Newsletter Employment Law III/2018

The entry into force of the new data protection law at the end of May 2018 has considerably increased awareness regarding the processing of personal data at enterprises as well as in the public debate, and a more restricted handling of data can be observed everywhere. In a new decision pronounced in August 2018, the Federal Employment Court [Bundesarbeitsgericht, BAG] has redefined the limits for using recordings from an overt video surveillance to justify a dismissal and, we are pleased to say, has considerably broadened their scope. This decision and further relevant employment law judgements can be found under the section “Current case law”. The section “News” gives a brief overview of the most important elements of the regular elections of representatives of severely disabled employees, which are due to be held in the period between 1 October and 30 November 2018.

By judgement dated 23 August 2018 - 2 AZR 133/18, currently only available as a press release, the BAG has ruled that film footage which documents the deliberate transgression of an employee may still be used and utilised in court six months after its recording. The employer may keep recorded footage until it sees legitimate grounds for its evaluation.

The claimant worked at a tobacco and newspaper shop. As a crime prevention measure, the defendant had installed an overt video surveillance system in its business premises. In the 3rd quarter of 2016 the defendant discovered a discrepancy in its stocks of tobacco goods and in August 2016 then checked the video recordings. The footage showed that the claimant had failed to put money received into the till on two days in February 2016. The defendant dismissed her without notice; the unfair dismissal case filed by the claimant was initially successful in the first two instances. In its judgement, the Regional Employment Court [Landesarbeitsgericht, LAG] prohibited the utilisation of the film footage on grounds that it violated the immediate deletion requirement of Sec. 6b para. 5 German Federal Data Protection Act, old version [Bundesdatenschutzgesetz a.F., BDSG a.F.].

The BAG partially repealed the appeal judgement and referred it back to the LAG. In the BAG’s opinion, as long as this concerned a legitimately overt video surveillance system, the processing and use of the film footage was permissible pursuant to Sec. 32 para. 1 p. 1 BDSG a.F. It held that a utilisation of the material does not become disproportionate simply through the passage of time; insofar, the general personal rights of the claimant protected under Art. 2 para. 1 in conjunction with Art. 1 para. 1 German Constitution [Grundgesetz, GG] are not infringed. The BAG did not consider it a mandatory requirement that the recordings had to be assessed immediately, rather, that the defendant was permitted to wait until he had legitimate cause to do so.

With this decision, the BAG is relaxing the usability of overt video recordings at the work place. Basically, there is no “use-by date” for recordings which would automatically render any utilisation impermissible after the expiry of such date. However, this should not be taken as a carte blanche for infinite storage. It is possible that the BAG will comment on a maximum storage period in the reasons for its decision.

Incidentally, the decision was pronounced on the basis of “old” data protection law. The BAG did point out, however, that the provisions of the new GDPR do not oppose a judicial appraisal of the personal data collected. Whether such appraisal is reconcilable with the principles of data economy, data minimisation and purpose standardised in Art. 5 GDPR remains to be seen. It is not unlikely that the ECJ will have to deal with this topic in the future.

Dr. Alexander Willemsen

An appraisal of the employer’s own conduct must be included in a consideration of the overall circumstances of an individual case within the scope of Sec. 626 German Civil Code [Bürgerliches Gesetzbuch, BGB]. According to the LAG Berlin-Brandenburg in its judgement dated 14 June 2018 – 15 Sa 214/18, if the employer offers the employee further employment until the expiry of the ordinary notice period, this would speak against any unreasonableness of the continuation of the employment relationship until it ends within the scope of an ordinary termination notice period.

The matter up for decision was the extraordinary dismissal of the claimant who had logged the time she had started work on four days in August and September 2017 a total of 135 minutes too early. During a corresponding hearing of the employee, the defendant offered the claimant the continuation of her employment relationship until the end of the year. As the claimant turned down this offer, no further details on this were discussed by the parties.

In contrast to the court of first instance, the LAG Berlin-Brandenburg held that the claimant’s extraordinary dismissal was invalid. The appeal instance made reference to case law of the BAG, pursuant to which an appraisal of the employer’s own conduct had to be included in a consideration of the overall circumstances of the individual case within the scope of Sec. 626 BGB. The defendant had considered the claimant’s further employment until the expiry of the ordinary termination notice period to be possible. For this reason it could not be assumed that the claimant’s conduct had been so serious that it would be unreasonable to continue her employment relationship until it ended within the scope of an ordinary termination notice.

The decision of the LAG Berlin-Brandenburg is in line with previous case law of the BAG and once again makes it clear that employers may not act in a contradictory manner. If the reason for the dismissal is suited to end the employment relationship with immediate effect, then this is precisely what should happen. At best, an ordinary termination can (and should) additionally be declared as an alternative measure. In this case, however, in view of the unreasonableness which is intrinsic to an extraordinary dismissal, there can be no active further employment until the expiry of the ordinary termination notice period.

Cornelia-Cristina Scupra

Employment contracts stipulated by the employer are known to regularly contain general business terms and conditions, which means that the individual clauses of the employment contract need to be checked inter alia as to their clarity and comprehensibility for employees (so-called transparency requirement of Sec. 307 para. 1 sentence 2 BGB). If expiry clauses in employment contracts fail to exclude the minimum wage guaranteed by Sec. 1 German Minimum Wages Act [Mindestlohngesetz, MiLoG] then, according to the judgement of the BAG dated 18 September 2018 - 9 AZR 162/18, the clause is invalid in its entirety as it violates Sec. 307 para. 1 sentence 2 BGB – even if minimum wage claims are not even an issue.

The employment agreement between the parties dated September 2015 stipulated inter alia that all reciprocal claims under the employment relationship expired if not asserted in writing to the other contractual party within three months of their maturity. Following the termination of the employment relationship by the sued employer, the parties agreed in a court settlement on the end of the employment relationship as per 15 August 2016 and on the due and proper settlement of accounts. The salary statement rendered by the defendant in October 2016 contained no payment in lieu of undisputedly existing holiday. The defendant countered the complaint filed in January 2017 for payment in lieu of holiday by pleading the three-month expiry period.

The defendant’s defence was unsuccessful. The claimant was entitled to the payment in lieu of holiday pursuant to Sec. 7 para. 4 German Federal Holiday Act [Bundesurlaubsgesetz, BUrlG]. The contractual preclusive period violated Sec. 307 para. 1 sentence 2 BGB. It was not clear and comprehensible because, in contravention of Sec. 3 sentence 1 MiLoG, it did not exclude the statutory minimum wage payable as of 1 January 2015. It also could not be upheld with respect to the claim to payment in lieu of holiday (Sec. 306 BGB). This certainly applied to employment contracts concluded after the entry into force of the MiLoG on 1 January 2015.

Expiry clauses in employment contracts, or even settlement clauses in cancellation agreements, which encompass without limitation all mutual claims under the employment relationship and therewith also the mandatory claim to the minimum wage, will have to be carefully reconsidered and possibly rephrased. Claims that are mandatory on grounds of their indispensability by force of law definitely have to be excluded from this if such clauses are to have any value at all.

Kathrin Vossen

By judgement dated 20 June 2018 - 5 AZR 262/17, the BAG ruled that a preclusive period in an employment contract is suspended in corresponding application of Sec. 203 p. 1 BGB for the duration of pre-trial settlement negotiations between the parties.

After the end of the employment relationship, the parties disputed over the employee’s existing claim to payment in lieu of holiday as well as the disbursement of remuneration for overtime which had accumulated on the claimant’s work-time account up to the end of the employment relationship. The employment agreement concluded between the parties contained a double preclusive period insofar, pursuant to which claims under the employment relationship had to be asserted in writing to the other side within three months of their maturity and, in case of their rejection, had to be filed with the court within a further three months of receipt of the rejection as they would otherwise lapse.

Following the defendant’s rejection of the written assertion of the claims by the claimant with reference to a possible amicable solution, the parties subsequently conducted settlement negotiations. As these were unsuccessful, the claimant judicially asserted his claims – however, only five months after the rejection of the claims by the defendant and thus after the expiry of the preclusive period in the employment contract.

The BAG repealed the decisions of the previous instances. According to the decision, which as yet is only available as a press release, the claimant had observed the three-month preclusive period for judicially asserting his claims since this has been suspended for the duration of the settlement negotiations between the parties in corresponding application of Sec. 203 p. 1 BGB. For this reason, the BAG could (still) leave open in its decision the question of whether the preclusive clause contained in the employment contract was invalid as a whole because it failed to expressly exclude the claim to the statutory minimum wage from its scope of application. This has now been clarified in the decision dated 18 September 2018 – 9 AZR 162/18 (see clause 1.3).

Because of the BAG’s decision, employers will no longer be able to feel complacent about the exclusion of corresponding contractual claims in future upon the expiry of corresponding deadlines if they have previously negotiated with the employee on an amicable settlement of the claims. On the other hand, the suspension of the preclusive period during settlement negotiations also means that the employer is not obliged to immediately judicially assert any claims it may have against the employee, but rather to initially strive to reach a more cost-effective and frequently quicker solution by negotiation.

Alexandra Groth

In practice, many enterprises round fractions of days of holiday up or down. This should no longer be the case since the BAG’s judgement dated 23 January 2018 - 9 AZR 200/17 at the latest. In this decision, the BAG stipulated that a claim to payment in lieu of holiday which amounts to less than half a day’s holiday should be neither rounded up nor down, unless statutory, collectively bargained or employment contractual provisions regulate otherwise.

The claimant demanded payment in lieu of 190 days of holiday from the years 2007 to 2015. In January 2008 she gave birth to her first child and took parental leave directly after her maternity leave until January 2011. In September 2011 she had her second child, and once again followed her maternity leave by taking parental leave until September 2014. As of October 2014 she was incapacitated from work due to illness. From April 2015 until the termination of the employment relationship at the end of September 2015 the claimant went back to work again – interrupted by her annual holiday. The defendant had previously informed the claimant that it was reducing her recreational leave by one twelfth for each full calendar month of parental leave. The claimant sought payment in lieu of the holiday she not taken since 2007 and argued inter alia that the proportionate reduction of her holiday claim during her parental leave pursuant to Sec. 17 para. 1 German Federal Act on Parental Benefit and Parental Leave [Bundeselterngeld- und Elternzeitgesetz, BEEG] violated Union law.

Within the scope of the judgement the BAG decided on several problems relating to holiday claims in connection with parental leave. Besides the aforesaid prohibited rounding up or down of fractions of days of holiday, the BAG ruled that the accrual of the claim to recreational leave is not dependent upon the employee’s obligation to render work services. Hence, neither the parental leave per se nor the work ban pursuant to maternity protection law detrimentally affect the holiday claim. Furthermore, it ruled that residual holiday from a first term of parental leave pursuant to Sec. 17 para. 2 BEEG can be transferred to the extent it has not lapsed prior to the start of the second term of parental leave and must be credited towards the holiday claimable by the employee when returning from the second term of parental leave.

The BAG evaded the question that is of interest in practice, namely whether a reduction of the holiday claim during the parental leave in accordance with Sec. 17 para. 1 BEEG violates Union law. This problem has been dealt with by the LAG Hamm, however, by judgement dated 31 January 2018 - 5 Sa 625/17), which came to the conclusion that Union law has not be violated. The decision is not yet legally binding, however, which means that the BAG may still have to deal with this question after all.

Anja Dombrowsky

In industrial disputes, permissible “weapons” frequently only seem to exist on the side of the unions. However, means of action and reaction are also available to employers. Strike-breaking premiums, the purpose of which is to deter employees from participating in strikes by promising a monetary payment, can be a very effective practical means in specific cases. However, premiums can permissibly only be granted for breaking a strike if certain conditions are fulfilled. Amongst other things, for example, the premium must be promised prior to the industrial dispute. Otherwise, case law regards this as an impermissible disciplinary measure.

By judgement dated 14 August 2018 - 1 AZR 287/17, the BAG recently had to address the issue of strike-breaking premiums once again. The BAG first of all confirms that strike-breaking premiums are a permissible weapon in industrial disputes. Secondly – and of extreme practical relevance – the BAG also considers premiums which clearly exceed the normal daily rate to be permissible.

The suing employee earned a gross monthly wage of EUR 1,480.00. Following the announcement of strike measures by the ver.di union, the defendant initially offered, in the form of an overall commitment, a strike-breaking premium in the gross amount of EUR 200.00 per strike day for full-time employees and, at a later date, a new strike-breaking premium in the amount of EUR 100.00 per strike day. The claimant participated in the strike for a total of 9 days and in an internal works council training measure for one day. He subsequently claimed payment of strike-breaking premiums for 10 days in the aggregate gross amount of EUR 1,200.00 and based his claim in particular on the principle of equal treatment under employment law.

Like the previous instances, the BAG dismissed the case. Although the payment of strike-breaking premiums did constitute an unequal treatment of striking and non-striking employees, the freedom to take industrial action enables the employer to counteract business disruptions and any pressure caused by the strike through permissible means. The unequal treatment is justified on grounds of industrial action law. The fact that the premium per strike day is a multiple of the claimant’s daily wage of EUR 69.60 also does not create impermissible pressure. With a gross premium in the amount of EUR 200.00 per strike day, the principle of proportionality is still observed.

Jörn Kuhn

By judgement dated 6 September 2018 - C-527/16 the ECJ ruled that an A1 certificate on the integration of an assigned employee into the social security system of the member state of the employee’s origin is binding for both the social security institutions and the courts of the member state of the assignment as long as it is neither revoked nor declared invalid by the member state of the employee’s origin. Exceptions to this are cases of fraud and an abuse of rights.

The subject matter of the decision was several questions submitted by the Austrian Higher Administrative Court [Verwaltungsgerichtshof]. An Austrian abattoir operator in Salzburg had its slaughter work carried out during the period 2012 to 2014 by employees of a Hungarian company sent to Austria. Before and after this period, these activities were undertaken by employees of a different Hungarian company. For these assigned employees, the Hungarian social security institutions had issued A1 certificates on the application of the Hungarian social security provisions. These certificates had partly been issued retroactively for cases in which the Austrian social security institution had already established the compulsory insurance of the assigned employees in Austria. Following the repeal of the decisions of the Austrian social security institution on compulsory insurance in Austria by the Austrian Administrative Court [Verwaltungsgericht], the referring court put several questions to the ECJ for a preliminary decision on the underlying Regulations (EC) No. 883/2004 and (EC) No. 987/2009.

The ECJ confirmed its previous case law regarding the binding effect of the A1 certificate (most recently judgement of 6 February 2018 – C-359/16) and confirmed and clarified once again that an A1 certificate is binding for both the social security institutions as well as for the courts. This extensive binding effect is upheld (except in cases of fraud and abuses of rights) as long as the A1 certificate is not revoked or declared invalid by the competent institution. The binding effect of an A1 certificate is even upheld if the Hungarian social security institution issues the certificate retroactively after the compulsory insurance obligation has been established by the Austrian social security institution.

Furthermore, the ECJ has severely restricted the transfer ban of Art. 12 of Regulation (EC) No. 883/2004. The transfer ban always applies when an employee replaces an assigned employee. According to the ECJ’s understanding, it is irrelevant to the transfer ban whether the employers of the employees concerned have their seat in the same member state or whether personnel or organisational ties exist between them.

The judgement of the Luxembourg judges can only partially be welcomed. Now that the ECJ has reconfirmed and concretised its previous case law on the extensive binding effect of an A1 certificate, its statements on the transfer ban of Art. 12 of Regulation (EC) No. 883/2004 will give rise to uncertainty in practice.

Cornelia-Cristina Scupra

Following the works council elections held this spring, the regular elections of representatives of severely disabled employees are now being held between 1 October and 30 November 2018. Although the essential elements of the election of representatives of severely disabled employees are similar (cf. Sec. 177 German Social Code Book IX [Sozialgesetzbuch IX, SGB IX]) to those of works council elections, they are not identical:

• One confidant and at least one deputy member to represent severely disabled employees are elected only in businesses which employ not only temporarily at least five severely disabled or equivalent employees.
• Eligible for election are all employees not only temporarily employed at the business who are aged 18 or above on the date of the election and have worked at the business for six months. The candidate himself may not be a severely disabled or equivalent employee.
• In contrast to the works council election, the election of the representative of severely disabled employees is purely an election of an individual. On grounds of the majority election system, the candidate with the most votes is elected confidant.
• The employer is obliged to provide the list of severely disabled and equivalent employees working at the business which must be kept pursuant to Sec. 163 para. 1 SGB IX.
• Basically, a formal election processes is conducted with an election committee comparable to that of a works council election. However, if a business has less than 50 severely disabled or equivalent employees eligible to vote, a simplified election procedure is conducted. Details of the election process are laid down in the Election Code for Representatives of Severely Disabled Employees [Wahlordnung Schwerbehindertenvertretung, SchwbVWO].
• The election can be contested on the grounds set forth in Sec. 19 German Shop Constitution Act [Betriebsverfassungsgesetz, BetrVG] and this is possible within 2 weeks of announcing the election results.

Kathrin Vossen

As already announced, our Employment Law Day is being held for the 10th time at our Cologne office on 8 November 2018.

The two topics we will be focussing on in the morning are the resolution of internals conflicts and the existing and new challenges of part-time and fixed-term employment law. Our main topic for the afternoon is the tension between flexible work forms on the one hand and the applicable laws on working hours and the right of direction on the other. The day will subsequently be rounded off with a look at current employment case law.

We look forward to having you join us for interesting lectures and lively discussion rounds.