Newsletter Employment Law II/2016
The regulation of temporary employment is progressing. The Federal Government’s intention to already amend the German Temporary Employment Act [Arbeitnehmerüberlassungsgesetz, AÜG] during the current legislative period is nearing completion. The initial draft bill was met with distinct criticism from all camps and has undergone a multitude of adjustments in the meantime. A political breakthrough (albeit as yet unsatisfactory in terms of content) has ultimately been achieved in that the Federal Cabinet passed a draft bill on 1 June 2016 to combat abusive uses of temporary employment and contracts for work. Although it remains to be seen whether further adjustments to the draft bill will be enforced during parliamentary legislative proceedings, the reform will probably become effective on 1 January 2017. Hence, these remain exciting times, not least due to the jurisprudence of the employment courts whose new decisions constantly influence day-to-day work practice.
1.1 Time required to change clothes and for getting to and from the workplace within the firm counts as working hours
According to a decision of the Regional Employment Court [Landesarbeitsgericht, LAG] of Hesse (23 November 2015, docket No. 16 Sa 494/15), the time required for changing clothes and for getting to and from the workplace within the firm represents remunerable working hours if the employer stipulates that the employee has to wear specific clothes and such clothes have to be changed at the firm. This applies to obvious protective clothing which employees cannot be expected to wear in public, even if the employer has not issued an instruction for employees to change clothes at the firm.
In the underlying case the parties disputed the fact that the working hours account was credited with the time spent on changing clothes and getting to and from the workplace within the firm. The claimant works at the defendant’s waste incineration plant. For industrial safety reasons he is obliged to wear protective clothing during working hours. This clothing is brightly coloured and bears a large logo of the defendant, and at the end of the shift is extremely dusty and smells unpleasant. The defendant set up a changing room on site with the possibility of cleaning the protective clothing. The defendant gave no express instruction to change at the firm.
In both court instances the case was decided in the claimant’s favour. The Regional Employment Court considered both the time required for changing as well as the time for getting to and from the changing room to the workplace within the firm to be a part of the working hours owed by the claimant. The working hours included any activity which as such served to satisfy another’s requirements. This also included changing for work if the wearing of specific clothing was required and these clothes had to be changed at the firm. This can also be presumed in cases where no instruction was given, if the wearing of such clothes in public cannot be expected, which is especially the case with brightly coloured clothing which bears a large company logo and which gets dirty and smelly during the work required of the employee.
Hence, going beyond the previous case law of the Federal Employment Court [Bundesarbeitsgericht, BAG] on the time required to change clothing and the associated time spent getting to and from the workplace within the firm, such time can also represent remunerable working hours in cases where no express instruction to change clothes at the firm has been given. This ultimately depends on whether the employer can be expected to wear the work clothes in public and can therefore be expected to change at home.
1.2 Working hours taken into consideration when crediting interim earnings against a remuneration claim on grounds of a default in acceptance
According to a judgement of the Federal Employment Court dated 24 February 2016 (docket No. 5 AZR 425/15), in cases where interim earnings are to be taken into account pursuant to Sec. 615 sentence 2 German Civil Code [Bürgerliches Gesetzbuch, BGB], the ratio between the working hours lost at the employer and the working hours worked in the new service relationship are to be considered. With this, the Federal Employment Court is restricting the principle of making an overall calculation when crediting interim earnings and exclusively allowing the crediting of the earnings acquired by the employee through the exertion of that (temporal) part of his employment efforts which he should actually have made available to his employer.
In the case underlying the Federal Employment Court’s decision the claimant worked at the defendant for 12 hours per week. Her employment relationship was terminated due to the closure of the business as per 31 December 2011. Within the scope of the unfair dismissal proceedings, however, the parties agreed upon a later termination date and the payment of outstanding remuneration during the period of default in acceptance for the years 2012 and 2013. Since the claimant had worked 17 hours per week in a different employment relationship during these two years, the defendant credited the interim earnings against the claims on grounds of default in acceptance in full. The claimant asserted that the part of the remuneration for the weekly working time which was extended by 5 hours could not be credited against the claim and filed a payment claim. The case was decided in her favour in all three instances.
In the Federal Employment Court’s opinion, the entire duration of the default in acceptance (overall calculation) is relevant for crediting interim earnings pursuant to Sec. 615 sentence 2 BGB and not just the time period of the default in acceptance during which the claimant worked elsewhere, However, only what was acquired by the employee through the exertion of that part of her employment efforts which she should have provided to her employer pursuant to her employment contractual conditions could be credited against the claim. Hence, in this case only the earnings for 12 hours per week and not 17 hours per week could have been credited against the claim.
It is comprehensible why the earnings generated elsewhere should only be partially taken into consideration. However, the Federal Employment Court’s decision raises further questions. For example, what happens when the working hours fluctuate or the person concerned becomes self-employed? What about if the claimant achieves the complete remuneration for the default in acceptance in just 10 hours? Ultimately, the Federal Employment Court’s decision is unconvincing. However, in future, particular attention must be paid to the working hours when crediting interim earnings against claims.
1.3 Termination for breaching compliance regulations
The Regional Employment Court of Rhineland-Palatinate (26 February 2016, docket No. 1 Sa 358/15) has ruled that a breach of compliance regulations can not only justify a conduct-based termination, but also a termination on grounds relating to the person. The claimant was the coordinator of building technology in the enterprise of the sued employer. The employer’s code of conduct, which the claimant had undertaken to comply with, contained prohibitions against corruption, the disclosure of insider information and insider trading. A company previously hired by the defendant which had been blocked from contracts of the defendant on grounds of invalid business practices, hired a detective after being removed from the group of bidders. It put a contact person onto the claimant. In correspondence the claimant declared that he could help procure contracts at his employer for outside firms insofar as this did not jeopardise his job. After the employer had been given this information by the detective agency, it declared the extraordinary termination of the claimant’s employment, alternatively ordinary termination.
The Regional Employment Court definitely considered the claimant’s conduct to be a breach of various employment contractual obligations and as such thereby confirmed the existence of a conduct-based termination reason. The Regional Employment Court also considered a termination on grounds relating to the employee’s person. The claimant had created circumstances which considerably called his personal aptitude into question. He had given the impression that he could assist bidders during contract award proceedings in a manner which surpassed the simple establishment of just a contact. In the objective appraisal, the claimant’s conduct was an expression of the statement that he would violate the defendant’s interests in the future to his own advantage and was open to corresponding offers. This could fundamentally justify a termination relating to the employee’s person under the aspect of his personal unsuitability. Ultimately, however, the termination failed in the absence of a warning letter which, in the Regional Employment Court’s opinion, would have been required in consideration of the circumstances as a whole.
The Federal Employment Court had already assumed that a termination on grounds relating to the employee’s person can come into consideration if there are tangible facts which justify the assumption that the employee will commit considerable breaches of duties in future or impair the employer’s security interests (15 October 1992, docket No. 2 AZR 188/92). Pursuant to the correct opinion of the Regional Employment Court of Rhineland-Palatinate, such a termination is also possible in case of compliance breaches. Due to the difficulties in delimitation vis-à-vis conduct-based terminations, however, in cases where it does not clearly involve an irreparable lack of suitability, a prior warning should be declared.
1.4 Legal consequences of a failure to conduct preventative proceedings pursuant to Sec. 84 Subsec. 1 SGB IX
In its judgement dated 21 April 2016 (docket No. 8 AZR 402/14; press release) the Federal Employment Court once again had to deal with the provision – which wrongfully is still unknown in business practice – of Sec. 84 Subsec. 1 German Social Code Book IX [Sozialgesetzbuch IX, SGB IX]. Sec. 84 Subsec. 1 SGB IX stipulates that, in cases where difficulties arise relating to the person or conduct of a severely disabled employee, or for operational reasons concerning the employment relationship of a severely disabled employee, the representative body for severely disabled persons, the works council and the integration office have to be called in as soon as possible to enable the employment relationship to be continued permanently to the extent possible.
The employment relationship with the severely disabled claimant had been terminated during the first six months without prior preventative proceedings. The claimant did not contest the termination, demanding instead from the sued federal state payment of compensation for discrimination on grounds of her disability pursuant to Sec. 15 Subsec. 2 German General Non-Discrimination Act [Allgemeines Gleichbehandlungsgesetz, AGG]. Preventative proceedings were a special protective measure to prevent discrimination against severely disabled persons as well as a “reasonable precaution” within the meaning of Art. 2 of the UN Disability Rights Convention and Art. 5 of Council Directive 2000/78/EC. Should no such precaution be taken, this has to be seen as discrimination. The Federal Employment Court did not share this opinion; preventative proceedings neither have these legal effects nor is the employer under any obligation to conduct preventative proceedings pursuant to Sec. 84 Subsec. 1 SGB IX during the first six months of the employment relationship (waiting period pursuant to Sec. 1 Subsec. 1 German Unfair Dismissal Act [Kündigungsschutzgesetz, KSchG]).
With this decision, the Federal Employment Court is in line with its fundamental decision from the year 2006 (7 December 2006, docket No. 2 AZR 182/06) in which the Federal Employment Court did not consider preventative proceedings to be a formal prerequisite for the validity of the termination of a severely disabled employee, but – as in the procedure for occupational integration management pursuant to Sec. 84 Subsec. 2 SGB IX - as a concretisation of the principle of proportionality intrinsic to protection against dismissal. Since this does not (yet) have any applicability during the waiting period, it is irrelevant whether a milder means could have been identified within the scope of preventative proceedings to avert the termination.
Vice versa, however, these decisions mean that after the expiry of a trial period, preventative proceedings must be taken into consideration in order to avoid the consequences of unfair dismissal law and possibly also discrimination law.
1.5 Strict written form requirement for requesting parental leave
The Federal Employment Court ruled in a judgement dated 10 May 2016 (docket No. 9 AZR 145/15) that a request to take parental leave pursuant to Sec. 16 Subsec. 1 German Federal Act on Parental Benefit and Parental Leave [Bundeselterngeld- und Elternzeitgesetz, BEEG] requires the strict written form within the meaning of Sec. 126 Subsec. 1 BGB. Employees therefore have to sign in their own hand by giving their signature or by making a hand-made mark certified by the notary. Telefax or e-mail is not suited to fulfil the legally prescribed written form. This leads to the nullity of the declaration.
The claimant worked as a legal secretary at the sued lawyer’s office. Her employment was terminated by letter dated 15 November 2013. In the unfair dismissal action the claimant asserted that her employment relationship could not be terminated pursuant to Sec. 18 Subsec. 1 sentence 1 BEEG. She had notified the defendant after the birth of her child by telefax on 10 June 2013 that she was claiming two years’ parental leave.
The previous instances granted the unfair dismissal action. The defendant’s appeal on points of law, however, was successful before the Federal Employment Court. The court stated in its decision, which is available to date only as a press release, that a person wishing to claim parental leave must request this in written form from the employer pursuant to Sec. 16 Subsec. 1 BEEG. The claiming of such leave represented a declaration of intent with legal effects and which requires receipt, through which the employment relationship is suspended during the parental leave. The request for parental leave demanded the strict written form pursuant to Sec. 126 Subsec. 1 BGB. To this effect, it must be signed by employees in own their hand by giving their signature or by making a hand-made mark certified by the notary. The declaration made by telefax or e-mail was not suited to preserve the written form requirement, with the result that the disputed declaration was null and void pursuant to Sec. 125 Subsec. 1 BGB.
The written form requirements can also be transferred to other declarations of employees. The notification and declaration of homecare leave pursuant to the German Homecare Leave Act [Pflegezeitgesetz, PflegeZG] as well as family homecare leave pursuant to the German Family Homecare Leave Act [Familienpflegezeitgesetz, FPfZG], which likewise require the written form, will therefore also only be valid if the strict form requirements of Sec. 126 Subsec. 1 BGB are observed.
1.6 Remedy of the failure to notify pursuant to Sec. 17 Subsec. 2 KSchG through the statement made by the works council
By judgement dated 9 June 2016 (docket No. 6 AZR 405/15) the Federal Employment Court ruled that the failure to notify the works council about the occupational groups during the consultation proceedings held in the event of a mass dismissal in cases where all employees are dismissed on grounds of a business closure, can be remedied through a conclusive statement of the works council. In this connection, one must be able to derive from the statement that the works council considers its consultation claim to have been fulfilled.
In the underlying case, following the insolvency of the employer, the insolvency administrator decided to close down the business and dismiss all employees. It conducted consultation proceedings pursuant to Sec. 17 KSchG, but in contravention of Sec. 17 Subsec. 2 sentence 1 No. 2 and 3 KSchG, failed to notify the works council of the occupational groups of the employees. The compromise of interests concluded by the insolvency administrator and the works council contained the following regulation:
“Sec. 10 Consultation proceedings pursuant to Sec. 17 German Unfair Dismissals Act
The works council was notified in good time and completely within the scope of the negotiations on this compromise of interests on 4 December 2013 pursuant to Sec. 17 Subsec. 2 KSchG.[...] The works council confirms the end of the consultation proceedings and gives its consent […].”
A few days after concluding the compromise of interests the insolvency administrator declared the termination of the employment relationships of the employees concerned for operational reasons.
The unfair dismissal action brought against this termination by an employee was rejected by the Federal Employment Court – as by the previous instances. As its reason therefor the Federal Employment Court stated that, although flaws in the consultation proceedings pursuant to Sec. 17 Subsec. 2 KSchG did fundamentally lead to a faulty mass dismissal notification and consequently to the invalidity of the declared terminations, the failure to notify the works council about the occupational groups in an exceptional case did not have these negative consequences in the event of a business closure insofar as the works council remedied the absent notification through its conclusive statement. The Regional Employment Court of Lower Saxony had stated in the previous instance that the conclusive statement of the works council had not been decisive since the works council’s examination was not impaired by the failure to notify it of the occupational groups in cases where all of the employees were going to be dismissed.
In practice, the Federal Employment Court’s jurisprudence creates a need to ensure a corresponding structuring of compromises of interests in the event of business closures. It must be evident from the works council’s statement that it deems its consultation claim to have been fulfilled.
Dr. Alexander Willemsen
2. Legal developments
2.1 Amendment of the German Temporary Employment Act
The Federal Government’s intention to already amend the German Temporary Employment Act [Arbeitnehmerüberlassungsgesetz, AÜG] during the current legislative period is nearing completion. As we had reported in our last two Newsletters, the Federal Ministry of Labour and Social Affairs [Bundesministerium für Arbeit und Soziales, BMAS] has prepared two draft bills in this connection to date, the essential regulatory content of which has already been presented by us. Besides the amendments to the AÜG, the term “employee” is also going to be legally defined in future in Sec. 611a of the new version of the German Civil Code [BGBnF]. The CDU/CSU and SPD agreed on 1 June 2016 on a draft bill which corresponds in terms of content to the second draft bill. The Bundestag is expected to address the draft in the near future, with the result that the reform is likely to enter into force on 1 July 2017 as planned.
2.2 Integration Act
Of additional significance are the reform endeavours of the Federal Cabinet concerning the asylum policy for employers. This involves the draft of an Integration Act adopted by the Federal Government at its conference on 25 May 2016. In particular, it serves to promote the integration of asylum seekers on the German vocational training and labour market. It is envisaged that the Act will be passed by the Bundestag before the summer break in July. From the employment law perspective, the following content of the regulation is of importance:
2.2.1 Temporary suspension of the priority check
At the moment, a so-called priority check pursuant to Sec. 39 of the German Residence Act [Aufenthaltsgesetz, AufenthG] must be conducted when employing asylum seekers. Its purpose is to check whether a German or EU citizen cannot preferentially be found for the job in question. According to the draft of the German Integration Act [Integrationsgesetz], this check is to be suspended temporarily for a period of three years. In regions with a tense labour market situation, however, the federal states can decide whether or not this new regulation is to be applied.
2.2.2 Targeted support of vocational training
Vocational training services are also to be far more readily accessible to specific foreigners. To this end, parallel aid, assisted vocational training and preparatory vocational training measures are to be provided to these persons at an earlier stage than was previously the case, and vocational training grants and vocational training wages are partially to be granted for the first time in such cases.
2.2.3 Secure residence status during the vocational training
To ensure planning security, also to the advantage of the employer providing the vocational training, toleration of the right of residence is to be ensured in future for the overall term of the foreigner’s vocational training. In addition to this, after the vocational training has been completed, a right of residence for a two further years shall be granted in cases of employment appropriate to the training, (so-called “3+2 regulation”).
Nils-Frederik Wiehmann, Jörn Kuhn
Dr. Gilbert Wurth
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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
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