim first accrues once the employment relationship has existed for a period of six months. In this respect the court remarked that the full holiday claim did not already accrue “with the existence of the employment relationship for six months” but only “after the existence of the employment relationship for six months”, and that the date of the expiry of the waiting period and the date of accrual of the full holiday claim did not coincide. In practical terms, this ruling essentially makes two statements: To begin with, employees whose employment relationships are terminated within the waiting period (Section 4 BUrlG) do not acquire a full holiday claim. Secondly, holiday claims pursuant to the BUrlG always have to be considered with respect to the calendar year. Consequently, according to Section 5 BUrlG, employees whose employment relationships were not established until 1 July of a calendar year will have to make do with a partial holiday claim in the first calendar year of their employment.

 

Nils-Frederik Wiehmann

 

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1.3 Retroactive effect of the service of a complaint in case of collectively bargained limitation periods

 

By judgement of 16 March 2016 (reference 4 AZR 421/15) the BAG ruled that the receipt of a complaint by a local court (Amtsgericht, AG) does not suffice to fulfil the requirements for observing a collectively bargained limitation period for which the written form suffices. Instead, the observance of the collectively bargained limitation period requires the timely service of the complaint to the other party (press release no. 12/16).
The employee claimed remuneration from his employer for the month of June 2013 and brought this claim before the employment court. The court received the complaint on 18 December 2013; the defendant did not receive the complaint until 7 January 2014. The applicable collective agreement contained a limitation period pursuant to which claims arising from the employment agreement must be asserted in writing within a period of six months – in this case by 31 December 2014.
The employee was of the opinion that the deadline had been met because the court had received the complaint on time. According to Section 167 of the German Code of Civil Procedure (Zivilprozessordnung, ZPO), late service had retroactive effect as per the date of the court’s receipt of the complaint. The employee won the lawsuit before the court of first instance and before the court of appeal.
The case was dismissed by the BAG upon the employer’s appeal on points of law. The court stated that Section 167 ZPO did not apply to collectively bargained limitation periods which required the written assertion of rights vis-à-vis the employer. The employee himself is responsible for the time lapse when he calls in the court to meet the deadline, despite there being no need for such measure. The service of the complaint on 7 January 2014 did not have retroactive effect as per the date of receipt of the complaint on 18 December 2013.
The BAG upholds its previous case law on the observance of collectively bargained limitation periods. Consequently, Section 167 ZPO does not apply to collectively bargained limitation periods which can also be met without judicial enforcement (BAG judgement dated 8 March 1976, reference 5 AZR 361/75). However, the abovementioned case law possibly deviates from the case law of the BAG’s 8th Senate. As regards the statutory limitation periods of Section 15, Subsection 4 of the German General Equal Treatment Act (Allgemeines Gleichbehandlungsgesetz, AGG) – which can also be asserted without judicial enforcement – the 8th Senate ruled that Section 167 ZPO is applicable (judgment dated 22 May 2014, reference 8 AZR 662/13).
In practical terms this ruling will have substantial impact. Employment agreements contain numerous limitation periods which are either based on collective agreements or individually agreed in the employment contract. The BAG’s present ruling can also be applied to limitation periods based on employment agreements. Insofar as a deadline can be observed through the written assertion of a claim, claims should be first asserted in a timely manner in writing vis-à-vis the contractual partner and only afterwards be asserted through the courts. The exclusive judicial assertion of the complaint entails the risk that the deadline will expire, since the party bringing the action has no influence over the date of service after the complaint has been received by the court.
 

Dr. Alexander Willemsen

 

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1.4 Severability clause could remedy a void non-compete clause that does not contain a commitment to compensate for non-competition (Karenzentschädigungszusage)

 

The LAG Hamm recently by-passed the established case law of the BAG and decided that a post-contractual competition prohibition which could be considered void due to its lack of a commitment to compensate for non-competition can be remedied through a severability clause. According to the LAG Hamm, the void competition prohibition that did not contain a commitment to compensate for non-competition is replaced by an effective competition prohibition which contains such a commitment (LAG Hamm dated 5 June 2015, reference 10 Sa 67/15).
In the case to be decided by the LAG Hamm, the claimant’s employment agreement contained a post-contractual competition prohibition for the duration of two years. The agreement did not contain a reference to Sections 74 et seq. of the German Commercial Code (Handelsgesetzbuch, HGB), nor was any compensation for non-competition agreed upon. The agreement envisaged a contractual penalty in the amount of EUR 10,000.00 for each violation as well as a severability clause, according to which - in the event of the nullity of a provision – provisions would apply which come closest to the meaning and purpose of the clause and intention of the parties. The claimant sued for payment of a compensation for non-competition in the amount of 50% of his last paid contractual remuneration for a period of two years after the termination of his employment agreement.
Both the employment court and the LAG awarded the claimant the compensation for non-competition because the severability replacement clause causes a reversal of the presumption of invalidity according to Section 139 of the German Civil Code (Bürgerliches Gesetzbuch, BGB), with the result that a provision only becomes void if its validity is no longer maintained by the supposed will of the parties. However, since the employment agreement contained both a secrecy obligation and a high contractual penalty, it could be assumed that considerable importance had been attributed to the claimant’s knowledge, meaning that it could be presumed that the parties had intended a binding competition prohibition. Should the employer have hoped that the employee would also comply with a prohibition that did not envisage any compensation on grounds of ignorance, then this would have been dishonourable and therefore must be disregarded. Accordingly, the court deemed that the severability replacement clause had led to the replacement of the void competition prohibition with an effective competition prohibition containing a commitment to compensate in the minimum amount in accordance with Section 74, Subsection 2 HGB. The employer, in its capacity to stipulate the general terms and conditions (Verwender), could not plead the invalidity of the severability clause as it infringed the law of general terms and conditions. Moreover, the LAG left open the question of whether or not the supplementary commitment to compensate was void due to a violation of the written form requirement pursuant to Section 74, Subsection 1 HGB in connection with Section 126, Subsection 2 BGB, because the employer could not plead such violation as it had been aware of its invalidity when the agreement had been concluded and, additionally, had failed to inform the claimant about this fact.
The verdict of the LAG Hamm is inconsistent with the established case law of the BAG, which regularly deems a post-contractual competition prohibition to be void if it contains no reference to compensation, such as a reference to Sections 74 et seq. HGB (cf. BAG judgement dated 28 June 2006, reference 10 AZR 407/05). Since an appeal is pending against the judgement of the LAG Hamm before the BAG under the reference 10 AZR 448/15, it awaits to be seen what stand the BAG will take. Thus, it is still relevant for new agreements that a compensation for non-competition must be agreed with employees in the amount stipulated in Section 74, Subsection 2 HGB if an envisaged competition prohibition is to be effective. Should the commitment to compensate for non-competition be missing in an existing agreement but the agreement contains a severability clause, there is still hope that – in the event of the BAG’s confirmation - a post-contractual competition prohibition containing a commitment to compensate for non-competition in the lawful amount will nevertheless be assumed.


Isabel Hexel

 

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1.5 Due form of the offer to carry out company integration management measures (“BEM”)
 

In the past there has repeatedly been reason to draw attention to the importance of a proper company integration management (“BEM”) within the meaning of Section 84, Subsection 2 of the German Social Insurance Code IX (Neuntes Buch Sozialgesetzbuch, SGB IX). The employment courts and in particular the BAG have most recently regularly had to address detailed questions on BEM. It has since become established case law of both the BAG and the regional employment courts (Landesarbeitsgerichte) that the employer’s burden of representation and proof is substantially increased in illness-based unfair dismissal actions if a BEM is not carried out, is not duly implemented or is not duly attempted. De facto, a duly implemented BEM therefore becomes a condition precedent for the validity of an illness-based dismissal.
Whether or not a BEM is in due form is already determinable upon its implementation: Section 84, Subsection 2, sentence 3 SGB IX explicitly stipulates that the employee concerned must have “previously” been informed about the objective of the BEM and the type and extent of the data collected in connection therewith. If the employee was not duly informed, a BEM cannot be implemented correctly within the meaning of employment law jurisprudence, respectively, should the employee refuse to participate in the measure, it cannot be duly attempted.
By judgement dated 22 September 2015 (reference 1 Sa 48a/15) the LAG Schleswig-Holstein re-emphasised the importance of the duty to properly inform the employee. The employer, in its position as defendant, had offered the claimant the execution of a BEM before declaring his illness-based dismissal following the claimant’s inability to work due to illness for more than six weeks per year over the previous five years. The letter offering the claimant a BEM contained no indication to the effect that data would be collected or used, i.e. the claimant was not informed which medical data would be collected and stored and to what extent and for what purpose the data would be made accessible to the sued employer. The claimant refused to participate in the BEM at that time, upon which the defendant declared his illness-based dismissal – and lost the subsequent unfair dismissal proceedings.
The LAG Schleswig-Holstein considered the illness-based dismissal to be ineffective on grounds that it was disproportionate. The sued employer had been unable to show that it had no other possibility of employing the claimant. Here, the employer bore an increased burden of representation as there had been no legally compliant BEM. The defendant had not informed the claimant in the form and manner prescribed in Section 84, Subsection 2, sentence 3 SGB IX as to which medical data would be collected and stored and to what extent and for what purpose the data would be made accessible to the employer. Here, the LAG Schleswig-Holstein upholds the case law developed by the BAG, which had already stressed the importance of duly informing employees as a prerequisite for an effective BEM in its judgement dated 20 November 2014 (reference 2 AZR 755/13).
The practical significance of the aforesaid case law is immense: In all endeavours to duly conduct or attempt a BEM – irrespective of whether this measure is intended to avoid the increased burden of proof in possible unfair dismissal proceedings or to actually enable the further use of the employee’s work efforts again in the long term – the employer should very carefully observe the requirements regulated in Section 84, Subsection 2, sentence 3 SGB IX. In the invitation letter, the data collected and used within the scope of a BEM must be described in detail and the use of data within the procedure must be explained. In all events this data will include personnel data, social data, data on a possible severe disability or gender equality, absenteeism, medical data (if necessary, including diagnoses), therapies and treatments, as well as work trials/efforts at reintegration. Furthermore, the use of the data must be explained. Hence, it is extremely advisable to examine standard invitation letter drafts that are already being used in companies with a view to the aforesaid amended case law and to revise them accordingly. If no structured processes to implement a BEM exist as yet, this should be tackled immediately.

 
Kathrin Vossen

 

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1.6 Flexibility in restructuring measures - bonus payments in return for waiving the right to file unfair dismissal actions and severance payments upon entering into a termination agreement
 

The examination of shop agreements providing for benefits to certain groups of employees under certain conditions has formed the basis of two current decisions. Each of these shop agreements was concluded in connection with an operational change together with a social plan. In both cases complaints were filed by employees who did not fulfil the respective requirements of the shop agreements and, consequently, did not receive any benefits. They considered these regulations to be a violation of the principle of equality. The subject matter of the decision of the LAG Munich dated 9 December 2015 (reference 5 Sa 591/15) was a redundancy payment which was to be made to employees in ongoing employment relationships upon the conclusion of a termination agreement with the respective employees. This regulation was deemed lawful. The BAG also had to decide in a case in which a special bonus was granted by shop agreement to those employees who did not file legal action against the termination of their employment agreements and who did not find subsequent employment (BAG, judgement dated 8 December 2015, reference 1 AZR 595/14). The BAG ruled that the requirement of a lack of subsequent employment constituted an unlawful differentiation which was not crucial to a claim to a special bonus. The facts underlying the judgements basically only differ with respect to the conditions underlying the envisaged premium payments, respectively redundancy payments. In the one case it was the requirement to conclude a termination agreement (LAG Munich), in the other the fact that the employee abstained from filing an unfair dismissal action and failed to find subsequent employment (BAG). Such differentiations in the granting of benefits in a shop agreement create a classification amongst employees which must be measured against the principle of equality under German shop constitution law (Section 75 Shop Constitution Act, Betriebsverfassungsgesetz, BetrVG). Here, unequal treatment must be justified by an acknowledged regulatory purpose of the agreement. In this context, some years ago the BAG already recognised the fact that the employer has a legitimate interest in promptly eliminating legal and economic uncertainty in connection with the termination of employment agreements (BAG judged dated 31 May 2005, reference 1 AZR 254/04). Since the conclusion of a termination agreement is directly related to this interest, the LAG Munich consequently did not consider this prerequisite for the premium payment to be an infringement of the principle of equality. However, to the extent - in the case to be decided by the BAG – it was required that the employee abstained from filing an unfair dismissal action and failed to find any subsequent employment, both differentiations were not covered by the regulatory purpose of the agreement. Since, according to the preamble of the special payment, this special payment also served the planning security purposes of the employer declaring the termination, the existence or absence of subsequent employment was irrelevant in this context. According to the BAG, however, such a differentiation is lawful in a social plan since its purpose is to mitigate the disadvantages suffered by the employees through the termination. The employer is permitted to influence the staff cut-backs envisaged by it within the scope of the implementation of operational changes and to create planning security. However, the decisions make it clear that differentiations in the granting of bonuses must be in line with the purpose of the respective regulation.

 

Jörn Kuhn

 

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2. Legal Developements

 

In the last edition of our Newsletter we had reported that the Grand Coalition had launched a draft bill to amend the German Temporary Employment Act (Arbeitnehmerüberlassungsgesetz, AÜG) on 16 November 2015 as well as other statutes. Due to severe criticism expressed by employers and unions, the draft bill of 16 November 2015 has been revised. On 17 February 2016 the German Federal Ministry of Labour and Social Affairs (Bundesministerium für Arbeit und Soziales) presented a new draft.
Below, we explain the significant changes in relation to the draft bill of 16 November 2015:

 

2.1 Maximum duration of personnel leasing

 

• According to the new draft bill, in hiring companies which are not bound by a collective wage agreement a deviation from the maximum duration of personnel leasing (18 months) is also permitted on the basis of a shop agreement which adopts the collective provisions of the collective agreement of the sector in which the temporary workers work.
• Should the collective agreement of the sector in which the temporary workers work provide for a corresponding opening clause (Öffnungsklausel), it is possible for the employer’s side and works council (Betriebsparteien) of the employer not bound by a collective wage agreement to stipulate a maximum duration of personnel leasing; however, this duration is limited to a maximum of 24 months.
• Companies without a works council will therefore not benefit from the new draft bill.

 

2.2 Equal pay principle

 

• Equal pay is now assumed if the temporary worker receives remuneration which equals the collectively bargained remuneration of a comparable employee of the hiring company in the hiring company, or, in the absence of such, receives remuneration which equals the collectively bargained remuneration of comparable employees in the sector in which the temporary workers work.
• By way of a collective agreement providing for a premium for a specific sector, a deviation from the equal pay principle is possible only for a maximum period of 15 months (previous draft: 12 months) on the condition that the temporary worker’s remuneration is raised gradually to the aforesaid remuneration after a maximum of 6 weeks.

 

2.3 Section 611a BGB-draft

 

The criteria catalogue provided for in the previous draft for purposes of distinguishing the employment relationship from other types of contracts has been abandoned.
• The rebuttable presumption of the existence of an employment relationship has also been abandoned insofar as the existence of an employment relationship has been established in status proceedings of the German Pension Insurance Union (Deutschen Rentenversicherung Bund).
• Only a general definition of the term employee is now envisaged.
It reads as follows:


“An employee is a person who, on the basis of a private-law contract, is obliged to provide employment services specified by others for another party and is bound by instructions in a situation of personal dependence. The right to give instructions may include details of contents, implementation, time, duration and place of the activity.  An employee is a person who essentially is not free to structure his activities and determine his working hours; the degree of personal dependence also depends on the nature of the respective activity. In order to assess whether a person is deemed an employee, all circumstances have to be taken into account. Should the actual implementation of the contractual relationship show that the person concerned is in an employment relationship, the designation set out in the contract is irrelevant.”

• Accordingly, an employee is a person who is obliged
   •  on the basis of a private-law contract
   •  in the service of another party
   •  to provide services bound by instructions
   •  to provide services determined by others
   •  in a situation of personal dependence

This essentially corresponds to the previous case law of the BAG on the
definition of the term employee.

 

Jörn Kuhn, Nils-Frederik Wiehmann

 

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Dr. Gilbert Wurth

Partner

Telephone: +49 221 2091 351 / 381
Telefax: +49 221 2091 333

gilbert.wurth@oppenhoff.eu

Kathrin Vossen

Partner

Telephone: +49 221 2091 351
Telefax: +49 221 2091 333

kathrin.vossen@oppenhoff.eu

Jörn Kuhn

Partner

Telephone: +49 69 707968 140
Telefax: +49 69 707968 111

joern.kuhn@oppenhoff.eu

Isabel Hexel

Partner

Telephone: +49 221 2091 348
Telefax: +49 221 2091 333

isabel.hexel@oppenhoff.eu

Southeast Asia

Recent matters we advised on include:

Arbitration proceedings between a Belgian and a Singaporean company concerning the delivery of parts for a big industrial complex to be erected in China.

Dr. Alexander Willemsen

Partner

Telephone: +49 221 2091 551
Telefax: +49 221 2091 333

alexander.willemsen@oppenhoff.eu