Founded in 2013 and headquartered in Saarbrücken, Germany, tec4U-Solutions GmbH develops software solutions and data services for material and product compliance management. Through its "DataCross" platform, the company supports manufacturers, distributors and importers in complying with international regulatory requirements, including REACH, PFAS and the EU Deforestation Regulation (EUDR).

Banyan Software is a global acquirer of specialized software businesses pursuing a long-term buy-and-hold strategy. With the acquisition, the company further strengthens its presence in the European vertical market software sector. tec4U-Solutions GmbH will continue to operate independently from its Saarbrücken headquarters.

ADVANT Beiten regularly advises Banyan Software on acquisitions in the German-speaking region and continues to support the company in executing its long-term growth strategy. This latest mandate highlights the firm's extensive expertise in cross-border M&A transactions in the technology sector and its longstanding experience in advising international software and technology companies.

Advisors to Banyan Software:
ADVANT Beiten: Christian Burmeister (Berlin and Freiburg, lead, Corporate/ M&A), Damien Heinrich (Freiburg, Corporate/M&A), Mathias Zimmer-Goertz, Christian Döpke (both Dusseldorf, IP/IT), Michael Riedel (Berlin, Employment Law).

Public Relations
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

The transaction involved the acquisition of essentially all of Sympatex Technologies GmbH’s assets, in particular its trademark rights and other key intangible assets. With this acquisition, Pidigi ensures the continuation of the day-to-day operations of the long-established trademark Sympatex.

ADVANT Beiten provided Pidigi with comprehensive advice on all legal aspects of the transaction, including the structuring and execution of the asset deal, as well as matters relating to corporate law, intellectual property law and labour & employment law.

Advice on the Italian legal aspects was provided by Stefano Dindo, a lawyer at the law firm Dindo, Zorzi e Associati in Verona which referred the matter to ADVANT Beiten.

Since 1986, Sympatex Technologies GmbH has been developing innovative, PFAS-free membrane technologies for functional clothing, footwear, protective clothing and technical applications. Pidigi S.p.A. has been operating internationally since 1953 as a supplier of materials to the footwear, leather goods and sportswear industries.

Advisor to Pidigi S.p.A.:
ADVANT Beiten: Matthias W. Stecher (in charge, IP/IT), Virginia Mäurer, Maike Pflästerer (both Labour & Employment), Christoph Heinrich (Antitrust), Tanja Hogh Holub and Christian Hess (both IP/IT), Mario Weichel (Corporate/M&A).

Dindo, Zorzi e Associati: Stefano Dindo

Public Relations
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Below is an overview of the most material State-level rules (as always with labor/social insurance laws, the local legislation on provincial/municipal level shall be considered as well and may deviate to some extent from the nationwide regulatory framework):

Gradual raising of the China retirement Age since early 2025

Effective from 1 January 2025, China had introduced the “Measures of the State Council on Gradually Raising the Statutory Retirement Age”, providing for a gradual increase in retirement age over 15 years: for male employees from 60 to 63 years of age, for women in white-collar roles from 55 to 58 years of age and for women in blue-collar roles from 50 to 55 years of age. 

Basically, the gradual increase in the statutory retirement age primarily impacts male employees born between 1 January 1965 and 31 December 1976, as well as female employees born between 1 January 1970 and 31 December 1981 (for white-collar roles), and those born between 1 January 1975 and 31 December 1984 (for blue-collar roles). 

For male employees born after 1 January 1977, the statutory retirement age will be 63 years. For female employees in white-collar roles born after 1 January 1982, the retirement age will be 58 years, and for those in blue-collar positions born after 1 January 1985, it will be 55 years.

To quickly calculate the gradually-raised statutory retirement age, the China National Social Insurance Public Platform has provided a quick calculator which can be accessed here (access from outside China may sometimes face problems).

More flexible early or delayed retirement age since 2025

In addition to raising the retirement age, the “Circular on the Provisional Measures for Implementing the Flexible Retirement System” China had also introduced a flexible early retirement mechanism in 2025 for employees who met the minimum contribution periods for pension claims. The period for early retirement cannot exceed three years, and the flexible retirement age cannot be lower than the original statutory retirement age, which is 50 and 55 years old for female employees, and 60 years old for male employees. 

Employees who voluntarily opt for flexible early retirement must notify their employers with three months prior notice (this is a notice requirement only, in other words the employer's consent to take such early retirement is not required).

Employees who reach the statutory retirement age and who choose to have their retirement postponed must obtain a mutual agreement with the employer on such postponement with at least one-month prior notice. The maximum postponement period is three years from the statutory retirement age. Once the postponed period of retirement is confirmed, some localities in China do not allow a further (second) extension while in some localities, consecutive postponements are allowed, provided the overall period does not exceed the three-year upper limit. Employees who have postponed their statutory retirement age in accordance with the law are protected by the PRC labor and social insurance laws and regulations until they have reached their deferred retirement age. 

As of 1 July 2026: New Regulatory Framework for Employees Working Beyond Retirement Age 

To complement the regulatory labour legal framework for staff working beyond the retirement age (and thus losing the protection under the regular PRC labor and social insurance laws and regulations), China has now issued a new regulation specifically protecting this part of the workforce with the “Interim Provisions on the Protection of the Basic Rights and Interests of Over-Age Workers”, taking effect as of 1 July 2026.

These provisions govern PRC employers and their staff who has passed statutory retirement age, are subject to the employers’ labor management and engage in paid work for such employers. Also re-employment after early retirement falls within the scope of the new provisions. The key items of the new provisions are the following:

• Written Agreement: employers and their retired staff must sign written agreements stipulating the basic rights and obligations of both parties.

• Labor remuneration: the specific amount, calculation standards, payment cycles (at least monthly), payment dates, and payment method of the salaries must be defined, payments must be in cash currency and shall not be lower than the minimum wage standards.

• Working time, rest and leave: employers must comply with PRC statutory working hours and holiday regulations; generally overtime should be avoided but if necessary, shall not exceed the statutory thresholds and overtime pay must be made according to regular rules.

• Occupational safety and health: employers shall assign appropriate job positions and workloads according to the staff’s knowledge, skills, experience, and physical condition, and provide safety and occupational health training; hazardous occupations are prohibited for retired staff.

• Work-related injury protection: employers must enrol their staff in work-injury insurance and retirement age staff suffering work-injuries or occupational diseases enjoy the full protection under work-injury protection rules.

• Pension Insurance and Medical Insurance: Staff who already receives basic pension and medical insurance benefits for retired employees and who continues to work retain their full entitlement to basic pension and medical insurance benefits while they continue to work.

Staff enrolled in the basic pension and medical insurance scheme who has not accumulated the minimum contribution period by the time they reach the statutory retirement age (currently 15 years for pension insurance, gradually extended to 20 years and currently 20 years for medical insurance) have two options to proceed: either contribute to the pension and medical insurance on an individual basis or – provided the employer agrees – be enrolled in the medical and pension insurance via the employer (in which case both the employer and employee shall contribute at regular levels). Which of such two options is chosen depends entirely on what the parties agree upon; if the employer does not want to contribute for such retired employees, the employees cannot compel the employer to do so but they can then voluntarily contribute to the basic pension and medical insurance on their own. 

Legal Protection: Trade unions have the right to supervise employers’ compliance with the protection of the lawful rights and interests of retirement age staff continuing to work and are entitled to demand corrective measures and may support such employees if they apply for arbitration or initiate legal proceedings. Retirement staff employees may file complaints with the locally competent labor bureaus if their employers violate the new provisions regarding overtime or remuneration. Alternatively, they may also submit disputes arising from their employment concerning labor remuneration, rest and leave, occupational safety and health, or work-injury protection, to mediation or arbitration and, if dissatisfied with the arbitral award, institute legal proceedings in a People's Court. 

Key consideration for drafting flexible delayed retirement or post-retirement employment agreements

• For staff who reached the retirement age before 1 July 2026 and continues to work beyond such date, employers should check if and if so what written agreements have been executed with such staff and if they conform to the new legal framework.

• In no case (whether staff has or has not passed statutory retirement age) may employers delay payment of wages and the compensation must always comply with local minimum wage standards.

• Irrespective of whether staff has or has not passed statutory retirement age, statutory overtime and working-hour limits must be complied with. 

• Staff before retirement (including during deferred retirement age) must be fully covered under mandatory basic social insurance and housing fund regimes by their employers; staff having passed the statutory retirement age must still be included in the work-injury insurance while other social insurance coverage is not mandatory, though voluntarily possible in various forms depending on the actual circumstances. 

• Employers are prohibited from coercing employees into selecting a specific retirement age or making such decisions against the employee's will; employers are not allowed to pressure employees to opt for early retirement and they are not allowed to reject employee decisions for early retirement; diligent record keeping of all communications between the employee and the employer regarding retirement age postponement / labor services is crucial to be able to demonstrate fair and equitable processing of these matters. 

• While flexible delayed retirement agreements require mutual consent between employers and employees, employers may still impose specific conditions on the delayed retirement, such as e.g. the employee meeting certain performance standards, etc.

• If an employer does not intend to retain employees beyond the retirement age but the employee proposes continued employment, the employer is not obligated to agree to the employee's request for delayed retirement and can proceed with the retirement application formalities; if retirement application formalities cannot be completed due to the employee refusing to cooperate, the employer is not compelled to retain the employee once he reaches the mandatory retirement age.

• If the employer and employee agree that the employee continues to serve the employer after reaching the regular retirement age, they shall carefully choose to either sign a flexible delayed retirement agreement to extend the retirement age, or to enter into a labor service agreement with the employee after the employee is entitled to receive pension payments; if the parties opt for a flexible delayed retirement agreement, employers must understand the following: if they intend to terminate the labor relationship with such employees during the extension period, labor termination must follow the statutory termination rules provided for in the labor laws and regulations; if they opt for a labor service agreement, the statutory labor termination reasons do not apply, but still can and must – though on more flexible terms – be stipulated in the labor service agreement.

Same rules for foreign staff in China? Generally yes but here – even more than for PRC domestic staff – local labour bureau practices shall be considered, in particular regarding the question whether foreign employees can continue to maintain/obtain work permits after reaching retirement age; for foreign staff with PRC green cards as well as for staff with Class A work permits this may be a lesser problem, for those with only Class B or C work permits, the situation may be more complex.

Susanne Rademacher
Kelly Tang

Klinikum Westbrandenburg – with its two paediatric and adolescent clinics in Potsdam and Brandenburg an der Havel – was transferred back to its two shareholders, Klinikum Ernst von Bergmann and Universitätsklinikum Brandenburg an der Havel, following a demerger carried out under the law governing corporate conversions. The Potsdam site will now become part of the Klinikum Ernst von Bergmann whilst the Brandenburg an der Havel site will continue to operate as part of the Universitätsklinikum Brandenburg an der Havel.

The Ernst-von-Bergmann Group with more than 4,500 employees is currently undergoing a comprehensive reorganisation process. The current integration at the Klinikum Ernst von Bergmann in Potsdam will establish clear and sustainable structures for paediatrics and adolescent medicine whilst strengthening collaboration between the specialist departments.

ADVANT Beiten has provided comprehensive advisory services to the Klinikum Ernst von Bergmann regarding its restructuring, most recently in connection with the sale of its majority stake in Lausitz Klinik Forst GmbH.

Advisors to Klinikum Ernst von Bergmann: 
ADVANT Beiten: Dr Karl-Dieter Müller (Berlin, in charge), Benjamin Knorr, Robert Schmid, Dr Thomas Jilg (all Corporate/M&A, Berlin), Dr Silke Dulle (Medical Law), Dr Dietmar Müller-Boruttau, Wolf J. Reuter, Dr Martin Kalf (all Labour & Employment, Berlin), Helmut König (Tax, Dusseldorf)

Media Contact
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Banyan Software was founded in 2016 and regularly acquires growing software companies with the aim of developing them over the long term as part of a buy-and-hold strategy. Banyan Software has locations in Canada, the United Kingdom and the DACH region. 

Gini was founded in 2011 and has established itself over more than a decade as a trusted provider of document and payment AI platforms. Among other things, its solutions simplify invoice payments, automate data capture and are firmly anchored in the work processes of leading financial institutions. Under Banyan's new ownership, Gini will continue to expand its market presence, particularly in the banking sector, private health insurance and e-commerce. 

Following the transaction, the company's location and product development will continue.

ADVANT Beiten regularly advises Banyan Software on the implementation of its growth strategy in the DACH region, most recently in June 2025 on the acquisition of star/trac.

Advisor Banyan Software:

ADVANT Beiten: Christian Burmeister (Lead), Damien Heinrich, Julius Bauer (all Corporate/M&A), Heiko Wunderlich, Fabian Moser (both Tax), Mathias Zimmer-Goertz, Christian Döpke (both IP/IT), Michael Riedel (Employment Law).

Public Relations
Frauke Reuther
Manager Communications
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

ProMach is a leading international platform in the field of packaging and processing technologies.

DFT is an established provider of innovative solutions in the field of sterilization, pasteurization and other thermal processes for the food and beverage industry. With the acquisition of DFT, ProMach is continuing its growth strategy in Europe.

The international cooperation within the ADVANT alliance played a central role in this transaction: our Italian alliance partner ADVANT Nctm has been advising ProMach in Italy for many years.

ADVANT Beiten entered into the mandate in close coordination with the US law firm Thompson Hine, which regularly advises ProMach on legal matters in the United States.

Advisors to ProMach:
ADVANT Beiten: Prof Dr Hans-Josef Vogel (Dusseldorf), Roy Naor (Frankfurt, both Corporate/M&A, lead partners), Dr Andreas Imping, Anna Kubitz (both Labour Law), Mathias Zimmer-Goertz, Christian Döpke (both IP/IT), Sarah Peters, Simon Litterst (both Corporate/M&A, all Dusseldorf), Christopher Harten (Dispute Resolution, Hamburg), Marcus Mische, Markus Linnartz (both Tax), Thomas Herten (Real Estate, all Dusseldorf), Katrin Lüdtke (Public Sector, Munich).

Public Relations
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

The Büter Group comprises German and Dutch (production) companies and is one of Europe's leading companies in the hydraulics industry. Founded in 1965, the family-owned company is headquartered in Emmen (NL) and has production facilities in Haren and Meppen (DE). It employs around 550 people. Over the past six decades, the family-owned company has developed numerous patents and utility models in cylinder and lifting technology and is now one of the technological market leaders in the industry.

NPM Capital, part of the family-owned SHV Group, is an investment partner based in the Benelux countries that focuses on long-term partnerships with family-owned and entrepreneurially managed companies. As part of the transaction, NPM Capital is acquiring the entire group of companies, including the two German subsidiaries Büter Hebetechnik GmbH and Büter Maschinenfabrik GmbH.

By joining forces with NPM Capital, Büter Group is well positioned to accelerate its growth strategy and continue to invest in technological innovation and international expansion. Under the new ownership, Büter Group will continue to operate independently.

Regarding the sale of the Dutch entities, the international law firm Houthoff acted on ADVANT Beiten's recommendation. Taurus Corporate was involved as an M&A advisor. The acquisition is still subject to the usual regulatory and antitrust approvals. The parties have agreed not to disclose the transaction volume. 

Advisors to the shareholders of Büter Group:
ADVANT Beiten: Dr Guido Krüger (Corporate Succession/Taxes), Prof Dr Hans-Josef Vogel (M&A, both lead partners), Julian Krause (Corporate Succession/M&A), Dr Magdalena Rindermann-Haugwitz (Corporate/M&A), Volker Küpper (Taxes), Thomas Herten (Real Estate), Dr Andreas Imping, Anna Kubitz (both Labour Law, all Dusseldorf), Christoph Heinrich (Antitrust Law, Munich) and Maximilian Steffen (Taxes, Hamburg).

PR
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

ADVANT Beiten's interdisciplinary team supported Zoot throughout the entire acquisition process - from the legal and tax due diligence to the structuring and negotiation of the transaction agreements through to the successful closing.

Zoot Sports was founded in 1983 in Kona, Hawaii - the birthplace of the Iron Man triathlon. The company specializes in innovative clothing, shoes and equipment for triathletes and endurance athletes and is one of the world's leading brands in this segment. Zoot stands for technical precision, high quality and athlete orientation and sells its products in over 25 countries. Since 2023, Zoot has been part of the Italian MVC Group, an international sporting goods company based in Italy.

Tailwind Brands is a company based in Bönen, which specializes in the distribution and brand management of premium sports and lifestyle brands. The company has an established distribution network in the DACH region as well as long-standing partnerships with leading sports retailers and online platforms. Tailwind has made a name for itself as a competent partner for the development and expansion of international brands in the European market.

With the acquisition of Tailwind Brands, Zoot Sports is laying the foundation for accelerated expansion in Europe. The combination of Zoot's international brand strength with Tailwind's regional market and sales expertise offers considerable growth potential in the coming years.

Advisor Zoot Sports:
ADVANT Beiten: Dr Markus Ley (Corporate/M&A, Munich), Dr. Erik Schmid, Virginia Mäurer (both Employment Law, Munich), Susanne Klein, Jason Komninos (both IP/IT, Frankfurt), Markus Linnartz (Tax, Dusseldorf), Petra Fendt (Banking & Finance, Munich), Anja Fischer (Real Estate, Munich).

Public Relations
Frauke Reuther
Communications Manager
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

In addition, six colleagues were elected Local Partners and nine colleagues were elected Salary Partners. The newly elected partners are from all six German offices of the law firm, working in seven different areas of competence.

Dr Florian Weichselgärtner handles a large number of liability cases every year, both in the area of manager liability and the liability of lawyers, tax advisors, insolvency administrators, corporate and restructuring advisors and auditors. His area of activity further comprises advice to companies on the processing of liability cases and compliance violations. The interdisciplinary advisory service of ADVANT Beiten enables Dr Florian Weichselgärtner to comprehensively handle the often complex liability cases across all legal areas (tax law, criminal law, labour law, capital market law, insolvency law, etc.). Due to his many years of advisory practice, he has proven experience both in conducting and defending actions for damages as well as in out-of-court dispute resolution.

These are our new Local Partners in alphabetical order:

• Sascha Opheys (Public Sector, Dusseldorf)
• Max Stanko (Public Sector, Berlin)
• Dr Philipp Sahm (Corporate/M&A, Frankfurt)
• Haide Spanier (Banking, Finance & Restructuring, Frankfurt)
• Mark Thönißen (Corporate/M&A, Frankfurt)
• Dr Mark Zimmer (Labour Law, Munich)

Our newly elected Salary Partners are listed in alphabetical order:

• Regina Dietel (Labour Law, Munich)
• Gamze Dogan (Tax Law, Dusseldorf)
• Verena Nader (Real Estate, Munich)
• Dr Christian Osbahr (Corporate/M&A, Freiburg)
• Robert Schmid (Corporate/M&A, Berlin)
• Simon Schuler (Corporate/M&A, Freiburg)
• Etienne Sprösser (Corporate/M&A, Freiburg)
• Maximilian Steffen (Tax Law, Hamburg)
• Ulrike Stöhr (Tax Law, Munich)

"The appointment of our new partners shows how closely we work together across offices and between our practice groups - supported by diverse industry expertise," explains Dr Guido Krüger, Managing Partner of ADVANT Beiten, adding: "The fact that we have had successful elections at all three seniority levels underlines the continuous development of outstanding talent in our firm. Accompanying our colleagues on their path to partnership is one of our central tasks."

ADVANT Beiten also continues to follow its strategy of targeted growth by lateral hires in selected areas. The following Local and Salary Partners reinforced the firm last year:

• Tanja Ehls (SP, Public Sector, Frankfurt)
• Julian Gruß (SP, Real Estate, Dusseldorf)
• Peter Meisenbacher (SP, Public Sector, Freiburg)
• Ansgar Messow (LP, Real Estate, Dusseldorf)
• Johannes Voß-Lünemann (SP, Public Sector, Berlin)

PR
Frauke Reuther
Manager Communication
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

As part of the restructuring, the company structure was streamlined through a total of four mergers. In doing so, Medizinisches Versorgungszentrum (MVZ) was merged with Poliklinik Ernst von Bergmann GmbH. On the other hand, Innovation-Transfer-Gesellschaft mbH, Diagnostik GmbH and Servicegesellschaft were directly incorporated into Klinikum Ernst von Bergmann gGmbH. Thus, Ernst-von-Bergmann-Gruppe has successfully reduced the number of its subsidiaries from 15 subsidiaries to eleven strong units. 

Ernst-von-Bergmann-Gruppe with more than 4,500 employees is currently undergoing a comprehensive reorganisation process. The corporate restructuring in the form of the mergers carried out is a fundamental component in this context to simplify the structures, to organise processes more efficiently and to strengthen the ability of Ernst-von-Bergmann-Gruppe to act in the increasingly complex health market.

Advisors to Klinikum Ernst von Bergmann gGmbH:

ADVANT Beiten: Dr Karl-Dieter Müller (Lead Partner), Benjamin Knorr, Robert Schmid, Dr Thomas Jilg (all Corporate/M&A, Berlin), Dr Silke Dulle (Medical Law), Wolf J. Reuter, Dr Martin Kalf, Marie von Hammerstein, Lisa Brix (all Labour Law, Berlin), Helmut König (Tax, Dusseldorf).

Media Contact
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Anti-abuse rules against entities avoiding employer responsibilities through ambiguous and complex structures

Sometimes, companies try to evade legal responsibility as employers through complex employment structures. Interpretation II stipulates that when project owners subcontract/assign their business to entities without legal business qualifications, or when an entity without the corresponding qualifications conducts business activities externally through "affiliation" with a unit with legal business qualifications, the contractor/affiliated entity with legal business qualification will be legally recognized as the entity bearing the main responsibility as employer. This clarification aims to afford employees with a better protection of their rights in seeking payment of salaries and social insurance benefits because the responsibility for such claims will be borne by entities with legal status and (hopefully) sufficient financial means to honour such commitments.

In cases of so-called "group employment" or "affiliated company employment" (i.e. employment models where within a group of affiliated companies’ staff is transferred across different entities/units), it is often difficult to determine which particular entity is the “true” employer. Interpretation II provides that in determining the true employer, priority shall be given to the entity who signed the labour contract. If no written contract exists, the overall management behaviour and other comprehensive factors shall be considered. Specifically, one shall not only focus on formal aspects such as which entity pays salary and social security but also on actual factors such as which entity manages the staff, allocates work tasks, controls working hours, conducts performance evaluations, etc. and in such case the affiliated entities jointly are liable for salary payment and insurance benefits. This rule aims to better protect employees subject to business outsourcing models involving low-cost models and questionable third parties and is aimed to steer companies to simplify structures they may have set up to evade legal liability through untransparent structures.

Situations qualifying as “two consecutive fixed-term labour contracts” entitling employees to open-term labour contracts

PRC labour laws provide that in certain cases employees are entitled to ask for an open-term contract. Among others, employees are entitled to request an open-term contract after two consecutive fixed-term labour contracts with the same employer. 

Interpretation II provides that any of the following situations shall be considered as "consecutive conclusion of two fixed-term labour contracts":

• The parties agreed to extend the term of the first labour contract for at least one more year and such extension period has expired.

• The labour contract stipulates that the contract automatically renews upon the expiration of the first term for another fixed term and such second fixed term has expired.

• The employee “for reasons not attributable to himself” continues to work at his original workplace or job position after the first term of the contract expires and the employer merely changes the contracting entity of the (new) labour contract but continues to exercise labour management over the employee and the contract term expires. 

This addresses a scenario where the employee continues working in the same position/location after his contract has expired, even though the employer has changed the formal "party" (such as the company or organization) responsible for the contract, but the initial employer continues to manage the worker as before. In such cases, the court may treat this as a continuation of the same employment relationship and recognize it as meeting the conditions for signing two fixed-term contracts in a row, provided the continued performance at the same workplace/position with a new contract party did not stem from a voluntary decision of the employee himself. 

• After the expiration of the first contract, a new labour contract is signed by engaging in other actions that violate the principle of good faith to avoid obligations, and the contract term expires.

This refers to a situation where the employer signs a new labour contract under circumstances that violate good faith principles after the initial contract expires. Despite these circumstances, the contract is still recognized as having expired and requires legal consideration.

In essence, the last two bullet points focus on identifying situations where employers may try to circumvent labour laws by changing the structure of contracts or manipulating conditions, and the courts should still recognize the contracts as consecutive fixed-term contracts under those conditions.

Also, where, after the expiration of a given labour contract, the employee continues to work for his employer and the employer does not raise any objections against such continued performance for more than one month after the previous contract expired, the employee is entitled to a renewed labour contract under the terms of the expired contract. If at this point in time circumstances warranting the conclusion of an open-term labour contract exist, the renewed contract shall be entered into for an open-term if so requested by the employee. Should the employer rather choose to terminate the labour contract, this will subject the employer to bear liability for termination of a labour contract according to law (e.g. make severance payment if so required by law).

Consequences of failure to enter into written labour contracts

Under Chinese labour laws, not entering into a written labour contract with an employee carries serious legal and financial consequences for employers. An employer must sign a written labour contract within one month from the employee’s first day of work.

If the employer fails to sign a written contract within more than one month but less than one year, the employee is entitled to claim double his monthly wage for each full month worked without a written contract, starting from the second month. Interpretation II specifies that for a period of less than one month, the payment shall be calculated according to the employee’s actual working days in that month.  However, the employer is exempt from liability for double wage payment if it can prove any of the following circumstances:

• The labour contract could not be concluded in a timely manner due to force majeure.

• The failure to conclude the labour contract is attributable to the employee's own fault (e.g. refusal to provide necessary information).

• Other circumstances as stipulated in laws and regulations on this subject matter.

If the employer still fails to sign a written contract within one year from the employee’s  work start date, the employee is deemed to have entered into an open-term contract starting from the second year. In this regard, Interpretation II specifies that while the employee is entitled to sign an open-ended labour contract as of such second year, the employee is not entitled to claim double wages for the period as of such second year. The employee however remains entitled to claim double wages from the day following the expiration of one month from his work start date until the day before the expiration of one year from the work start date (so basically up to eleven months of a double wage claim).

Interpretation II further provides that where the term of a labour contract expires under any of the following circumstances and the court determines that the term of the labour contract automatically renewed/extended by operation of law, this situation shall not be regarded as a “failure to conclude a written labour contract”:

• The employer terminated the labour contract despite the terminated employee being under statutory protection against dismissal pursuant to Art. 42 Labour Contract Law (which lists situations such as medical treatment, occupational hazards/disease, maternity, other legally protected conditions). 

• The initial term of the labour contract expired but has been automatically extended 

in accordance with Art. 17 Labour Contract Law Implementing Regulations (extension until the agreed end of the service period after specific technical training under Art. 22 Labour Contract Law).

• The labour relationship is extended in accordance with Art. 19 Trade Union Law under the framework of a valid collective bargaining agreement. 

Clarifications for cases of breach of service period and non-compete agreements

Breach of Service Period: If the parties to a labour contract agreed on a minimum service period for the employee (e.g. following specialized training) and the employee breaches such obligation, PRC labour laws allow the employer to claim compensation for the resulting losses. Such labour contracts or training agreements often stipulate formulas for calculating such compensation. Interpretation II provides that courts shall not rigidly enforce such agreed formulas but comprehensively consider all actual losses of employers, such as the training expenses, housing subsidies, travel costs, the length of service that the employee has fulfilled and other special benefits granted to the employee. The compensation amount shall be proportionately adjusted based on factors such as the degree of fault of both parties regarding the employee's resignation. 

Validity of Non-compete Agreements: Under PRC labour laws non-compete obligations can only be imposed on employees having knowledge of and access to employers’ trade secrets and/or confidential information relating to intellectual property rights. Thus, in case of dispute, employers bear the burden of proof to demonstrate that the obliged employees did in fact have such knowledge/access during their employment period. If employers fail in such demonstration, the non-compete agreement is not binding on the employees. Additionally, when assessing the validity of non-compete agreements, court will put the substance scope, geographical area and duration of the non-compete restrictions into relation to the nature and scope of trade secrets and other protected information that the employee had access to. If a court finds that certain parts of the non-compete restrictions are incompatible with the trade secrets the employee had access to and thus the non-compete restrictions exceed the necessary scope for protecting the trade secrets, courts may determine such parts of the non-compete agreement invalid. Thus, employers are compelled to tailor the scope, geographical location and duration of non-compete restrictions based to the nature of the employee's position, job description and trade secrets he has access to because if excessive in nature/scope, the validity of the non-compete agreement can be challenged.

Procedural aspects regarding labour termination / labour disputes

A labour contract cannot continue to be performed: If an employer terminates a labour contract without being entitled to do so, PRC labour laws provide that employees can either claim for double severance payment or for reinstatement of the labour relationship if it is possible to continue to perform the labour relationship. Regarding the latter, Interpretation II provides that in the following cases, a labour contract cannot continue to be performed (thus making the reinstatement claim mute and compelling the employer to pay double severance):

• The labour contract expires during the labour dispute process and there are no legal requirements that mandate a renewal or extension of the labour contract.

• The employee has begun to enjoy the basic old-age insurance benefits according to law.

• The employer has undergone bankruptcy liquidation, had its business license revoked, been ordered to close down, been dissolved, or has decided to liquidate voluntarily.

• The employee has already been employed by another employer and the new labour relationship seriously affects the continued performance of the original labour relationship or the employee refuses to terminate the labour contract with the new employer. 

• Other circumstances exist make it objectively impossible to restore the labour relationship.

Salary calculation during the period until resumption of contract performance: If the employer is ordered to resume the performance of a labour contract with an employee, the employee's salary during the period from the termination date until the date of work resumption shall generally be calculated based on the normal labour wage standard of the employee (i.e. including base pay and fixed allowances but excluding performance-based salary/bonus, overtime pay and year-end bonuses). However, if the employee contributed to his dismissal and only the employer's dismissal procedure does not comply with the law, the court may, based on the degree of the employee's fault, proportionally reduce the wages that the employer should make up for.

Off-boarding occupational health examination: For employees engaged in operations with occupational disease hazards, conducting pre-departure occupational health examinations is a legal prerequisite for employers to dismiss such employees. If an employer terminates a labour contract without conducting a pre-departure occupational health examination for the employee as required, the employee has the right to request the continuation of the labour contract unless any of the following circumstances can be proven by the employer to exist:

• the pre-departure occupational health examination is completed before the conclusion of the first-instance court hearing, and the examination results show that the employee has no (suspected) occupational disease. 

• The employee refuses to undergo the pre-departure occupational health examination without a valid reason.

Defense of statute of limitation: In legal terms, "statute of limitation" refers to the maximum time within which a party can initiate legal action, such as a labour arbitration claim. If the time limit expires, the party may be barred from pursuing their case. In this regard, Interpretation II provides the following clarifications:

• No Raising the Defense During Arbitration: If a party did not raise the statute of limitations defense during the arbitration process (because of their own reasons), it cannot later use this defense during the litigation process (whether during the first or second instance of litigation). The court will not accept this defense in such cases.

• New Evidence: If the party has new evidence showing that the statute of limitations has indeed expired for the other party’s claim, the court will support this defense even during the litigation process.

• Failure to Raise the Defense in the Proper Time: If a party fails to raise the statute of limitations defense in arbitration or during the early stages of litigation, it cannot later seek a retrial or raise the statute of limitations defense during a retrial. The court will not entertain this defense in such cases.

This clarification encourages parties to raise relevant defenses (like the statute of limitation) in a timely manner during arbitration or earlier litigation stages. This rule prevents parties from using the statute of limitation defense as an afterthought if they failed to address it at the appropriate time.

Cases involving foreign nationals or entities

Foreigners asking for confirmation of their employment relationship: Interpretation II stipulates that foreigners employed in China by local employers are entitles to request courts to confirm the existence of their local employment relationship in the following cases:

• The foreigner obtained Chinese permanent residence status (aka Greencard).

• The foreigner obtained a Chinese work permit and resides legally in China.

• The foreigner has otherwise gone through the relevant legal procedures to work/reside in China.

Labor disputes involving foreign representative offices (FROs): According to Chinese law, FROs do not hold independent legal person status and are not entitled to directly hire Chinese nationals as employees. Rather, FROs must enter into labour dispatch agreements with qualified PRC human resources agencies to hire such Chinese staff through a three-party arrangement where the Chinese staff enters into the labour contract with the qualified agency and the agency in turn enters into a labour dispatch agreement with the FRO (or its foreign parent company). This arrangement has it made debatable how to involve the FRO/its foreign parent company in case of labour disputes involving dispatched staff. Interpretation II now confirms that legally established FROs may be parties to labour dispute cases and that in case any party to such cases applies for the participation of the foreign parent of the FRO to the lawsuit, the courts shall support such requests.

Opting out of mandatory social insurance is illegal 

According to PRC labour and social insurance laws, both employers and employees are obliged to participate in the mandatory basic social insurance in China. 

Any agreement between the parties to a labour contract, or any undertaking by the employee, waiving the employer’s obligation to pay social insurance contributions is invalid. 

If an employer fails to pay mandatory social insurance, the employee may terminate the labour contract for that reason and the employer must pay the statutory severance payment to the employee. 

If under any of these above circumstances the employer makes up the social insurance payments in accordance with the law, he is entitled to recover from the employee the employee portion of contributions.

Susanne Rademacher
Dr Jenna Wang-Metzner
Kelly Tang

Nowadays, many companies have a matrix structure where employees and executives of various units - even across national borders if necessary - cooperate. Often, employees are led by executives, who are at a different location, however, are working in the same company or with another group company. In the IT service company concerned, the work tasks were divided into different areas in which employees from various organisational units cooperated in teams and were led by so-called matrix executives. 

But how does such an organisational structure, where an executive leads employees in various units, relate to the eligibility to vote in works council elections? 

In the case at hand, the election committee had considered matrix executives to be eligible to vote who were superiors of the employees belonging to the respective unit. Therefore, the matrix executives participated in the works council election which was subsequently contested by the employer.

The BAG now affirmed a voting right of matrix executives and considered the works council election to be effective. In the press release published in this context, the BAG clarified that executives, who lead employees in several units of the same company due to an internal matrix structure and are integrated into the company organisation, have an active voting right in all of these units. Unlike the previous instance (Higher Labour Court (Landesarbeitsgericht, LAG) of Baden-Wuerttemberg, decision of 13 June 2024 - 3 TaBV 1/24), which only provided for an eligibility to vote of matrix executives in their "main unit" assigned to them under their employment agreement and denied it in all other units, the BAG, thus, assumes a multiple eligibility to vote. The eligibility to vote pursuant to section 7 German Works Constitution Act (Betriebsverfassungsgesetz, BetrVG) is linked to the employee's affiliation to the company. This affiliation is founded on the integration into the company organisation. If an employee is already integrated into a unit and, thus, is eligible to vote in this unit, this does not preclude his additional eligibility to vote in another unit. Consequently, it is possible to be eligible to vote in several units. In the opinion of the BAG, multiple integration into different units results in a corresponding multiple eligibility to vote of the executives concerned. 

For a final assessment of the judgment and its consequences for the practice, the publication of the grounds of the judgment must be awaited. In the light of the works council elections already taking place next year, however, the considerable relevance of the BAG's current decision should already now be pointed out. The decision is of great practical importance for dealing with matrix executives in works council elections, since it results in a multiplication of the eligibility to vote for matrix executives who lead employees in several units. As a consequence, they must be registered on the electoral rolls of all units in which they lead employees.

For future works council elections, employers are therefore advised to take increased care when verifying eligible voters. Under certain circumstances, a significantly higher number of eligible voters must be expected. This will ultimately also influence the size of the works council committees (section 9 BetrVG): The number of works council members might increase, which will then be accompanied by an increased cost burden for the employer due to the works council work (section 40 BetrVG). The employer will also have to provide considerably more information to the election committee in order that an appropriate classification of the executives can be made by the election committee when preparing the electoral rolls (section 2 (2) sentence 1 First Ordinance on the Implementation of the German Works Constitution Act (Erste Verordnung zur Durchführung des Betriebsverfassungsgesetzes, Wahlordnung, WO). 

The BAG has only published a press release so far. As soon as the grounds of the judgment are available, a follow-up article on this topic will appear.

ApoBank and the AXA Insurance Group have been cooperating in the sale of financial and insurance products for more than 25 years. Both companies now want to bundle the sales activities of their mobile sales companies apoFinanz and Deutsche Ärzte Finanz more closely. 

As part of the restructuring, apoFinanz will be merged with Deutsche Ärzte Finanz. At the same time, apoBank acquires additional shares in Deutsche Ärzte Finanz. The merger creates the largest financial sales organisation for academic health professionals in Germany. With around 500 independent financial advisors, the new company will serve more than 320,000 customers. The merger will be completed in August 2025. A cross-office team from ADVANT Beiten is providing apoBank with comprehensive legal advice.

With more than half a million customers and total assets of around EUR 52 billion, apoBank is the largest cooperative retail bank in Germany and the number one financial services provider in the healthcare sector. Its customers are primarily members of the healthcare professions, their professional organisations and associations, healthcare facilities and companies in the healthcare market.

With the reorganisation of their joint sales subsidiaries, the partners want to combine the strengths of the companies and use the synergies for additional growth. 

Advisors to apoBank: 

ADVANT Beiten: Heinrich Meyer, Rainer Süßmann (both lead partners in charge, Banking/Finance, Frankfurt), Dr Christian Ulrich Wolf, Maren Dedert (both Corporate/M&A, Hamburg), Christoph Heinrich, Prof Dr Christian Heinichen (both Antitrust Law, Munich), Oliver Korte, Christopher D. Harten (both Commercial, Hamburg), Dr Thomas Drosdeck, Dr Gerald Müller-Machwirth (both Labour Law), Susanne Klein, Lennart Kriebel and Daniel Trunk (all IT- and Data protection Law, all Frankfurt)

Advisor to AXA: Hengeler Mueller

Public Relations
Frauke Reuther
Communications Manager
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Heinrich Meyer
Rechtsanwalt 
ADVANT Beiten
Phone: +49 69 756095-414
heinrich.meyer@advant-beiten.com

Banyan Software was founded in 2016 and regularly acquires growing software companies with the aim of developing them over the long term as part of a buy-and-hold strategy. Banyan Software has offices in Canada, the UK and the DACH region.

Headquartered in Munich, Germany, star/trac is specialised in optimizing complex yard management operations. Its innovative solutions significantly enhance operational efficiency, reduce truck waiting times, and ensure compliance with the stringent safety and regulatory standards.

ADVANT Beiten advises Banyan Software regularly on the implementation of its growth strategy in the DACH region, most recently in January 2025 on the acquisition of FoxInsights.

Advisor Banyan Software:
ADVANT Beiten: Christian Burmeister (Lead), Damien Heinrich, Julius Bauer (all Corporate/M&A), Heiko Wunderlich, Fabian Buker (both Tax), Mathias Zimmer-Goertz, Christian Döpke (both IP/IT), Lelu Li (FDI), Alexander Grässel (Labor & Employment Law).

Public Relations
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

With its SolarMe electricity brand, Solarimo offers tenant electricity solutions for the housing industry. With this transaction, 300 photovoltaic systems with an installed capacity totalling 10.3 megawatts are to be transferred to Einhundert's operations by the end of the year. The systems are expected to supply more than 10,000 tenants across Germany with locally generated solar power. This is expected to save around 4,000 tonnes of CO2 per year.

ENGIE Deutschland GmbH is committed to accelerating the transition to a carbon-neutral economy. In Germany, the company plans, builds, operates and markets wind, photovoltaic and hydropower plants as well as pump storage and battery storage systems. Engie trades in electricity and gas and supplies end customers with energy.

The transaction was led by Dr Barbara Mayer, Christian Burmeister and Peter Meisenbacher at ADVANT Beiten. 

Einhundert Energie GmbH has been supporting real estate companies in the electrification and decarbonisation of their building portfolios since 2017. The Cologne-based company enables housing companies and their tenants to participate in the energy transition. The aim is to use 100 per cent CO2-neutral energy from local PV systems.

Consultant Solarimo:

ADVANT Beiten: Dr Barbara Mayer (Corporate/M&A, Freiburg), Christian Burmeister (Corporate/M&A, Freiburg/Berlin), Peter Meisenbacher (Public Sector/Energy, Freiburg/Berlin, all lead partners), Dr Erik Schmid, Alexander Gräßel (Labour Law, Munich/Freiburg).

Consutant Einhundert Energie:

Noerr: Dr Christoph Thiermann, Dr Christian Haagen (Munich/London)

Public Relations

Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Dr Barbara Mayer
Rechtsanwältin
ADVANT Beiten
+49 (761) 15 09 84 - 14
Barbara.Mayer@advant-beiten.com

Christian Burmeister
Rechtsanwalt
+49 (761) 15 09 84 - 18
Christian.Burmeister@advant-beiten.com

High-Risk AI systems under the EU AI Act In a employment context, the new regulation concerns foremost: 
a) AI systems intended to be used for the recruitment or selection of natural persons, in particular to place targeted job advertisements, to analyze and filter job applications, and to evaluate candidates. 
b) AI systems intended to be used to make decisions affecting terms of work-related relationships, the promotion or termination of work-related contractual relationships, to allocate tasks based on individual behavior or personal traits or characteristics or to monitor and evaluate the performance and behavior of persons in such relationships.

The most important requirements for high-risk AI systems at a glance 

The providers of high-risk AI systems bear the following obligations: 

• Quality and risk management
• Technical documentation, record-keeping and logging obligations
• Consideration of accuracy, robustness, cybersecurity and accessibility during development
• Transparency and information obligations
• Registration in the relevant EU database and cooperation with the competent authority

Those who only deploy of high-risk AI systems generally have to fulfil fewer requirements than providers. However, there may be scenarios in which they can be subject to the same extensive obligations as the providers of high-risk AI systems.

Looking ahead, the AI Liability is poised to complement the EU AI Act. It aims to streamline legal pathways for individuals harmed by AI systems, including in employment related situations. However, the legislative process is still in its early stages and only rarely does a directive emerge from the legislative process in the form in which it was presented by the EU Commission.

Banyan Software was founded in 2016 and regularly acquires growing software companies with the aim of developing them over the long term as part of a buy-and-hold strategy. Banyan Software has offices in Canada, the UK and the DACH region.

FoxInsights, headquartered in Munich, is a spin-off of one of the Top3 Innovation Labs (EnBW Innovation) in Germany. The company offers IoT-based remote tank monitoring solutions. Through digitalisation and data analytics, FoxInsights optimises the sales and ordering process as well as supply chains in the energy, mobility and recycling sectors.

Advisor Banyan Software:
ADVANT Beiten: Christian Burmeister (Lead), Damien Heinrich (both Corporate/M&A), Dr Christian von Wistinghausen, Lelu Li (both Investment Control), Heiko Wunderlich, Fabian Buker (both Tax), Mathias Zimmer-Goertz, Christian Döpke (both IP/IT), Dr Erik Schmid, Alexander Grässel (both Labor & Employment Law).

Public Relations
Frauke Reuther
Manager Communications
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

HECHT Contactlinsen GmbH is the leading manufacturer of custom-made rigid contact lenses in Germany. The company was founded in 1978 and has subsidiaries in Germany, Switzerland and Spain. The company has won multiple awards for its reliability, quality and manufacturing processes.

Novum Capital invests in small and medium-sized companies with annual revenues of up to EUR 200 million on behalf of German and international pension funds, private pension schemes, and endowments. Novum Capital helps its portfolio companies to improve their market position, increase their profitability, enhance the benefits of their business models for society – and increase the value of the companies.

In addition to the comprehensive legal advice provided by ADVANT Beiten under lead partner Gerhard Manz, the law firm Esche Schümann Commichau advised the sellers on tax matters. Löbbecke & Cie. GmbH assisted the seller in the transaction as M&A advisor.

Advisor HECHT Contactlinsen GmbH:

ADVANT Beiten: Gerhard Manz (lead partner), Dr Barbara Mayer, Stephan Strubinger, Damien Heinrich, Dr Christian Osbahr (all Corporate/M&A, Freiburg), Prof Rainer Bierwagen (Brussels), Marcus Mische (Tax) and Dr Andreas Imping (Employment Law, both Dusseldorf).

Media Contact
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Gerhard Manz
Rechtsanwalt
ADVANT Beiten
+49 (761) 15 09 84 - 11
gerhard.manz@advant-beiten.com

Amphenol is one of the world’s largest designers, manufacturers and marketers of connectors and interconnect systems, antennas solutions, sensors and high-speed cable.

Luetze International Group is active worldwide and consists of various companies in a holding structure. The group of companies has a tradition of over 60 years in automation and is one of the leading companies in the industry today. Luetze Group offers innovative solutions in the areas of highly flexible cables, cable assemblies, interfaces, power supply and monitoring as well as control cabinet wiring.

Luetze Group's range of services complements Amphenol's portfolio in various segments of the fast-growing electronics market and underlines Amphenol's future-oriented, cross-border positioning.

In this transaction, ADVANT partner firm ADVANT Altana advised on French law, Fox Williams advised on UK law, Havel & Partners advised on Czech law, Kellerhals Carrard advised on Swiss law and E+H advised on Austrian law.

ADVANT regularly advises Amphenol on European M&A projects, most recently ADVANT Altana and ADVANT Beiten jointly advised Amphenol on the acquisition of the CMR Group based in France.

Advisor Amphenol Corporation: ADVANT Beiten: Dr Christian von Wistinghausen, Tassilo Klesen (both lead partners in charge), Olga Prokopyeva (all Corporate/M&A, Berlin), Susanne Rademacher, Lelu Li, Kelly Tang, Dr Jenna Wang-Metzner (all Corporate/M&A, Beijing), Michael Riedel (Labour & Employment, Berlin), Carsten Pütger, Danah El-Ismail (both Real Estate, Berlin), Mathias Zimmer-Goertz, Christian Döpke (both IP/IT/Media, Dusseldorf), Uwe Wellmann (Antitrust Law, Berlin), Christoph Heinrich (Antitrust Law, Munich), Dr Marion Frotscher and Simon Bauer (both Tax, Hamburg).

Advisor Sellers of Luetze Group: Heuking Kühn Lüer Wojtek: Dr. Rainer Herschlein, LL.M., Dr. Emanuel Teichmann (both Corporate/M&A, Stuttgart), Dr. Stefan Bretthauer, Jia-Xi Liu (both Antitrust Law, Hamburg).

Public Relations
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

The deal involves that the Herder start-up KITALINO acquires Kidling, an administrative software for nurseries. Kidling offers a digital solution for nursery management and parent communication. Through this acquisition, Herder becomes a comprehensive software provider for nurseries with its subsidiary KITALINO and Kidling.

Kitalino GmbH and Verlag Herder are part of the Herder publishing group. One of the main topics of the publishing house is education. Herder offers a large range of books on the subject, eight scientific journals, special issues and digital products. Kitalino GmbH, a subsidiary of the Herder group, is leading in the field of digital support for educational processes in nurseries. The company specialises in the creation and implementation of Software as a Service (SaaS) solutions that are specifically tailored to the structure and quality requirements of the workflow in nurseries. Their main product is the KITALINO software as a platform to enable digital development documentation and communication in compliance with data protection requirements. 

Kidling, an enterprise of Quintic Digital GmbH, offers a comprehensive nursery software to make everyday life easier for professionals, parents and children. Both the browser and the app solution help to actively plan the week, document the children's development and optimise communication between nursery and parents. Digitalising these processes means that nursery professionals can work more efficiently and focus on what is actually important: the education and care of children.

The ADVANT Beiten team headed by Dr Barbara Mayer regularly provides legal advice to the Herder publishing group, most recently on the acquisition of essential parts of the publishing house Wissenschaftliche Buchgesellschaft (wbg).

Advisor to the Herder publishing group:
ADVANT Beiten: Dr Barbara Mayer and Lisa Werle (both Corporate/M&A, Freiburg), Dr Erik Schmid (Labour Law, Munich).

Media Contact
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Dr Barbara Mayer
Rechtsanwältin
ADVANT Beiten
+49 (761) 15 09 84 – 14 | +49 (173) 3169669 
barbara.mayer@advant-beiten.com

 

TETEC AG, which specialises in regenerative medicine, had been integrated into the international medical technology group B. Braun through the surgical division Aesculap, based in Tuttlingen, Germany. In future, Aesculap will strategically focus even more strongly on innovative medical technology relating to surgical processes in the operating room, which means that the regenerative medicine business segment no longer fits into the medical technology group's portfolio.

In the United States, B. Braun has partnered with Octane Medical for more than ten years. With the completion of the transaction, the Canadian specialist for regenerative medicine has taken over TETEC completely, including the approximately 160 highly specialised employees at the site in Reutlingen, Germany.

Octane is a global group of companies headquartered in Ontario, Canada, with subsidiaries in the United States and Europe, specialising in innovative processes, biomaterials and bioreactors for regenerative medicine. Part of the group are Octane Clinical Systems, Octane Orthobiologics, Octane Exo, Octane Biotech and Octane Biotherapeutics (BioTx).

B. Braun is one of the world's leading medical technology companies. With over 60,000 employees, B. Braun is a reliable partner that develops intelligent solutions and sets pioneering standards to accelerate progress in healthcare.

Advisors to Aesculap AG:
ADVANT Beiten: Dr Sebastian Weller (lead partner), Nico Frielinghaus, Dr Winfried Richardt, Markus Schönherr, Sarah Heinrichs, Simon Litterst (all Corporate/M&A), Christian Schenk, Markus Linnartz (both Tax), Thomas Herten (Real Estate), Christian Döpke (Data Protection Law, all Dusseldorf), Dr Erik Schmid (Labour Law), Christoph Heinrich (Antitrust Law, both Munich), Rainer Süßmann (Banking & Finance, Frankfurt), Dr Christian von Wistinghausen, Lelu Li (both Foreign Trade Law, Berlin).

Advisor to Octane Medical:
Osborne Clarke

Media Contact
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Dr Sebastian Weller
Rechtsanwalt
ADVANT Beiten
+49 (211) 51 89 89 - 134
sebastian.weller@advant-beiten.com

The COMEM Group has been supporting its customers throughout the entire life cycle of a transformer for more than 60 years. The company combines its experience in the manufacture and supply of various transformer accessories with innovative services for transformer manufacturers, service organisations and end users.

Weidmann Technologies Deutschland GmbH, a member of Weidmann Group, has been a leading developer of fibre optic temperature measurement systems for 25 years. Standard products and products for special applications are offered based on technological expertise in the development and manufacture of complete systems.

The addition of OPTOCON to COMEM's portfolio is an important step towards the company's growth and expansion strategy. The acquisition not only expands the product portfolio but also enables the company to gain a foothold in the field of sensors and optical systems.

Advisor to COMEM S.p.A.:
ADVANT Beiten: Tassilo Klesen (lead partner in charge), Lelu Li (both Corporate/M&A), Michael Riedel (Labour Law, all Berlin)

Advisor to Weidmann Holding AG:
CMS Hasche Sigle: Hendrik Hirsch, Maxine Notstain (both Corporate/M&A)

Public Relations
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

With Spandau Pumpen, SKF disposes of extremely competitive screw-type and seal-less coolant pumps with a valuable customer base mainly in the European market. Through the acquisition, EBARA aims to enter the global market for machine tools and filter systems and will expand its portfolio by providing new products and services.

EBARA will take over the customer base and certain assets of Spandau Pumpen, will relocate the production to one of its plants in Italy and will work on the expansion of its business. EBARA Corporation has committed itself to achieve several UN Sustainable Development Goals (SDGs) in order to create added business value and to reinforce its reputation as an excellent global player.

The global development of new markets through acquisitions and integration of value-added products are a central element of EBARA's strategy. Further investments are planned in the field of M&A.

Advisor to EBARA Pumps Europe:
ADVANT Beiten: Dr Markus Ley and Moritz Kopp (both in charge, Corporate/M&A), Christian Hess (IP/IT), Dr Erik Schmid, Regina Dietel (both Labour Law), Christoph Heinrich, Cathleen Laitenberger (both Antitrust Law) and Maximilian Matusewicz (Corporate/M&A, all Munich).

Public Relations
Frauke Reuther
Communication
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Dr Markus Ley
Rechtsanwalt (Lawyer)
ADVANT Beiten
+49 (89) 3 50 65 - 1211
markus.ley@advant-beiten.com

As one of the leading German games publishers, astragon Entertainment strengthens the development of its own simulation brands with the acquisition. astragon gains an experienced and reliable partner in Independent Arts, thus enabling it to continue the development of existing and new working simulation titles as well as to diversify the portfolio of own productions across various platforms.

Independent Arts, located in Hamm, Germany, has developed commercial video games since 1990, which makes it one of the oldest and most traditional German development studios. The studio with 39 employees has decades of experience and expertise through its own development projects and porting, as well as a strong creative contribution and an excellent management. Independent Arts welcomes an even closer cooperation and the opportunity to expand personnel and structure of the studio as a part of astragon in order to implement more projects and business strategies in the future.

Advisors to astragon:
ADVANT Beiten: Dr Andreas Lober (IT/IP/Media), Dr Guido Ruegenberg (Corporate/M&A, both in charge), Lennart Kriebel (IT/IP/Media), Dr Gerald Müller-Machwirth (Labour Law, all Frankfurt).

Media Contact
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Dr Guido Ruegenberg
Rechtsanwalt
ADVANT Beiten
+49 69 756095-393
guido.ruegenberg@advant-beiten.com

Dr Andreas Lober
Rechtsanwalt
ADVANT Beiten
+49 69 756095-582
andreas.lober@advant-beiten.com

The Federal Labour Court held that – regardless of the skill with which they negotiated their salary – women and men should earn the same salary when they perform the same or equal work.

Facts of the case

A female employee had been working as a member of the company sales team since 1 March 2017. When she started working for the company, her gross basic salary was EUR 3,500.00. Two male employees worked on the same team. One of the male employees commenced work for the company on 1 January 2017, almost the same time as the female employee. The employer initially offered this male employee a gross basic salary of EUR 3,500.00, which he refused. After negotiations, the employer increased the gross salary offer to the male employee to EUR 4,500.00. According to the employer, this difference was justified because the male employee was employed to replace a better-paid female sales representative, who had left the company.

The employee claimed payment of salary in arrears amounting to the difference between her salary and the salary paid to her male colleague for the period from March 2017 to July 2019. The employee argued that she should earn the same basic salary as her male colleague as both performed the same work. In addition, the employee demanded the payment of appropriate compensation of at least EUR 6,000.000 for the discrimination suffered due to her gender with respect to her salary. Both the Labour Court and the Regional Labour Court dismissed her claim.

The judgment

The employee succeeded in her appeal to the Federal Labour Court (Bundesarbeitsgericht, BAG). The BAG affirmed that the employee had been discriminated against due to her gender because the employee had been paid a lower basic salary than her male colleagues, although they performed the same work. Therefore, in the view of the BAG, the employee had a claim to the same basic salary as her male colleagues under Article 157 of the Treaty on the Functioning of the European Union (TFEU), §§ 3(1) and 7 of the Transparency in Wage Structures Act (EntgTranspG). The fact that the employee was paid a lower basic salary for the same work substantiated the assumption that the discrimination was due to gender. The BAG further held that the employer’s claims, that the male employees were better negotiators or replaced a better-paid saleswoman who had left the company, could not rebut this assumption. With respect to the payment of compensation for discrimination based on gender, the BAG awarded the employee EUR 2,000.00.

Consequences for practice

The judgment of the BAG targets the elimination of wage disparities due to gender. The BAG has now decided the question of whether better negotiating skills are an individual characteristic of each employee or whether differentiating based on these skills instead forms the basis for discrimination due to gender. In the Court’s view, negotiating skills alone are not an appropriate objective criterion to justify a difference in pay between women and men. In this way, the equal treatment laws limit private autonomy when concluding employment agreements. These laws aim to close the existing pay gaps between women and men. According to the BAG, it would be contradictory if employees could agree on higher pay for workers of one gender compared to workers of another gender for the same or equal work, without clear additional objective criteria for the difference.

Practical tip

Employers should be prepared for other employees to follow this example and bring claims of discrimination due to gender with respect to salary negotiations. Employers are therefore advised to avoid claims for wage disparities due to gender by not basing wage differences on the better negotiating skills of a worker in the future. Salary differences are still permitted, providing any such differences are based on objective, gender-neutral criteria. Where a remuneration system has not yet been established, we recommend that employers establish a system with objective criteria to determine salaries. Such criteria can, for example, include qualifications obtained, international experience, language proficiencies (if the company would benefit from these languages) or the number of years that the employee has worked for the company. In any case, good negotiating skills do not belong on this list.

Nora Nauta

When performing the social selection to determine which employment relationships will be terminated for operational reasons, “age” can be taken into account for the reconciliation of interests to the detriment of the employee where the employee is already receiving an old-age pension or can receive one within two years of the end of the employment relationship foreseen by the letter of termination. Old-age pensions for severely disabled persons are the sole exemption.

Facts of the case

The case before the Federal Labour Court (Bundesarbeitsgericht, BAG) involved a plaintiff, who was born in 1957 and had worked for the employer since 1972. After insolvency proceedings were opened over the employer’s assets, the insolvency administrator and the works council performed the reconciliation of interests to obtain a list of 61 names, including the plaintiff’s, from a total of 396 employees. These 61 employees would be issued with notices of termination for operational reasons.  The list of names was a result of the social selection. The insolvency administrator considered the plaintiff the least worthy of protection within her peer group because she was the only employee with the option of receiving the old-age pension for those employed for an exceptionally long time, in accordance with §§ 38 and 236b of the Social Code (SGB VI), soon after the end of her employment relationship.

The plaintiff considered the termination ineffective. She claimed that the social selection was flawed because she was clearly more worthy of protection than a significantly younger colleague who was born in 1986 and had worked for the employer for a much shorter period (since 2012).

Both the Labour Court in Dortmund and the Regional Labour Court in Hamm, on appeal, followed the plaintiff’s argumentation and held in her favour.

The judgment

The BAG saw things differently: the judges in Erfurt considered the “age” selection criterion ambiguous. Increasing age generally means an increased need for social protection because older employees still typically have more difficulty finding a new position. This need for protection decreases when the employee either already receives a replacement income in the form of an old-age pension without deductions or can receive one at the latest within two years of the end of the employment relationship. The only exemption is old-age pensions for persons with a severe disability in accordance with §§ 37, 236a SGB VI.

When considering age in the reconciliation of interests, the employer and the works council have a measure of discretion which would allow a high age to be considered to the detriment of the employee in line with the stated requirements.

Consequences for practice

The decision should be welcomed. The statutory rules in § 1 (3) of the Act Against Unfair Dismissal (Kündigungsschutzgesetz, KSchG) and § 125 (1) No. 2 of the Insolvency Code (Insolvenzordnung, InsO) provide merely that employers shall take the criteria for social selection, including age, “sufficiently into account.” This does not necessarily mean that the need for social protection should be given more weight as the employer ages. In contrast, it would be difficult to see why the fact that an employee will have security in the form of an old-age pension in the foreseeable future or is already receiving such security should not result in “less” need for social protection. And lastly, it also increases the protection of younger employees, who do not (yet) have such security. Accordingly, the fact that the BAG has now settled this controversial matter of law and created certainty for practice by establishing the two-year limit for “close to retirement” should also be welcomed.

However, it should be noted that an early pension for severe disability may not be considered within the framework of the social selection as this would constitute inadmissible discrimination on the basis of severe disability under the case law of the European Court of Justice (ECJ) (Judgment of the ECJ of 6 December 2012 in Case No. C-152/11). Naturally, the remaining social selection criteria such as seniority, maintenance obligations and severe disability must be considered. Within this framework, however, it is now possible to rate an employee who is close to retirement or is already receiving an old-age pension as less needing of social protection.

Dr Michael Matthiessen

Based on proprietary platform technologies, Ethris has been developing mRNA therapeutics for diseases with inadequate treatment and for regenerative medicine for more than 10 years. The biotechnology company develops highly effective mRNA-based drugs for administration directly into the upper and lower respiratory tract and by intra-muscular injection.

Cipla is India's third-largest pharmaceutical company and South Africa's third-largest generic drug manufacturer. It has a particular focus on drugs and therapies for respiratory diseases. Cipla became internationally known for its production of low-cost HIV medicines. Founded in 1935, Cipla employs about 23,000 people.

ADVANT Beiten has a strong positioning in the healthcare sector and in advising international clients on investments in the German market.

Advisor Cipla Ltd.:
ADVANT Beiten: Christian Hipp (Antitrust), Benjamin Knorr (Corporate/M&A and Tax, both leading advisors, Berlin), Dr Dietmar O. Reich (Antitrust, Hamburg and Brussels), Wolf J. Reuter (Employment, Berlin), Robert Schmid(Corporate/M&A, Berlin), Dr Christian Ulrich Wolf (Corporate/M&A, Hamburg), Christian Hess (IP/IT, Munich).

Advisor Ethris GmbH:
m law group. Munich

Media Contact
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Benjamin Knorr
Rechtsanwalt
ADVANT Beiten
+49 (30) 26471 – 262
benjamin.knorr@advant-beiten.com

The Terreal businesses to be acquired by Wienerberger are expected to generate revenues of EUR 740 million and a run-rate EBITDA of approx. EUR 100 million in 2022. The enterprise value of the respective Terreal businesses amounts to EUR 600 million, subject to customary adjustments. The acquisition agreement was signed at the end of December, marking the start of the exclusive negotiation phase. The closing is expected to occur in the course of 2023.

The merger control part of the transaction is led by ADVANT Beiten partners Uwe Wellmann and Christoph Heinrich who are jointly responsible for German merger control and coordinate a team of law firms in various jurisdictions. Cross-border merger control advice is provided in cooperation with, inter alia, ADVANT Altana in France, Binder Grösswang in Austria, Woźniak Legal in Poland and Radovanović Stojanović & Partners in Southeastern Europe.

The M&A work stream was led by E+H (Vienna, Graz). ADVANT Beiten partner Dr. Mario Weichel took over its German part and together with a multidisciplinary team performed the legal due diligence on the Creaton business. ADVANT Altana was responsible for the French due diligence.

Advisers to Wienerberger:
ADVANT Beiten: Uwe Wellmann (Berlin) and Christoph Heinrich (both lead partners, both Competition law), Dr Mario Weichel, Maximilian Matusewicz (both Corporate/M&A), Cathleen Laitenberger (Competition Law), Anja Fischer (Real Estate), Katrin Lüdtke and Philipp Früh (both Public Law), Christian Hess (IP), Michael Ziegler and Petra Fendt (Finance), Chiara Peterhammer (Commercial, all Munich), Nima Valadkhani (Commercial), Wolf J. Reuter (Employment Law) and Dr Ariane Loof (Data Protection, all Berlin).

Media Contact
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Uwe Wellmann
Lawyer
ADVANT Beiten
+49 30 26471-243
uwe.wellmann@advant-beiten.com

Employers must record the beginning, end and duration of the daily working time of employees, and do not have a grace period to implement a time-recording system, except where the legislators have adopted a derogation that is admissible under EU law. The works council (currently) has a co-decision right with respect to the establishment of arrangements for recording working time – subject to any future statutory rule.

Facts of the case

The dispute erupted over whether the works council of a work operated jointly by two employers had a right of initiative concerning the introduction of an electronic working time-recording system. After a conciliation committee was established to look at the question of the “adoption of a works agreement on the introduction and use of an electronic system to record working time”, the employers questioned the conciliation committee’s jurisdiction. In response, the works council brought an action under the resolution procedure to establish that it had a right of initiative in this case.

The judgment

The Federal Labour Court (Bundesarbeitsgericht, BAG) answered the application in the negative (see also the article by Lipinski/Holzapfel on the press release of the Court). In the Court’s view, the only restriction to the right of initiative for the introduction of an electronic system to record working time is the fact that the matter is prescribed by legislation (§ 87 (1), introductory half provision, Works Constitution Act (Betriebsverfassungsgesetz, BetrVG). When and to what extent a statutory provision, which is binding on the employer, regulates the subject of co-determination both finally and with respect to content, the parties will not have any flexibility concerning arrangements and the works council will not have any co-decision right. In the view of the BAG, the right of initiative cannot relate to the introduction of working time recording – the “whether”. In this respect, employers already have a statutory duty to act. Pursuant to § 3 (2) No. 1 of the Occupational Health and Safety Act (Arbeitsschutzgesetz, ArbSchG), employers are required to introduce a system that records the start, end and thus the duration of working times, including overtime at their sites. According to the Court, this derives from the interpretation of this employee protection standard in line with EU law.

At its core, the BAG judgment provides that the duty to record working time applies expressly to all employees of a work within the meaning of § 5 (1) first sentence of the BetrVG. However, the Court noted that the national legislator can adopt provisions that would exempt certain employees from the duty to record working time, providing any such provisions are in line with EU law. This could be the case where the duration of the working time cannot be measured and/or is not predetermined due to special characteristics, or where the employees themselves can set the working time. The duty is not limited to the introduction of a system to record working time, the use of which is optional for employees. Instead, the system must actually be used. However, responsibility for recording the working hours may be delegated to employees.

The BAG (initially) strengthened the co-decision and initiative rights of the works council with respect to arrangements for the protection of health under § 87 (1) No. 7 of the BetrVG. Subject to any other future rules legislators may adopt, the works council has a right of initiative for the arrangements for the system to record working time. As this also relates to the form of recording (manual or electronic) and the works council’s application in this case only covered the electronic recording of working time, the application was unsuccessful. It limited the conciliation committee to only one possible form of implementation and, therefore, the committee potentially could not issue a (comprehensive) substantive decision on the form of working time recording.

Consequences for practice

In the BAG’s view, employers are responsible for recording all working time under the current law. There is no grace period: the duty already applies. According to the reasoning of the judgment, where there is a works council, employers are also not free to decide alone whether to record working time with “paper and pencil” or electronically at the site. In the absence of any binding requirements in accordance with § 3 (2) (1) of the ArbSchG, employers have some leeway when selecting and defining the system for recording working time, as long as the legislator has (still) not adopted any exhaustive provisions. Employers can use this leeway when working with the works council in accordance with § 87 (1) No. 7 of the BetrVG to determine the particulars of recording working time, such as the “form” it should take. In this respect, the BAG rejected a right of co-decision for the “whether” while strengthening the right with respect to “how”. However, it is important to stress that the BAG assumes this is the “current” legal situation, which is subject to any further future rules adopted by legislators.

Whether the obligation to record working time also applies to executive employees is not entirely clear. The present case only concerned the question of whether the duty relates to all employees of the work within the meaning of § 5 (1) first sentence of the BetrVG. The Senate answered this question in the affirmative. Some consider that the obligation does not apply to executive employees – based on an interpretation that is in line with EU law. Whether this is correct in light of the current law and whether this is what the BAG intended, cannot be said conclusively yet. However, as the BAG explained, the fact that the legislator has not yet adopted any special rules would generally support a different view. Further, the fact that special rules apply for certain areas (e.g., employees in road haulage, the crew of vessels for inland waterways, seafarers under the Act on Employment at Sea and those working offshore) must also be considered.

Trust-based working hours can still be used. However, any trust-based system must respect the relevant legislation and working time must be recorded.

Practical tip

Employers should take the time now to analyse whether and to what extent there is (currently) a need to act within their operations before any expected legislative changes are adopted. Employers should ascertain which employees are currently recording working times. Depending on the outcome of this assessment, it could make sense to be cautious at the relevant sites and wait for the legislator to further elaborate on the obligation to record working time before negotiating and agreeing to a new works agreement – to the extent that there is a works council. The expected new legislation could result in changes to the scope of potential arrangements and thus to the co-decision right as well. This would make the “half-life” of any hastily negotiated works agreement on recording working time rather short. A draft bill for the legislation should be presented in the first quarter of 2023. There is also currently no risk of direct fines in the case of an infringement of the duty to record working time under § 3 (2) No. 1 of the ArbSchG because it (currently) does not constitute an offence.

Dr Sebastian Kroll

Dr Kathrin Bürger, Dr Silke Dulle, Christina Kamppeter, Susanne Klein, Dr Ralf Hafner, Dr Georg Tolksdorf and Dr Sebastian Weller represent five different legal areas and are spread across five locations.

• Dr Kathrin Bürger (Labour Law, Frankfurt and München), Licensed Specialist for Labour Law, advises particularly on collective labour law issues. She assists companies with collective bargaining changes and (in-house) collective bargaining negotiations as well as strike preparation measures. Beyond that, Dr Bürger advises companies on the negotiation with works councils, also as a part of conciliation boards, as well as on all kinds of individual labour law issues.
• Dr Silke Dulle (Corporate/M&A, Berlin), Licensed Specialist for Medical Law, provides legal advice to clients of the healthcare sector, especially in the area of hospitals and health insurance companies. Her legal consultancy covers hospital law, social security and pharmaceutical law, procurement law and corporate law.
• Christina Kamppeter (Labour Law, Munich), Licensed Specialist for Labour Law, advises national and international companies on all aspects of individual and collective labour law, in particular regarding negotiations with works councils and trade unions. One focus of her work is on providing labour law advice on restructurings.
• Susanne Klein (IP/IT/Media, Frankfurt), Licensed Specialist for Information Technology Law, is a renowned expert in data protection law. In addition, she advises her national and international clients in IT and copyright law.
• Dr Ralf Hafner (Litigation & Dispute Resolution, Munich), advises his national and international clients in complex international disputes on dispute resolution out of court and represents them in arbitration and state court proceedings.
• Dr Georg Tolksdorf (Assets/Succession/Foundations, Hamburg) provides legal advice in the area of inheritance and foundation law as well as (tax-optimized) succession planning for private individuals and (family-owned) companies. Another focus of his work is on the execution of (corporate) wills.
• Dr Sebastian Weller (Corporate/M&A, Dusseldorf) focuses on Corporate/M&A as well as Private Equity/Venture Capital, particularly providing legal advice for take-overs, participations and restructuring projects. He provides support on all issues relating to corporate and transformation law as well as corporate compliance.

In addition to the seven new Equity Partners, the following Salary Partners have been appointed Local Partners:

• Dr Anne Dziuba, Labour Law, Munich
• Dr Daniel Fischer, Real Estate, Frankfurt
• Dr Christina Hackbarth, IP/IT/Media, Munich
• Christian Hipp, Antitrust Law, Berlin
• Tanja Hogh Holub, IP/IT/Media, Munich
• Sylvia Jenoh, Tax, Frankfurt
• Dr Klaus Kemen, Real Estate, Berlin
• Dr Markus Ley, Corporate/M&A, Berlin
• Jörn Manhart, Labour Law, Dusseldorf
• Carsten Pütger, Corporate/M&A, Dusseldorf
• Dr Jochen Reuter, Real Estate, Frankfurt
• Dr Winfried Richardt, Corporate/M&A, Dusseldorf
• Dr Florian Weichselgärtner, Dispute Resolution, Munich
• Mathias Zimmer-Goertz, IP/IT/Media, Dusseldorf

Furthermore, the following colleagues successfully continue their career path and have been appointed from  Senior Associates to Salary Partners:

• Annalena Benz, Real Estate, Munich
• Jens Ledermann, Tax, Frankfurt
• Dr Martina Schlamp, Labour Law, Munich

Beyond growth from its own ranks, ADVANT Beiten also continues its course of targeted growth with lateral hires in selected areas and confirms the salary partnership of the following colleagues:

• Christian Burmeister, Corporate/M&A, Freiburg/Berlin
• Dr Moritz Jenne, Corporate/M&A, Freiburg
• Dr Sebastian Kroll, Labour Law, Munich
• Markus P. Linnartz, Tax, Dusseldorf
• Dr Ariane Loof, Labour Law, Berlin
• Dr Michael Matthiessen, Labour Law, Berlin
• Dr Birgit Münchbach, Corporate/M&A, Freiburg
• Kristin Müller-Nedebock, Tax, Hamburg

"All seniority levels are of central importance for the future of our law firm. We are therefore all the more pleased to be able to accompany so many colleagues of different seniority levels, legal areas and locations on their career paths, comments Philipp Cotta, Managing Partner of ADVANT Beiten, and adds: Our modified career track offers all colleagues even more flexibility in their individual career planning and allows us to emphasise our professional expertise across the different levels even more clearly to our clients."

Congratulations to all elected and confirmed partners.

Background

The inflation relief bonus (also known as just the “inflation bonus”) is intended to give employers an incentive to pay their employees an additional bonus. It is a tax-free amount for which social security also does not need to be paid. The rule is comparable to the “Corona bonus”. However, after having to extend the “Corona bonus” numerous times, legislators decided to provide a longer time period (more than 26 months) for the payment of an inflation bonus from the beginning.

Overview

Established in the Income Tax Act (§ 3 No. 11c of the EStG), the key elements of the inflation relief bonus are:

• The payment must be voluntary, i.e., paid in addition to other bonuses and payments owed to employees. Existing wage components (such as Christmas bonuses) may not be transformed into inflation bonuses.
• The bonus may take the form of a cash payment or benefits in kind.
• The payment must refer to inflation. There are no specific requirements in this respect. It will be sufficient, e.g., if pay slips indicate the inflation relief bonus.
• The total tax-free amount may be split up into smaller payments. However, all inflation bonus payments made between 26 October 2022 and 31 December 2024 will only be tax-free up to a total of EUR 3,000.
• This tax-free amount applies to each employer. Regardless of whether an employee has already received the full amount of the bonus from their old employer, a new employer can still pay the employee the full bonus.

As with other additional benefits, the works council must be involved and the employment law principles of equal treatment and the effectiveness of voluntary payments must be respected. Employers bound by a collective agreement should also assess whether the agreement grants employees an entitlement to the payment of an inflation relief bonus, or if such an entitlement is planned.

Options

One-time payment or staggered payments

The bonus may be paid as a one-time payment (one payment of a maximum of EUR 3,000), or as various smaller payments made over the period until 31 December 2024. The employer may also split the amount over the whole period, e.g., pay a monthly amount of EUR 125 from 1 January 2023 to 31 December 2024. A staggered arrangement is also possible, such as a monthly payment of EUR 100 per month in 2023, increasing to EUR 150 per month in 2024.

This effectively allows employers to use the tax-free amount for wage increases that are pending but not yet binding, and generate “more net from the gross pay,” at least until 31 December 2024. To ensure the amount is tax-free, the increase must be temporary until 31 December 2024, and it must be identified as the inflation relief bonus.

It might be beneficial for those starting a job with a new company to agree to a lower basic salary until 31 December 2024, which would then be supplemented by the inflation bonus. Such an arrangement could be very attractive for both employers and employees towards the end of the period of validity – the end of 2024.

All the same or difference

Generally, employers are neither required to pay an inflation relief bonus nor to favour all employees in the same way. The employment law principle of equal treatment allows for differential treatment. As with other benefits (e.g., bonus payments), any such differential treatment requires an objective reason.

The following differences could be possible, for example:

• Key date rule: Only employees who have an employment contract that has not been terminated at the time of the payment will receive a bonus.
• Differences based on salary groups: The inflation relief bonus can be higher for lower salary groups. Higher salary groups can even be excluded. When the difference between the salary groups are not that big, a sliding scale should be adopted (the higher the basic salary, the lower the inflation bonus).

Cash payment or payment in kind

Even though the public debate about the inflation relief bonus has focused on cash payments, employers can pay the tax-free amount of EUR 3,000 in other benefits (e.g., vouchers for petrol, goods, or food). The financial advantage is tax-free and free from social security payments. It is also possible to split the bonus between cash payments and payments in kind.

Summary

If you look more closely at the inflation relief bonus, various options are available to employers. The basic principles of employment law and the rights of the works council must be respected when implementing the bonus. If employers have questions, they should seek legal advice. However, in view of the long period of validity, every employer should be able to find a way to use the inflation relief bonus for their benefit.

Dr Philipp Melle

Christian von Buddenbrock and Jörn Manhart, both partners at the international law firm ADVANT Beiten, have been advising Uniper on the concept of the pure defined contribution scheme since 2019, drafted all the necessary contractual texts, from the employer's draft collective agreement to the pension plan, and supported Uniper in the collective bargaining negotiations. In addition, ADVANT Beiten was involved in the BaFin approval process for Uniper and in coordination with Metzler Sozialpartner Pensionsfonds AG. In September 2022, the Metzler rBZ 1 pension plan of the Uniper social partner model was the first in Germany to receive the BaFin clearance certificate in accordance with its application.

The pure defined contribution scheme was initiated by the then Federal Minister of Labour, Andrea Nahles, and anchored in 2017 in the Act on the Improvement of Occupational Pension Provision (BetrAVG). The instrument is intended to allow employers to issue pension commitments that are guaranteed and thus risk-free in the long term. As a counterbalance to the lack of a guarantee component, the law orders mandatory participation of the social partners in the implementation and management of the pension scheme. However, the considerable legal ambiguities, political restraint on the part of the social partners and questions of competence between collective bargaining and supervisory law have since made it difficult to set up pure defined contribution schemes.

The social partner model is aimed at employees of the Uniper companies who fall within the pay scale group in Germany. It also offers the possibility for other collective agreements to join the pension scheme. 

Media Contact
Markus Bauer
Rechtsanwalt (Lawyer)
Head of Marketing Labour Law
ADVANT Beiten
+49 (89) 350 65 - 1104
markus.bauer@advant-beiten.com

Christian Freiherr von Buddenbrock
Rechtsanwalt (Lawyer)
ADVANT Beiten
+49-211-518989 - 190
christian.vonbuddenbrock@advant-beiten.com

Jörn Manhart
Rechtsanwalt (Lawyer)
ADVANT Beiten
+49-211-518989 - 190
joern.manhart@advant-beiten.com

The calendar year is drawing to a close. For employers and employees, the focus moves to leave entitlements. How many days of leave are left? When do they have to be taken? What does the company have to do in this respect? The European Court of Justice (ECJ) has already clarified the legal situation in this area of law, e.g., in its judgment on the obligations of employers to enable employees to take their leave. The ECJ has now tightened its jurisprudence on this issue.

Facts of the case

After the termination of the employment relationship, the employee claimed payment in lieu of 101 days of leave that she had not taken during the five previous years. The employer refused to pay, claiming that the limitation period had expired. At first instance, the Labour Court held largely in favour of the employer. On appeal, the District Labour Court granted the employee payment in lieu of the leave because the employer had failed to fulfil its obligations and enable the employee to take her leave in each case. The Federal Labour Court stayed the proceedings and submitted the matter to the ECJ for a preliminary ruling on the question of whether the European rules on appropriate working conditions preclude the application of the German limitation periods where the employer fails to put the employee in a position to actually take their leave by informing them of their leave entitlements and inviting the employee to use them.

The judgment

The ECJ answered this question in the affirmative. The limitation periods established in the German Civil Code limit an employee’s right to paid annual leave under Article 7 of Directive 2003/88/EC and Article 31 (2) of the Charter of Fundamental Rights. The limitation periods pursue the employer’s legitimate objective of ensuring legal certainty. However, in the view of the Court, this interest will no longer be legitimate where the employer has failed to inform the employee of their leave entitlements and is therefore responsible for the fact that the employee has not taken their leave and is now making a retroactive request for (payment in lieu of) leave entitlements from such a long time ago. In such a situation, employers may not benefit from their reliance on the limitation periods. European law provisions, therefore, preclude reliance on the national limitation periods where they apply irrespective of whether the employer has actually put the employee in the position to take their leave by informing the employee about their leave entitlements.

Consequences for practice

The judgment again accentuates the effect of an employer’s failure to inform its workers of their leave entitlements. In such cases, employers cannot rely on limitation periods.

Practical tip

For many companies, the obligation imposed on employers by the ECJ case law to inform employees of their untaken leave entitlements is still a low priority. However, this judgment of the ECJ shows the wide-reaching (financial) consequences of the failure to comply with this obligation. Employers should therefore ensure without delay that they are complying with the obligations imposed by the ECJ with respect to informing employees of their leave entitlements and about the expiration of such entitlements. This obligation can be fulfilled, for example, by hanging a notice on a notice board about payroll processing or speaking to employees directly.

Regina Dietel

Ariana Loof will work in the team of Dr Thomas Puffe and Dr Thomas Barthel. She specializes in collective labour law and in data protection law, particularly in data protection law for employees. Before her time at KPMG, she worked for the law firm Dentons.

"We are very pleased that we were able to win over an experienced lawyer in Dr Loof, who besides her focus on classic labour law possesses extensive expertise in data protection law, particularly in data protection for employees," emphasizes Markus Künzel, Partner and head of the labour law practice group at ADVANT Beiten. "This area is becoming increasingly important in practice. Therefore, we are very happy that this allows us to perfect our line up not only at the Berlin office but also throughout Germany," the lawyer continues.

The Berlin labour law practice recently already reinforced itself at partner level with Dr Michael Matthiessen, see our Press release dated 4 July 2022.

Media Contact
Markus Künzel
Head of the Labour & Employment Law practice group
ADVANT Beiten
+49 (89) 350 65 - 1130
markus.kuenzel@advant-beiten.com

Markus Bauer
Rechtsanwalt (Lawyer)
Head of Marketing Labour Law
ADVANT Beiten
+49 (89) 350 65 - 1104
markus.bauer@advant-beiten.com

The transaction is structured as a share deal whereby Aurelius will acquire the specific legal entities, i.e. Sappi Stockstadt GmbH, Sappi Maastricht Real Estate B.V. (including its subsidiary Sappi Maastricht B.V.), Sappi Finland I Oy and Sappi Finland Operations Oy, which own and control the assets and liabilities of the individual mills.

The enterprise value of the transaction amounts to approximately EUR 272 million and the consideration consists of cash proceeds and retained receivables as well as retained liabilities. The transaction is expected to close in Q1 2023, subject to various standard suspensive conditions.

Sappi is a global leader in dissolving pulp and paper-based solutions, headquartered in Johannesburg, South Africa. It has over 12,000 employees, manufacturing facilities in ten countries spanning over three continents and customers in over 150 countries worldwide.

Advisors to Sappi Limited:

Advant Beiten: Dr Christoph Schmitt (Lead Partner; Banking & Finance) and Dr Markus Ley (Lead Partner, Corporate Law); Dr Mario Weichel and Maximilian Matusewicz (both Corporate Law); Dr Gerald Müller-Machwirth and Maike Pflästerer (both Employment Law); Katrin Lüdtke and Philipp Früh (both Public Law); Anja Fischer (Real Estate); Susanne Klein (IT Law and Data Protection) as well as Christoph Heinrich, Dr Christian Heinichen and Cathleen Laitenberger (all Antitrust and Competition Law).

Stibbe is advising on the Dutch law aspects and Fondia is advising on the Finnish law aspects of the transaction.

Media Contact
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
Frauke.Reuther@advant-beiten.com

Markus Ley
Rechtsanwalt
ADVANT Beiten
+49 (89) 35 0 65 - 1211
Markus.Ley@advant-beiten.com

The BAG strengthens the competence of the general works council for the introduction and use of technical facilities in the case of uniform company administration and data storage (e.g. Microsoft Office 365).

Summary of Facts

The employer intended to introduce and use Microsoft's Office 365 software package in all its offices. The use of the software was to be in the form of a single-tenant solution. For this, it was planned that the entire company for electronic data processing would be managed as a uniform client (tenant) with a central administration, and data created and collected during use would be stored in a uniform cloud. The general works council agreed to the company-wide use of the software package. A local works council, however, considered the general works council to be incompetent and requested that its own competence be established for parts of the software package.

Decision

The BAG strengthens the competence of the general works council and states - as did the Cologne Regional Labour Court before - that the general works council is responsible for exercising the right of co-determination pursuant to Section 87 (1) no. 6 of the Works Constitution Act (Betriebsverfassungsgesetz - BetrVG) in the case of the company-wide introduction and use of Microsoft Office 365. The Office 365 software package is a technical device within the meaning of Section 87 (1) no. 6 BetrVG. When using the desktop applications and the individual services of the software package, data is generat-ed or collected that can be used to monitor the performance and behaviour of employees. In the opinion of the BAG, the uniform company administration of the software with centrally assigned administration rights enables centralised control of the behaviour and performance of employees in all company establishments. For compelling technical reasons, this central monitoring option requires an inter-company regulation. It is irrele-vant that user-specific settings can be made for individual modules or that company-specific regulations can be made for the use of individual modules. The principle of separation of competences requires the exclusive competence of the general works council.

Consequences in practice

The BAG's decision is appreciated. It strengthens the primary competence of the general works councils and group works councils with regard to the introduction and use of software packages at company or group level. As a general rule, local works councils are primarily responsible for exercising co-determination rights under works constitution law. If, however, matters affect several establishments or the company as a whole and regulations must be made on a compulsory basis for all establishments, the general works council has the primary responsibility for exercising co-determination rights. This also applies accordingly to the primary competence of the group works council. The thresholds for a primary competence of the general or group works council are high. Negotiations and the conclusion of agreements with these bodies therefore regularly require delega-tions from the local works councils. The BAG also emphasises the principle of separation of competences, according to which the regulation of a matter is either the exclusive responsibility of the individual works councils, the general works council or the group works council. This creates legal certainty that even with regard to individual modules of a software package, negotiations do not have to be conducted with several bodies at different levels. This means that there is no need to negotiate with several local works councils, but one body is responsible for the whole company or group.

Practical advice

The decision shows once again that by designing the framework conditions of technical facilities, especially with regard to administration rights, storage options and control powers, influence can be exerted on the body responsible for negotiations. Decisions of employers to create uniform technical framework conditions are respected by the BAG even if it would be technically possible to create them individually for each establishment. These design options should therefore be considered in advance with regard to the body to be involved and used if necessary. Framework (general) company agreements that provide framework regulations for further modules or updates required at a later date are also a useful variant to simplify negotiations on the introduction and use of technical facilities, such as complex software packages.

Sonja Müller

"§ 59 Special Provisions under Labour and Social Law

Where an employee is put under quarantine during his or her leave under Article 30, whether or not in conjunction with Article 32, or is required to be quarantined under a statutory instrument issued under Article 36(8), first sentence, number 1, the days of quarantine shall not be offset against annual leave."

For employers, this means in future that in the event of a domestic quarantine order, these days are not to be offset against annual leave.

On this topic, the German Federal Labour Court (Bundesarbeitsgericht, BAG) submitted a preliminary ruling to the European Court of Justice (ECJ) in its decision of 16 August 2022, asking whether holiday leave already granted must be granted subsequently due to a domestic quarantine ordered during this period. A detailed review of this decision by Maximilian Quader can be found here. For former cases from previous years, this provision will not apply in the new version of the Infection Protection Act, so that the decision of the ECJ remains to be seen.

Nora Nauta

When an employment relationship ends, so does the employer's non-compete obligation. Employees are then able to use their practical knowledge for a competitor. In order to prevent a competitive set-up later down the line, employers often opt for a post-contractual non-competition obligation. The condition precedent is, most notably, a compensation payment for the time of the obligation, a non-competition compensation ("Karenzentschädigung"). Again and again, disputes arise in connection with the post-contractual non-competition obligation and with the amount of the non-competition compensation. Now the German Federal Labour Court was asked to decide whether so-called Restricted Stock Units ("RSUs") granted by the parent company have to be considered when it comes to the amount of the non-competition compensation.

Case Background

The claimant was employed by the company from 2012 until January of 2020. In the employment agreement, the parties agreed on a nine-month post-contractual non-competition obligation according to which the employer undertook to pay a non-competition compensation. The amount of non-competition compensation agreed was "half of the last contractual benefits received". Under a separate agreement, the employee took part in a share ownership programme (RSU programme) of the US parent company. The employer took on the calculation of RSUs already transferred and settled everything with the parent company internally. Under the title "Summary of the Personal Remuneration", the employer informed the employee about the expected amount of remuneration for the year of 2019, which consisted of a basic salary and the current value of the RSUs expected to become due in the calendar year. In an "informative overview", the employer explained that the RSUs are provided by the parent company and will not be considered for the calculation of the post-contractual non-competition compensation. In October of 2019, the employment relationship was terminated by means of a settlement agreement. In deviation from agreements between the employee and the parent company, it provided that all RSUs still due for 2019 will be transferred to the employee despite the release from work. After leaving the company, the employer received the agreed non-competition compensation.
By means of the action, the employee sought a non-competition compensation which was calculated by taking into consideration the RSUs granted in the three-year period before leaving.

The Decision

The Federal Labour Court decided that the employee does not have any claim to a higher non-competition compensation. The court held that RSUs were no "contractual benefits" as defined in the contractual agreement. The term "contractual benefits" only covered benefits which are based on the interchangeability of the employment contract und which the employer owes the employee as remuneration for performed work. The agreements on the granting of the RSUs were made with the parent company. Taking the RSUs into account when calculating the non-competition compensation requires that the employer has assumed an (co-)obligation. Such an obligation does not arise, in particular, from the fact that the employer took care of all taxation and administrative matters for the parent company with regard to the RSUs.

Practical Implications

The amount of the non-competition compensation must reach half of the last contractual benefits received by the employee for each year of the obligation. Here, the following principally applies: the more far-reaching the obligation, the higher the compensation payment in order to be fully binding. All remuneration payments actually received by the employee for the work performed, i.e. all benefits in cash and in kind (e.g. annual remuneration, bonus payments, holiday allowances) are taken into account when calculating the compensation payment. Depending on whether fixed wages or variable remuneration components are concerned, different points in time or periods are decisive for the calculation. After this judgment it is clear that when the amount of the non-competition compensation is calculated, benefits paid by third parties, like, in particular, RSUs granted by the parent company, are not taken into account, unless the parties have agreed otherwise.

Practical Advice

Offering the prospect of RSUs is a popular means to motivate employees to stay with the group, create financially attractive incentives for company loyalty and, at the same time, also enough performance incentive. Employers should be careful to not assume liability for RSUs granted by third parties - in particular the parent company -, as this can have significant financial consequences. Liability is not accepted already when the employer has influence on the content of the "if" of the granting, the criteria or the amount of the remuneration (e.g. by assessments or propositions). If the contractual obligation only exists between the employee and the parent company, it is a difficult process for the employee to enforce claims, especially because in many cases parent companies, like here, have their seat abroad and therefore other jurisdictions apply.

Laura Anna Hagen

It is safe to say that this is the most important decision of the year in labour law and a true surprise for the companies: the Federal Labour Court (BAG) made it clear that all employers are obliged to record the working hours of their employees irrespective of whether there is a works council or not.

Case Background

The proceedings were originally about the scope of the co-determination rights of the works council. The employer and the works council were in dispute over whether the works council had the right to pro-actively request the introduction of electronic time recordings. Negotiations between the parties regarding the conclusion of a company agreement on working time recording were behind the dispute. The employer had even purchased the hardware required for recording time electronically already. When the company decided not to introduce time recording after all, however, and the negotiations with the works council were abandoned, the works council was set on obtaining confirmation by court that it has a right of initiative regarding the introduction of an electronic time-recording system.

The BAG had already rejected such right of initiative with reference to the purpose of the statute in 1989. The Regional Labour Court of Hamm, however, opposed this decision with judgement dated 27 July 2021 (7 TaBV 79/20) stating that works councils were indeed allowed to request the introduction of electronic time recording on their own initiatives. The employer lodged a legal appeal against this. While this appeal was generally successful, the BAG bases its decision on completely different reasons than in 1989 and is therefore expected to cause far-reaching repercussions for the day-to-day running of businesses.

The Decision

The BAG determined that companies are legally obliged to record working hours based on the application of the Occupational Safety and Health Act in compliance with European law alone. Therefore, this judgement constitutes an aftermath of the highly publicised ECJ ruling dated 14 May 2019 in the matter CCOO versus Deutsche Bank SAE (C-55/18) which obliges the member states to introduce statutory provisions for recording working hours.

The BAG had already addressed this ruling only a few month ago when it determined  that the considerations of the ECJ do not make a difference when it comes to the burden of proof in lawsuits concerning overtime hours (4 May 2022 - 5 AZR 359/21). The following still applies: if an employee wants to bring an action regarding the payment of overtime work, the employee continues to be obliged to present and prove the overtime hours worked as well as the employer's orders to work overtime.

Practical Implications

Even though it does not appear so at first glance, the decision also contains good news for employers. For it leads to legal clarity for companies, as it rejects the extension of the co-determination rights of the works council in an important regard. It has now been determined that work councils do not have a right of initiative and, therefore, cannot demand the introduction of electronic time-recording systems against the will of the companies. According to the press release, the BAG does not require the employer to record time technologically or electronically either. It must only meet the requirements of the ECJ which requires an objective, reliable and accessible system to record time.

Practical Advice and Outlook

Employers are now obligated to introduce a system with which they can record the hours worked by their employees. In our view, however, this does not mean a comeback of time clocks nor the end of trust-based working time. It will still be possible for companies to delegate the documentation of working time to the employees with regular plausibility checks probably being required. If and in how far the BAG will make more detailed specifications in this regard remains to be seen. In addition, employers - if not already done - should set clear regulations for ordering and working potential overtime hours to avoid potential lawsuits concerning overtime hours. It will also be interesting to watch whether the German legislator, who was "overtaken" by the BAG with this decision, will dare to approach the very important topic "Reform of laws on working hours" pursuant to the specifications of the coalition agreement.

Dr Wolfgang Lipinski, Benedikt Holzapfel

The flu season will soon be upon us. Occupational health and safety measures are needed to protect workers against the SARS-CoV-2 virus. The Omicron variant has been circulating in Germany since January 2022 but has resulted in proportionately fewer serious illnesses. However, the total number of those with the virus was ten times higher in Sumer 2022 compared to the past two summers. In response to the rate of infection with the Omicron variant, for which vaccinated persons have also tested positive multiple times, and the resulting high levels of illness in the workforce, the Federal Ministry for Labour and Social Affairs (BMAS) found it necessary to prepare a proposal for a draft bill for a new Corona-ArbSchV. The new Corona-ArbSchV will enter into force on 1 October 2022 and will apply initially until 7 April 2023.

On 24 August 2022, the BMAS released a draft bill for a revised Corona-ArbSchV. It required employers to again offer employees the possibility to work from home and to provide rapid tests. However, the version adopted by the Federal Cabinet on 31 August 2022 only requires employees to assess various measures as part of the company hygiene concept. In contrast to previous versions of the Corona-ArbSchV, there is no longer any obligation to implement specific measures.

Company hygiene concept measures

The focus of the new occupational health and safety measures is the obligation for employers to establish a company hygiene concept. This hygiene concept should evaluate the well-known and proven measures for protection against infection and establish and implement the measures that the company considers necessary. In this respect, the employer does not have a direct obligation to implement the measures. Instead, the employer must evaluate, based on its own risk assessment in accordance with §§ 5 and 6 of the Occupational Health and Safety Act, whether it should implement certain measures within the company to the extent that the operational requirements allow. In this respect, the employer can consider the regional occurrence of infection, as well as the specific risks of infection for the activities performed. According to the draft bill, the BMAS has based the list on the measures that have proven both practical and effective during the pandemic.

Employers should pay particular attention to the following measures when evaluating the company hygiene concept:

• Maintaining a minimum distance of 1.5 metres between persons
• Ensuring hand hygiene
• Adherence with etiquette for coughing and sneezing
• Airing interior areas following infection protection guidelines
• Reducing contacts between persons for operational reasons
• The offer for employees to carry out appropriate activities from home where no operational reasons would prevent it
• The offer for workers who cannot work solely from home to test themselves regularly for free.

To avoid the spread of infection through droplets, a minimum distance of 1.5 metres between two persons should be maintained. Where the distance falls below this minimum and health and safety measures are insufficient, employers must make protective face masks available to employees.

Suitable hand hygiene rules must also be established. According to the explanatory memorandum to the draft bill, this will be guaranteed if the employer makes available cold water, soap and disposable towels or suitable hand sanitiser.

The avoidance or at least the reduction of contact between persons within the workplace is the last suitable measure. Employees should, for example, avoid using the same rooms or vehicles or split employees into teams that are as small as possible. Business trips or other in-person meetings should be reduced to only those which are necessary to continue operations.

The new version of the Corona-ArbSchV no longer mentions avoiding contact, but merely from a reduction in contact. Employees should, for example, avoid using the same rooms or vehicles or be split into teams that are as small as possible. Business trips or other in-person meetings should be reduced to only those which are necessary for continued operations.

No obligation to offer employees to work from home

In adopting the new version of the Corona-ArbSchV, the Federal Cabinet decided that employers should no longer be obliged to offer employees the opportunity to work from home. When evaluating the company hygiene concept, the employer should merely assess whether an offer to work from home should be made to employees and whether such an offer should be implemented as part of the hygiene concept.In the view of the BMAS, allowing employees to work from home has proven to be a good way to avoid unnecessary contact with other persons at work. Despite this fact, the Federal Cabinet succumbed to pressure from the FDP and stopped short of imposing a strict obligation to allow employees to work from home. Instead, employers are free to decide whether to offer their employees the opportunity to work from home. In so doing, the company must assess whether the tasks performed by the employee can be performed from home or whether operational needs rule out working from home. This will be the case when operations would otherwise be significantly restricted or could not be maintained. Such activities include processing and distributing incoming post, processing incoming and outgoing goods, and counter or janitorial services.

When looking at the overall picture, the employer must also consider that working from home can make it easier to combine private life and work, e.g., for employees who have additional care responsibilities for dependents due to the Coronavirus. The draft bill names caring for a sick child as one such additional care responsibility. This relates specifically to circumstances brought about by the Coronavirus, such as the needs of employees with disabilities or with health factors which would put them at risk for a severe case of infection (e.g., weak immune system).

Where the offer to work from home is made, the employee will not have any obligation to accept the offer. It will still be necessary for the employee’s home to fulfil the necessary technical and spacial requirements and for an agreement on working from home to be concluded between the employer and workers. Such an agreement could, for example, be contained in an individual employment contract or works agreement.

Option for employees to be immunised

In accordance with § 3 of the Corona-ArbSchV, employers must make it possible for their employees to be immunised against the Coronavirus during working time. This provision regulates the employer’s support obligations with respect to the provision of the necessary personnel, rooms, amenities, devices, and resources.

All in all, the new version does not contain any completely unknown rules. Instead, a weakened variant of the familiar rules will enter into force in October. For most employers, therefore, the assessment requirement that will apply from 1 October 2022 will not cause any significant difficulties. Most rules will already be implemented within the company, and many have remained unchanged.

At a glance

As an employer, what do I have to consider from 1 October 2022?

Nora Nauta

Voluntary corona bonuses paid by an employer to its workers to compensate the employees for the strains of performing their work during the pandemic are “hardship pay” and, as such, are exempt from attachment in accordance with § 850a No. 3 of the Code of Civil Procedure (Zivilprozessordnung, ZPO).

Facts of the case

The employee worked as a kitchen assistant and barkeeper for a restaurant. The employer paid a voluntary corona bonus of EUR 400. As the employee was in the middle of an ongoing insolvency proceeding, the insolvency administrator asked the employer to pay the administrator the corona bonus, which the administrator viewed as an attachable emolument. When the employer refused, the insolvency administrator brought an action against the employer. At first instance before the Labour Court in Braunschweig and on appeal to the Regional Labour Court of Lower Saxony, the claim was dismissed. The Courts held that the term “hardship” in § 850a No. 3 of the ZPO refers to the particular pressures faced by employees when performing their duties. This includes circumstances that are detrimental to the employee’s health and measures necessary for their protection. As a barkeeper, the employee had to comply with social distancing rules and hygiene measures and was required to wear a mask. The employee also had an increased risk of infection through contact with guests of the restaurant and endured significant psychological stress. The sense and purpose of the protection from attachment in § 850a No. 3 of the ZPO are to ensure the economic livelihood of the debtor (in this case the employee). That’s why it’s advisable to keep bonuses away from creditors where those bonuses are designed to compensate for adverse and particularly onerous working conditions. It would miss the purpose of the corona bonuses – recognition for the performance of work under the special conditions of the pandemic – if these bonuses would not be protected from attachment. A corona premium should therefore benefit the employee without restriction so that they get the additional pay for the dangers faced through their job.

Section 850a No. 3 of the ZPO grants protection from attachment only to the extent that the relevant bonus does not exceed the “normal framework”. This requirement is also fulfilled here. In this respect, § 3 No. 11a of the Income Tax Act (Einkommensteuergesetz) provides that corona premiums will be tax exempt up to an amount of EUR 1,500. Bonuses that are lower than this amount will not exceed the “normal framework”.

The insolvency administrator appealed to the Federal Labour Court (Bundesarbeitsgericht, BAG).

The judgment

Without success: the BAG agreed with the lower courts and rejected the insolvency administrator’s claim. In granting the bonus, the employee sought to compensate the employee for the hardship they suffered in performing their work. Accordingly, this is an unattachable bonus under § 850a No. 3 of the ZPO. The amount of the bonus also did not exceed normal levels.

Consequences for practice

The judgment is right. The voluntary corona bonuses were intended to honour the particular burdens that made performing work during the pandemic more difficult, and these premiums should be protected from attachment by creditors. It is not clear from the brief press release of the BAG whether the BAG has followed the strict line taken by the LAG Berlin-Brandenburg (judgment of 23 February 2022 in Case No. 23 Sa 1254/21, see ADVANT Beiten Labour Law Newsletter, June 2022, page 11), according to which the protection against attachment will depend on whether a premium rule was applied indiscriminately to all employees (then it can be attached) or whether it depends on the specific hardship faced by the individual employee (then unattachable). We will have to wait for the reasoning of the Court to be published.

Practical tip

This judgment clarifies that any corona bonus should be protected against attachment where the employee faced additional burdens in performing their work due to the pandemic and the tax-free level of EUR 1,500 was not exceeded. In such cases, an attempt by the employee’s creditors to garnish the bonus can be rejected and the bonus can be paid to the employee. In contrast, care should be taken where corona bonuses were paid without any distinction based on the hardship actually faced by the employees. In such cases, it is recommended that one wait until the full judgment is available and not pay any bonus to either the employee or their creditors. Instead, in such cases, employers try to agree on temporarily withholding the payment or, where it is not possible to reach an agreement, deposit the amount of the bonus with the court.

Dr Michael Matthiessen

The facts of the case are as follows: The employers jointly run an inpatient residential facility. As of 2017, they have negotiated with the works council on the conclusion of a so-called company agreement (an agreement between employer and works council) for recording of working time. At the end of May 2018, they decided not to introduce any electronic time recording in the company. The negotiations were broken off. With the present proceedings, the works council wants it to be established that a co-determination right for the proactive introduction of an electronic time recording exists for the works council. The works council considers that the employees may also have an interest in the introduction of an electronic time recording, precisely where the exact recording of working time and overtime is concerned. The employers, on the other hand, are of the opinion that the co-determination right of the works council for the introduction of technical monitoring equipment pursuant to Sec. 87 (1) No. 6 of the German Works Constitution Act is a mere right of defence for the protection of personal rights of the employees. Accordingly, the works council may not proactively demand the introduction of such equipment.

"Should the Federal Labour Court decide in favour of the works council, the Federal Labour Court would give up its longstanding case law. Since the court has refused such a right of initiative in a relevant decision from the year 1989", explains Lipinski. "A change of case law would have far-reaching consequences for the industrial constitution law and business practice. Since the works council could also demand, for instance, the use of other IT systems or software previously not used with the employer, such as Windows 365, MS-Teams, Zoom etc. from the employer in case of affirmation of such a right of initiative. In the absence of an agreement with the employer, a conciliation committee ('arbitration board' with employers' and employees' representatives under the guidance of a neutral chairperson) would have to be convened which may also decide against the will of the employer", according to Lipinski. "The extremely high practical relevance also arises from the fact that the technical equipment - pursuant to the previous decisions of the Federal Labour Court - must only be suitable for behaviour control, even if this is provably not the purpose of the employer. In this case, the co-determination of the works council is already to be affirmed according to the Federal Labour Court, thus, the scope of application of the provision concerned is tremendous", the lawyer continues.

"European factors" might also play a role for the decision to be taken on 13 September 2022. The European Court of Justice (ECJ) had decided in 2019 (C-55/18 – CCOO) that the German legislator must adopt a provision under EU law which obliges employers to establish a system, by which the daily working time performed by each employee can be measured. Despite a declaration of intent in the coalition agreement of the governing parties in the past year, the German legislator could not agree on a provision. "It is presumed in part that the Federal Labour Court could take its decision in the light of this case law of the ECJ. From the substantive point of view, however, it is about something different (not about the obligation of the German legislator to adopt a provision for recording of working time, but about the question whether the works council may enforce an electronic time recording in the company). Should the Federal Labour Court, however, agree with the works council, the Federal Labour Court would de facto convert the works council into a kind of 'company police" which - instead of the legislator who has not yet taken action - may force the employer to introduce a comprehensive electronic time recording", explains Lipinski. "This has to be refused, as it is unequivocally and quite clearly specified by the legislator according to the present German Working Hours Act that only the working time exceeding eight hours per day has to be recorded by the employer. If one would like to regulate this differently, the legislator is demanded and not the Federal Labour Court as a court which only has to apply existing laws or interpret unclear provisions. In addition, the ECJ does not demand any technical or electronic time recording. A technical equipment is, however, a prerequisite for the existence of a co-determination right, with which we are dealing here", according to Lipinski. We sincerely hope that the Federal Labour Court, therefore, maintains its previous case law which refuses a right of initiative with convincing arguments and that - as intended by the separation of powers - the legislator adopts a provision".

Lipinski even goes one step further: "It would be best if the German legislator would carry out a comprehensive reform of the laws on working hours. Since in the light of mobile office, working from home, flexible working hours etc. the existing laws on working hours often no longer correspond to the practical reality of life of the parties to an employment agreement. Most urgently, the legislator should strengthen the flexibility in the employment relationship by abolishing the limit of 8 hours work per day and by introducing maximum working hours per week instead", concludes the lawyer.

Dr Wolfgang Lipinski is a Labour Law Specialist and a Partner at ADVANT Beiten. He will be pleased to be at your disposal for interviews.

To facilitate readability, this document does not use the masculine and feminine forms of language at the same time. The generic masculine is used, whereby all genders are equally referred to.

Media Contact

Dr. Wolfgang Lipinski
Labour Law Specialist
ADVANT Beiten
+49 (89) 350 65 - 1133
wolfgang.lipinski@advant-beiten.com 

Markus Bauer
Head of Marketing (Labour & Employment Law practice group)
ADVANT Beiten
+49 (89) 350 65 - 1104
markus.bauer@advant-beiten.com

An employer’s order for employees to wear medical face masks (surgical masks) as a safeguard against the Coronavirus does not fulfil the requirements for a hardship supplement under § 10 No. 1.2 of the Framework Collective Wage Agreement for commercial workers in the industrial cleaning industry.

Facts of the case

The worker is employed as a cleaner. The Collective Wage Agreement for the Industrial Cleaning Industry applies to his employment relationship based on the order declaring the Agreement generally binding. Between August 2020 and May 2021, he wore a medical face mask while carrying out his cleaning duties as instructed by his employer. The employer adopted the measures to safeguard against the Coronavirus. The employee demanded he be paid a hardship supplement equivalent to 10% of his hourly wage for wearing the mask based on § 10 No. 1.2 of the Framework Agreement. He claimed that wearing a medical face mask while working constituted a hardship that should be compensated by the hardship supplement. A medical face mask should be considered part of his personal safety equipment because it also reduces the risk that the wearer will become infected. The lower courts dismissed the claim.

The judgment

The Federal Labour Court (Bundesarbeitsgericht, BAG) shared the view of the lower courts. It clarified that a medical face mask is not a respiratory mask within the meaning of § 10 No. 1.2 of the Collective Wage Agreement. The collective provisions relate to occupational health and safety regulations. Accordingly, the term respiratory mask includes only those masks which are personal protective equipment and are primarily intended to protect the individual wearer. This does not apply to medical face masks, which are designed to protect others, not the wearer, and do not meet the requirements under the occupational health and safety provisions for personal protective equipment. The employee is therefore not entitled to a hardship supplement under the provisions of the Collective Agreement for wearing a medical face mask.
The judgment of the BAG is correct and logical. In line with the judgments of the lower courts in this case and other judgments at first instance, the supplement should be denied. In its opinion of 24 April 2020, the Trade Association for Industrial Cleaning (one of the parties to the Collective Agreement) also clarified that only FFP masks of protection classes 1 – 3 are respiratory masks within the meaning of the Collective Agreement; everyday masks and surgical masks do not fall within this definition.

The wording of the provisions of the Collective Agreement, but also the sense and purpose of the rule target the personal protection of workers. In addition, the hardship supplement only applies – as is clear from the broader context of the standard – when a certain intensity is exceeded. This is not the case when wearing a simple surgical mask.

Consequences for practice

The judgment is relevant to more than just the Collective Wage Agreement for the Industrial Cleaning Industry. The provision in question concerns general occupational health and safety provisions. Accordingly, the BAG clarified that respiratory masks are only those masks that are designed for the personal protection of the wearer and are part of the wearer’s personal protection equipment. Medical face masks are designed to primarily protect others and not the wearer. This argument can be applied in other cases, and not just those based on the Collective Wage Agreement for Industrial Cleaning Services.

Anne Dziuba

Failure to obtain the agreement of the Integration Office in accordance with § 168 of the Ninth Volume of the Social Code (SGB IX) when terminating the employment of a severely disabled person will result in a presumption, pursuant to § 22 of the General Act on Equal Treatment (Allgemeinen Gleichbehandlungsgesetz, AGG), that the employment agreement was terminated because of the disability.

Facts of the case

The employee worked as a janitor for a primary school on the basis of a contract that fell under a personnel sharing agreement. He was paralysed on one side of his body following a stroke and declared incapacitated for work on 11 February 2018. The employer became aware of the incapacity on 12 February 2018 through the employee’s then supervisor. The employer terminated the employment relationship at the end of March 2018. In addition to an action for unfair dismissal, which ended in a settlement, the employee brought an action for the payment of damages for discrimination based on his severe disability in accordance with § 15 (2) of the General Act on Equal Treatment (AGG). In his view, the fact that the employer failed to get the approval of the Integration Office before terminating the employment relationship substantiated his claim. When the notice of termination was issued, there was no official verification of his severe disability, nor had the employee applied to be recognised as a severely disabled person. However, the employee argued that his severe disability was so obvious that no verification was necessary.

The judgment

The Federal Labour Court (Bundesarbeitsgericht, BAG) rejected the claim for payment of damages under § 15 (2) of the AGG. The dismissal was direct discrimination within the meaning of § 3 (1) of the AGG, but the employee had failed to sufficiently show that the discrimination was a result of his severe disability. The Court confirmed that the infringement of § 168 of the SGB XI could establish the rebuttable presumption in § 22 of the AGG that the severe disability was “causal” for the discrimination. However, the employee had failed to conclusively prove the infringement of § 168 of the SGB XI. His disability was not evident at the time of the dismissal.

Consequences for practice

This judgment shows that there can already be a claim for compensation under § 15 (2) of the AGG where the (severe) disability has not yet been verified nor has the person applied for verification. Such a claim nevertheless requires that the severe disability was evident to the employer. A disability, even a severe disability, will only be obvious in very exceptional cases. The requirements for the obviousness characteristic are strict: the BAG held that the test was not fulfilled in this case, even though the employee was in intensive care with one side of his body paralysed following his stroke.

Practical tip

Careful attention should be paid to compliance with the procedural duties and/or duty of care with respect to severely disabled persons in daily practice to avoid claims for compensation for discrimination from persons with severe disabilities. Failure to comply with all requirements can lead to a presumption of discrimination based on disability. In the case of job applications, for example, private and public employers must comply with the duties to investigate and the right of participation in accordance with §§ 164 and 165 of the SGB IX respectively. The decision of the BAG makes it clear that the failure to acquire the approval of the Integration Office in accordance with § 168 of the SGB IX may be a fact that would establish a presumption of discrimination and a causal link between the discrimination and the severe disability within the meaning of § 22 of the AGG. If such facts exist, the employer is encouraged to refute the presumption of discrimination on grounds of severe disability. The rebuttal is subject to such strict requirements that the need for one must be avoided.

Sabrina Miersen and Lisa Schrader

The Federal Labour Court (Bundesarbeitsgericht, BAG) submitted a question to the European Court of Justice (ECJ) for a preliminary ruling on whether the refusal to regrant leave to an employee because he was not ill but ordered by the relevant authority to isolate during his leave, is compatible with European law.

Facts of the case

An employee was forced to quarantine during his leave because he had contact with a person who was infected with the Coronavirus. He demanded that the squandered leave be regranted because he was unable to organise his leave freely as a result of the quarantine order. The Labour Court in Hagen dismissed the claim, while the Regional Labour Court in Hamm found in favour of the employee on appeal.

The judgment

The BAG has called on the ECJ to issue a preliminary ruling in this case. The Federal Leave Act (Bundesurlaubsgesetz) contains a rule specifying that sick days shall not be counted as leave. This provision only applies to sick days and the lower courts have generally held that this rule does not apply where the employee is forced to quarantine although they are not themselves ill (see Vacation even if stuck in quarantine | Advant Beiten (advant-beiten.com)). The application of EU law, especially the EU Working Time Directive and the EU Charter of Fundamental Rights, could give a different conclusion. The BAG stayed the proceedings before it until the ECJ issues its preliminary ruling on the question.

Consequences for practice

The preliminary reference to the ECJ brings with it not insignificant risk that leave will need to be regranted when employees were not able to properly take it, not because they were ill but because they had to spend it in quarantine. There is no legal basis for a regrant of leave under German law. However, the ECJ might come to a different conclusion given the importance of the right to paid annual leave.

Practical tip

The preliminary reference to the ECJ means uncertainty for employers. Unless and until the ECJ has decided that the refusal to regrant leave in such cases is contrary to EU law, employers can continue to refuse employee claims for the regrant of leave. However, employers will have to accept the higher risk when doing so. As a precaution, employers should prepare for employees to have a claim for the regrant of leave and to take this into account in planning. In addition, employers should establish the necessary reserves. The ECJ ruling should not be expected before next year. In addition, employers are free to regrant any relevant leave entitlements now, for example, to strengthen employee loyalty. In such cases, any claims of “company practice” should be avoided.

Maximilian Quader

Employers should consider carefully whether it makes sense to use so-called full and final settlement clauses. Full and final settlement clauses are provisions in termination/winding up agreements or court settlements which swiftly and comprehensively settle all open claims arising out of an employment relationship between the parties. They are designed to provide legal certainty quickly. However, caution should be taken when drafting them.

Facts of the case

To terminate the employment relationship on 31 October 2020, the employer and employee concluded a termination agreement. This contained a full and final settlement clause “that all claims against the other party arising out of or in connection with the employment relationship and its termination, irrespective of the legal grounds, whether or not the claim has been established shall be completely settled with the fulfilment of this termination agreement.” The employee subsequently claimed continued payment of wages for June/July 2020. At first, the employer paid the employee the wages. In November 2020, the employer informed the employee in her payslip for October 2020, i.e., after the end of the employment relationship, that she had no claim for continued remuneration. The employer therefore offset the amount of overpaid wages for June/July 2020 with her salary for October 2020 and paid the employee a smaller net amount.

The judgment

The Regional Court of Mecklenburg-Vorpommern (Landesarbeitsgericht, LAG) held that it is not necessary to address the question of whether the employee had a claim for repayment. The conclusion of the termination agreement and the “constitutive negative acknowledgement of debt” extinguish all claims against the other party. This full and final settlement clause also covers any possible “claims of unjust enrichment” from overpayment of wages. In the interests of a quick settlement, the full and final settlement clause should be interpreted broadly. The clause prevented the employer from carrying out any set-off at the start of November. The employee therefore has a claim for the continued payment of wages.

In the Court’s view, the only exception to this is claims, which are regulated in detail and separately from any full and final settlement clause, such as clauses concerning employee rights to leave and compensation for leave not taken, the payment of overtime, or employer claims for the return of work materials. For the LAG, it did not help the employer’s argument that the parties agreed that the employment relationship would be settled in an orderly fashion in accordance with the provisions of the employment agreement and that the resulting net amount would be paid out. Offsetting a payment against an earlier overpayment did not fall under the adopted rule.

Consequences for practice

The LAG followed the case law of the Federal Labour Court, interpreting full and final settlement clauses broadly. For this reason, a termination agreement should be formulated carefully so that an employee does not have to unwillingly waive rights to claims such as claims for the repayment of any excess salary paid or performance-linked advance. The legal nature and effect of a full and final settlement clause should be determined through interpretation.

Practical tips

When the parties want to exclude claims from the full and final settlement clause, those claims must be expressly mentioned in the agreement. If this does not occur, the claims will be lost and cannot be enforced. This decision shows that the employer should also consider carefully which claims it might still have against the employee. Possible claims should also be considered prior to any hearing before the labour courts or the conclusion of any contractual agreement so that any full and final settlement clause is not concluded in haste.

Nathalie Spitzer

An applicant, who used the chat function on the online portal “eBay Kleinanzeigen” to apply for a job advertised on the site fulfils the definition of an applicant in § 6 (1) 2nd sentence of the General Act on Equal Treatment (Allgemeines Gleichbehandlungsgesetz, AGG). Neither his repeated enquiry about whether the advertiser was only looking for a woman nor the fact that he used a “form” for the pre-trial enforcement of his compensation claim constituted an abuse of rights, as claimed by the employer. Neither provides sufficient indication of a pseudo application which is solely designed to be able to subsequently claim compensation.

Facts of the case

A small business with an auto repair shop ran an ad in the positions vacant section of eBay Kleinanzeigen (eBay Classified). The ad stated: “Secretary wanted! We’re looking for a secretary to start immediately. Full-time/part-time: It would be great if you have experience. …” The ad used Sekretärin, the feminine form of Secretary in German. The claimant answered the ad via the chat function and described in a few sentences his reasons for wanting the position. He referred to his office experience and made it explicitly clear that he was applying for the position. He also asked the defendant whether they were only looking for a woman for the position. The company also used the chat function to reject his application, stating that they were looking for “a lady for the secretarial position”. The male claimant saw discrimination based on sex in the rejection of his application and claimed compensation equivalent to three times the gross monthly salary from the company. The company rejected his claim, arguing that his application was only designed to allow him to claim damages and should therefore be considered an abusive use of the law.

The judgment

The Labour Court in Elmshorn rejected the claim for compensation because the claimant was not an applicant. The Court categorised the claimant’s response to the position vacant as him “making contact” because he failed to provide sufficient personal information. However, the Regional Labour Court of Schleswig-Holstein held in favour of the Applicant.

The informal application made via the chat function in eBay Kleinanzeigen gave the applicant the necessary status under the AGG. Those who take the unusual step of advising a position via eBay Kleinanzeigen must expect that they will receive applications for the position which do not take the classical written form and are not accompanied by extensive application documents. In addition, the law does not require any minimum level of personal information. Simply, the applicant must be identifiable. The Regional Court also rejected the claim that the Claimant had abused his legal rights. The defendant’s repeated questions about whether the company was only looking for a woman for the position was not sufficient indication that the applicant only applied for the position to claim compensation under the AGG. As the claimant’s application was only rejected because of his sex, he was entitled to claim compensation.

Consequences for practice

The judgment provides legal clarity on the status of an applicant in online recruiting scenarios and shows that even small companies should be sensitised to the requirements of the AGG. It makes it clear that these requirements also need to be considered when a job is advertised via online portals and digital channels. The Regional Court of Schleswig-Holstein makes it unmistakeably clear that the recruitment procedure can start when a short response to a position vacant ad is received via an online chat. Accordingly, a person who applies for a position vacant that is advertised online by sending just a few sentences via the chat function will be an applicant within the meaning of the AGG. In addition, the judgment confirms the high hurdles established in the case law for the claim of an abuse of rights. Accordingly, the circumstances must generally indicate that the claimant’s application is part of a systematic “business model”. To the extent that the applicant may be seriously interested in the position, such systematic circumstances will not be present.

Practical tip

As companies are increasingly using online channels for recruitment (e.g., LinkedIn, Xing, WhatsApp), it should be noted that the application procedure can start when a chat message is received. Accordingly, the HR team should take the same care when answering a chat on behalf of the potential employer that they would take when placing an online position vacant ad and ensure that they do not discriminate against applicants. A hasty chat response could potentially result in a claim for damages under the AGG.

Jonas Türkis

Background

The Whistleblower Act implements the EU Whistleblower Directive, which seeks to establish standard protections for informants throughout the EU. Implementation is long overdue, as the deadline for transformation into national law ended on 17 December 2021. In 2019, Germany provided some protection for whistleblowers with the adoption of the “Act on the Protection of Business Secrets”. However, this new draft bill goes far beyond the 2019 Act.

Content of the draft bill

The Whistleblower Directive and the German Whistleblower Act are designed to establish comprehensive protection for whistleblowers. This is based on the following components:

• Companies and organisations with more than 50 employees must establish and operate a secure internal whistleblower system. Small companies with fewer than 250 workers have been granted a “grace period” until December 2023.
• Whistleblowers must have the option of providing information orally, in writing or in person, as they wish.
• When information is provided, the internal reporting channel must provide the whistleblower with confirmation of receipt within seven days.
• Within three months, the competent person or body must inform the whistleblower of the measures taken, e.g., the opening of an internal compliance investigation or the referral of the matter to the relevant authority, such as a law enforcement agency.
• Second, Germany must establish the equivalent possibility to provide information to the Federal Office of Justice (Bundesamt für Justiz) as an external notification body. The Laender can also establish bodies that whistleblowers may notify in such situations.
• Whistleblowers can decide freely whether to notify the internal company body or the external body.
• To protect the whistleblower against “retaliation”, the law contains a wide-reaching reversal or the burden of proof: if a whistleblower is “disadvantaged” with respect to their professional activities, it will be assumed that the disadvantage they face is in retaliation. In addition, the whistleblower may claim damages for the (assumed) retaliation.

Significance for practice

Companies and organisations should prepare for and organise professional installation and implementation of an internal notification system in good time because failure to do so can result in significant fines. If a whistleblower system is already part of the internal compliance management system, companies should assess whether the system is in line with the requirements of the Whistleblower Protection Act and make any necessary adjustments in time.

Particular care should be taken with respect to the reversal of the burden of proof when implementing personnel measures “near” the whistleblower, such as in their team or at their level. This is particularly important when the whistleblower reveals their identity (they are not required to remain anonymous), when there is an exemption releasing the notification body from the duty to maintain confidentiality (§ 9 of the draft bill), or when the notification body infringes the duty of confidentiality. In such cases, the identity of the whistleblower will be exceptionally known. Accordingly, a failure to consider the whistleblower for a pending promotion, but even the breach or simple failure to extend a fixed-term employment contract could be considered “retribution”. As a result, the employer will have to show that they have not disadvantaged the whistleblower due to the notification made by the employee. If this exculpatory evidence is insufficient, the employer may face a claim for damages from the whistleblower, as well as fines. Employers should therefore be prepared for the reversal in the burden of proof to be used as an additional “weapon” in an action against unfair dismissal, which could make it more difficult to defend against such a claim.

Conclusion

The Whistleblower Act will require all companies with more than 50 employees to review and adapt any existing internal whistleblower system or to establish such a system for the first time. Companies should consider whether to outsource and use a third party as their notification body and as the operator of the notification system. In any case, companies are required to follow up on notifications, take measures and remedy violations. Finally, employers must ensure that any whistleblower is protected against retribution. At the same time, they should bear in mind the potential for misuse of the new reversal of the burden of proof.

Dr Anne Dziuba, Maike Pflästerer, and Dr Michael Matthiessen

Dr Michael Matthiessen joined the Berlin labour law team as a Partner on 01 March 2022. He is a labour law specialist and has been a lecturer at the University of Greifswald since 2009. His area of expertise includes the out-of-court advice and representation of employers in individual and collective law disputes. He focuses on the areas of drafting employment agreements, termination and time limitation of employment relationships as well as works constitution. He regularly advises companies in the sectors of health, banking and automotive retail.

The labour law division in Munich is also welcoming a renowned addition to the team. Dr Sebastian Kroll will be joining the practice group there as a partner on 01 September 2022. He also is a labour law specialist. He focuses on collective labour law, the assistance with restructuring (including the negotiations concerning volunteer programmes, reconciliation of interests and social plans), assignment of external staff as well as legal representation, in particular in dismissal protection lawsuits. He regularly advises companies, predominantly in the sectors of marketing and advertising, mechanical and plant engineering, health, insurance and publishing, as well as employers in the public sector.

"We are pleased that with the two new additions we were able to gain two colleagues who are highly respected and established in the market," says Markus Künzel, Head of the Practice Group Labour and Employment Law in ADVANT Beiten's Munich office, adding, "Both have many years of industry expertise that fits perfectly into our existing advisory portfolio; and they excellently complement our team of cooperating experts across offices - both professionally and personally."

Media Contact

Markus Bauer
Head of Marketing (Labour & Employment Law practice group)
ADVANT Beiten
+49 (89) 350 65 - 1104
markus.bauer@advant-beiten.com

Markus Künzel
Head of the Labour & Employment Law practice group
ADVANT Beiten
+49 (89) 350 65 - 1130
markus.kuenzel@advant-beiten.com

The Federal Labour Court (Bundesarbeitsgericht, BAG) handed down its first judgment on workplace hygiene concepts and provided legal certainty for employers when adopting workplace regulations to protect against Corona risks. Employers may impose measures which go beyond the statutory rules and recommendations applicable at the time. The BAG grants employers a considerable margin of discretion: the protective measures adopted may not counteract the pursued objective.

Facts of the case

In August 2020, after taking various structural and organisational measures to protect employees against infection with the COVID-19 virus, such as increasing the size of the orchestra pit, the Bayerische Staatsoper (Bavarian State Opera House) ordered all employees to present a negative PCR test at the start of the season. The Staatsoper’s hygiene concept, which was based on expert advice, established this obligation. This concept also required employees to undergo subsequent tests, although the testing frequency depended on the group to which the specific employee belonged (groups 1 to 4, depending on the risk of infection in the workplace). The employees could choose whether to take part in the tests organised by the Staatsoper or whether to be tested elsewhere and bring the result of the test with them.

When an employee refused to take a PCR test at the start of the season, she was subsequently not given any work. The employer also cancelled the payment of her salary. The musician brought a claim for the payment of her salary based on the delay in acceptance and sought continued employment without any obligation to take any tests.

The judgment

Like the lower courts, the BAG rejected the appeal on all counts. If employees refuse to present the results of lawfully ordered Corona tests, they are not “willing to perform” their work. The employee is therefore not entitled to payment of their salary for the period in which they did not work. According to the BAG, employers are not only justified but required to regulate the working conditions to protect employees from risks and threats to life and health. The occupational hygiene concept can include regular testing of employees, providing all other possible suitable protective measures – such as regular airing, mask wearing, etc. – have already been taken. The orders of the Staatsoper in this case were therefore also lawful. According to the BAG, the Staatsoper had not exceeded the scope of its discretion. This is because, in the case of an order to take a PCR test, the employer’s intrusion on the bodily autonomy of the employee is minimal and the PCR test promoted the aim pursued by the Staatsoper – to protect against Corona outbreaks in the workplace and break through the infection chain. The basic right to self-determination over personal data (data privacy) does not make the order unlawful. If an employer may order employees to take tests as part of the employee protection concept, the tests will also be lawful under data protection law.
The BAG rejected the claim for work without the presentation of a Corona test because the claim was too general (so-called global claim). The flautist’s claim for further work without testing also covered situations in which she was otherwise required – e.g., under law – to present a Corona test.

Consequences for practice

This judgment of the BAG provides clarity and establishes the test that courts will apply when assessing company employee protection concepts. In this respect, the BAG approves a considerable scope of discretion for employers. In particular, an order for all employees to take Corona tests can be permissible. However, this requires a well-balanced hygiene concept and other protective measures, e.g., the wearing of a mask, etc. to be taken. If these measures do not offer adequate protection, employees can be obligated to take Corona tests. At the core of this decision is the benchmark for assessment: the Court followed the recent jurisprudence of the Federal Constitutional Court (Bundesverfassungsgericht) and determined that only those protective measures that are not suitable for achieving the employer’s aims, do not promote those aims or even oppose those aims will be unlawful. This shows that the Court does not impose a strict standard but protects the decisions of employers. In addition, the BAG confirms that employers may also impose measures which go beyond the statutory rules and recommendations.

Practical tips

Although the legal review of such worker protection concepts is limited, companies should still develop them with care and document the considerations and decision-making process. This is particularly true when Corona tests are to be ordered. These can be part of the hygiene concept even if they are not required under statute. Such measures do, however, need grounds. The aim must therefore be clearly defined, and the tests must be necessary, suitable and appropriate in accordance with the above decision. In this case, the aim was to detect and break infection chains. In addition, the implementation of the testing concept must ensure sufficient protection of health data.

Christina Kamppeter, Dr Olga Morasch

Note: Our firm represented the Bayrische Staatsoper in this case. Still, we have tried to present the facts and judgment as objectively as possible.

Many companies introduce their employees by name on the company website. When the employer fails to delete such information promptly after an employee leaves the company, it can be expensive for the former employer, as the judgment of the Labour Court (Arbeitsgericht, ArbG) of Neuruppin shows.

Facts of the case

A biologist, who worked as an office manager, was named on her employer’s public website and introduced as the company’s in-house biologist, although this was not her position. When she left the company, the employee requested that the company delete the information from its website. When her name and incorrect position still appeared online one year later, she sent her former employer a reminder and demanded that the company issue a cease-and-desist declaration to confirm that they had removed the information and claimed EUR 8,000 in damages. The employer deleted the information and provided the requested cease-and-desist declaration but paid only EUR 150 in damages. The employee then brought a claim before the Labour Court in Neuruppin, demanding payment of only EUR 5,000 in damages, minus the EUR 150 that had already been paid.

The judgment

The ArbG Neuruppin ordered the former employer to pay EUR 1,000 in damages, minus the EUR 150 already paid. The Court based its decision on data protection law, as the name of the employee is personal data within the meaning of the General Data Protection Regulation (GDPR). Under Article 82 of the Regulation, where a person suffers damage as a result of a data processing infringement, the person shall have the right to receive damages from the data controller. In this case, it is the former employer that processed the employee’s data without justification after the employee left the company. Due to the accompanying invasion of privacy, even non-material damage will be considered when calculating the amount of compensation to be awarded, which shall expressly serve as a warning and deterrent. In addition, the employer had a duty to delete the data promptly after the employee left the company not just under data protection law, but as a general ancillary obligation of the (terminated) employment relationship. The Court therefore held that compensation amounting to EUR 1,000 was appropriate.

Consequences for practice

The judgment of the ArbG Neuruppin highlights the risk of liability under data protection law, which is particularly virulent when an employee leaves the company. Employers are well advised to update the company website quickly in such cases and delete all information about the former employee. This is especially true when the employment relationship does not end amicably, and additional areas of conflict are best avoided.

Practical tip

The judgment concerns the legal use of employee information on the internet, whether it is on the company website or social media. Such information can include names, photos and videos of the employee. Considering the not insignificant risk of liability and an increasingly consolidated case law, employers should thoroughly assess their use of employee data in advance. In particular, the employer must ensure that the employee has given their legally effective consent, which covers all purposes, before using any data. Where there is subsequently no justification for the use of the employee’s data, such as because the employee did not give their consent, the infringing data must by deleted without delay.

Maximilian Quader

When a "get-to-know-each-other internship" includes a tour of the company, accident insurance cover can apply through the statute of the employer’s liability insurance association.

Facts of the case

An applicant for a position took a one day, unpaid "get-to-know-each-other internship" with the potential employer. To this end, the applicant and the company concluded a get-to-know-each-other/internship agreement. During the internship, the applicant took part in discussions, especially with the IT department, and went on a site tour, viewing the company’s high-bay warehouse at the end. While viewing the high-bay warehouse, the applicant fell and broke her upper right arm.

The judgment

Contrary to the defendant (the employer’s liability insurance association) and the lower courts, the Federal Social Court (Bundessozialgericht, BSG) held that this was an accident at work.  This was only because, according to its statutes, the employer’s liability insurance association provided accident insurance for persons who toured the company. While the interests of the applicant in getting to know her potential new employer were generally not covered, these interests would not exclude accident insurance coverage in this case according to the statute of the association because the statute did not limit the coverage to persons who were visiting the company solely to tour the site.

Consequences for practice

The welcome judgment of the BSG offers new opportunities for the design of get-to-know-each-other internships. However, each company should check whether its liability insurance association has a similar rule in its statute. This will not always be the case. Without such a rule in the statutes, there will rarely be accident insurance coverage for such internships by operation of law. Insurance protection coverage otherwise only applies in the case of employment within the meaning of § 2 (1) of the Seventh Volume of the Social Code (Sozialgesetzbuch), when the injured person is integrated into an external company and their instructions are subordinate to the instruction issued by the company, in particular with the respect to the time, duration, location and type of performance (see judgment of the BSG of 12 December 2013 in Case No. B 4 AS 87/12 R). The decisive criterion is an action in the interests of another party. In the case of a get-to-know-each-other internship, the applicant’s interests in getting to know their potential employer are paramount. Persons who are primarily acting in their own interests are not automatically covered by accident insurance by law.

Practical tip

Before any get-to-know-each-other internship commences, the applicant and the potential employer should conclude several agreements. Care is required not only considering the stumbling block for accident insurance protection, but also to avoid an obligation to pay the applicant for the internship. Without a contractual agreement, a get-to-know-each-other internship or work placement can give rise to a de facto and thus indefinite employment relationship, which would give the applicant a claim for remuneration for work performed. A real "trial work placement," is correctly not classified as an employment relationship, and only arises when there is no obligation on the applicant to perform any work and the trial work placement is only designed to grant the applicant the opportunity to get to know the company and their potential position. In this case, the employee is not subject to the right of the potential employer to issue instructions nor does the employer exercise such a right and may not direct any instructions to the applicant. Trial ‘work’ is therefore effectively ruled out. Such a "trial work placement" can only be for a short period to avoid triggering any wage entitlements, in particular any claims for the statutory minimum wage. In addition, applicants should be contractually required to conclude accident insurance at their own cost.

Sonja Müller

While the special rule for temporary agency workers calculates leave and holiday pay on a pro rata basis depending on the duration of the contract, the general statutory rule grants a full year’s leave for each year of employment that commences at the start of the calendar year, as well as pro rata leave where the employment relation-ship starts or ends during the year. The user undertaking took the view that the special rule for temporary agency workers applied and sought to compensate only the lower level of leave and holiday pay accordingly. The national court sought a preliminary ruling from the ECJ on whether the special rule for temporary agency workers was contrary to Directive 2008/104/EC of the European Parliament and of the Council of 19 November 2008 on temporary agency work (Directive 2008/104/EC).

The ECJ held that the equal treatment principle established in article 5 of Directive 2008/14/EC applies, which provides that at least those substantial terms and condi-tions of employment that would apply had the workers been employed directly by the user undertaking will apply, including the payment in lieu of paid annual leave that is not taken and the payment of holiday pay. Accordingly, a national rule, which would pay temporary agency workers less than directly employed employees, will be contrary to Directive 2008/104/EC.

This ruling should be interesting for temporary agency workers working in Germany. Under § 7 (4) of the Federal Leave Act (Bundesurlaubsgesetz, BUrlG), leave not taken by the end of the employment relationship will be compensated where could not be taken because the employment relationship ended. In light of the judgment of the ECJ, the equal treatment principle will need to be taken into account when calculating any payment in lieu of leave as well as any holiday pay in accordance with § 11 (1) of the BUrlG. Temporary agency workers must at least be put in the same position as they would have been in, had they been employed directly by the user undertaking during the period of employment.

Julia Meler

Not for all employees

First, it should be mentioned that even after the implementation of Phase 2, an eAU will not be issued for all employees. The certificate of incapacity to work in paper form will still have to be used for certain employees. These include employees who have private health insurance and those treated by a doctor who is not a panel physician. The same applies to rehabilitation and preventative medical institutions, and where the medical certificate is from a doctor in a foreign country.

Retrieval by employers

In the future, where the employee does fall within the scope, they will no longer have to present their employer with a certificate of incapacity to work. The employer will instead retrieve the data from the health insurance provider. The following must be kept in mind:
Employers are not entitled to take a “shot in the dark” and request data from health insurance providers without a reason. A request may only be made after an employee has indicated an inability to work. In addition, due to some technical hurdles, the eAU will not necessarily be available immediately after the doctor has confirmed the inability to work. As doctors must sign the data using a qualified electronic signature, delays in the transfer can be expected. Health insurers therefore recommend that employers first try to retrieve an eAU on the day after the employee has seen the doctor. This does not release the employee from the obligation to inform the employer of their inability to work without delay.

Continued payment of wages and right to refuse performance

One legal issue concerns the right of the employee to refuse to work. A new subsection 1a is introduced into § 5 of the Continued Remuneration Act (Entgeltfortzahlungsgesetz, EFZG), which releases employees with statutory health insurance from the obligation to present a certificate of inability to work. There will no longer be a “yellow certificate” to give the employer. However, until now, the presentation of (or failure to present) this “yellow certificate” was the basis for the employee’s right to refuse to work under § 7 (1) No. (1) of the EFZG.

While the introduction of the new subsection 1a brings § 5 of the EFZG into line with the changed circumstances, no changes are currently planned for § 7 of the EFZG. This means that there is no express statutory rule that would justify the employer’s refusal to continue paying the employee’s wages where the employee fails to meet their obligations to have a doctor confirm their incapacity to work. That this was not what the legislator intended is clear from both the eAU’s aim of reducing bureaucracy and from the name of the BEG III. It is not obvious why the legislator would also want employers to bear the responsibility for the failure to present a doctor’s certificate confirming the inability to work (in time). To rectify this situation and close the gap in the legislation, employers should at least be given the right to refuse to perform their duties when an employee fails to fulfil their obligation to have their incapacity for work determined by a doctor (in due time). In the future, the employer will also be justified in contractually moving the material time for this to the first day of the incapacity for work.
In this respect, standard provisions in employment contracts which require the employee to present a certificate of inability to work from the first day of illness will be ineffective. For older contracts, such clauses should be interpreted as being valid under the new rules so that, after the entry into force of the new legal status, the employee is required to have their inability to work confirmed on the first day of said inability, rather than requiring the employee to present a doctor’s certificate on the first day.

Practical tip:

Nonetheless, employers should still aim to adapt such clauses to bring them into line with the new law, especially if other changes must be made to the employment agreement anyway. Employers should ensure that new contracts take the new laws into account and change the focus of the relevant contractual provisions to the determination by a doctor rather than the presentation of the doctor’s certificate. For the transitional period, future changes to the law can be anticipated and a two-tier approach can be used accordingly.

Evidentiary value of the eAU

Finally, the question arises as to whether the eAU will have the same evidentiary value as the conventional certificate of inability to work. Conventional certificates allowed the employer to draw conclusions based on indications. Frequently changing doctors or the use of doctors whose practices are located far away from the employee’s home could, for example, raise suspicions about the validity of the inability to work. As things currently stand, the employer will not be provided such information because the data received will no longer indicate which doctor provided the certificate. If the amount of information in the certificate is reduced, the evidentiary value of the certificate should be reduced accordingly.

Summary

The eAU will result in a reduction in the level of bureaucracy, at least once digital communication between doctors, health insurers and employers is properly established. Employers must also consider several new employment law features early on. In particular, employers should address the question of how delays and glitches in the transfer of electronic certificates of inability to work will be dealt with in the future. Clauses in employment contracts should also be slowly adjusted to bring them into line with the new system.

Dr Anne Dziuba
Benedikt Holzapfel

The failure to provide target numbers in accordance with § 17 (3) 5th sentence of the Act against unfair dismissal (Kündigungsschutzgesetz, KSchG) does not make the mass redundancy notice invalid.

Facts of the case

The employer regularly had more than 20 employees working for its business. In the period between 18 June and 18 July 2019, the employer dismissed 17 of these employees. The employee claimed that the dismissal is ineffective because the mass redundancy notification failed to provide all of the information that should be provided in accordance with § 17 (3) 5th sentence of the KSchG.

The judgment

The Regional Labour Court of Hessen (Landesgericht Hessen, LAG) held that a mass redundancy notice is ineffective if it does not contain all of the information that should be included. The Court based its decision on an interpretation of the KSchG in line with the EU Collective Redundancy Directive, which requires all relevant information to be provided. This includes information about the sex, age, occupation, and nationality of the employees to be dismissed – the so-called should information – in accordance with § 17 (3) 5th sentence of the KSchG. The LAG Hessen assumed that it would be possible to interpret § 17 (3) 5th sentence of the KSchG in line with the Directive; such an interpretation would be consistent with the wording, the hierarchy of norms, and the will of the legislator as evident from the legislative history. On appeal, the BAG annulled the judgment and remitted the case back to the lower court. The BAG clarified that the failure to provide the so-called “should information” in accordance with § 17 (3) 5th sentence of the KSchG does not make the mass redundancy notification ineffective.

According to the clear intentions of the legislature, failure to provide the should information does not make the mass redundancy notification invalid. National courts cannot use an interpret the law in line with the EU Directive to break with this legislative decision. Such an interpretation is also not advisable. The case law of the ECJ has clarified that the information in § 17 (3) 5th sentence of the KSchG does not have to be contained in the notification, even under the EU Directive.

Consequences for practice

Employers can relax, at least temporarily. The Court decided not to establish a new hurdle for reporting mass redundancies.

Practical tip

Despite the judgment of the BAG, mass redundancy notifications remain a stumbling block for effective notices of dismissal. In the past, courts constantly established new requirements for the notification. Employers should carefully check whether a mass redundancy notification can be avoided, such as by remaining below the thresholds or spreading the redundancy notices over a 30-day period (e.g., with multiple waves of dismissals or the use of a cleverly staggered voluntary programme). More extensive measures will require early planning before negotiations on the reconciliation of employer and employee interests start.

Dr Anne Dziuba

A scanned signature does not fulfil the written form requirements for a fixed-term agreement. This will be the case even if the employment relationship is only supposed to exist for a few days.

Facts of the case

The employee concluded 25 short-term, temporary employment contracts with the employer, a recruitment agency, over a four-year period. The contracts were always for a term of between one and seven working days, with one of 21 working days. Most recently, the employee worked as a hostess at a trade show. The employment contract was for a fixed term of five working days and had a scanned signature of the managing director at the bottom. After countersigning the contract, the employee sent the original back. This was normal practice for agreements concluded between the parties. The employee brought an action claiming that the fixed term of the last employment contract was ineffective. She argued that the contract was invalid under § 14 (4) of the Act on part-time and fixed-term employment contracts (Teilzeit- und Befristungsgesetz, TzBfG) because it infringed the written form requirement. The employer argued that the written form requirement did not require the employer to provide the employee with an original written declaration of acceptance. It further argued that it is an abuse of law and violates the good faith principle for the employee to bring an action based on the lack of written form after concluding 24 previous contracts in the same manner without mentioning this defect.

The judgment

The Regional Court (Landesarbeitsgericht, LAG) of Berlin-Brandenburg held in favour of the employee. The fixed term was ineffective due to a failure to comply with the written form requirement. This requirement was set out in § 126 of the German Civil Code (Bürgerliches Gesetzbuch) and was fulfilled when the exhibitor personally signs the agreement. The written form requirement can also generally be satisfied by electronic form. In this case, it needs to be an electronic document with a qualified electronic signature. A scanned signature does not fulfil the written form requirement. The managing director did not sign the agreement himself, nor did he sign it using a qualified electronic signature. Where a signature is mechanically reproduced, such as a scan, the document has not been signed by hand. A scanned signature is also insufficient for the qualified electronic signature requirements. Subsequently signing the agreement will not make the fixed term effective. The employee did not act in bad faith or abuse the legal system. The fact that she had not criticised the practice for the previous 24 fixed-term agreements did not prevent her claim from succeeding. The employer’s reliance on a practice that was not legally conform was not worthy of protection. The result of the ineffective fixed term was an employment relationship that continued until the notice of dismissal, since issued, took effect.

Consequences for practice

The judgment highlights the need to comply with formal requirements. In contrast to normal employment contracts which do not need to follow any specific form requirements, a fixed-term agreement requires written form to be effective. If the fixed term is invalid because of a failure to comply with the written form requirement, the employment agreement will be concluded for an indefinite period. As the judgment shows, there is no exemption for contracts concluded for a short period.

Practical tip

Employers should pay strict attention to the written form requirement for a fixed-term contracts. In principle, both parties must sign the same document. In addition, the signed fixed-term agreement must reach the employee before the start of the contract. The signatures of both parties must apply to the entire agreement establishing a fixed term. In addition, for the written form requirement, the signatories must sign using their full names. It is not clear, whether he qualified electronic signature fulfils the written form requirement of § 14 (4) of the TzBfG. Some of the legal literature rejects this approach. Numerous pending cases throughout Germany concern the question of whether the qualified electronic signature is sufficient for a fixed-term agreement to be effective. The LAG viewed the qualified electronic signature as a form of signature by one’s own hand. However, there has not been a judgment of the German Federal Labour Court on this matter. For certainty, we recommend that both parties hand sign their name on the contract.

Lisa Schrader

Even if you are forced to isolate at home as a close contact, you can still take leave (at home) and the employer does not have to subsequently grant leave that has already been taken while in quarantine according to a recent judgment of the Regional Labour Court (Landesarbeitsgericht, LAG) of Schleswig-Holstein.

Facts of the case

Imagine: finally, your long-awaited vacation is about to start when the health authority orders you to quarantine at home as a close contact. This is exactly what happened to an employee. He was forced to spend his 3032 Christmas holidays alone at home. In his view, this was comparable to being sick during his vacation and the Federal Leave Act (Bundesur-laubsgesetz, BUrlG) does not count the period of illness as leave – although, in this case, he was not incapable of working due to illness. Accordingly, he demanded that his employer grant him the days of leave that he had lost while in quarantine. The case came before the LAG Schleswig-Holstein.

The judgment

The LAG rejected the employer’s claim to a regrant of leave. According to the Court, the employer had fulfilled the employee’s entitlement to leave by granting the leave and paying the employee holiday pay. All other events that disrupted his holiday fell within the employee’s general sphere of risks and were his “personal fate.” In particular, the employer does not owe the employee a successful vacation. Paragraph 9 of the BUrlG provides that, in the case of illness during leave confirmed by a doctor’s certificate, the days of incapacity for work do not count towards annual leave. However, this provision does not apply in the current case. The law does not specify what should happen in the current situation. However, if the legislator had wanted a specific rule to apply, it had two years to adopt appropriate provisions. Only when the employee is already unable to perform their duties due to illness are they justified in not counting this same period towards granted leave.

Consequences for practice

Employers should welcome this judgment because it supports a row of decisions rejecting the “analogy” described above (= corresponding application) and thus the claim sought by the employee. However, this has not closed the matter entirely. Most recently, the LAG Hamm added to the uncertainty and approved the grant of new leave in light of the significance of leave entitlements under EU law. Until the Federal Labour Court (Bundesarbeitsgericht, BAG) clarifies this issue, employers can still apply the predominant jurisprudence of the highest courts and reject the request for new leave.

Practical tip

Employers can refer to the judgment in this case and reject any claim for new leave where leave was already approved, and the health authority orders the employee to go into quaran-tine during their holiday (but they are not too ill to work). Until the BAG hands down a clear judgment on the issue, employers must accept the remaining uncertainty introduced by the judgment of the LAG Hamm.

Maximilian Quader

Many employers wonder whether severance payment caps in social plans adopted to implement operational changes constitute an impermissible disadvantage for older employees. The grant of additional bonuses to employees who waive the right to bring an action for unfair dismissal also has employers on thin ice: is the separate works agreement effective or does it constitute a circumvention of the ban against making social plan benefits dependent on the waiver of the right to bring an action for unfair dismissal? Does a cap in the social plan also cover these bonuses? The Federal Labour Court (Bundesarbeitsgericht, BAG) recently looked at these and other essential operational issues.

Facts of the case

When closing a site, the employer and the works council concluded a social plan. The social plan capped severance payments at EUR 75,000. The works agreement (WA) concluded on the same day included a “waiver bonus” (also referred to as a “turbo clause”), which employees could claim if they did not bring an action for unfair dismissal. The WA contained neither a cap nor a clear reference to the rule in the social plan. The employee brought an action for unfair dismissal and was awarded the maximum amount of EUR 75,000. In addition, he claimed he had a right to the waiver bonus because it was not covered by the cap in the social plan. In addition, he argued that the settlement cap clause inadmissibly disadvantaged him because of his age, so he should have a claim to an “unlimited” settlement under the social plan.

The judgment

In contrast to the lower courts, the BAG upheld part of the claim and decided as follows:

• The cap in the social plan was not void because it disadvantaged older employees. This disadvantage is objectively justified by its legitimate aim. The cap on settlements is designed to ensure just distribution: given the limited social plan funds, all affected employees should be granted equitable bridging support. Without a cap on the severance payments, these funds would be exhausted from reaching settlements with older employees as such employees are generally entitled to higher severance pay.
• The waiver bonus in the WA was effective. In contrast to the judgments of the lower courts, the BAG held that there was no circumvention of the ban against making payments under the social plan dependent on a waiver of the right to bring an action for unfair dismissal. This stems from the interpretation of the WA. In addition, by granting settlements of up to EUR 75,000, the social plan redressed the economic disadvantage faced by the employees affected by the change in operations.
• The cap in the social plan does not affect the waiver bonus. As the WA does not cap the bonus, the BAG had to interpret whether the cap in the social plan also applied to the waiver bonus. The Court held that it did not. According to the BAG, any other interpretation would infringe the principle of equality under works constitution law because the employee who was entitled to the maximum severance under the social plan would not receive any further payment for waiving the right to bring an action for unfair dismissal. This would contradict the purpose of the waiver bonus.

Consequences for practice

The fact that the BAG chose not to follow the lower courts but considered the common practice of simultaneously negotiating the social plan and waiver bonus (in a separate WA) to be lawful is to be welcomed. To do this, the Court had to overturn its previous case law. In addition, the BAG provided clear requirements for an effective cap in social plans.

Practical tips

If employers wish to agree on a cap in the social plan and an additional waiver bonus with the works council, the following should be kept in mind:

• The social plan and waver bonus provisions should be kept formally separate:
• A separate budget (“pot”) should be set up for each type of payment and these payments should be calculated separately;
• The waiver bonus should be less than the severance cap
• If both payments are to be capped, the social plan and WA should contain separate rules for each (alternatively, fixed amounts can be agreed for the waiver bonus).
• Where there are caps in the social plan, the severance amounts should be assessed to confirm that they are still sufficient to mitigate the expected economic losses.

Dr Olga Morasch

Highly trained employees are essential for any company. It is in an employer’s interest to support the professional development of their employees. At the same time, employers want to ensure that they will benefit from any training employees receive. Accordingly, advanced training agreements often contain repayment obligations. But it is not so easy to ensure that such clauses are effective, as a recent judgment of the Federal Labour Court (Bundesarbeitsgericht, BAG) again shows.

Facts of the case

An employee worked as a geriatric nurse at a clinic. She concluded a professional development agreement with her employer. Pursuant to the agreement, the company would pay the costs of the training. In return, the agreement contained a repayment clause, requiring the employee to repay the costs of the training if the employment relationship was terminated within a commitment period of six months and the employer was not responsible for the grounds for termination. The employee terminated the employment relationship within the commitment period and was then asked by the employer to repay the costs of the training. The Labour Court (Arbeitsgericht) and the Regional Labour Court (Landesarbeitsgericht) both rejected the employer’s demand for repayment.

The judgment

The BAG confirmed these decisions. In the view of the BAG, the repayment clause was ineffectively formulated in the preformulated standard contract because it unreasonably disadvantaged the employee. The repayment clause in the advance training agreement applies where the employee terminates the agreement for any reason for which the employer is not responsible. The case of an unforeseen, permanent inability of the employee to perform her duties, such as in the case of a serious illness, is not covered. If the employee terminates the employment relationship before the end of the commitment period because she is involuntarily and permanently unable to perform her duties, the employer cannot have any further interest in maintaining the “meaningless” employment relationship until the end of the commitment period as it cannot use the employee’s acquired qualifications anyway. The fact that the investment in professional development does not pay off for the employer due to the involuntary, permanent inability of the employee to perform their duties is a normal business risk. In addition, the employee’s occupational freedom under Art. 12 (1) first sentence of the Basic Law (Grundgesetz) is restricted as she must continue to work from the company until the end of the commitment period, possibly even after the expiry of the term of continued remuneration, to avoid the repayment obligation. The restriction placed on occupational freedom by the repayment clause is not compensated by an appropriate financial advantage.

Consequences for practice

The judgment confirms the jurisprudence of the BAG that the involuntary inability of an employee to perform their duties may not be covered by a repayment obligation. The wording should therefore explicitly exempt such cases from any repayment obligation.

Practical tip

Particular care needs to be taken when drafting any repayment clauses in advanced training agreements. The case law establishes various, in part very specific requirements for this. A repayment clause should still be included as it can cover cases in which the employment relationship is terminated due to a fault of the employee.

Regina Dietel

Leasing workers from a foreign temp agency that does not have a permit for personnel leasing does not result in a fictional employment relationship between the user company and the worker when the agency relationship is subject to the law of another EU Member State.

Facts of the case

A French temp agency sent a worker on assignment to a German company to provide consultancy services in relation to the changeover to a new ERP system (Enterprise Resource Planning, software solutions for resource planning). The employment agreement and the agreement on the provision of services were subject to French law. The French company did not have a German permit for personnel leasing. After the end of the assignment, the French worker brought a claim against the German company and asked the Court to determine that an employment relationship existed between the two and sought to enforce various claims for payment. The question of the extent to the worker had been integrated into the operations of the German company remained contentious.

The judgment

The Federal Labour Court (Bundesarbeitsgericht, BAG) rejected the French worker’s claim. Even though the French temp agency did not have a permit for personnel leasing, the Court held that no employment relationship arose between the worker and the German company. Accordingly, there were also no payment entitlements. The lower court assumed that §§ 9 and 10 of the Employee Leasing Act (Arbeitnehmerüberlassungsgesetz, AÜG) were overriding mandatory national law that applies in the case of cross-border employee leasing, even when the underlying contractual relationships are subject to foreign law (in this case French law). Where the temporary employment agency does not have a permit, §§ 9 and 10 of the AÜG provide that the employment contract between the agency and the agency employee will be invalid and a fictional employment relationship will be established with the user of the worker’s services; this fictional relationship formed the possible basis for the worker’s claims in this case. However, the BAG did not follow this approach. It held that §§ 9 and 10 of the AÜG were not overriding mandatory provisions under private international law (Article 9 of the Rome I Regulation). The administrative offence provisions in the AÜG already provides sufficient punishment for breach of the permit requirement in employee leasing cases such as the present one.

Consequences for practice

The judgment significantly reduces the risks in the case of cross-border personnel leasing. Companies using such services will not face the threat of the establishment of a fictitious employment relationship in the circumstances described. Following this logic, the contractual relationship between the temporary employment agency and the user company will remain valid – where this contract is subject to foreign law – and will need to be unwound. In this respect, the contractual provisions agreed between the parties will prevail.

Practical tip

What’s true for purely domestic cases of personnel leasing is also true for cross-border cases: much care must be taken to correctly structure and implement the contractual relationships. In the case of a service contract, the user company should avoid integrating the worker into the company. In the case of personnel leasing, care should be taken to ensure, for example, that the relevant permits have been obtained. In the case of infringements, fines of up to EUR 30,000 can be imposed on both the temporary employment agency and the user company.

Gerald Müller-Machwirth

The ADVANT Beiten team around lead partner Dr Sebastian Weller provided full support for the complex transaction across practice groups and offices: from the preparation and structuring of the transaction (including due diligence), to the negotiation, implementation and closing of the transaction including antitrust notification.

Medline is a leading global healthcare company that manufactures and distributes high-quality medical and surgical products. Medline Europe was founded in 2011 and operates branches, as well as production and distribution centres throughout Europe.

Asid Bonz is a leading supplier to clinics and hospitals in Germany, offering high-quality products for surgery, anaesthesia, ward care and urology. Asid Bonz was founded in 1811 and is known worldwide for having developed the first anaesthetic ether. In 2021, Asid Bonz achieved a turnover of more than 30 million euros and supplied more than 1,100 hospitals in Germany.

With similar business models and excellent customer service, the two companies are an excellent strategic fit. In the future, Medline will make the Asid Bonz brand available to its broad European customer base outside of Germany. Within Germany, Asid Bonz sales representatives will have access to selected Medline products to further expand their partnership with customers.

Advisor to Medline International B.V.:
ADVANT Beiten: Dr Sebastian Weller (Corporate/M&A, in charge), Nico Frielinghaus (Corporate/M&A), Dr Tassilo Klesen (Corporate/Commercial), Markus Schönherr (Corporate/M&aA), Dr Patrick Hübner (Investment Control), Peter Weck (Labour Law), Dr Andrea Pomana (Antitrust), Christoph Heinrich (Antitrust), Marco Mirceta (Antitrust), Mathias Zimmer-Goertz (IP), Christian Döpke (Data Protection), Dr Marion Frotscher (Tax), Simon Bauer (Tax), Katrin Lüdtke (Public Law), Sascha Opheys (Subsidies).

Advisor to Medi-Globe Europe:
White & Case: Dr Stefan Koch, lead partner

Media Contact
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
Frauke.Reuther@advant-beiten.com

Dr Sebastian Weller
Lawyer
ADVANT Beiten
+49 (211) 51 89 89 - 134
Sebastian.Weller@advant-beiten.com

Downing tools to participate in a “wildcat strike”, a strike that is not organised by the union, can constitute a breach of duties and justify extraordinary dismissal without notice.

Facts of the case

The employees were employed as bike couriers. To ensure their demands were heard, the employees participated in a four-day strike. This strike was not organised by a union but taken solely by the employees. Despite numerous requests from the employer to end the “wildcat strike”, the employees did not take up their work again.

The judgment

The Labour Court (Arbeitsgericht) in Berlin held that the extraordinary notices of dismissal with immediate effect which were issued were effective. In doing so, the Court applied the settled case law of the labour courts. Accordingly, industrial action is only legal when it is taken by parties able to conclude a collective agreement in order to assert the demands that they are seeking to implement through a collective agreement. On the employee side, unions and not individual employees can sign a collective agreement. Accordingly, a strike that is not authorised by the union cannot result in the conclusion of a collective agreement and is therefore not valid industrial action.

Consequences for practice

Employers do not have to simply accept employees ceasing work without the backing of the union. This is an unjustified refusal to work and classic labour law measures can be used to counter such unjustified action. It must be kept in mind that the employee’s conduct will only justify a written warning and notice of dismissal when the employee does not perform their work. Where an employee only takes part in such strikes outside of working hours, a notice of dismissal is not justified - at least for unlawful refusal to work.

Practical tip

Where employees participate in “wildcat strikes”, employers should demand that the employees return to work without delay and simultaneously warn of legal consequences for their employment if they fail to comply. If this does not have the desired effect, employers can issue notices of extraordinary dismissal with immediate effect.

Benedikt Holzapfel

A Corona bonus, which is the subject of a collective agreement and is granted to all employees but does not take into account the specific burden suffered or exposure faced by individual employees during the Corona crisis, is not protected by the emoluments exemption in § 850a No. 3 of the Code of Civil Procedure (Zivilprozessordnung, ZPO) and can be garnished (subject to the attachment-exempt threshold).

Facts of the case

The employee had filed for private insolvency and had relinquished “all attachable claims for earnings” under his employment contract to the insolvency administrator. The applicable collective agreement foresaw a one-off Corona bonus that would be paid to all employees without distinction for 2020 and 2021 (as a tax-free grant). Based on the relinquishment order, the employer paid the Corona bonus to the insolvency administrator rather than the employee. The employee brought a claim seeking to have the bonus paid (again) directly to him arguing that the emoluments exemption in § 850a No. 3 of the ZPO applied to the bonus as “danger or hardship pay”.

The judgment

The Regional Labour Court (Landesarbeitsgericht, LAG) of Berlin-Brandenburg did not share this view. Even though the provisions of the collective agreement expressly stated the aim of the bonus as “mitigating the additional burden caused by the Corona crisis,” it was still not protected against garnishment. The emoluments exemption in § 850a No. 3 of the ZPO only applies to bonuses and premiums that are paid to employees to balance out a particular hardship that goes beyond the normal levels or a danger associated with the performance of their work. As the rule granting the bonus payments did not differentiate based on the extent to which individual employees were exposed to particular hardship or danger due to the Corona crisis (e.g. through increased risk of infection due to frequent direct contact with customers), and the bonus was instead paid to all employee regardless of the type of work they performed, the collective bonuses only served to balance out or mitigate the “overall societal effects of the Corona crisis” without establishing a connection to the individual performance or circumstances of the performance of the work. Considering the purpose stated in the collective agreement, this is not a “danger or hardship pay” within the meaning of § 850a No. 3 of the ZPO. As a result, the bonus may be garnished and the employer’s payment to the insolvency administrator was legal.

Consequences for practice

The judgment not only provides legal certainty – the question of whether Corona bonuses can be garnished is highly controversial (except for Corona bonuses paid to those working in the care sector, which may not be garnished under statute). The LAG in Lower Saxony, for example, took the opposite view in an earlier decision (of 25 November 2021 in Case NO. 6 Sa 216/21) and affirmed that the bonus was protected from garnishment. Both Courts allowed the appeal so that the Federal Labour Court (Bundesarbeitsgericht) will now have the final say on the issue. It is at least doubtful whether the scope of § 850a No. 3 of the ZPO should be interpreted as narrowly as it was by the LAG of Berlin-Brandenburg. It is not apparent from the wording of the provision that the emoluments exemption only applies to bonuses that take the degree of hardship or danger faced by the individual employee into account.

Practical tip

Until the BAG has issued its final clarification, employers are well advised not to pay out any Corona bonus affected by the garnishing of wages to either the employee or the attachment creditors, but to try instead to reach an agreement with the employee and the creditors that the payment will be provisionally withheld. Where it is not possible to reach an agreement, the employer should deposit the monies with the relevant court to be held until the issue of entitlement is clarified. The employer will otherwise run the risk of paying the wrong party so that they would have to claim the payment back from that party and repay the bonus to the other (correct) party.

If the opinion of the LAG Berlin-Brandenburg is followed, the question of exemption from garnishment will depend on the specific arrangements in the (collective or works) provisions concerning the bonus, which will necessitate the consideration and check of the specific provisions on a case-by-case basis.

Dr Michael Matthiessen

Infection ruins wedding. This is one way to summarise the decision of the Regional Labour Court (Landesarbeitsgericht, LAG) of Munich. A wedding celebration had to be cancelled because the bride had to isolate herself. At least the bride and groom were not saddled with a loss because (fitting for Valentine’s Day) the LAG awarded damages to the employee (who was also the bride).

Facts of the case

The Managing Director for the employer returned to the office after his vacation with a cold. Despite his obvious symptoms, he didn’t isolate himself as a precaution but returned directly to work after his vacation and took part in external meetings. The employee drove with the ill Managing Director in one car to various meetings. Neither of them wore a mask in the car. Then the inevitable happened: a short time later, the Managing Director tested positive for the Coronavirus. Under the rules applicable at the time, the employee had to go into quarantine as a close contact and the planned wedding celebration could no longer take place. The caterer, music and rented rooms: everything had to be cancelled. The total damages were EUR 5,000. The employee claimed this amount in damages from the employer. She won her case before the Labour Court. The employer did not want to pay and appealed the decision.

The judgment

The LAG followed the decision of the Labour Court and found in favour of the employee. It held that the employer had breached its duty of care through the conduct of the Managing Director and caused the wedding to be cancelled. In the view of the LAG, the ill Managing Director should not have taken the employee with him in his car. If he had not come into the office or had they at least driven to the meetings in separate cars, the employee would not have had to go into quarantine and the wedding could have taken place as planned. The LAG also did not see any contributory negligence on the part of the employee that could have mitigated the circumstances (she could have worn a mask or driven in her car). The employee could not be expected to demand that her line manager take a separate car. In the Court’s view, this would be the same thing as the employee advising the Managing Director that he was not sufficiently considering his health and not responding appropriately. The LAG did not want to require this of the employee, especially during a pandemic.

Consequences for practice

The judgment takes a textbook approach to the catalogue of duties of employees, breach of duties, causality, and contributory negligence. The judgment is particularly relevant in practice because it highlights the importance of each company having a hygiene concept. A breach of the duty of care can be expensive in the circumstances and the judgment gives clear form to this duty, which is often less tangible.

Practical tip

The legislators have now bowed out of the fight against the pandemic in the workplace almost entirely. There are almost no clear and binding rules and responsibility has shifted to the employer. However, as the pandemic is not yet over and we can again expect to have a high number of cases in Autumn at the latest, employees should use the illusory “Corona summer break” to review and adapt existing corporate hygiene concepts. And one should remember: in 2020 and 2021, many weddings were cancelled due to lockdowns. And precisely these weddings (hopefully, in most cases anyway) will take place in 2022 and 2023 instead.

Martin Biebl

The Federal Labour Court (Bundesarbeitsgericht, BAG) has provided clarification with respect to the adjustment of pension benefits for pension fund commitments based solely on profit sharing pursuant to § 16 (3) No. 2 of the Act for the Improvement of Operational Pensions (Gesetz zur Verbesserung der betrieblichen Altersver-sorgung, BetrAVG). With this judgment, the Third Senate provides employers with the opportunity to assess existing pension fund commitments for risks with respect to pension adjustments.

Facts of the case

The Court was asked to consider the employer’s obligations to adjust the employer-financed portion of the company pension, which the employer had drawn from a regulated pension fund since 1 October 2011. The pension fund had established separate assets and liabilities for different wage categories, in particular for new and legacy tariffs. A further distinction is made within these categories for profit classes. The pension fund entitlements of the Claimant were therefore determined by two tariffs. The Claimant took the view that the employer had illegally failed to adjust the pension fund annuities in 2014. In her view, the pension should have been adjusted based on the developments in the consumer price index (CPI) over the three previous years and the employer also had a duty to assess whether adjustments should be made in the future. According to the Claimant, § 16 (3) No. 2 BetrAVG did not abolish this duty as the applicable transitional rules in § 30c (1a) of the BetrAVG constituted inadmissible retroactivity and the pension fund illegally used surpluses to build accruals for losses.

The judgment

The BAG held that the employer-financed part of the Claimant’s pension was subject to pension adjustments based on the CPI for only one of the two tariffs applicable to the Claimant. The other tariff fulfilled the conditions of the exception in § 16 (3) No. 2 of the BetrAVG, so that all pension fund surpluses related to that bond portfolio had to be used to increase the pension benefits. The BAG also held that the exemption clause did not infringe the prohibition against allowing property to deteriorate under the EU Mobility Directive, as the new rules in § 16 (3) No. 2 of the BetrAVG do not lower the protection existing under national law, but instead makes a correction. The Court held that there was also no inadmissible retroactivity of the transition provision in § 30c (1a) of the BetrAVG for this exemption, arguing that the legislator adopted an effective date rule that is both justifiable and fact-based.

Consequences for practice and practical tip

Where the employees failed to bring a claim before 1 January 2016, the transitional provision in § 30c (1a) of the BetrA will protect employers committed to providing a company pension plan against employee demands for adjustment.  Employers should therefore review the contracts with their pension fund and check whether the contracts deal with the use of surplus in line with § 16 (3) No. 2 of the BetrAVG, which protects employers against further demands for adjustment from employees under § 16 (1) of the BetrAVG.

Julia Meler

Facts of the Case

The employee was employed as a delivery driver for a retail establishment. His working time was recorded by way of technical recording equipment. The start and end of his working time were set. Breaks were not. At the end of his employment relationship, the claimant sought payment for hundreds of hours of overtime. He claimed that he had worked the whole time (as recorded technically) and could not take breaks because any breaks would not have left him with enough time to make all his deliveries. The employer disputed the overtime.

In a noteworthy (and controversial) decision, the Labour Court in Emden (ArbG) found in favour of the claimant at first instance. The Court held that the employer had an obligation to pay in accordance with the judgment of the ECJ of 14 May 2019 – Case No. C-55/18 – [CCOO]. This judgment – which has become known as the “time clock” judgment – requires the EU Member States to compel employers to establish a comprehensive system of time recording. As a result, the ArbG held that the employer had a direct obligation to measure, record and control the working time of its employees. Any infringement of this obligation by the employer will result in a reversal of the burden of proof: if the employer failed to establish a reasonable system of recording time and fails to control the working time as required by the ECJ judgment, the employee must only plausibly present the number of overtime hours claimed. In contrast, the employer then had to show that the overtime was not worked or was not necessary. In this respect, the ArbG simply brushed aside the settled jurisprudence of the BAG on the allocation of the burden of proof and the burden of producing evidence.

The Regional Labour Court of Lower Saxony (Landesarbeitsgericht, LAG) could not make much of the reasoning of the Court in Emden and essentially dismissed the action. In the view of the LAG, the time clock judgment did not have any impact on the burden of proof and burden of producing evidence in cases involving overtime. A claimant seeking payment for overtime will have the burdens of proof and producing evidence both for the number of hours of overtime and for their necessity.

The judgment

The employee was also unsuccessful in his claim before the BAG. The BAG shares LAG’s view that the judgment of the ECJ in the time clock case does not change anything with respect to the burden of proof and the burden of producing evidence. The central finding: an obligation to measure the daily working time is based on EU law and serves to protect the health of workers. However, it does not have any effect on the principles for the allocation of the burden of proof under German law in a case concerning the payment of overtime. As the claimant was unable to meet these burdens of proof and to produce evidence, there was no payment due for the supposed overtime.

Consequences for practice

The judgment will be a relief for many companies. Given the stir caused by the decision from Emden, the BAG took an important decision of principle. The numerous cases involving overtime necessitated such a decision. Everything remains as it was: employees must provide proof of the overtime worked and when this overtime was worked. They must also show what work they did, and that the employer required, knew about or approved the overtime. Derogating from this principle based on the ECJ judgment required interpretation acrobatics. Fortunately, the BAG clearly rejected the special approach taken by the Court in Emden.

Practical Tips

Employers confronted with claims for payment of overtime must carefully assess whether the claim satisfies the burdens of proof and providing evidence. Deficiencies in the statement of claim should be presented as part of an effective defence in the case – referring to the case law of the BAG, of course. Companies must also ensure that conduct does not imply tacit acquiescence or that managers have not been too quick just to “sign off” on overtime. It remains to be seen (at least until the full judgment is available), what position the BAG has taken concerning the obligation to record working time as part of employee health and safety: does the BAG consider that there is already an obligation to record working time or is action needed by the German legislator for the obligation to apply?

Martin Biebl

(Institution-related) Mandatory vaccinations

In December 2021, the legislator introduced “institution-related mandatory vaccinations” for certain areas of the healthcare sector (§ 20a Infection Protection Act, Infektionsschutzgesetz, IfSG). At first, the new rules only affected healthcare facilities (“institution-related”). However, a closer look revealed that mandatory vaccinations will also apply to some employees outside of the healthcare sector. Against this background and considering the possible imposition of general mandatory vaccinations, employers from other sectors should keep a close eye on the arrangements and employment consequences for the new rules.

The substance of the new rules

The new rules don’t impose mandatory vaccinations; they impose a duty to provide certain evidence of immunity. By 15 March 2022, persons working in healthcare, aged care, and other care facilities must either present a vaccination certificate or proof of recovery from the virus (“2G proof”) or provide a doctor’s certificate to show that they cannot be vaccinated for medical reasons. When the 2G proof expires, the employee must present a new certificate within one month.

The submission requirement is based on activities within the facility and is not limited to employees of the facility. It also includes external persons who are not just temporarily (for a few minutes) at the facility (e.g., tradesmen). Actual contact with persons from vulnerable groups is generally irrelevant; persons working in the administration department will also be required to submit their 2G proof.

This makes it clear that the duty to provide the relevant certificates not only applies to companies active in the healthcare sector, but also to manufacturers of medical and medical technology products, as well as to various service companies (e.g., cleaning companies, tradesmen, etc.), where their employees visit healthcare facilities that are covered by the measures.
If the 2G proof is not submitted by the deadline, or if there are doubts about its validity, employers must inform the responsible health authority, which can then impose orders (e.g., disqualification from the practice of certain activities).

Practical tip: The law does not say what form the notification and submission of personal data to the health authority must take. Accordingly, an email will be sufficient. For good measure, the employer should ask the authority to confirm receipt of the email.

Persons who start working for a healthcare institution after 16 March 2022 must submit the evidence before they start work, i.e., they can only be active in the facility after valid 2G proof has been presented. Accordingly, from 16 March 2022, there will be a statutory disqualification from the practice of certain activities for new recruits who fail to provide 2G proof, while “existing employees” will only be disqualified where the relevant health authority orders. Employers and employees may be fined up to EUR 25,000 for an infringement of an order or the statutory disqualification.

Employment law consequences

Where a statutory or ordered disqualification applies to employees and they cannot be deployed elsewhere (e.g., outside the facility or in home office), the employer's obligation to pay remuneration does no longer apply in accordance with the principle of “no work, no pay”.

Practical tip: Employers should decide how they want to deal with employees who fail to fulfil the statutory requirements. If an employee can’t work elsewhere (e.g., from home, as might be the case for a nurse or someone providing nursing care for the elderly), the employee will be disqualified from that work upon the entry into force of the law and the employer won’t have to pay the employee any longer. In light of the strict jurisprudence of the Federal Labour Court on the topic, it will only be possible to issue a notice of dismissal to the employee on personal grounds because they are no longer qualified to perform the work in exceptional circumstances.

If an employee persistently refuses to present the appropriate proof and they are likely to be permanently unemployable due to disqualification, the employment relationship can be terminated on conduct grounds, providing the employee previously received a warning for relevant conduct.

Companies that have at least a connection to the medical and healthcare sectors should assess whether employees are employed in facilities that fall under § 20a of the IfSG. If an employee is not only temporarily active in such a facility so that 2G proof is required, the employer must demand that employees submit the relevant proof.

End of the obligation to work from home

Although numerous employees are affected by the new rules in § 20a of the IfSG, the key statutory measures for the protection against the Coronavirus and the related requirements on employers will, for the most part, end on 20 March 2022. The exact timeline for the abolition of each measure is still unknown and depends on the relevant Land. However, the current obligation to work from home in accordance with § 28b (4) of the IfSG will expire on 19 March 2022. This is likely to raise the question of whether employees will have to return to work from the office or whether they can continue, at least in part, to perform their duties from their home office.

Loss of the statutory special entitlement

In the wake of the Corona pandemic, legislators introduced a transitional statutory entitlement to work from home for the first time. The elimination of § 28b of the IfSG also eliminates this statutory special entitlement. Unless employers and employees have reached an agreement on remote work, the employer can use its right to give directions and order employees to return to work at the office (this is also in line with the judgment of the Regional Labour Court of Munich of 26 August 2021 in Case No. 3 SaGa 13/21).

As many employees wish to continue working from home or working remotely, at least sometimes, many employers have already developed appropriate concepts. Where possible, employers should exercise their right to give directions and authorise employees to work from home or work remotely, rather than grant employees a right to work from home or work remotely. This has the advantage of making it easier to have the employee return to work in the workplace.

It should also be noted that the term “home office” is not legally established in Germany. Colloquially, home office is often used as a synonym for both legally established terms, “teleworking” and “remote working”. The primary difference between the two is that the Workplace Regulation applies to telework and requires the installation of a fixed workplace with a monitor in the employee’s private dwelling. In contrast, the Workplace Regulation does not apply to remote working: employees can perform their work from any place they wish within Germany, without any difficulties, via an IT connection to the company. The Coalition Treaty for the current “traffic light” Government intends to keep both working from home and teleworking as permitted forms of remote working. In particular, the Treaty proposes to give employees the right to request to work from home or remotely. Employers should only be able to refuse this request on operational grounds. (Urgent) “Operational issues” can also be found, for example, in the Federal Leave Act (Bundesurlaubsgesetz) or the Act on Part-time and Fixed-term Employment Contracts (Teilzeit- und Befristungsgesetz). Sometimes the law establishes presumptive examples, sometimes the courts have further defined the term in individual cases. The same can be expected for “operational grounds” in relation to the request to work from home. Naturally, the specific nature of the work may constitute an operational ground that would be opposed to working from home. The nature of the work of an employee working in an assembly line in a production facility could conceivably prevent that employee from working from home. The Coalition Treaty also intends to make it possible for employees to work remotely within the EU. Currently, employers face significant risks if employees work remotely in another EU Member State (e.g., the possible establishment of a permanent establishment for tax purposes in that Member State).

Possible arrangements employers can make

Unless employers have not already done so, they should develop flexible working arrangements in this context. We recommend, that companies do this on the basis of their instruction right (Direktionsrecht). In addition to avoiding giving the employee a right to work from home, this approach avoids the administrative burden of concluding a separate contract with each employee. As the works council has a co-determination right with respect to the structuring of mobile work in accordance with § 87 (1) No. 14 of the Works Constitution Act (Betriebsverfassungsgesetz), the employer may also conclude a works agreement with the works council establishing the details for remote work. The co-determination right covers, for example, the rules about the duration of remote working, the start and end of daily working hours for mobile work, and the place from which employees may work remotely.

Practical tip: Employers should set detailed uniform rules that employees must comply with when working from home/working remotely (e.g., exclusive use of an encrypted wireless network).

The 3G rule for access to the workplace and rapid antigen tests are dropped

The far-reaching steps of lifting the statutory corona protection measures affects in particular the 3G obligation in workplaces (§ 28b (1) of the IfSG). This means, from 20 March 2022, employees are no longer required to show that they are immune (vaccinated, recovered or tested) unless the obligation to provide evidence for work in a healthcare, aged care, or other care institution applies (§ 20a of the IfSG, see above). Accordingly, this also means employers no longer have to check the status of employees (vaccinated, recovered or negative test).

Practical tip: In a few exceptional cases, such as where special circumstances exist or all employees consent, employers may continue to check the 3G status in the workplace on a “voluntary” basis. This could be the case where the check forms part of a particularly strict hygiene concept within the workplace or where it is justified by the circumstances (e.g., employment of persons requiring special protection).

Apart from that, employers must continue to offer employees two rapid antigen tests per week (§ 4 (1) of the Covid-19 Occupational Health and Safety Regulation (Covid-19-Arbeitsschutzverordnung)) and provide medical-grade protective masks (§2 (2) of the Covid-19-Arbeitsschutzverordnung). With the lapse of the regulation on 20 March 2022, these obligations will also cease to apply to employers. How exactly employers will continue to ensure basic protection and which specific measures they will have to follow remains to be seen. We will let you know.

Authors: Laura Hagen, Jonas Türkis

In addition, on 5 February 2022, the Care Commission (Pflegekommission) agreed on higher minimum wages for care workers working in aged care: the minimum wage for care workers in Germany will increase in three stages from 1 September 2022. For unskilled nursing staff, the Care Commission recommends an increase in the hourly wage to EUR 14.15 per hour, while for qualified care workers it should increase to EUR 15.25 per hour and nursing specialists can expect an increase to EUR 18.25 per hour. Based on the recommendation of the previous Care Commission, a sliding scale applies to the minimum wage based on the level of qualification. The fifth Care Commission advocated the maintenance of this structure. For employees in the aged care sector, the Care Commission also recommends an entitlement to additional paid leave beyond the statutory leave entitlement. For employees with a 5-day working week in 2022, this additional leave will be seven days, while for 2023 and 2024 it will be nine days.

Around 1.2 million employees work in institutions to which the minimum wage for the care sector applies. The current regulation for the minimum wage in the care sector applies until 30 April 2022 and provides a current minimum wage for unqualified care workers of EUR 12, EUR 12.50 for qualified care workers and EUR 15 for nursing specialists. These minimum wages will increase to EUR 12.55, EUR 13.20, and EUR 15.40 respectively on 1 April 2022. Where the special minimum wage for the care sector does not apply (for example, to employees of private institutions), the general statutory minimum wage of EUR 9.82 per hour applies. In the coalition agreement, the Federal Government agreed to an increase in the general statutory minimum wage to EUR 12 per hour. The planned increases in minimum wages for the care sector based on the recommendations of the Commission are as follows:

For unqualified care workers: From 1 September 2022, the minimum wage will increase to EUR 13.70 and then to EUR 13.90 from 1 May 2023. From 1 December 2023, the minimum wage will be EUR 14.15.

For qualified care workers (care workers with at least one year of training and a corresponding position), the minimum wage of EUR 14.60 will apply from 1 September 2022, increasing to EUR 14.90 on 1 May 2023, and EUR 15.25 on 1 December 2023.

For nursing specialists, the minimum wage will increase to EUR 17.10 on 1 September 2022, and then to EUR 17.65 on 1 May 2023, and 18.25 on 1 December 2023.

The Federal Ministry for Labour and Social Affairs intends to set the new minimum wages for the care sector by way of a regulation based on the recommendations of the Care Commission. This will make both the recommended minimum wages for the care sector and the entitlement to additional leave binding, irrespective of any entitlements to higher wages or numbers of leave days under the employment contract or a collective wage agreement.

(Source: Notice of the German Federal Government of 23 February 2022 and press release of the Federal Ministry of Labour and Social Affairs)

The increase in the minimum wage also affects low-paid employment, so-called mini-jobs or 450-euro jobs. To ensure low-paid employees can still work ten hours per week under the new minimum wage, the bill increases the mini-job threshold to EUR 520. The Federal Government also adopted measures aimed at promoting employment subject to social security contributions and preventing the misuse of mini-jobs as a replacement for regular employment. To make the mini-job worth it, the maximum income limit for a mini-job has been increased from EUR 1,300 per month to EUR 1,600. This provides greater relief for low-wage employees who are subject to social security contributions.

Germany has had a statutory minimum wage since 2015. It sets the minimum wage level for nearly all employees. Exceptions apply to only a few groups of persons, such as trainees, long-term unemployed or some interns. Since January 2022, the minimum wage has been set at EUR 9.83 gross per hour. The minimum wage will increase to EUR 10.45 on 1 July, and to EUR 12 from 1 October.

(Source: Press release of the German Federal Government of 23 February 2022)

Most employees don’t feel entirely secure in their employment relationship during the first six months – rightly so. The strong general protection against unfair dismissal, which applies to all employees equally, and the stricter special protection against unfair dismissal which applies to groups that are worthy of protection, such as severely disabled persons, normally only starts once the employment relationship has existed for an uninterrupted period of six months. Often, the parties agree on a probationary period with a significantly reduced notice period.

In a recent judgment, the European Court of Justice (ECJ) significantly reduced this uncertainty during the first six months, at least for (severely) disabled employees. The Court held that the employment of a (severely) disabled person can only be terminated during the probationary period where certain conditions are fulfilled.

Facts of the case

The claimant was employed as a railway track maintenance technician for a Belgian railway company and was still a trainee. He was diagnosed with a heart condition and fitted with a pacemaker. As the pacemaker was sensitive to electromagnetic fields, he could no longer be employed to work near the railway tracks. In addition, he was recognised as having a disability. The employee was then employed for three months as a warehouseman and later dismissed on the grounds that he was unable to perform the duties for which he had been recruited. In contrast to statutory staff members, during the training period, employees did not have the right to be reassigned to another position.

The judgment

The ECJ was asked to decide whether this approach was compatible with the requirements of Directive 2000/78/EC establishing a general framework for equal treatment in employment and occupation. This Directive requires “reasonable accommodations” to be made for people with disabilities. The Court held that the Directive applies to all employees, even trainees. Accordingly, a disabled employee must be reassigned to another position rather than have their employment terminated, unless this would impose an unreasonable burden on the employer. To assess whether such measures would constitute a disproportionate burden, the financial burden, the size, financial resources, and total turnover of the company, as well as the possibility of obtaining public funding or other assistance will be decisive. There must also be a suitable vacant position that the worker is capable of performing given their skills and abilities. This must be determined in advance.

Consequences for practice

This judgment will also have an impact on the German legal system: in Germany, a severely disabled employee only has special protection against dismissal after six months of uninterrupted employment. This was an attempt by the German legislator to remove an obstacles to the employment of workers with a severe disability because an immediate increase in the level of protection against unfair dismissal for employees with a severe disability could act as a deterrent for some employers and thus reduce the number of opportunities on the employment market for severely disabled applicants. This judgment could thwart the conscious decision of the legislators and its desired effect. During the first six months of employment, employers in Germany must now also respect at least a toned-down protection against dismissal. Before dismissing an employee with a (severe) disability, the employer must check whether the employee may be reassigned in accordance with the guidelines established by the ECJ. This could result in companies being less willing to employ persons with (severe) disabilities.

Practical tip

It remains to be seen just how far this judgment will be picked up by the German legislator and labour courts. In any case, it can be expected that (severely) disabled employees will seek to use this judgment in their favour. Employers are therefore advised to keep the requirements of the ECJ in mind and give them due account prior to issuing a notice of dismissal for an employee who is (severely) disabled.

Regina Holzer

In 2019, the Federal Labour Court (Bundesarbeitsgericht, BAG) established for the first time that a cancellation agreement will be void when it was concluded in disregard to the principle of fair negotiations (Judgment of the BAG of 7 February 2019 in Case No. 6 AZR 75/18). This principle will be infringed, for example, when one party creates or exploits a situation of psychological pressure to make it significantly more difficult or even impossible for the other party to reach a voluntary and considered decision. For the BAG, whether such a situation exists will depend on the facts in the specific case. Recently, the Court had the opportunity to decide such a case.  The BAG held that an employer does not have to give an employee time to think before concluding a cancellation agreement.

Facts of the case

The dispute concerned the continuation of the employment relationship after the conclusion of a cancellation agreement. On 22 November 2019, the managing director and the defendant’s later lawyer held a meeting with the employee in the managing director’s office. They alleged that the employee had changed the sales prices in the IT system without authorisation in order to simulate higher profits. After a break of about ten minutes (in which the managing director, the lawyer and the employee sat silently in the room), the employee signed the prepared cancellation agreement which would end the employment relationship on 30 November 2019 (the normal notice period was six months; the offer did not contain any settlement). Other details of the discussions were disputed.

On 29 November 2019, the employee brought a challenge to the cancellation agreement claiming that she was unlawfully coerced and wanted her job back. She claimed she was threatened that if she didn’t sign the agreement, she would be issued with a notice of termination of employment with immediate effect and a criminal complaint would be filed against her. She was not given long to think about her options, nor was she allowed to obtain legal advice. She claimed that this constituted an infringement of the principle of fair negotiations. The Labour Court found in favour of the employee, while the Regional Labour Court reversed the decision and dismissed the claim.

The judgment

The employee’s appeal was unsuccessful. The cancellation agreement is effective. The BAG was unable to ascertain any illegal coercion. According to the BAG, given the circumstances in the case, a reasonable employer could seriously consider issuing a notice of termination of employment with immediate effect and filing a criminal complaint. The employer also did not negotiate unfairly. In this respect, the BAG followed the judgment of the Regional Labour Court on appeal. The employee’s freedom of choice was not violated by the fact that the cancellation agreement was only on offer if she signed it immediately so that she could not delay her decision.

Consequences for practice

Little by little, the BAG has provided clarity concerning the principle of fair negotiations and has been reticent in applying the principle, which is to be welcomed. The principle should be applied restrictively, as employees already have adequate protection through the right to challenge the validity of a cancellation agreement on grounds of deception or coercion. According to the press release, time pressure will not automatically be an indication of unfair negotiations. The BAG also makes it clear that, in the specific situation, the employer was justified in considering issuing a notice of extraordinary termination of employment and filing a criminal complaint. The question of illegal coercion must therefore be answered in the negative in this case.

Practical tip

The full judgment of the Court, when it is available, will provide greater legal certainty. However, the fact that a cancellation agreement can be conditional on its immediate signing is welcome from an employer’s perspective. It is also already clear that the evidence of the discussions and circumstances in which they took place will be important in such situations. Employers should take detailed minutes of any severance talks and always ensure that a witness is present. If, as the BAG rightly states, a finding of coercion and a breach of the principle of fair negotiations will depend on the facts of the case, employers are well-advised to examine and document the circumstances of the specific case.

Martin Biebl

The dispute involved the continuance of an employment relationship after the conclusion of a cancellation agreement. On 22 November 2019, the managing director and the company’s employment lawyer and later attorney of record for the defendant held a discussion in the office of the managing director with the claimant, who was the sales team coordinator for the building services department. They alleged that the claimant had changed or reduced sales prices in the IT system, without authorisation, in order to simulate a higher profit. After a break of about ten minutes, during which the claimant, the managing director and the lawyer sat silently at the table, the claimant signed the cancellation agreement prepared by the defendant. This provided for the amicable termination of the employment agreement on 30 November 2019. The other details of the discussions remained disputed.

The Claimant brought an action on 29 November 2019 challenging the validity of the cancellation agreement due to unlawful threats. With her claim, the claimant sought to enforce the continued application of the employment agreement after 30 November 2019. She asserted that if she didn’t sign the cancellation agreement, the defendant had promised that it would issue her with a letter of termination of employment without notice and file a criminal complaint against her. Her request for more time to consider and seek legal advice was not granted. According to the claimant, in this respect, the defendant breached the principle of fair negotiations. The Labour Court found in favour of the claimant. On appeal by the defendants, the Regional Labour Court rejected the claim.

The claimant was also unsuccessful in her appeal to the BAG. Even if the reported discussions were taken in her favour, there is no illegality in the claimed threat. A reasonable employer in the current case can seriously consider issuing a letter of termination without notice and filing a criminal complaint. Likewise, in its limited review and based on the measures developed by the BAG in its judgment of 7 February 2019 (Case No. AZR 75/18), the Regional Labour Court held that the defendant had not negotiated unfairly and thus had not infringed its duty under § 311 (2) No. 1 in combination with § 241 (2) of the BGB. The claimant’s freedom of choice was not violated by the fact that the defendant only provided the cancellation agreement for immediate acceptance in accordance with the first sentence of § 147 (1) of the BGB, nor by the fact that the claimant thus had to decide immediately whether to accept the agreement or not.

(Source: Press release of the BAG)

Facts of the case

The dispute involved the claimant’s obligation to repay a loan he received from the defendant to finance training. The loan agreement provided that the defendant would waive the repayment requirement if, for operational reasons, the defendant did not offer the claimant a position of employment within five years of the end of the training. Whether the claimant received an email with a contract for employment as an annex on the last day of the deadline was in dispute. The defendant produced evidence from its inbox and outbox which showed that the email was sent and that it did not receive any notification that the email was undeliverable. According to the claimant, he only received said email three days later. According to the attached employment agreement, the defendant would start withholding EUR 500 per month from the claimant’s salary as a repayment for the loan. The defendant was of the view that it had made the claimant an offer of employment in time through the email. The condition precedent for the waiver of repayment of the loan had therefore not occurred. The defendant sought to rely on the prima facie evidence with respect to the timely delivery of the email.

The judgment

The Labour Court held in favour of the claimant. The Regional Labour Court dismissed the defendant’s appeal. The Court held that it is for the sender to prove and provide evidence that an email was received. Sending the email does not establish prima facie evidence of the receipt by the recipient. Whether the message was received on the recipient’s server is not known. As with regular mail, it is technically possible that the message will not be delivered. The risk of this happening cannot be imposed on the recipient. The sender chooses how they will communicate their declaration of intent and thus bears the risk that the message will not arrive. To ensure that an email reaches its intended recipient, the sender can request a read receipt through the options on its email software.

Consequences for practice

The judgment applies not just to labour law but to all civil law cases except where specific statutory provisions apply. When sending an important email, you should therefore generally ask for confirmation of receipt of the email from the recipient or set up an automatic read receipt. If the sender does not do so and has no evidence of receipt, the burden of proof could be their downfall before court.

(Source: Press release of the Regional Labour Court in Cologne)

The Federal Labour Court (BAG) recently decided that annual leave can be cut proportionately when whole workdays are not worked because of short-time work. This judgment is the second wide-reaching decision of the Court in connection with the Corona pandemic (after its judgment on the continued payment of wages where there are site closures during lockdown).

Facts of the case

The claimant works part-time as a sales assistant (3 days per week). She has an annual leave entitlement of 14 days (28 days in the case of a 6-day week). During the Corona pandemic, the defendant introduced short-time work. In June, July and October 2020, the employee had short-time work with zero hours work based on a short-time work agreement. In November and December, the employee worked for a total of five days. The company, therefore, recalculated the employee’s annual leave for 2020 at just 11.5 days. The employee claimed that she was due a further 2.5 days of annual leave. The Regional Labour Court of Dusseldorf (LAG Düsseldorf, judgment of 12 March 2021 in Case 6 Sa 824/20) held in favour of the employer. According to § 3 (1) of the Federal Leave Act (Bundesurlaubsgesetz, BurlG), no leave was acquired during the three months of short-time work with zero workdays. The annual leave was reduced proportionately.

The judgment

The BAG followed the view of the LAG Düsseldorf. According to the press release, the Court reasoned that the loss of whole workdays due to short-time work justified a recalculation (“reduction”) of the leave entitlements during the year. Under § 3 (1) of the BurlG, an employee is entitled to 24 workdays of paid leave where the working time is spread evenly over six days in the week. If the weekly working time is spread over fewer or more than six workdays under the employment agreement, the leave entitlement must be calculated in light of the work rhythm applicable for the leave year in according with the formula (24 workdays x number of days the employee has to work divided by 312 workdays). The loss of workdays due to short-time work justifies the recalculation of the leave entitlement. Based on the contractually agreed short-time work, lost workdays are not to be equated with periods that the employee has to work either under national or EU law. The employee’s leave entitlements for 2020, therefore, did not exceed the 11.5 workdays calculated by the company. Calculated on the basis of the three months in which the employee did not work at all, the employee has leave entitlements of only 10.5 workdays (28 workdays x 117 workdays with work obligations divided by 312 workdays).

Consequences for practice

The judgment of the BAG brings much needed legal certainty for many employers. If whole workdays are not worked due to short-time work, this will reduce the annual leave entitlement accordingly. Employers now have legal certainty of their right to reduce employee leave during the next short-time work period, where this is desired from a corporate policy perspective. The decision is not limited to longer periods of short-time work with no work (at least according to the press release). The BAG uses the general term “whole workdays not worked” as a result of short-time work, which necessitates a recalculation of the leave entitlements. However, there are often also “whole workdays not worked” for pro rata short-time work, too. The opinion of the Court should provide more clarity in this respect.

Practical tip

Annual leave can be reduced proportionately in the case of short-time work where whole workdays are not worked. The following formula should be used to calculate the reduced leave:

(Number of leave days x Number of individual days with work obligations) / 260 (for a 5-day working week) or 312 (for a 6-day working week)

The reduction should be undertaken as soon as possible when there is short-time work. Where the duration of the short-time work is unclear, the leave entitlements should be recalculated each month and communicated to the employee. In particular, any reduction should be entered into the relevant HR management system without delay. This will limit the number and scope of cases in which employees take leave that they are no longer entitled to after the recalculation.

Dr Anne Dziuba, Maximilian Nickel

If a workers’ union brings an action for the implementation of a collective agreement, the affected union members do not have to be named in the action (at first). The Federal Labour Court (Bundesarbeitsgericht, BAG) again confirmed that employers must fulfil purely contractual obligations arising under a collective agreement. The workers’ union can enforce this right to implementation by way of a claim for performance, but it will be limited to those employees who are members of the union.

Facts of the case

At the heart of the case was a dispute between the Bayerischen Jounalisten-Verband e.V. (Bavarian Journalism Association) and the Bayerischen Rundfunk (Bavarian Broadcasting Service) about the implementation of collective agreements. The employer and the union had concluded various works agreements, which also allowed for rules concerning the remuneration of personnel with the same status as employees. The basis for this remuneration was to be a so-called fee framework for television and radio. In December 2016, the employer changed its remuneration practice and started paying personnel with the same status as employees a daily rate rather than in line with the agreed fee code. The union saw this as a breach of the collective agreement and sued the employer for implementation (application of the fee code) for all personnel with the same status as employees, without naming these persons in the suit. The union was unsuccessful before the two lower courts. The Courts held that the action was inadmissible because the claim did not specify the names of the affected persons.

The judgment

The union persisted and had at least some success on appeal. The BAG held that the employer breached its implementation obligations under the collective agreement. The per diem reporters had to be paid in accordance with the special fee code agreed in the collective agreement. The payment of daily flat rates contradicted the rule in the collective agreement. The union can bring an action to force compliance with the collective agreement. In bringing this action, which logically can only apply to union members, the union does not have to specify the names of the persons working for the employer to whom the suit relates. The union can – and this is the important part of the judgment –commence the action without naming names, i.e. to bring the action on behalf of an anonymous union member to enforce the rights of the members. This prevents the employer from learning who is a member of the union. In contrast to the judgment of the District Labour Court, the BAG held that the admissibility of the claim did not require the affected union members to be named in the main proceedings.

Consequences for practice

The judgment is particularly important from a procedural perspective as the right to claim performance has been recognised for a while. Since the union did not specify the union members in its lawsuit, the lower courts rejected the claim as inadmissible because it infringed § 253 (2) of the Code of Civil Procedure (Zivilprozessordnung). This provision is designed to allow the defendant, in the case of judgment against them, to readily recognise what they need to do to comply with the judgment. This is in line with the BAG’s long jurisprudence in this area. The Labour Court and the Regional Labour Court held that this requirement was not fulfilled because the claim only referred abstractly to “members of the union”. The lower courts found the employer would not know exactly what it had to do. The BAG relaxed this certainty requirement, making it possible for unions to bring an action for enforcement of a works agreement without revealing the names of the employees who fall under the collective agreement. As the employer is not allowed to ask an employee whether they are a member of a union, the union does not have to reveal the names of its members in any claim for performance.

Practical tip

Employers that are confronted with performance actions from unions have lost a procedural plea against the admissibility of the claim as a result of the judgment of the BAG. However, the BAG also assumes that the names of the workers will have to be provided to the defendant/employer sooner or later. The fact that the court affirms the claim for performance is not enough to directly result in payment entitlements for individual members. Employees who seek to invoke the more advantageous rules of remuneration, for example, must eventually reveal that they are a member of the union and fall under the collective agreement to benefit.

Martin Biebl

A job advertisement referring to a “young team” could indicate discrimination against older applicants. However, depending on the wording of the advert, the assessment might be different in the case of a start-up. If you want to avoid becoming a breeding ground for compensation claims, avoid any direct or indirect reference to age – regardless of whether young or old – in job adverts.

Facts of the case

Approximately two years after it was founded, a start-up advertised a job for a position as a “Key Account Manager”. In the ad, the company stated that it offered a “young team with flat hierarchies that give you real freedom”. An applicant, who was born in 1972, received a letter informing them that their application had been unsuccessful. The applicant took this as an opportunity to claim compensation and brought an action before the labour court. The applicant claimed that the letter of rejection showed unlawful discrimination on the basis of age. The applicant submitted the job advert as an indication of this discrimination. They claimed that the wording “young team” showed that the company was targeting younger applicants. The start-up argued that “young team” didn’t refer to the age of any applicants, but to the relatively short period since the start-up had been established.

The judgment

The applicant was unsuccessful in his claim for compensation before both the Labour Court and the Regional Labour Court and both Courts dismissed the case. The Courts couldn’t identify any discrimination against the unsuccessful applicant based on age. In particular, the Courts held that the wording “young team”, as described in the job advert in this case, did not constitute any indication of an unlawful disadvantage due to age.

The reference to a “young team” in a job advert can indicate an expectation that the successful applicant should be “young” to fit in well with the team. If this was the case, the Courts probably would have found in favour of the applicant. However, the Courts understood the words “young team” to have a different meaning in this specific case. Since the company introduced itself in the opening few passages as a start-up that had only existed for a few years, the reference to a “young team” should be understood as paraphrasing “a workforce that has only existed for a short period.”

Consequences for practice

Adverts for positions vacant may not violate any of the prohibitions against discrimination on the grounds listed in § 7 (1) of the General Act on Equal Treatment (Allgemeines Gleichbehandlungsgesetz, AGG).  This is written in black and white in § 11 of the AGG. Job adverts referring to the age of the desired applicant should be avoided. Employers otherwise risk claims for compensation from unsuccessful applicants.

Job adverts will be considered discriminatory on the basis of age when they make specific age stipulations (e.g., “at least 30 years old” or “Maximum age of applicants: 45 years old”) or provide age brackets (e.g., “18 to 35 years old”). However, even seemingly neutral criteria can constitute discrimination based on age. This can include a reference to a “young team”. In the above case, the company was able to rely on the fact that it was a start-up. In other cases, unsuccessful applicants have won claims for compensation where there was a reference to a “young team” in the job advert.

Practical tip

Regardless of whether your company is a newly established start-up or one that has been active on the market for a while, you should avoid using the word “young” in the job adverts. Start-ups can of course refer to the fact that they were recently established. They can use the year of establishment or the term “start-up” in the job advert, for example. Descriptions that use the adjective “young”, such as “young team” or “young company,” should be avoided as a precaution.

Michael Riedel

The Federal Social Court (FSC) extends accident insurance protection in the home office: the way from the bedroom to the desk is now also an insured way to work when the employee intends to start work immediately. Accident insurance protection no longer starts with “walking through the front door of the house.”

Facts of the case

The employee was on his way to work from his bedroom to his home office downstairs. Normally, he starts working immediately and does not have breakfast first. While walking down the spiral staircase between the two floors, he slipped and broke one of his thoracic vertebrae. Based on the previous jurisprudence of the Federal Social Court, the employers’ liability insurance association and the Regional Social Court (Landessocialgericht, LSG) of North Rhine-Westphalia (Judgment of 9 November 2020 in case L 17 U 487/19) both rejected his claim for an accident at work.

The judgment

>The FSC reversed the decision of the LSG of North Rhine-Westphalia and confirmed that it was an accident at work. Previously, the FSC has drawn a clear border, so that the way to work only started with “walking through the front door of the house”. The FSC has now abandoned this border in the case of working from home. According to the FSC, an employee who falls on the way directly from their bed to their home office is protected by statutory accident insurance. The route taken to start work in a home office is performed in the interests of the employer and should therefore be insured as a path at work.

Consequences for practice

With this judgment, the FSC extends its accident insurance protection for employees working from home. It should be noted that this case stems from an accident that occurred in 2018, before the COVID-19 pandemic. The obligation to work from home during the pandemic did not play a role. The decision also did not concern the explicit statutory extension of industrial accident protection to the home office and remote working, which entered into force on 18 June 2021 – as implemented through the new § 8 (1) third sentence of the Seventh Volume of the Social Code (Sozialgesetzbuch, SGB VII). The present situation has become significantly more relevant since 2018, and the decision is likely to be relevant to numerous older cases simply because of the Corona pandemic.

By recognising the “domestic route to work” as an insured route, the FSC abandons its restrictive case law based on its previous legal position. This brings the judgment into line with what the legislator is seeking to achieve with the new § 8 (1) third sentence of the Seventh Volume of the Social Code: comprehensive accident insurance for remote working and working from home. Further cases will be needed to clarify when the rule applies and will probably follow.

Practical tip

The extended accident insurance protection has made remote work and working from home even more attractive for employees. Employers should therefore think now about how they will deal with employee requests to continue using the current proven working model after the end of the Corona pandemic. The clock can no longer be turned back on these developments. Employers should therefore prepare themselves now.

Philipp Melle

Our partners Dr Andreas Lober (Media/Entertainment), Dr Wolfgang Lipinski (Labour Law) and Dr Gerrit Ponath (Private Clients and Nonprofit Sector) are listed as leading names in their respective legal areas. Wojtek Ropel (Media/Entertainment) and Katharina Fink (Private Clients and Nonprofit Sector) are among the names of the next generation. In addition, numerous lawyers are on the list of recommendations for the various legal areas.

Legal areas/practice areas in the ranking:

Labour Law, Corporate Law and M&A (medium-sized deals), Industrial Property (Trademark Law and Competition Law), Real Estate and Building Law (Real Estate Law and Project Development), Information Technology (Data Protection and IT/Digitalisation), Media (Gaming, Entertainment, Press Law and Publication Law), Private Clients and Nonprofit Sector, Public Law (Planning and Environmental Law, Public Procurement Law, State Aid Law).

Congratulations to the practice groups and industry groups and to our recommended lawyers.

Background:
The Legal 500 has been published for 35 years and is an independent guidebook. Law firms and lawyers are recommended exclusively on the basis of their performance. In-house lawyers are given a comprehensive overview of around 400 commercial law firms and 2700 lawyers in Germany. The analysis covers 23 practice areas and 90 rankings. As part of the research of The Legal 500 Deutschland, hundreds of interviews are conducted with lawyers and more than 23,000 clients are surveyed.

The Regional Labour Court (Landesarbeitsgericht) in Dusseldorf held that, where the thresholds are exceeded, collective redundancies must be notified to the Employment Agency (Agentur für Arbeit) even in the case of dismissal due to illness.

Facts of the case

The dispute involved dismissal(s) due to illness. Prior to issuing a notice of dismissal to the Claimant, the employer had issued 34 other notices of dismissal due to illness within a 30 day period. The Claimant brought an action for unfair dismissal and argued the dismissal due to illness was invalid. In particular, the Claimant argued that the employer should have submitted a mass redundancy notification to the Employment Agency and carried out the consultation procedure with the works council. At first instance, the Labour Court in Dusseldorf found for the Claimant.

The judgment

The Regional Labour Court in Dusseldorf confirmed the judgment of the lower court. The dismissal was invalid due to the employer’s failure to submit a notification of collective redundancy pursuant to § 17 (3) of the Act against Unfair Dismissal (Kündigungsschutzgesetz, KSchG) and carry out the consultation procedure with the works council in accordance with § 17 (2) of the Act. The threshold of 30 dismissals within 30 calendar days was exceeded. It was therefore necessary to make a collective redundancy notification. This conclusion cannot be invalidated by the fact that the dismissals in question were due to illness or on personal grounds. In the view of the Regional Labour Court, such dismissals also must be taken into account when calculating the thresholds under § 17 (1) first sentence of the KSchG. This follows from the interpretation of the rule: the wording of § 17 of the KSchG refers to dismissals and does not specify their grounds. Systematically, the exceptional provision in § 17 (4) of the KSchG only applies to termination without notice.

Consequences for practice

Generally, the employer must inform the Employment Agency before issuing multiple dismissals on personal, conduct or operational grounds – how many depends on the size of the operations. As § 17 of the KSchG applies to dismissals on personal or conduct grounds, as well as redundancies on operational grounds, all dismissals must be taken into account when calculating the thresholds.

Practical tip

A collective redundancy notification is necessary in the case of multiple dismissals on any grounds. Section 17 of the KSchG only provides an exception in the case of dismissal without notice. In the case of doubt, a collective redundancy notification should therefore be submitted as a precaution. If one is not submitted, the dismissals will be invalid. A further appeal was rejected.

Anne-Kathrin von Dahlen

Similarly, the Paul Ehrlich Institute was tasked with amending the requirements of the vaccination certificate, where applicable, and publishing any new requirements on its homepage. One change has already been made. Persons who were vaccinated with the Johnson & Johnson vaccine now require a second vaccination for “fully vaccinated” status. Evidence has shown that a single vaccination with this vaccine provides insufficient protection against infection with the SARS-CoV-2 Coronavirus.

In both cases, an additional vaccination with one of the vaccines approved in the EU will be sufficient to obtain “fully vaccinated” status. Until now, unvaccinated persons who had recovered from a Coronavirus infection obtained this status with their first vaccination. Those who had been vaccinated once with the Johnson & Johnson vaccine had “fully vaccinated” status 14 days after vaccination.

Employers should use these changes as an opportunity to fulfil their obligations under § 5 of the SAR-CoV-2 Employee Protection Regulation (SARS-CoV-2-Arbeitsschutzverordnung) by again informing employees of the risks of a COVID-19 infection and the existing vaccination options. Employers should also release employees from their duties in order to go and get vaccinated. Further, concerning the controls on employees before entering their place of work, as required under § 28b of the Infection Protection Act (Infektionsschutzgesetz), employers must recheck employee information and update their documentation on employee vaccination and recovery status wherever there is a change to the requirements or validity of such certificates.

(Source: Communication of the Federal Ministry for Labour and Social Affairs of 26 January 2022)

If an employer breaches provisions containing procedural and/or support obligations designed to benefit persons with severe disabilities, this breach will normally establish a statutory presumption that the unsuccessful, severely disabled applicant was not included in the selection/hiring procedures due to their disability and was therefore disadvantaged. Such provisions include the first sentence of § 165 of the Ninth Volume of the Social Code (Sozialgesetzbuch, SGB IX), according to which public employers must notify the Employment Agency at an early stage of any new vacancies or new positions that need to be filled. Publication of the position on the job board of the Federal Employment Agency (Bundesagentur für Arbeit, BA) will be insufficient to fulfil this requirement.

Facts of the case

A severely disabled applicant with a 50% degree of disability claimed compensation from a district because his application for a position with the district was unsuccessful. In 2017, the district published a position vacant notice on the job board of the BA for a position as “Director Legal Office and Local Council (lawyer),” to be filled from January 2018. According to the job description, the position required the applicant to have successfully completed a university degree in law or equivalent and have several years of relevant professional and managerial experience. Although the Claimant did not fulfil these requirements, he applied for the advertised position in November 2017, indicating his severe disability. The district did not invite the applicant in for an interview but informed him instead in April 2018 that they had selected another applicant. In response, the Claimant submitted a claim for compensation to the district under § 15 (2) of the General Act on Equal Treatment (Allgemeines Gleichbehandlungsgesetz, AGG). He criticized the fact that he, as an applicant with severe disabilities, was not considered during the preliminary procedure of the selection process. When he did not receive a response from the district, he brought his claim for compensation under § 15 (2) of the AGG before the Court.

The judgment

While the Court at first instance dismissed the claim for compensation because the Claimant clearly did not fulfil the specifications of the position, the Federal Labour Court decided in his favour. He was disadvantaged due to his severe disability. The claim for compensation under § 15 (2) of the AGG was therefore established. Contrary to the requirements of the first sentence of § 165 of the SGB IX, the district failed to notify the relevant Employment Agency of the advertised position, which could be filled by a person with severe disabilities. The publication of the position on the job board of the BA could not (yet) be qualified as notification within the meaning of the first sentence of § 165 of the SGB IX. The infringement of the notification requirement under § 165 of the SGB IX was enough to establish the statutory presumption under § 22 of the AGG, that the Claimant was not considered because of his severe disability and was therefore disadvantaged.

Consequences for practice

The judgment makes public employers aware of just how strictly the Federal Labour Court will assess formal breaches of the law related to persons with severe disabilities during the recruitment process. Although the lower courts found that the Claimant was obviously not suitable for the advertised position because he did not have the relevant professional experience, the Claimant was still presumed to be disadvantaged in the application process due to the district’s failure to fulfil a formal requirement and notify the Employment Agency. If the notification had been made, the compensation claim would probably have been unsuccessful before the Federal Labour Court, too.

Practical tip

In line with this judgment of the Federal Labour Court, public employers should ensure that they properly notify the appropriate Employment Agency of any positions which a person with severe disabilities could fill before advertising the position. In this respect, publication of the position vacant on the job board of the BA will not be sufficient.

Jonas Türkis

You see them everywhere, tearing through the city on their bikes while glancing at their smartphones: delivery cyclists delivering an evening meal or the weekly shopping in huge backpacks. The Federal Labour Court (Bundesarbeitsgericht, BAG) has now held that employers must make available to the delivery riders the work tools necessary for the riders to deliver delicacies such as pizza or burgers.

Facts of the case

The case was brought against an employer of bike courier riders who deliver food and drinks from various restaurants. The employment contracts took the form of general terms and conditions and required the cyclists to provide their own bicycle and use their own mobile phone. For each hour of work, the cyclists received a EUR 0.25 credit that could be used for bike repairs at specific repair shops. An employee brought a claim before the court and demanded that the employer make available a roadworthy bicycle and a suitable smartphone for his contractually agreed activities. He argued that it was the responsibility of the employer to provide the necessary tools. The employer responded that its employees already had their own bicycle and mobile telephone anyway. Any disadvantage from using their own was compensated by the statutory option to reimburse expenses and to provide credit for repairs.

The judgment

The BAG decided in favour of the employee: the requirement for the cyclist to use his own bike and smartphone unreasonably disadvantaged the Claimant in contravention of § 307 (2) No. 1 and the first sentence of § 307 (1) of the Civil Code (Bürgerliches Gesetzbuch, BGB) and is therefore ineffective. The contractual provisions in question meant that the employer did not have to pay the procurement and operational costs to the detriment of the employee, nor bear the cost risk associated with wear and tear, loss, or damage to the essential work tools. This was contrary to one of the basic concepts of the working relationship, which requires the employer to provide the essential tools for the performance of the agreed activities and to ensure that the tools functioned effectively. In the Court’s view, the resulting disadvantage was also not sufficiently compensated in the present case. The reimbursement of expenses, as required under statute, does not constitute appropriate compensation as there was no contractual provision.  In addition, the employee did not have free access to the budget for repairs. The employee therefore has a right, in accordance with § 611a (1) of the BGB, to be provided with a bicycle and a smartphone that are suitable for the performance of the agreed activities.

Consequences for practice

The judgment is designed to ensure that the minimum wage levels imposed by law cannot be undermined. Employees, especially those who are only paid close to the minimum wage for their work, cannot be asked to make further sacrifices with their assets to be able to perform their work. The employer must make the necessary tools available to the employee.>

Practical tip

The judgment clarifies that employers cannot escape their obligations to bear the procurement and operational costs for necessary work tools. However, the Court indicated that it would be possible to pay appropriate financial compensation instead of providing the tools. This gives employers sufficient contractual leeway to find an appropriate solution.

Regina Holzer

ADVANT Beiten has originally advised Paca Puratos on the acquisition of shares and on a planned investment of/in frizle fresh foods beraten. In the course of the transaction, however, frizle fresh foods AG, which specialises in innovative food products, had to file for insolvency. The ADVANT Beiten team around lead partner Prof. Dr. Hans-Josef Vogel subsequently changed strategy and advised their client on the acquisition of the full business operations from the insolvency administrator.

Fresh spaetzle dough in a bag - the founders of frizle fresh foods launched this business idea in 2015. Even though it failed to land a deal in the well-known TV series "Die Höhle der Löwen", the start-up received a lot of media attention and was quickly representedin many retail chains with its product. This was followed by a number of other fresh, liquid doughs and products that were not yet established in the German market.

PACA, founded in 1934, is leading the Israeli fresh yeast market for more than 40 years. Owner of “Shimrit” a famous Israeli baking goods brand, well known for successful commercial products such as fresh yeast, yeast flours, margarine, naturina, fresh pastry dough bases and fresh batters. PACA is co-owned by Puratos and the Sommerfeld Family. With the acquisition of frizle fresh foods, the company expands its product portfolio of innovative food products and continues their business operations.

Advisors to Paca Puratos:
ADVANT Beiten: Prof. Dr Hans-Josef Vogel (Head, Corporate/M&A), Wilken Beckering (Insolvenzy Law), Dr Winfried Richardt (Corporate/M&A), Mathias Zimmer-Goertz, Christian Döpke (both IP), Thomas Herten (Real Estate), Doreen Methfessel and PeterWeck (both Labour Law, all Dusseldorf).

Insolvency Administrator frizle fresh foods:
Law Firm Rochade Anwälte (Mannheim)

Media Contact
Frauke Reuther
Manager Communications
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Prof. Dr Hans-Josef Vogel 
Lawyer
ADVANT Beiten
+49 (211) 51 89 89 - 0
Hans-Josef.Vogel@advant-beiten.com

Founded in 2014, the Berlin-based start-up JUNIQE specialises in prints and posters by artists and is excellently positioned in the market. Since its foundation, JUNIQE has received more than 20 million euros in capital from shareholders, including well-known names such as Vorwerk Ventures, High-Tech Gründerfonds and the Cewe Foundation. The founders of JUNIQE leave the operational management but remain closely associated with the company in an advisory capacity. The JUNIQE location in Berlin and the brand will be retained. The number of MYPOSTER employees increases by 70 to 350 with the takeover.

MYPOSTER was founded in 2011 and has experienced rapid growth in recent years. The MYPOSTER group includes the brands myposter, Kartenliebe, ArtPhotoLimited and its own production company Printhouse. The takeover of JUNIQE is MYPOSTER's largest acquisition to date and represents a milestone for the company. MYPOSTER will further develop JUNIQE's business model strategically and innovatively and thus expand it into an even stronger provider in European e-commerce.

Advisors to MYPOSTER:
ADVANT Beiten: Dr Sebastian Weller (in charge, Corporate/M&A/Venture Capital, Dusseldorf), Dr Martin Rappert, Dr Julia Offermanns, Nico Frielinghaus, Dr Winfried Richardt, Markus Schönherr (all Corporate/M&A, alle Dusseldorf), Tassilo Klesen (Corporate/Commercial, Berlin), Wilken Beckering (Corporate/Commercial, Dusseldorf), Lelu Li (Commercial, Berlin), Thomas Herten (Real Estate, Dusseldorf), Peter Weck (Labour Law, Dusseldorf), Christoph Heinrich (Antitrust, Munich), Mathias Zimmer-Goertz (IP, Dusseldorf), Christian Döpke (Data protection, Dusseldorf), Helmut König (Tax, Dusseldorf), Jan Christian Mohrmann (Tax, Frankfurt), Dennis Grimmer, Vivienne Sulek (both Financial Due Diligence, both Dusseldorf).

Advisors to JUNIQE: Osborne Clarke (Nicolas Gabrysch, Alexandra Nautsch)

Media Contact
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Dr. Sebastian Weller
Lawyer
ADVANT Beiten
+49 (211) 51 89 89 -134
Sebastian.Weller@advant-beiten.com

The article by our Expert:ins Andrey Slepov and Elena Morozova in the Winter 2021-22 edition of Business Quaterly is available in English and Russian in our download area below.

WPG is a leading provider of advanced mission-critical drive systems and services for off-highway and industrial applications, headquartered in Lohmar near Cologne, Germany. WPG is represented in 75 countries with components and drive systems for agricultural, industrial, construction and mining machinery and employs more than 2,200 people worldwide. 

The merger of Comer Industries, listed on the Borsa Italiana, with WPG will create one of the world's largest suppliers of drive solutions in the agricultural sector, with an expected combined turnover of one billion euros in 2021.

ADVANT Beiten supported the transaction, which was completed in December 2021, in particular by carrying out legal due diligence, conducting a clearing procedure under the German Foreign Trade and Payments Regulation (Außenwirtschaftsverordnung) and assisting with German and Russian antitrust clearance.

Adviser to Comer Industries: 
ADVANT Beiten: Dr Christian von Wistinghausen (Lead Partner in charge), Tassilo Klesen, Dr Patrick A. Hübner, Lelu Li, Olga Prokopyeva (all Corporate / M&A, Berlin), Dr Klaus Kemen, Robin Maletz (both Real Estate, Berlin), Katrin Lüdtke, (Public Sector, Munich), Michael Ziegler, Petra Fendt (both Banking/Finance & Capital Markets, Munich), Christoph Heinrich, Cathleen Laitenberger (both Antitrust Law, Munich), Uwe Wellmann (Antitrust Law, Berlin), Susanne Klein (IP/IT, Frankfurt), Dr Nicole Hirschvogel (IP/IT, Munich), Julia Alexandra Schütte (Employment & Labour, Berlin), Christian Freiherr von Buddenbrock (Employment & Labour, Dusseldorf), Julia Meler (Employment & Labour, Munich).

ADVANT Beiten, Moscow (Russia) (for regulatory clearances under Russian law): Vasily Ermolin

ADVANT Nctm, Milan (Italy), NOBILI RTZ Legal

Adviser to WPG: Freshfields Bruckhaus Deringer LLP, Milan (Italy)

Media Contact
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Dr. Christian von Wistinghausen
Lawyer
ADVANT Beiten
Tel.: +49 30 26471-351
Christian.Wistinghausen@advant-beiten.com

In its judgment of 9 June 2021 (Case No, 3 Sa 82/21), the Regional Labour Court of Schleswig-Holstein clarified that claims to payment in lieu of leave which already accrued at the time the settlement is reached will normally be covered by an agreed financial settlement clause.

Facts of the case

In the case in question, an employee, whose employment had been terminated, sought the payment in lieu of leave (the existence of which was undisputed) after an action for protection against unfair dismissal resulted in a court-led settlement agreement. The plaintiff’s employment was terminated at the end of May 2020, effective at the end of June 2020. During the settlement negotia-tions in July 2020, the Parties agreed that the employment relationship fin-ished at the end of June 2020 – per the termination date. At the same time, the Parties agreed that with the performance of the settlement, “all claims from one party against the other arising out of or in connection with the employ-ment relationship” will be settled (so-called financial settlement clause). In addition, the Parties agreed that the monthly gross salary for June 2020 had to be properly calculated and paid. No specific rules were agreed for leave. The Employee, therefore, argued that he was still owed payment in lieu of the leave days that were not taken because the payment of the leave days formed part of his salary. The Employer refused to pay based on the financial settlement clause.

The judgement

The Regional Court of Schleswig-Holstein followed the Employer’s arguments. With the effective end of the employment relationship, the right to leave transforms into a claim to payment in lieu, as the possibility to grant leave extinguishes at this point. As the claim for payment accrued before the settle-ment agreement was concluded, the claim for payment in lieu of leave would be covered by the broadly interpreted financial settlement clause.

Practical consequences

The judgment should be welcomed. It provides legal certainty for a situation that frequently arises: the parties agree that the employment relationship terminated at a time in the past and the Employee still has untaken leave entitlements. In line with the agreed final settlement, the employer should be able to trust that the financial settlement clause will also cover all claims to payment in lieu of leave – already accrued. The clarification provided by the Regional Court of Schleswig-Holstein is that the claim to payment in lieu of leave could not, by nature, be part of the gross salary. The obligation to properly calculate the final salary in line with payroll accounting principles, therefore, did not apply.

When concluding a settlement agreement, you should therefore pay close attention to whether the agreed end date is in the past or the future. Care should be taken, particularly in the latter case, as possible claims for payment in lieu of leave might still arise. Under the judgment, a financial settlement clause will generally not cover such claims (see judgment of the Regional Court of Rhineland Palatinate of 28 April 2015 in Case No 8 Sa 580/14). In such cases, the employer and the employee should agree on the underlying facts and that the employee took their leave in natura.

Jonas Türkis

The article by Dr Dominik Sorber and Laura Anna Hagen was published in the online magazine LabourLawMagazine on 14 December 2021 and can be read here in full.

Risks when working remotely in another country

While working from home and remote working were the exception in many sectors until not so long ago, these working forms have become part of everyday life after one and a half years of the pandemic. Thanks to the technical conditions that have been created, employees – provided their position allows – can work from anywhere. Within a brief period, it’s almost become standard for employees to perform (part) of their work not just from home, but from anywhere they please. Employees are happy to use this freedom and have become even more creative about where they perform their work. Once the technical conditions were created and working from home was firmly established during the pandemic, there was a rapid increase in the number of employees who not only wanted to work from home but also wanted to work remotely in other countries, or who had already done so without authorisation. The reasons are numerous: the employee may not want to use additional leave to comply with quarantine obligations existing abroad, unless they are spending a longer period there with their family, or they may simply wish to work from a nice location in the south.

Few know and many overlook the fact that working from another country for a short period can have risks for the employer. In principle, remote working in another country raises the same issues as business trips and foreign postings. The most common issue is the application for and use of Form A1 for trips abroad but within the EU. It is often concluded that – in contrast to business trips or foreign postings - Form A1 is not necessary for remote working in another EU Member State because the travel is not at the initiative of the employer, but at the request of the employee.

The National Association of Statutory Health Insurance Funds (GKV Spitzenverband) and the German Liaison Agency Health Insurance – International (DVKA) provided clarity in a position paper issued in July 2021. Remote working in another company could constitute a posting under the European Regulation on the Coordination of Social Security Systems (Article 12 (1) of Regulation (EC) 883/2004). Simply the fact that the performance of activities in another country was at the initiative of the employee does not exclude a possible posting within the meaning of this Regulation if the criteria are fulfilled. As a rule, this will be the case with remote working in another country. For a posting to be assumed, the employee must have an employment relationship with the company in the home state and must still be subject to the German employ-er’s right to issue instruction. In the view of the National Association, this will be fulfilled in the case of remote work abroad whenever the employer agrees to the employee’s temporary stay in another country, accepts performance of the work by the employee and continues to pay the employee’s salary for the work. Ultimately, it does not matter whether the employer posts the employer to another country or whether the employee is (remote) working in another country at their own request.

Practical tip:
In general, Form A1 will still be needed where the employee is voluntarily working remotely in another Member State of the EU.

Intensification through the Directive on the posting of workers

Remote work in another country can also raise other issues that typically have to be complied with during business trips abroad. In specific cases, the “detection risk” might be lower when the employee is working on their laptop at a finca in the south rather than visiting a foreign customer or being “visible” on the foreign market. The rules based on the Directive on the posting of workers must be observed; these rules were significantly intensified with the reform of the Directive and its implementation in the Member States in July 2020. Accordingly, during the time spent in the other country, certain (minimum) employment conditions of the relevant country must be observed. As a rule, in the case of employees who are remote working in another country, there will be no problems with respect to their pay and leave entitlements. However, the provisions on working time and rest periods for the relevant location must be followed. The foreign authorities can check the compliance with and evidence of compliance with these rules. The difficulty for employees is often that they must know or find out what the rules in the relevant Member State are and demonstrably ensure that they have been followed during the time spent in that Member State by the employee.

Practical tip:
Employees who work remotely in another country should carefully document their working time. In the case of controls, Form A1 should be provided or at least made available to the authority quickly, together with other evidence of the employment conditions (employment contract, payslips).

Other points to be observed for travel abroad

Compliance with employment conditions also often requires compliance with an obligation to register; most EU Member States have now introduced this requirement for posted workers. However, the registration requirements are not uniform throughout the EU. There is also no uniform clarification on whether exemptions from this registration requirement apply for short-term remote working. This will generally have to be examined on a case-by-case basis. While some Member States don’t require registration for just a few days of work, in many Member States it is not easy to clarify whether a short period of (voluntary) remote work within the borders requires notification. Failure to clarify the issue with the local authorities means there will always be a risk of infringement.

Remote working in another country also raises tax law issues that must be observed. In particu-lar, there is a risk that this remote work will result in a permanent establishment in another country. Further issues can arise, such as when the employee uses certain programs for their work, while the agreed licence for use is restricted to use in a specific country or area. Residen-cy law issues might arise too, such as for third-country nationals, who are working in another country temporarily on the strength of a German work permit or visa, but also for German nationals who are working remotely in a country outside of the EU.

Challenges in practice

These topics are not new but just have a “new look”. Foreign travel for employees has always involved complex issues and high levels of energy and expense when preparing and implement-ing travel plans, especially when numerous employees within the company were concerned. Employers had to know the requirements in the relevant country and implement them. In some countries, it is difficult to simply establish what the legal requirements are. In addition, business trips and postings to another country often need to take place without much notice. Employers must also maintain an overview of any foreign travel. Even employees working remotely from another country will pose similarly large challenges for companies. Many companies often don’t know whether the employee is at home in Germany or working from another country for them. The administrative burden is high and often difficult to define.

Relief through legal tech solutions

This is where the further advantages of digitalisation of the working world become clear. Everyone is talking about legal tech solutions, which are designed to automate work processes and make them more efficient. Why not meet new (digital) challenges with new digital solutions? Given the significant administrative effort for companies, the issue of foreign travel for employ-ees is primed for a digital solution, perhaps more than any other issue.
Since last Autumn, the legal tech product “BBGO” (www.bb-go.de) has offered companies support when preparing and implementing business trips in and postings to another country. It allows companies to neatly administer and organise employee trips abroad. After entering posting data into the system for a specific employee, the user completes a list of questions tailored to the target destination. They then receive a checklist with the necessary To-Dos for the international trip. The product was recently awarded first place in the PMN Awards in the category “Legal Tech”.

Summary

It will be exciting to see how the digitalisation of the working world continues to develop in the future. While digitalisation can be a challenge for companies, it also yields new digital solutions that can significantly facilitate working processes.

Dr Martina Schlamp

The Regional Court of Braunschweig acquitted managers of VW in proceedings for a breach of trust concerning the payment of inappropriately high salaries to the works council mem-bers. This makes it clear: fixing a reasonable salary often proves to be a nearly impossible “gaze into the crystal ball”.

Facts of the case

In proceedings before the Regional Court in Braunschweig, two former board members and two upper-level HR Managers of VW AG were accused of approving the payment of inappropriately high salaries and bonuses to five high-level members of the works council. The accusation was breach of trust, partly in particularly serious cases. The prosecution estimated the damage to VW AG at more than five million euro. The public prosecutor argued that the four accused managers acted wilfully and knowingly in contravention of their duties by approving the payment of the inappropriate salaries to works council members. The main proceedings concerned in particular the salary of long-time works council chairman, Bernd Osterloh, who received 3.125 million euro. In the years where large bonuses were paid, his total salary even amounted to three-quarters of a million euro. Special proceedings are ongoing against the works council chairman for possibly aiding and abetting this breach of trust due to his high salaries.

The judgment

The LG Braunschweig acquitted all four defendants of the accusation of breach of trust. The Court could not see any criminal conduct that the defendant had to answer for and found that there was no evidence that the managers had acted with intent. The judges did not follow the line taken by the public prosecutor, who had argued for suspended sentences and fines in their pleadings.

Practical consequences;

Again and again, there have been discussions about reasonable salaries for works council members, especially when particularly sensational cases have been made public. Allegations quickly arise, that the company is trying to get the works council on their side by paying members high salaries and that the salaries make the works council much too close to the “Mighty”. Salaries of works council members are regulated under the Works Constitution Act (Betriebsverfassungsgesetz). According to Act, being a member of the works council is primarily an honorary office. The principle of no loss of pay applies, according to which works council members continue to receive their previous salary while performing their functions as members of the works council. The salary should also be adjusted to the level of comparable career development within the establishment. This is supposed to offset any possible eco-nomic disadvantages of taking up the office.
Yet therein lies the difficulty. The prohibition against discrimination and favouritism of works councils applies. The Works Constitution Act even provides for a separate offence, punishable with a term of imprisonment of up to a year or fines. Setting the “right” salary level is therefore a fine line because if the salary is too high, it might be considered favouritism and if it is too low, it might constitute prejudice. The necessary salary adjustment causes serious difficulties in practice. The salary that the relevant member of the works council would have received, had they not taken up a post on the works council, must be determined. That’s like looking into a crystal ball. If someone has been the chairperson of the works council for 30 years, it is almost impossible to determine how their career would have developed within the company without their position on the works council. Qualifications and skills acquired through the office may generally not be considered for the determination. Yet it is often argued when discussing an appropriate level of salary for the works council that the chairperson of the works council of a large company negotiates with the management “as an equal” and even exercises management functions.
Due to the difficulties and uncertainties when determining the salaries of the members of the works council and the simultaneous imminent (penal) consequences, the current legal provisions have long been considered inadequate and vague. One point of dispute in the proceedings before the LG Braunschweig was also whether there were sufficiently precise rules for the setting of salaries for members of the works council at all.

Practical tip

Companies are well-advised to clearly document the determination and adjustment of the salaries of members of the works council and to demonstrably define the group of compara-ble employees for each member of the works council. Moreover, no additional payments such as bonuses or benefits in kind should be paid solely to works councils if the same payments are not normally made to the comparable employees within the establishment.

Dr Martina Schlamp

"COVID-19" has shaped our everyday life for almost two years now. Short-time work, closed restaurants, lockdown in almost all industries, especially in retail; in short: many months that have clearly left their mark on education, professions, employees as well as employers. The issues surrounding COVID-19 are manifold; many blogs and newsletters document the range of topics and the development of the pandemic, cf. also this article. In a recent ruling, the German Federal Labor Court (Bundesarbeitsgericht - BAG) had to decide on the problem of whether the employer must also bear the operating risk in the event of a lockdown, i.e. the officially ordered closure of the business, and against this background also owes remuneration to an employee. The Court ruled that the employer does not bear the risk of the loss of work and is therefore not obliged to pay any remuneration to the employees under the aspect of the so-called default of acceptance.

Summary of Facts

The facts underlying this decision have the peculiarity that the plaintiff was employed as a marginal employee in a sales outlet of the specialized trade, and the business was closed due to official order because of COVID-19. For this group of employees, the legislator did not provide for any entitlement to short-time allowance, so that the plaintiff could not draw any income at all, not even a statutory replacement benefit. From the circumstances described, the court of lower instance, the Lower Saxony Regional Labor Court (Landesarbeitsgericht (LAG) Niedersachsen), drew two conclusions that were fundamental to the decision: The employer generally bears the operating risk in the event of official closures. The LAG did not weigh the risks of the employer and the employee. It did not examine the question of an "interference with the basis of the transaction" and an adjustment of the contract, although this is not far-fetched. The LAG Lower Saxony also states that the defendant did not examine the possibility of employment elsewhere in a job not affected by the closure. Finally, the employer also failed to show that its existence was endangered by the payment of compensation. The LAG provides the main reasoning in the final paragraph of the decision. The LAG places the burden of a legislative deficit on the employer, which in the opinion of the LAG consists in the fact that the employer had chosen a contractual arrangement with the marginal employment which, in contrast to employment relationships subject to social insurance, was not mitigated by the use of short-time work and benefits from the statutory unemployment insurance. This contractual arrangement by the employer is advantageous for it, which is why the operating risk on its side "mirrors" the remuneration obligation.

In summary: In the absence of statutory fallback solutions, employers also bear the risk of an official closure in cases such as the COVID-19 pandemic. This argumentation appears problematic as imposing the "legal loophole" on the employer by unilaterally assigning the risk leaves the ground of the interpretation of applicable laws and would in any case require a more profound argumentation than that of the LAG as judicial interpretation of the law.

The Decision

The BAG has taken a diametrically opposed view of the "legal loophole". The Court sees the legislator as having the duty to provide "adequate compensation for the financial disad-vantages (...) incurred by the employees as a result of the sovereign intervention." This cannot be transferred to the employers; they would have to bear the compensation obligation, but not the risk that would arise on the employee side due to gaps in the compensation system subject to social insurance and the lack of downstream claims - such as short-time allowance.

Practical Implications

The decision is likely to surprise large parts of literature, because - as Preis in the Erfurt Commentary (21st edition 2021, Sec. 615, marginal no. 132a et seq. with further references) - many participants in the discussion come to the conclusion that in cases of mutual "impossi-bility" of fulfilling their contractual obligations in the case of official measures, the employer bears the wage risk (loc. cit., marginal no. 132k). The latter is referred to claims for compensation under public law. The BAG expressly did not follow this view, but rather exonerated the employer from risks that had been realized as a result of the pandemic and referred to the legislator, who would have to provide a remedy for this case. No further argumentation can be inferred from the BAG press release available so far, so that it remains to be seen how the BAG has assessed the arguments of the lower courts in detail, in particular whether there will be an intensive discussion of the topic of "operational risk".

Practical Advice

For practice, no major conclusions can yet be drawn from the preliminary contents of the press release; if necessary, claims for repayment against employees are conceivable, insofar as employers have paid in these constellations. The ruling is likely to have significance for legal policy above all as it can be stated that the BAG considers the legislator to be under an obligation.

Dr Thomas Drosdeck

No right to work from home for employees

The District Court (Landesarbeitsgericht, LAG) of Munich (in a judgment of 26 August 2021 in Case No. 3 SaGa 13/21) held that employers can revoke a directive to work from home if operational grounds are later revealed that prevent employees from working from home. However, the (new) directive from the employer must be “reasonable”. In the case in question, the technical equipment at the employee’s residence was not compatible with that available and used in the employer’s offices. This resulted in problems with using and processing documents and data. In addition, the directive to work from home could be revoked because the employer was not using his own laptop but his wife’s. It therefore could not be shown which data protection measures had been taken to ensure that corporate data was sufficiently protected against attacks from third parties. The LAG Munich also held that there was no general legal right to work from home. It is common knowledge that the political parties could not agree on granting employees such a right, at least during the last legislative period.

In another case, the LAG in Cologne held (in a judgment of 12 April 2021 in Case No. 2 SaGa 1/21) that a requirement to wear a face mask while on the employer’s premises also applied to an employee who had a medical certificate exempting him from wearing a cover over his mouth and nose. In addition, the Court held that the employee had no right to work from home because he did not have the necessary technical equipment available at home. The employer was not required to take technical and organisational measures to enable the employee to perform his work from home.

Practical tip:
Employees do not have a general right to work from home. To avoid disputes, employers should always assess whether the employee’s tasks can be performed from home. This is not a question of whether the task could theoretically be performed from home, but a question of whether the requisite technical equipment is available and whether compliance with the data protection requirements can be guaranteed. Technical equipment should be made available to make it possible for employees to work from home. In particular, all equipment should conform to the necessary technical requirements. In other cases, an employee should be asked to show how he or she intends to work from home before any directive to work from home is issued. It will be interesting to follow the developments in a right to remote work through the legislature and see what this will mean specifically for equipment.

Special bonuses may only have repayment obligations in exceptional situations (“Corona bonus”)

The Labour Court (Arbeitsgericht, ArbG) in Oldenburg held (in a judgment of 25 May 2021 in Case No. 6 Ca 141/12) that a so-called repayment obligation clause with an agreed commit-ment period of 12 months is invalid where the corona bonus granted is EUR 550.00. A repayment clause typically provides that any special bonus paid by the Employer must be repaid if the employee terminates the employment relationship before a specific date. The Court based the invalidity of the clause on the fact that the foreseen lock-in period of 12 months unreasonably disadvantaged the Employee. In addition, the Court held that the repayment clause was invalid because the special bonuses were intended to only recognise company loyalty, but also honour the work that had already been performed. That is what the wording “one-off tax exemption relating to the Corona pandemic” implies. Accordingly, the bonus financially compensates employees and recognises the strain on them during the pandemic.

Practical tip:
The judgment of the Labour Court in Oldenburg confirms and consolidates the case law of Germany’s highest Court on special bonuses. If employers wish to grant a special bonus to honour company loyalty (and only company loyalty), the wording of the clause must be carefully considered. Avoid any formulations that give any indication that the bonus might also recognise performance because such wording would prevent the effective agreement of any repayment clause. The following rule of thumb applies to special bonuses, which only honour company loyalty and provide a repayment clause: in the case of small bonuses (up to EUR 100.00), it is not possible to effectively agree on a repayment clause. Repayment clauses may be agreed for bonuses of more than EUR 100.00 and up to the amount of one gross monthly salary, providing the employee is bound for a maximum of three months; where the bonus is equivalent to more than one gross monthly salary but less than two, the maximum lock-in period is six months.

Test requirement within the company

Employers can generally make access to company premises dependent on a negative corona test. This was confirmed by the Labour Court in Offenbach in summary proceedings (judgment of 3 February 2021 in Case No. 4 Ga 1/21). Under a works agreement, where the incidence rate was above 200, the employer restricted access to factory premises to those who could show a negative test. In its judgment, the Court held that the employer is required to protect employees from dangers to their life and health. In particular, under the Occupa-tional Safety Act, the employer has a duty in the current situation to take necessary measures to ensure occupational safety. The measure was also not inappropriate because the test requirements were reasonable for employees in light of the pandemic.

Practical tip:
Given the dynamic and changing course of the pandemic, employers must take into account the fact that circumstances have changed since the Labour Court in Offenbach issued its judgment. In the meantime, a considerable percentage of people in Germany are vaccinated. When adopting rules to protect the workforce, as much consideration must be given to this fact as to data protection and discrimination, especially in relation to unvaccinated employees.

Concerning the works council

The following two judgments must be read in light of the works council elections that will be held in 2022 and the complications that corona will cause for the selection of electoral committees and in the conduct of meetings of the workforce:

Invalidity of an election board appointed in the parking lot?

In summary proceedings, the Labour Court in Weiden (judgment of 18 December 2020 in Case No. 3 BVGa 2/20) deemed that an election board appointed during a spontaneous works council meeting held in the parking lot of the establishment was not invalid. The case concerned the planned initial election of a works council. After three election officials invited all workers to attend a meeting at the company offices to vote for the election board - posting a copy of a hygiene concept and notifying the employer – the Government of the Land put the state into partial lockdown. In the employer’s view, this prevented the works meeting from being held in the company offices. Consequently, the works meeting took place at the planned time, but was held in the parking lot of the establishment instead. The Labour Court in Weiden concluded that the appointment of an election board for a works council election can only be declared void in the case of very grave errors. The right to carry out works council elections is not suspended during the pandemic. The election must be possible without complications, and at the same time, the appointment must be subsequently voidable. Legally, this means that the election was initially valid. The result will be different only where the error in the election procedure is so serious that it results in invalidity. The election must then have “the stamp of invalidity all over it”. In that case, the election would be regarded as never having existed.

Practical tip:
The Courts have set a high hurdle for establishing the absolute invalidity of actions taken to prepare for an election. The duty of the employer to provide support continues to exist when the appointment of the election board is voidable. Otherwise, there would always be the danger that the election would be delayed and the establishment would be without a works council. Employers should take their duty to provide support seriously and fulfil this duty – as long as the invalidity is not obvious. Failure to fulfil this duty constitutes unlawful interference in elections and is punishable with imprisonment, §§ 20 (1) and 119 (1) of the Works Council Constitution Act (Betriebsverfassungsgesetz, BetrVG).

Facilitating online meetings of the works council

A judgment of the LAG in Berlin-Brandenburg (judgment of 14 April 2021 in Case No. 15 TaBVGa 401/21) looked at the prevention of meetings because of the pandemic. In a decision in summary proceedings, the Court held that the employer had to provide the hardware necessary for conducting video conferences. The employer did not have to give the works council money for procurement.

Practical tip:
The works council now has a right to be provided with certain requested materials. However, the employer does not have to provide the works council with the funds to acquire the goods. In light of the new rule in § 30 (2) of the BetrVG on the option of holding meetings via video and telephone conference, employers should provide the works council with sufficient resources upon request.

Claim for compensation where ordered to close by the authorities

Hot off the press is the first judgment of the Federal Labour Court (Bundesarbeitsgericht, BAG) dealing with the corona pandemic (judgment of 13 October 2021 in Case No. 5 AZR 211/21). At the previous instance, the LAG of Lower Saxony held that, in the case of an employee with a part-time position (mini-job) who claimed payment for work despite the fact that the authorities had ordered the shutdown of the establishment where she worked, the employer’s operating risk had been realised to the employer’s detriment. The BAG took a different view. Where an employer is forced to temporarily close its establishment due to the imposition of “lockdown” measures by the state to combat the corona pandemic, the employ-er is not, in the Court’s view, required to continue to pay the employee a salary under the principle of default in acceptance. As an explanation, the BAG stated that the employer does not bear the risk of a loss of working hours when, to protect the public against a severe and deadly disease resulting from a SARS-CoV-2 infection, authorities ordered social contact to be reduced to a minimum and nearly all non-essential facilities and establishments to close. This is not a case of a risk inherent in the nature of the specific establishment being realised. It is for the state to provide adequate compensation, where appropriate, for the financial disadvantages suffered by the employee due to the intervention by the state. If this is not guaranteed in the case of part-time employees, this would be due to a gap in the social security law system.

Practical tip:
The judgment of the BAG provides companies with legal certainty and financial relief. It should be remembered that this case concerns an exceptional situation –the “corona situation” – and cannot be directly applied to other facts that don’t involve the closure of establish-ments due to the pandemic. The general principle that employers bear the operational risks – e.g. in the case of natural catastrophes – can still apply. The full judgment (only the press release is currently available) might provide more information on to what extent the BAG specified the requirements for the employer’s operating risk in detail and which conclusions might be drawn for future cases.

Conclusion

Even if some judgments might seem controversial and the curious facts in some cases possibly suggest a particular meaning, the general overview does identify some commonali-ties: the Labour Courts were not led astray by the volatile atmosphere in the working world and remained true, in most cases, to the general principles established in the case law of the BAG. Accordingly, many judgments yielded logical results. Moreover, the well-founded argumentation of the Courts means that they have also provided effective equipment to soberly classify strange constellations in the future.

(Julia Meler, Asil Buruncayir)

Editor’s note:

Due to the large number of labour law cases concerning COVID-19, it was not possible to deal with all of them in this article. Some have already been commented on in past Newsletters (chronological):

Dismissals for operational reasons due to Corona: Judgment of the ArbG Berlin of 25 August 2020 in Joined Cases No. 34 Ca 6664/20, 34 Ca 6667/20, 34 Ca 6668/20 (Newsletter April 2020)

Obligation to wear compulsory face masks: Judgment of the ArbG Siegburg of 16 December 2020 in Case No. 4 Ga 18/20 (Newsletter April 2020)

"Corona-Cougher" as grounds for termination: judgment of the LAG Dusseldorf of 27 April 2021 in Case No. 3 Sa 646/20 (Newsletter June 2020)

Employer’s compensation claim in the case of a 14-day quarantine order: Judgment of the Administrative Court of Koblenz of 10 May 2021 in Joined CasesNo. 3 K 107/21.KO and 3 K 108/21.KO (Newsletter June 2020)

The Employer trades in sewing machines and accessories. He operates a branch where the Employee has been working as a marginal part-time worker (geringfügig Beschäftigte) in sales since October 2019. The branch was closed during the month of April 2020 by general order of the city of B. dated 23 March 2020 due to the coronavirus pandemic. If this had not been the case, the Employee would have worked earning a net remuneration of EUR 432.00. The Employee claimed this amount as so-called remuneration in the case of default in acceptance (Annahmeverzugslohn). She is of the opinion that the closure of a branch by official order due to the coronavirus pandemic constitutes a case where the Employer must bear the operational risk.

The lower courts have granted the claim. They argued that the provisions regarding remuneration in the case of default in acceptance referred to all circumstances where the Employer was not able to provide the necessary work equipment either for factual or legal reasons. Pursuant to Sec. 615 sentence 3 of the German Civil Code (BGB) the Employee may demand the agreed remuneration for the services not rendered as the result of the "default" without being obliged to provide cure if the Employer is in default in accepting the services. A default is defined as the Employer not accepting the work performance offered to them. Making an offer is not required, for example, if the Employer closes a shop due to an official order. The courts also argued that the general order of the city of B. had only banned opening retailers to the public. Thus, it would have indeed been possible to assign other reasonable tasks to the Employee. The courts believed that this situation came close to the general commercial risk borne by the Employer.

"Whenever it is not possible for the employer to respond to business closures with shorttime work (Kurzarbeit), it needs to be determined who will bear the risk regarding remuneration," says Dr Wolfgang Lipinski, a licensed labour law specialist, Partner and practice group head at the international corporate law firm ADVANT Beiten. "This is true, for example, for all marginally-employed workers like in this case. As they are not subject to social security contributions, they may not be paid short-time allowance (Kurzarbeitergeld)," the lawyer continues. "Should the Federal Labour Court negate the realisation of general life risks in this case, it thus takes the side of the employees and imposes the risk regarding remuneration on the employers as part of their business risk. 

This means that entrepreneurs should take special precautions for future cases of business closures due to the coronavirus pandemic. Provisions set forth in employment or collective agreements could avoid such costs for continued remuneration in the future. However, these stipulations need to be laid down meticulously so that they may later be upheld by a court of law," Lipinski emphasises.

Dr Wolfgang Lipinski is a Labour Law Specialist and a Partner at ADVANT Beiten. He is the head of the Labour & Employment Law practice group comprising approx. 65 lawyers and available for interviews and guest contributions.
 
Contact
Dr Wolfgang Lipinski
Phone: +49 89 35 065-1133
Email: Wolfgang.Lipinski@avant-beiten.com

Public Relations (Labour & Employment Law)
Markus Bauer
Phone: +49 89 35 065-1104
Email: Markus.Bauer@advant-beiten.com

"Congratulations to our interdisciplinary team around the trio in charge - Michaela Felisiak, Martina Schlamp and Markus Schulz - on this great success! Being nominated was already a great recognition, and having won the award fills us with pride and joy", says Philipp Cotta, Managing Partner of the law firm ADVANT Beiten.

The PMN Management Awards have honoured innovations in management and business services by commercial law firms and multidisciplinary law firms from Germany, Austria and Switzerland since 2009. There are Awards in seven categories. In addition to domain categories such as Communications, Legal Tech, Human Resources and Business Development, young, unusual law firm start-ups are honoured in the Newcomers category. An experienced and independent jury discusses all entries and selects the winners.

The laudatio at the award ceremony commented: "For companies, it is a bureaucratic nuisance: the A1 certificate. Since 2019, it has to be issued to employees when they travel to another EU country on business. It gets even more complicated when your own people travel or are posted for longer periods. Many HR departments are taking stabs in the dark - quick, expert and cost-effective advice is needed.This is where Beiten Burkhardt comes in with its digital tool "BBGO" to help companies with postings abroad in a clear and legally secure manner. (...) BBGO helps create templates. They offer HR departments (...) security for postings abroad. For the HR manager, the formerly complex task becomes a matter of a mouse click."

Media Contact

Dr Martina Schlamp
Lawyer
ADVANT Beiten
+49 (89) 35065 – 1127
Martina.Schlamp@advant-beiten.com

Markus Bauer
Head of Labour Law Marketing (Practice Group Labour and Employment Law)
ADVANT Beiten
+49 (89) 35065 – 1104
Markus.Bauer@advant-beiten.com

The legal future of personnel secondments by public-sector companies is uncertain. The BAG has referred the question of whether personnel secondments - which are particularly common in the hospital sector - are compatible with the European Temporary Employment Directive 2008/104/EC to the European Court of Justice (ECJ).

Facts

Employer and employee dispute before the BAG about the validity of a personnel assignment. Since 2000, the employee has been employed in the mailroom of a public hospital operator under private law. This area was outsourced to a hospital-owned service company in June 2018. Since the employee objected to the transfer of his employment relationship to the service company, he has since been seconded by the employer to the service company - without any time limit - and continues to perform his duties there unchanged. The collective agreement for the public sector applicable to the employment relationship (TVöD) expressly provides for the possibility of secondment:

"Section 4 (3) sentence 1 TVöD: If employee tasks are transferred to a third party, the work performance owed under the employment contract shall be performed at the third party at the request of the employer while the employment relationship continues to exist (personnel secondment)."

Despite the clear provision in the collective agreement, the employee believes that he is not obliged to work for the service company. The provision of personnel would in fact be a case of employee leasing. This is inadmissible because the hospital operator does not have a permit for the transfer of employees and the secondment is intended to be permanent. The employee considers the exemption provision in Section 1 (3) No. 2b of the German Temporary Employment Act (AÜG), which largely exempts personnel secondments from the strict regulations on employee leasing, to be contrary to European law.

The decision

After the lower courts had rejected the claim, the BAG now referred the central legal issues of the case to the ECJ. The ECJ must therefore decide whether the provision of personnel under Section 4 (3) of the TVöD - other collective agreements in the public sector provide for similar rules - is subject to the European Temporary Employment Directive 2008/104/EC. If this is the case, the ECJ will have to answer the further question of whether the scope exception of Section 1 (3) No. 2b of the German Temporary Employment Act (AÜG), which is anchored in national law on the supply of temporary workers, is compatible with the Temporary Employment Directive 2008/104/EC.

Consequences for the practice

The referral to the ECJ by the BAG poses considerable risks for the current model of personnel secondment, which is widespread among public-sector companies. Since the former jobs with the employer have been eliminated, the personnel secondments are, according to the collective bargaining regulations, designed for the long term - and not only for a temporary period, as is the case with employee leasing (temporary employment). If the existing exemption in Section 1 (3) No. 2b AÜG were to be declared contrary to European law by the ECJ, this would fundamentally call into question the current practice of personnel secondment.

Practice tip

As long as the current exemption for personnel secondments has not been declared contrary to EU law, personnel secondments based on a collective agreement of the public sector can be continued and even new personnel secondments can be ordered. However, employers must be prepared to end this practice if the courts actually "overturn" the scope exception in Section 1 (3) No. 2b AÜG. In these cases, employers who have previously provided personnel to third-party companies will not be able to avoid terminations for operational reasons. These terminations were precisely to be avoided by the collectively agreed instrument of personnel secondment. It is hoped that the ECJ and BAG will keep these serious consequences in mind in their further decisions.

Michael Riedel

In the case underlying the ruling, several thousand female employees who mainly worked as sales assistants sued Tesco. Relying on the principle of equal pay laid down in Art. 157 TFEU (Treaty on the Functioning of the European Union), they claimed that they were entitled to the same remuneration as male sales staff. The fact that the sales employees work in sales centers and thus in different operations does not preclude this. Rather, the decisive factor was that the activities of the female sales staff were to be regarded as at least equivalent to those of the male sales staff. Tesco, however, took the view that the principle of equal pay only applied to the same work but not to work of equal value. The ECJ ultimately followed the plaintiffs' argumentation and ruled that employees can directly invoke the EU principle of equal pay even in the case of work of equal value. In doing so, the ECJ clarified that only those wage conditions that can be "traced back to one and the same source" are comparable. Such a source in the sense of a uniform responsibility is at least also possible in the case of different operations of a company. In concrete terms, this means that employees may at least invoke and compare the principle of equal pay across operations, i.e. throughout the company. Whether the activities of the female sales staff and those of the male sales staff in the case of Tesco are actually equivalent must now be clarified by the Watford Labor Court.

The ruling is also likely to attract attention in Germany. The general requirement of equal pay for work of equal value is generally recognized under German law with regard to Article 3 of the German Constitution (Grundgesetz, GG). However, while the prohibition of discrimination in pay on the grounds of gender has already been implemented in national law with the introduction of the German Equal Pay Act (Entgelttransparenzgesetz), the general requirement of equal pay is still not established in simple law. In particular, it has not yet found explicit expression in the German General Equal Treatment Act (Allgemeines Gleichbehand-lungsgesetz, AGG). The ruling has thus provided clarity to the extent that the requirement of equal pay is now also secured under EU law. Any doubts in the interpretation of Article 3 GG and the AGG may thus be eliminated. Whether the principle of equal pay applies not only throughout the company but also throughout the group remains unclear, though, even after the ECJ ruling.

Jonas Türkis

For infection prevention and control, two female employees suspected of being infected were ordered to self-isolate. Subsequently, the employer applied to the state of Rhineland-Palatinate for reimbursement of compensation payments which it had made to its employees for their loss of earnings during the period of isolation, as well as for social security contributions. The state only granted reimbursement for the period from the sixth day of self-isolation, stating that the employees had a claim against the employer for continuation of pay for the first five days of isolation. The employer filed an action, arguing that in case of a quarantine lasting longer than five days, the period of absence could no longer be considered relatively inconsiderable, as provided for in section 616 of the German Civil Code (BGB). If the inability to work lasted for a considerable period of time, the claim for continuation of pay would not apply at all, i.e. also with respect to the non-considerable period of time ("all-or-nothing principle").
The administrative judges in Koblenz did not agree and dismissed the action on the following grounds: Although it is true that an employer who continues to pay wages and social security contributions in the case of self-isolation has a claim for reimbursement of these payments under the German Infection Protection Act. However, this was not the case if the employee was entitled to continuation of pay by the employer despite the employee's inability of work. Pursuant to section 616 sentence 1 BGB, an employee is entitled to continuation of pay if he or she is prevented from performing his or her duties for a relatively inconsiderable period of time through no fault of his or her own. This was the case here. The official self-isolation orders, which were issued on the basis of a suspicion of contagion, were an obstacle to performance on their part. In addition, the period of inability to work for six or fourteen days, which had occurred as a result of the self-isolation, was still a relatively insignificant period. In order to assess the significance, primarily the proportion of the years of employment or service to the duration of the inability to work is relevant. With a duration of employment of at least one year, an inability to work of a maximum of fourteen days as a result of a self-isolation was generally still to be considered an insignificant period. This result did further not need to be corrected for reasons of reasonableness in the case discussed. The risk of having to continue to pay the employee's wages for a fortnight during a quarantine of a maximum of fourteen days in the case of an employment relationship lasting at least one year was generally calculable for the employer. Since the employees of the employer had already been employed by the employer for considerably longer than one year, they were therefore entitled to continuation of pay. This precluded the employer's claim for compensation. The parties have the right to appeal against both decisions, which has been admitted due to its fundamental importance.

(Source: press release of the Administrative Court of Koblenz of 1 June 2021)

The LAG did not share this view (dated May 6, 2021 - 5 Sa 1292/20; preceding ArbG Emden dated November 9, 2020 - 2 Ca 399/18). The judgment of the ECJ dated May 14, 2019 - C-55/18 ("time recording") has no significance for the burden of presentation and proof in the lawsuit concerning overtime hours with regard to the question of order, acceptance, or operation necessity of overtime hours. The ECJ has no competence related to the decision on issues of remuneration. Therefore, the employer has not established the requirements for a claim for overtime payments. The LAG has allowed an appeal to the Federal Labor Court.

(Source: press release of the Higher Labor Court of Lower Saxony)

(Source: press release of the ArbG Berlin dated May 18, 2021)

The employee had been employed by the employer as an EDI (Electronic Data Intercharge) manager since 1996. In April 2019, the company had hired a colleague who had previously worked for the company as a working student. While she was working as a working student, the employee had once grabbed her shoulders from behind, whereupon she had told him to stop. During a two-day team retreat at the end of September 2019, at the hotel bar in the evening, the employee tried several times to put his jacket on his colleague despite her expressed refusal.  This prompted another employee who was present to ask him to stop. Later, he followed his colleague on the way back from the hotel bar to her room, although - when he declared that he wanted to come to her room   she had refused. In front of her room, he pulled her towards him and tried to kiss her. After the colleague pushed him away, he pulled her towards him again and actually managed to kiss her. The colleague pushed him away again, opened her room door, quickly went inside, and locked the door. In a subsequent WhatsApp message, he wrote to her that he hoped she was not angry with him. After the colleague reported the incident to her supervisor, the employer terminated the employment relationship without notice, alternatively with due notice, after hearing the employee. The Cologne Labor Court dismissed the complaint against this dismissal after taking evidence by hearing several colleagues. The Cologne Higher Labor Court (LAG) confirmed this decision in the appeal proceedings. In particular, there was no need for a warning, as it must have been obvious to the employee that he had crossed a red line with the sexual harassment, which made it intolerable for the employer, whose obligation it was to protect its female employees from sexual harassment, to continue the employment relationship.

(Source: press release of the Higher Regional Court of Cologne of April 1, 2021)

(Source: press release of the des LAG Berlin-Brandenburg dated April 14, 2021)

(Source: press release of the North-Rhine Westphalia Regional Social Court)

Establishment and election of the works council

According to the explanatory memorandum for the WCMA, the legislator assumes that many companies, particularly small ones, deliberately decided not to establish works councils. The high formal standards for establishment were supposedly a disincentive. The WCMA reduces the obstacles by allowing the simplified election procedure under § 14a of the Works Constitution Act (Betriebsverfassungsgesetz, BetrVG) to be used in works with up to 100 employees (rather than up to only 50 employees, as is currently the case). The simplified election procedure has shorter time limits to expedite the overall election. In works with 101 to 200 employees, the election committee and the employer can agree to use the simplified procedure as an alternative to the normal election procedure. The time limits applicable to the election procedure are also reduced. To encourage more employees to run for a position on the works council, the WCMA reduces the number of necessary supporting signatures for a list of candidates.
Another change concerns the right to challenge a works council election, a difficult, time-consuming, and expensive process in practice: where the challenge is based on the falsity of the electoral roll and the challenger failed to use the available legal avenues to clarify such an election flaw, the right to challenge the election is limited in favour of legal certainty.

Youth and trainee representatives (YTR)

The election procedures for YTR have also been simplified. The maximum age limit has been abolished to encourage trainees to become involved; instead, the status of the employee as a trainee will be decisive.

Special protection against dismissal

The Act Against Unfair Dismissal (Kündigungschutzgesetz, KSchG) already contains rules providing special protection against unfair dismissal for various groups of people who are involved in the works council election. The WCMA additionally provides that those employees who are responsible for inviting others to a works council election or appointing an election board may not be dismissed from the point of time of the invitation or appointment until the results of the election have been announced (§15 (3a) Act Against Unfair Dismissal, revised version).

Remote working and working from home

The rules introduced by the WCMA on remote working and working from home are the most significant. Sections 30 to 34 of the Works Constitution Act (revised version) provide the option of meetings of the works council to be held via video or telephone conference in accordance with the framework – to be established by the works council itself - while face-to-face meetings are still preferred. In addition, the new law clarifies that a qualified electronic signature can be used in the future to conclude works agreements. Both the works council and employers should welcome these changes as they facilitate cooperation and the work of the works council.
A key element of the WCMA is the introduction of a new co-determination right concerning arrangements for remote working, established in § 87 (1) No. 14 of the Works Constitution Act. This new right is designed to promote remote working and protect workers when performing their duties from a home office. The precise wording of this new rule should be observed. The co-determination right concerns the arrangements for but not the introduction of remote working. In contrast to other co-determination rights in social matters, the works council does not have a right of initiative that would enable it to request that remote working be allowed. This wording took some of the sting out of the new rule; originally, the proposed new right was much broader.

Artificial intelligence

Artificial intelligence has become increasingly significant with the advance of digitalisation of the working world. The WCMA establishes that the co-decision rights of the works council concerning the planning of procedures and workflows continue to apply where there are plans to use artificial intelligence, such as algorithm-based decision-making systems. The works council must be informed of these plans and consulted on the measures and their effects on employees. The co-decision rights for the establishment of selection guidelines pursuant to § 95 of the Works Constitution Act continue to apply even when they are developed exclusively or partly with the support of artificial intelligence; without the approval of the works council, these guidelines cannot be implemented. If you have ever experienced works council negotiations on technical items, you will know that these discussions are likely to cost companies both time and money. What’s more: the works council can consult an expert for information and communications technology – a rule that is likely to be met with little enthusiasm from the company due to the already high costs for advisors for the works council.

Continuing education

Qualifications are vitally important especially in light of digitalisation, but also with respect to ecological and demographical change. To take this into account, the WCMA strengthens the rights of the works council concerning continuing education and extends the works council’s general right of initiative in vocational training to include the option of involving the conciliation board. If the works council demands, for example, that training measures be provided for certain programmes or tools and the employer disagrees, the conciliation board can help both parties reach a compromise, such as on the duration of the training and the participants.

Data protection

The new version of § 79a of the Works Constitution Act contains a clarifying provision on the responsibility of the employer under the General Data Protection Regulation when the works council processes personal information. According to this provision, the employer remains responsible for the data processing within the meaning of data protection law. More specifically, this means that the employer’s liability also extends to possible data protection infringements committed by the works council.

Summary

Given the increasing digitalisation of the working world, the amendments to the Works Constitution Act were definitely necessary. As a whole, the new provisions introduced by the WCMA can also be viewed as moderate, even if they are associated with increased costs. Only those works councils that prefer to delay taking decisions and adopting resolutions for tactical reasons are unlikely to welcome the use of modern technology to facilitate their work. The future will show whether the extension of the simplified election procedure to works with up to 100 employees or in certain cases up to 200 employees will have the desired effect of more works councils being formed.

Dr Thomas Lambrich

An employee may be dismissed with immediate effect when he deliberately coughs on a colleague at close range and remarks that he hopes that the colleague catches the coronavirus.

Facts of the case

The employer accused the employee in question of repeatedly failing to comply with the hygiene measures in force in the workplace, such as covering the mouth and nose when coughing or sneezing and maintaining a safe distance. Previously, the employee indicated – according to a further allegation – that he “did not take seriously” the operational measures to counteract the coronavirus. Finally, the employee coughed on a colleague at close range and said something like, “Chill, you won’t get the coronavirus.” The employer issued an extraordinary notice of termination of employment with immediate effect. The employer did not know whether the employee was infected with the coronavirus when it issued the notice of termination.

The judgment

The employee brought an action against unfair dismissal and presented different facts to those alleged by the employer. He claimed that he felt a tickle in the back of his throat on the day in question and suddenly had to cough. He claimed he maintained sufficient distance from his colleague. The Regional Labour Court found for the Plaintiff. The employer was unable to prove a breach of duties in the specific case. As the employer has the burden of proof for a ground for dismissal, this failure was to the employer’s detriment.

Consequences for practice

Those who disregard hygiene rules within the company risk consequences for their employment. The Regional Labour Court emphasised that the facts outlined by the employer – assuming they were true – could in principle justify the termination of the employment relationship with immediate effect. Those who intentionally cough on a colleague at close range in the hope that they catch the coronavirus will be in breach of the duty to treat colleagues with consideration inherent in the employment relationship.

Practical tip

The judgment is an example of the potential new conflicts in the employment relationship arising due to the corona pandemic. Depending on the severity of the infringement of the hygiene rules, the reaction can be anything from the issue of a written warning to extraordinary termination of employment. Employers are therefore well-advised to document all infringements of the hygiene rules in detail to be able to prove the conduct in the event of any dispute.

Anne-Kathrin von Dahlen

Even if an employee is unable to perform his duties because he or she is subject to a quarantine order, the employer will not normally be justified in dismissing the employee where the written confirmation of the order can only be submitted after a delay.

Facts of the case

The employee worked as an installer for the employer, a master roofer. When the letter of dismissal was issued, the employee had worked for the employer for less than six months.
The employee had had contact with someone who was infected with the SARS-CoV-2 virus and was ordered to isolate at home by the health authority. As a result, he was not able to report for work. The employer demanded the employee present the quarantine order. When the employee rang the health authority to inquire about a copy of the order, the health authority promised to send it, but it had not arrived so that the employee did not yet have anything present to his employer as proof. The employer doubted the truth of the information provided by the employee and terminated the employment relationship with immediate effect.
The Act against Unfair Dismissal did not apply as the employee was still in the waiting period and the employer employed fewer than ten workers. Accordingly, the termination did not have to comply with the strict requirements of the Act against Unfair Dismissal.

The judgment

The Labour Court in Cologne still held that the dismissal was invalid because it went against public policy and good faith within the meaning of §§ 138 and 242 of the German Civil Code (Bürgerliches Gesetzbuch) and was therefore arbitrary. According to the Court, the dismissal was based on non-objective motives, as evidenced by the fact that the notice of termination was issued shortly after the quarantine order.

Consequences for practice

The judgment does not introduce anything innovative. Where the Act against Unfair Dismissal does not apply, the employer does not need grounds for dismissal to terminate the employment relationship unilaterally. However, as the Labour Court in Cologne correctly decided, the dismissal may still not be arbitrary. The German Federal Constitutional Court held in 1998 that even where the Act against Unfair Dismissal does not apply, the dismissal must still respect “a certain degree of social consideration” (Judgment of the Federal Constitutional Court of 27 January 1998 in Case No. 1 BvL 15/87).

Practical tip

The pandemic has shown that many, which fall outside of the legal framework, still require both employers and employees to exercise a degree of judgment. An employer should have some understanding in the case of a quarantine order when the employee is not able to immediately provide evidence of the order from the relevant health authority. The health authorities have reached their limits during the pandemic so that even employers should exercise some patience in the circumstances instead of immediately calling the information provided by the employee into question.

Ines Neumann

An employer may refuse to continue to employ an employee where– as documented by a medical certificate – the employee is unable to wear a face mask. The employee is unfit for work in this case.

Facts of the case

The Defendant employed the employee as an administrative clerk at the municipal town hall. In a letter of 6 May 2020, the Municipality issued an order requiring all visitors and employees to wear face masks on the town hall premises. The employee presented two medical certificates which released him from the obligation to a wear face mask of any kind. The municipality did not want the employee to work at the town hall if he was not wearing a face mask. In an application for an injunction, the employee sought an order allowing him to continue employment at the town hall without having to wear a face mask; alternatively, he wanted to be allowed to work from home. The Labour Court rejected the employee’s application. The employee appealed this decision.

The judgment

The appeal was unsuccessful. According to the Regional Labour Court, the employee had no right to force the municipality to tolerate him working in the town hall without wearing a cover over his mouth and nose. Under the Ordinance on the Protection against the Risk of Infection with the Coronavirus of the Land of NRW (Coronaschutzverordnung) applicable since 7 April 2021, a face mask requirement applied to the town hall of the municipality. The SARS-CoV-2 Worker Protection Regulation (SARS-CoV-2-Arbeitsschutzverordnung) of 21 January 2021 also imposed an obligation on employees to order the compulsory wearing of face masks to provide the best possible protection for employees. In addition, according to the Regional Labour Court, this order was covered by the right to issue directives. Wearing an FFP-2 mask serves to protect employees and visitors to the town hall as well as the employee himself from infection. If the employee has a medical certificate that he is not able to wear a mask, the employee is unfit for work and therefore not employable.
In this case, the Regional Labour Court also held that the employee did not have a right to be allocated to another position that he could still perform, such as one where he could work from home. At least some of the employee’s tasks had to be performed at the town hall. Performing some of his work from home would not fully counteract the fact that he was unfit to work so that a home office solution could not be offered at that time.

Consequences for practice

The obligation to wear a mask at work (by law, regulation, or order) will continue to raise questions. In principle, it is possible to release an employee from the obligation to wear a mask in a specific case. However, this is insufficient to establish a right of an employee to continued employment at the workplace without wearing a face mask. The judgment makes it clear that the employer has a significant duty of care towards other employees, which, in the case of doubt, takes precedence over the individual’s right to employment. In addition, it is important to bear in mind that employees – depending on the specific case – could be considered unfit for work if they have a medical certificate which exempts them from complying with the order to wear a mask in the workplace and are also unable to perform their duties from home, with the consequence that they have a right to continue to receive their salary for a period of six weeks. If the requirement to wear a face mask in the workplace is likely to remain for the foreseeable future and there is no medical treatment or therapy that is likely to make it possible for the employee to wear a mask, the issue of a notice of termination of employment on personal grounds could even be considered in the specific case.

Practical tip

Where an employee presents a medical certificate exempting them from wearing a face mask, the employer should first assess the specific content of the medical certificate and what it actually covers. If the certificate plausibly shows that the face mask cannot be worn for medical reasons, the employer should consider whether the employee in question could perform his or her duties from home. Where this is not the case, it might also be possible to make some modifications within the workplace to safeguard against infection. However, the employer is not required to create a new position for the employee. If an employee refuses to wear a face mask in the workplace without a (sufficiently reasoned) medical certificate, it is possible to place the employee on leave without pay. In addition, a written warning can be issued and, where the employee continually refuses to wear a face mask, termination of the employment relationship can even be considered.

Nadine Radbruch

The constant performance of numerous minor contracts (“microjobs”) by a user of an online platform (“crowdworker”) based on a framework agreement concluded with the platform operator (“crowdsourcer”) can, as a whole, be viewed as an employment relationship in accordance with § 611a (1) fifth sentence of the German Civil Code (Bürgerliches Gesetzbuch) when the crowdworker is required to perform the services him or herself, the activities to be performed are relatively simple and how the tasks are to be conducted is prescribed and the crowdsourcer controls the award of the contracts and use of the online platform.

Facts of the case

Crowdworking is a form of work that has become increasingly important over the last few years. Companies offer “jobs” via an internet platform. Those interested in a job can then offer their services via the same platform. The scope of activities varies widely, from writing texts to testing software and even to controlling activities or quality management. The contracts normally stress the independent nature of the crowdworker’s work and exclude the existence of an employment relationship.

After some discrepancies from companies, a crowdworker did not receive any more contracts and his account was deleted. He brought an action for a declaration that an employment relationship had been established for an indefinite period and sought remuneration and holiday pay. He complemented his claim with an action against unfair dismissal after receiving a notice of termination from the defendant during the legal proceedings as a precautionary measure in case the Court held that an employment relationship had been established. Like the Labour Court in Munich before it, the Regional Labour Court (LAG), also in Munich dismissed the case and held that no employment relationship existed. The Federal Labour Court (BAG) largely reversed the decision of the LAG Munich and referred the case back to the LAG in part. The essence of the judgment: crowdworkers can be employees.

The jobs in question concerned the performance of checks on the way branded goods were presented in retail or at petrol stations. The “crowdworker” accessed a website operated by the client and, in combination with an app, checked the way the goods were presented in the stipulated markets and provided the information to the client. The whole contractual relationship was transacted via the app, from the description of the work to the acceptance of the job. Payment was made via PayPal. The foundation for the work was a so-called “Basis Agreement” which essentially provided that the contractor could select which of the available jobs to take, but did not have to take any. The agreement also did not contain any stipulations about the place of work or working time, and the contractor was entitled to employ staff or sub-contractors. This Basis Agreement was supplemented by “General Terms and Conditions,” which contained a bonus payment rule. Contractors gained so-called experience points to achieve a higher “user status,” which made it possible for them to apply for a greater number of higher value contracts, resulting in higher pay. The General Terms Conditions explicitly provided that the contractor was not bound by instructions and no employment relationship had been established. Effectively, the performance of the contract involved the company providing the contractor with the opportunity to accept jobs on the company website and through an app accessed via his own smartphone. The app contained a GPS that could access the user’s current position and geographically limited the location of jobs. It also ensured that the contractor visited the correct target, in short: it was also used for control. In this case, the crowdworker completed around 3,000 jobs between February 2017 and April 2018, generating on average 15 to 20 hours of work per week. In April 2018, the Defendant informed the contractor that he would not be offered any more contracts and that his account would be deleted.

The crowdworker brought an action seeking a declaration that an employment relationship for unlimited duration had been established, together with a claim for further employment and the payment of lost remuneration. The was extended to include a claim for protection against unfair dismissal once the crowdworker received a notice of termination during the litigation. The LAG in Munich rejected the employee status: the Court stressed the fact that the Claimant was not obliged to take jobs but was free to choose when and which jobs he accepted.

The judgment

The BAG took a different view. The company had designed the platform so that the crowdworker could not freely decide of the place, time or nature of the job, but could only accept a bundle of jobs, which had to be completed within a prescribed time period and in line with the instructions for performing checks on the relevant retailers and petrol stations. The incentive system also supported a view of personal and economic dependence because the crowdworker was forced to take several jobs in order to coordinate them and obtain a higher hourly rate.

Consequences for practice and practical tips

Declaratory provisions, such as those here which sought to rule out an employment relationship and state that the crowdworker could work without instructions, are little help for contractual design. To provide both parties with legal certainty about the status, both the agreement itself and any practical implementation must provide either as little information as possible or further information about the time and place and personal performance of the activities. Even in light of the judgment of the BAG, awarding a high volume of contracts to a crowdworker reinforces the personal and economic dependence and is decisive as a criterion for employee status. In this respect, it is recommended that employers or platform operators implement maximum limits for the award of contracts. Finally, we recommend that you include provisions, which have at least an indicative value in the case of a solo contractor, and provide that the contractor is not economically dependent on the repeated award of contracts but that crowdworking is only a “side job” and/or the contractor is active on multiple platforms so that their reliance on one platform is eliminated.

Dr Thomas Drosdeck

What specific changes does the draft introduce?

The BMAS “overshoots” when implementing the guidelines set out in the Coalition Agreement: in addition to the foreseen amendments, the draft bill introduces a requirement to expressly specify affected fundamental rights (so-called “Zitiergebot”) and a requirement on the employer to provide information to employee representatives. The new law could enter into force on 1 January 2022. More specifically, the draft proposes the following changes to the Part-time and Temporary Employment Act (Teilzeit- und Befristungsgesetzes, TzBfG) and the Third Book of the Social Code (SGB III):

• Fixed-term employment contracts without objective grounds for their temporary nature will only be permissible for a total duration of 18 months (until now: 24 months); only one extension will be permissible within this period (until now: three).
• If an employee1 initially worked for the same employer as an agency worker, a subsequent fixed-term employment contract without objective grounds will only be permitted where the total period does not exceed five years (the prohibition against “previous employment” does not prevent the conclusion with the agency worker of a subsequent fixed-term employment contract without objective grounds as the prohibition does not apply to prior employment as an agency worker). This does not apply where more than three years have elapsed between the last post with the company as an agency worker and the planned start of employment with the company.
• While the new statute will limit the powers of parties negotiating collective bargaining agreements to deviate from these rules, the right to deviate is maintained. The maximum duration of a fixed-term agreement without objective grounds can be extended by collective bargaining agreement to a total of 54 months and can be extended a maximum of three times.
• Companies which generally have more than 75 employees will only be able to conclude fixed-term contracts without an objective ground with a maximum of 2.5% of employees. For the calculation:
  • Determining whether the threshold of 75 employees is met: Employees means all employees employed by the employer (not the work), including agency workers (if these are normally employed), except for trainees. A pro-capita basis applies for the determination (not an FTE view);
  • Determining the 2.5% rate: This applies both to temporary contracts without objective grounds for new employees and to the extension of existing fixed-term contracts. The basis is the employer and not the work. At the time of the agreed start of work (or on the first day of the extension), the percentage of fixed-term employment contracts without objective grounds should be below 2.5%. The first calendar day of the preceding quarter is decisive for the calculation of this share. The percentage calculated on this day will not change until the first day of employment. Only those employees, whose employment agreements are concluded or extended after the law enters into force and whose employment the employer has designated as temporary without objective grounds will be included in this calculation (see more about the requirement to expressly specify affected fundamental rights, below), regardless of whether the fixed terms are effective;
  • Where the 2.5% rate is exceeded, all subsequent fixed-term contracts without objective grounds will be treated as if they were concluded as permanent contracts. The employer bears the burden of proving that it did not exceed this 2.5% rate;
  • It should also be possible for the works council to monitor whether the 2.5% rate was respected. On the first day of each quarter, employers will be required to provide employee representatives with the rate of fixed-term contracts without objective grounds.
• In the future, employers will be required to indicate in writing whether the agreement is a fixed-term employment agreement without objective grounds and, where this is the case, to indicate the statutory norm on which the fixed-term is based (so-called Zitiergebot). If such information is missing, the temporary nature may not be based on one of these statutory grounds. If the agreement contains such information, employers cannot base the fixed term on objective grounds.
• Fixed-term employment contracts – both with and without objective grounds for the temporary nature – shall no longer be permissible when the total term with the same employer exceeds a maximum period of five years. Various fixed-term contracts count towards the total term, including where the employee worked as an agency worker if three years have not passed between the agency contract and other contracts. Agreements with a fixed term also count where the fixed term was based on other legal provisions substantiated in the TzBfG, e.g., § 21 of the German Parenting Allowance and Parenting Leave Act (Bundeselterngeld- und Elternzeitgesetz), § 6 of the Home Care Leave Act (Pflegezeitgesetz), etc. Exceptions from this maximum limit apply to contracts that have a fixed-term due to the specific character of the work (e.g., professional soccer players, artists, etc.), for fixed-terms based on court settlements, for agreements which terminate when the employee reaches the statutory retirement age, and for any leave of absence for civil servants (where the civil servant status is maintained, so-called In-Sich-Beurlaubung).
• The new subsection 10 of § 111 SGB III introduces a rule which provides that the grounds for the fixed term of an employment contract will be objective when the employee’s current position is abolished and the employee transfers to an organisationally independent entity (transfer company).
• It should be assumed that fixed terms that apply to transfers to the transfer company also count towards the above-mentioned total duration of five years.

What happens to existing agreements?

The draft proposes the following transitional rules for agreements that apply when the Act enters into force:

• Fixed-term employment agreements that are concluded before the Act enters into force (currently by 31 December 2021), may be extended only once for a total duration of up to 18 months. Until the Act enters into force, companies will still have the possibility to conclude or extend fixed-term employment contracts in accordance with the current law (up to a total duration of 24 months). There are no plans to reduce the current total duration to 18 months after the entry into force of the new Act.
• Fixed-term contracts without objective grounds, which are concluded or extended before the planned Act enters into force, remain unchanged and do not count towards the calculation of the 2.5% share.
• Collective bargaining agreements, which contain deviating provisions that exceed the maximum limits foreseen in the draft bill (maximum total duration of the fixed term of 54 months; a maximum of three extensions within this period), remain in force for one year after the Act enters into force.

Summary

The draft bill has already received both praise and criticism. It is questionable whether the tightening of the rules was necessary now when the economic effects of the corona crisis are not entirely foreseeable. Instead of more limits to the possibility to conclude fixed-term employment contracts, many employers wish they had greater flexibility. From an employer perspective, the introduction of a statutory obligation to retain employee information would have also been desirable. Before concluding each fixed-term agreement without objective grounds, a check needs to be performed to confirm whether the specific employee was employed by the same employer “before” – which the case law interprets as “in the last 20 years”. An infringement of the prohibition against fixed-term agreements in the case of “prior employment” results in an indefinite employment relationship. However, once an employment relationship ends, employers may not retain personal information for too long. Data protection law (including the right to erasure under Article 17 of the General Data Protection Regulation) prevents the retention of such information. National legislators can effectively limit the employee’s right to erasure by introducing a statutory obligation to retain certain employee information. In light of the upcoming election, it remains to be seen whether the bill will be adopted as planned.

Dr Olga Morasch

[1] All persons and job titles mentioned here are given in the male form to make the article easier to read, they are intended to include female forms as well as diverse persons.

A clause in an employment contract which provides that all claims arising out of the employment relationship will be forfeited, is invalid. Both the employer, which provided the standard form employment contract containing the clause, and the employee can invoke this invalidity.

Facts of the case

The dispute before the Federal Labour Court (BAG) concerned a claim for damages by the employer for EUR 101,372.72, which was brought as a counterclaim to an action against unfair dismissal. The employee was employed as a commercial clerk. The employment contract contained the following exclusionary clause:

“§ 13 Time limits: All claims arising out of this employment agreement must be submitted in writing within 2 months of maturity and, in the case of the rejection of the claim by the other party, an action for the claim must be brought within a time limit of one month.”

The employee’s husband was a limited partner and director of the company. He repeatedly used company funds to pay private invoices. The transfers were booked by the employee, who was responsible for financial and payroll accounting. The company terminated the employment relationship. In response to the resulting action against unfair dismissal, the company brought a counterclaim for damages.

The judgment

The BAG reversed the decision of the lower Court (Regional Labour Court of Rhineland-Palatinate of 18 July 2019 in Case No. 5 Sa 169/18). The Regional Labour Court held that the claims of the company had not lapsed in accordance with § 13 of the employment contract. Instead, following § 202 (1) of the German Civil Code (Bürgerliches Gesetzbuch, BGB), the limitation period in the case of liability for intent may not be relaxed in advance by legal transaction. Interpreting the clause in light of its spirit and purpose provides that the counterclaim for damages, in this case, is not covered by this clause.

The BAG did not agree with the lower court’s interpretation in this case. The Court stated that a disclaimer in preformulated contract terms within the meaning of §310 (3) No. 2 BGB covers all claims that arise in relation to the employment relationship, without exception. As a basic principle, such clauses cover all reciprocal statutory and contractual claims that the parties have against each other based on their legal positions as established by their contractual relationship and thus also to claims for damages from an intentional breach of contract and intentional unlawful acts.

However, as the exclusion of liability for intention constitutes an infringement of § 202 (1) BGB, the BAG held that the disclaimer clause in this specific case is invalid under § 134 BGB (infringement of a statutory prohibition). Even the employer, as the party that provided the clause, can successfully invoke the invalidity of the clause.

Consequences for practice

The BAG changed its case law. Until now, claims for intentional breach of contract and intentional unlawful acts were not covered by disclaimer clauses found in general terms and conditions. This will now be the case. Not just employees but employers too can invoke the invalidity of a disclaimer pursuant to § 202 (1) BGB in combination with § 134 BGB, even where the employer uses standard form contractual provisions.

Practical tip

Employers should keep this judgment in mind when using standard form employment contracts and should expressly exclude liability for intentional breach of contract and intentional unlawful acts from disclaimers. There is otherwise a risk that the disclaimer will be invalid, which, where a dispute arises about back pay, for example, could place you at a legal disadvantage.

Martin Fink

Working from home and virtual meetings are the new normal for many companies since the onset of the coronavirus. Yet when infection rates fall and lockdowns are lifted, the question arises as to what extent employers can order employees to return to the office. At this point, it is necessary to comply with the current rules. The Labour Court in Cologne held that the order of an employer on the works council to hold meetings at the workplace and the imposition of sanctions for failure to comply with this order was not legitimate and the employer therefore had to refrain from such actions until at least 30 June 2021.

Facts of the case

When its stores were closed during the 2020 lockdown, the employer, a textile company, tolerated the fact that the works council meetings were held via video conference. In November, the employer ordered the works council to hold its meeting at the company offices and threatened to dock salaries if the works council failed to comply. It also acted on this threat in relation to three members of the works council, who still took part in a meeting from home at the end of 2020. After the end of the second lockdown, the employer announced further wage cuts and written warnings. When five members of the works council participated in their regular meeting from home in March, they received written warnings for their failure to attend (in person). In response, the works council turned to the Labour Court and applied for injunctive relief against the pay cuts, written warnings and threats of dismissal.

The judgment

The Labour Court ordered the employer to cease and desist from docking any pay, or issuing any written warnings or letters of termination to the members of the works council for participating in works council meetings from home until 30 June 2021. These measures prevented members of the works council from carrying out their duties (§ 78 (1) Works Constitution Act, BetrVG). The measures that had already been taken meant that they had to fear that letters of termination of employment would also be issued. The fact that § 129 (1) BetrVG allowed members of the works council to participate in works council meetings from home via video or telephone conference meant that the order constituted a prohibited obstruction of the discharge of their duties. This temporary norm applied until 30 June 2021 and had to be respected until then.
The norm does not establish any specific conditions that have to be fulfilled to virtually attend a works council meeting. Restriction on the forms of participation therefore could only be derived from the rule that the works council and employer should work together in the spirit of mutual trust (§ 2 (1) BerVG). A breach of this rule was not to be feared in this case. Instead, the employer should encourage virtual participation in meetings as it simultaneously helps reduce the risk of infection.

Consequences for practice

The judgment of the Labour Court is one in a line of jurisprudence. The Regional Labour Court of Berlin-Brandenburg (Judgment of 24 August 202 in Case No. 12 TaBVGa 1015/20) and the Labour Court of Berlin (judgment of 7 October 2020 in Case No. BVGa 12816/20) both held that the chairperson of the works council is responsible for any vote on the form of the meeting. There is no statutory norm, which would give the employer a right to influence this decision. It falls within the discretion of the chairperson of the works council to reach a decision; § 129 (1) BetrVG gives the chairperson the choice. The circumstances at the workplace and the local infection rates will influence the decision of the works council to hold a meeting virtually.

Comment

Until now, the decisions concerning § 129 (1) BetrVG demonstrate that employers have little influence on the decision of the chairperson of the works council on the form of the meeting. Nonetheless, the works council can be required not just to decide freely but to consider certain circumstances in each case. The employer can seek judicial review. Further sanctions, such as written warnings or pay cuts are not recommended.

Regina Holzer

Dear Readers,

Another judgement has been rendered in connection with corona. In its judgement of 15 April 2021 (8 Ca 7334/20), the Cologne Labour Court ruled on the invalidity of a dismissal - with non-applicability of the German Protection Against Unfair Dismissals Act - due to officially ordered domestic quarantine.

The Case

A master roofer has been employed as an assembler since the beginning of June 2020. In October 2020, the health authority ordered a domestic quarantine for the master roofer by telephone. The reason for the quarantine is a contact person who tested positive for the SARS-CoV-2 virus. The master roofer informed the employer of this and that he would therefore not be able to come to work. The employer had doubts about the quarantine ordered by the authorities and demanded written confirmation. The master roofer attempted to obtain written confirmation from the health authority. The health authority promised to provide such confirmation, but did not confirm the quarantine in writing at first.

The employer did not pay the remuneration for October 2020 and terminated the existing employment relationship with the master roofer with effect as of 8 November 2020 in a letter dated 26 October 2020.

Judgement of the Cologne Labour Court

The action for protection against dismissal was successful. The German Protection Against Unfair Dismissals Act (Kündigungsschutzgesetz) was not applicable because the waiting period had not been fulfilled and the company was too small. The Cologne Labour Court considered the dismissal to be arbitrary, as it was unethical and contrary to good faith within the meaning of sections 138 and 242 of the German Civil Code. In the opinion of the Cologne Labour Court, the direct temporal proximity of the dismissal to the quarantine ordered by the authorities did not alone result in an "exclusion of dismissal in the form of special protection against dismissal". Employees were also protected from dismissals based on irrelevant motives outside the Protection against Unfair Dismissals Act.

My best wishes for getting through the fourth wave of labour law.

With warm (labour law) regards

Dr Erik Schmid

_{Note: This blog post has already been published in the labour law blog of Dr Erik Schmid at Rehm Verlag (www.rehm-verlag.de).}

Grave compliance infringements can justify the termination of an employment relationship. When the grounds for termination only come to light during a compliance investigation by an external third party, the employee whose employment has been terminated will also bear the costs of the investigation where there was a specific suspicion of wrongdoing, and the investigatory measures were necessary for his termination.

Facts of the case

The employer and employee brought a dispute before the BAG concerning a claim for damages for the repayment of the costs of an investigation in connection with allegations of expense account misuse and the submission of false claims. The employee was a member of the management board of his former employer (annual gross salary of approximately EUR 450,000.00). After the company received several anonymous tips about alleged compliance infringements, the company decided to launch an investigation to clarify the allegations and mandated a specialist law firm to perform the compliance investigation. The law firm charged approx. EUR 200,000.00 for the report of their investigation. The company terminated the employee’s employment without notice. The employee fought the dismissal in court and lost. As part of a counterclaim, the company claimed the reimbursement of the investigation costs from the employee. At first instance, the employer failed in its claim, however, the Regional Labour Court (LAG) ordered that the former employee pay EUR 66,500.00. According to the LAG, the costs of the investigation were to be borne by the employee at least until the letter of termination was issued. The employee appealed.

The judgment

The BAG denied the claim for damages. Indeed, an employer can claim the reimbursement of costs arising due to the necessary involvement of a law firm when said firm is mandated to look into a specific suspicion of significant wrongdoing and the employee is found guilty of a serious, intentional breach of duty. In the view of the BAG, where there is a specific suspicion of significant misconduct by the employer, the necessary expenses incurred by the injured party to avert impending detriment is part of the damages to be compensated. However, the right to compensation is not without limits: compensation claims are only possible where they relate to measures that a reasonable, commercially-minded person would consider appropriate in the circumstances and either necessary to eliminate the problem or to avoid further damage. In the case in question, the company could not demonstrate that the costs claimed were necessary for the termination of the employment agreement. The claim for reimbursement failed due to the company’s failure to provide sufficient evidence.

Consequences for practice

The BAG remains true to its case law and recognises the possibility, in principle, to claim compensation and agrees with the LAG on the basis for such a claim: the lower Court referred to the judgment of the BAG of 28 October 2010 in Case 8 AZR 547/09 (reimbursement of detective costs) and affirmed the right to claim reimbursement, in principle. In that case, the BAG held that an employee had to reimburse the employer for the costs of a detective who had been engaged by the employer to investigate a breach of duties under the employment contract. The employer in that case had mandated a detective with surveillance of the employee in light of a specific suspicion and the employee was subsequently found to have committed a deliberate breach of his duties.

Practical tip

None of this helped the company in the present case. It simply was not able to show which specific activities were performed or investigations carried out, when they were performed and to what extent they were performed due to a specific suspicion against the former employee. The need for “no stone to remain unturned” and to ensure “every corner of the company is checked” in a compliance investigation by an external third party, is understandable from the point of view of those keen to clean up the issue. However, this tabula rasa approach does not really help when one thinks about the end of the process and later wants to take recourse against the convicted employee. Claims for damages can only be prepared when there is a specific suspicion of serious misconduct and when the necessary investigative measures can be attributed to the facts supporting the termination of employment.

Martin Biebl

The Federal Labour Court (BAG) was asked to take a decision on the practical question of to what extent an employer must provide an employee who is leaving the company with a copy of email correspondence and make all emails available in which the employee was named. The Court was able to leave open the question about the scope of the right to data copies (Article 15 (3) GDPR) because the appeal failed on procedural grounds.

Background

Employers are regularly facing claims that can only be met at significant expense in connection with (threatened) actions against unfair dismissal. Rarely will data protection concerns be paramount. Instead, employees are often more interested in increasing the pressure on their (former) employer as motivation for a proposal of a more generous settlement. Data protection is instead used as a pawn by the parties while the right to self-determination of personal information is rarely the focus.

Claims to the release of comprehensive data copies raise important data protection law issues. When the claim is made for copies of all email exchanges from the whole period of employment, the copies normally reveal personal information not only about the employee making the claim, but also about the communication partner, such as the sender or recipient of each email. The employer is not allowed to simply give out their personal information, even if the employee already knows who they were communicating with. To this extent, the right to data copies under Article 15 (4) GDPR is limited to where the rights and freedoms of other persons are not affected. With respect to any third parties concerned, such as the sender or recipient, the release of email copies constitutes special data processing which requires a legal basis. That is why the employer must either carry out a careful data protection review and document this review before releasing such data copies or ensure that all personal information concerning such third parties is unidentifiable. Both options normally involve considerable effort and expense.

Facts of the case

The judgment of the BAG is based on facts often be found in cases before German courts. The employer terminated the employment relationship during the probationary period. The employee brought an action against unfair dismissal. At the same time, he brought a claim for all information that the employer had about him, as well as a claim for a copy of this information. He requested the release of all emails that he had sent or received or in which he was named under data protection law. The Labour Court dismissed the claim. The Regional Labour Court ordered the employer to release copies of the documents, which were used to respond to his request for information. Otherwise, the Court dismissed the appeal. With his appeal to the BAG, the employee continued to pursue his request for copies of all email communications in which he is named.

Requirement to provide copies of all emails is too “vague”

The appeal to the BAG was unsuccessful on procedural grounds (lack of certainty of the application). In the Court’s view, it remained unclear which email copies had to be provided if the claim for information was executed as the employee had simply claimed all emails in which he “is mentioned by name”. The Claimant had to define the emails so specifically that they could be identified without any doubts in enforcement proceedings. The full text of the judgment is not yet available. However, the press release from the Court indicates that the Erfurt Judges require employees to use a so-called action by stages to first bring a claim for information about which emails concerning the employee are in the employer’s possession. Based on this information, the employee would then be able to provide a sufficiently precise application for the delivery of a copy of the data and enforce his rights.

Consequences for practice

The controversial and very relevant issue of the scope of a claim to a copy of data under data protection law, in particular the extent to which copies of an extensive email portfolio are to be provided, remains unsettled at the highest level. This is unsatisfactory for practice. Failure to properly comply with the right to data copies can result in draconian fines and expensive compensation claims.

At least it has been clarified that a claim to data copies must be sufficiently specific for the courts. The claim therefore contains “procedural hurdles”, which should dissuade employees from randomly making a blanket claim for their whole email correspondence.

Instead, a claim for data copies must be sufficiently specific and stipulate which copies exactly are to be provided. This will provide reasonable limits to the scope of such claims and facilitate the transparency and feasibility of such claims for employers.

Before the highest Court will be able to clarify these data protection law issues, a comparable case with slightly different litigation tactics, such as an action by stages, will need to be brought before the German courts. Employees are unlikely to change their strategy towards their (former) employer, and data protection is unlikely to only become the subject of proceedings when it is the substantive issue. It remains to be seen whether and to what extent an action by stages will be used as such procedures are often very time intensive and thus not expedient for either party.

Practical tip

Companies should therefore continue their data protection approach and only provide copies of employee data, including individual emails, where the employee has specifically requested the data and where such data can be legally provided (for instance, with part of the information blacked out). Often, the claim for information is brought as “leverage” in combination with an action against unfair dismissal and to strengthen the position when negotiating a settlement. In cases of termination of employment during the probationary period, in particular – like that in the case before the BAG – the employee has few arguments in favour of the payment of a settlement due to the lack of protection against unfair dismissal. In a comparable case of the termination of employment and resulting action against unfair dismissal, any claims for information and copies of data under data protection law should be dealt with as part of a “whole deal”. A so-called factual settlement, for example, could be reached where the data protection law claims are recalled or even waived.

Gerd Kaindl
Susanne Klein
Lennart Kriebel

Dear Readers, dear Monopoly players,

With the coming into force of the Fourth Act for the Protection of the Population in the Event of an Epidemic Situation of National Significance, the regulations on home office will be included in the German Infection Protection Act and the previous regulations on home office will be deleted from the SARS-CoV-2 Occupational Health and Safety Ordinance. In terms of content, the regulation remains the same for employers, but employees are obliged to work from home for the first time.

Previous Corona Home Office Regulation

Up to now, in the case of office work or comparable activities, the employer had to offer its employees to carry out these activities at their home if there were no compelling operational reasons to the contrary. The decision on suitability or possible conflicting reasons was made by the employer.

Previously, employers were obliged to offer home office to their employees but employees were not obliged to accept the offer and work from home. Home office required the consent of the employees. In the Monopoly game language, this would be roughly comparable to the community card: "Pay a fine of £ 15 or take a Chance card".

A deviating determination of the contractual place of work from the company to the home office required a regulation in the employment contract between employer and employees or a company agreement.

The previous obligation of the employer to offer home office was regulated in the SARS-CoV-2 Occupational Health and Safety Ordinance.

Home Office - Duty of the Employer and of the Employee

The employer's duty to offer home office wherever possible remains and is regulated by the "Fourth Act for the Protection of the Population in the Event of an Epidemic Situation of National Significance" (Federal Emergency Brake) from now on in section 28b (7) German Infection Protection Act and reads as follows:

„(7) In the case of office work or comparable activities, the employer must offer employees the opportunity to carry out these activities in their homes if there are no compelling operational reasons to the contrary. The employees must accept this offer if there are no reasons to the contrary. The competent authorities for the implementation of sentences 1 and 2 shall be determined by the federal states in accordance with section 54 sentence 1."

If offered by their employer, employees must work in their home office if this is possible on their part. In the Monopoly game language, this would be roughly comparable to the Chance card: "Move forward to the [place of residence] road. If you pass Go, collect £ 200."

Reasons for employees not being able to do so may be cramped quarters, interference from third parties or inadequate technical equipment.

With warm (labour law) regards to the home office or to the workplace in the company.

Yours Dr Erik Schmid

_{Note: This blog post has already been published in the labour law blog of Dr Erik Schmid at Rehm Verlag (www.rehm-verlag.de).}

If an employee insults his colleagues with statements such as: "I wished for a gas chamber, but I didn't get it. The Turks should be thrown into the fire and have their heads cut off", even his recognised severe disability does not protect him from being dismissed. The employee believed himself to be "untouchable" and "unterminable" on the basis of his disability - and was wrong.

What happened?

The employee had already insulted his colleagues from Turkey as "oil eyes", "niggers" and "subjects". After approval by the Integration Office, the employer terminated the employment relationship with the employee, who then filed an action for unfair dismissal. The 5th Division of the Dusseldorf Regional Labour Court dismissed the action in its judgment of 10 December 2020.

Dismissal due to severe racist insults effective

According to the Regional Labour Court, the dismissal was socially justified due to the statements made to the colleagues and the employment relationship was effectively terminated. The terms "oil eyes", "niggers" and "subjects" all constitute unacceptable offensive remarks. The employee's serious misconduct finally culminated in the employee's national-socialist inhumane statement in response to the completely innocuous question of the work colleague as to what he had received for Christmas. According to the judges, a prior warning was unreasonable in view of the seriousness of the misconduct and the weighing of interests was also to the employee's disadvantage despite his severe disability.

Addressing racism in the labour courts

Racist remarks in the workplace constitute unacceptable insults that result in termination of employment. The ruling discussed here is reminiscent of last year's "Ugha, Ugha!" decision by the Federal Constitutional Court. The judges in Karlsruhe drew a line under a constitutional complaint by an employee against his extraordinary dismissal because of inhumane remarks (here you can find the press release). The employee had previously imitated his dark-skinned colleague with monkey sounds.

The decisions raise awareness that racism is also pervasive in the workplace and employers are well advised to prevent racist behaviour from its very beginnings.

Dr Kathrin Bürger
Anne-Kathrin von Dahlen

Dear Readers,

Many people - including myself as an enthusiastic canteen-goer - are affected. The canteen example serves to illustrate whether and, if so, how restrictions due to the corona pandemic in social institutions lead to co-determination rights of the works council and how they just do not.

The right to co-determination under Section 87 (1) No. 8 BetrVG

The works council has a right of co-determination under Section 87 (1) No. 8 of the German Works Council Constitution Act (BetrVG), which covers "the form, organisation and administration of social services whose scope is limited to the establishment, the company or the group". Social services include canteens, company sports facilities, company day nurseries, company buses or pension and benefit funds. The right of co-determination extends to the form, organisation and administration. In the first step, there is no co-determination as to whether such a social service is arranged or established at all. The employer is free to decide on this. The employer is also free to decide to terminate the social service completely.

Staff canteen of a university hospital

A university hospital operated staff canteens at its sites through its own service company. Due to the corona pandemic, it was informed in March 2020, among other things, that a new procedure for serving meals would apply. The regular operation of the staff canteen was restricted and replaced by "take-away offers". The seating area in the canteen was closed and the choice of dishes/food was reduced. In addition, special hygiene rules applied due to the pandemic.

Sigmaringen Administrative Court, decision of 15 February 2021 (PL 11 K 2615/20)

Due to the pandemic-related reduction of meals/food offered without the involvement of the employee representative body, the staff council applied for a declaration that the (partial) closure and reopening of staff canteens in connection with the corona pandemic violated the right of co-determination.

In its decision of 15 February 2021, the Sigmaringen Administrative Court declared that the staff council's application was successful. The Administrative Court stated that a canteen is a social facility in terms of co-determination law. In addition, the Administrative Court pointed out that restrictions on the scope of services of a canteen or the modalities of serving meals are measures of the administration of a social service facility.

The Sigmaringen Administrative Court also stated that the right of co-determination was not excluded from the precedence of the law and collective agreements. Precedence of law and collective agreements means that there is no right of co-determination of the staff council or the works council (Section 87 (1) BetrVG introductory sentence) if there are already statutory or collective agreement provisions on a subject and there is no more room for manoeuvre in the implementation which can be negotiated between the employer and the employee representative body. Should, however, a statutory or collective agreement provision leave the organisation of individual measures to the head of the department, the decision of the head of the department is subject to the co-determination of the employee representative body. At the time, the operation of restaurants and similar establishments was initially prohibited by the state government's ordinance until April 2020. But canteens for staff or members of public institutions were exempt from this. In the view of the Administrative Court, a right of co-determination thus continues to exist within the relevant regulatory scope.

Practical advice

The precedence of law and collective agreements must not be underestimated in practice. Within the scope of the corona pandemic measures, but also outside of this special situation, there is no right of co-determination of a works council or staff council if simply the (mandatory) requirements set out in law and collective agreement are implemented. Employers can try to follow these guidelines in order to be able to decide freely and without the works council's right of co-determination, for instance in the case of social services.

Now my stomach is rumbling, bon appétit and with warm (labour law) regards

Yours Dr Erik Schmid

^{Note: This blog post has already been published in the labour law blog of Dr Erik Schmid at Rehm Verlag.}

Dear Readers.

Home or mobile office already existed before SARS-CoV-2, but has increased significantly due to the corona pandemic and is (temporarily) obligatory due to the Conference of Prime Ministers of 19 January 2021. Home or mobile offices are organised in different ways and to different extents. But the question is whether and, if so, in what way and to what extent the works council has a right of co-determination. The Higher Labour Court of Hesse (LAG Hessen) reached a decision on this in a temporary injunction proceeding in its decision of 18 June 2020 (5 TaBVGa 74/20).

Initial situation

The employer has introduced mobile working due to the corona pandemic and to protect workers from infection at the workplace. In interim injunction proceedings, the works council attempted to obtain an injunction against the implementation of the "mobile working" model.

LAG Hessen, decision of 18 June 2020 - 5 TaBVGa 74/20

The summary proceedings initiated by the works council were unsuccessful. In the view of the Higher Labour Court of Hesse, the decision of the employer to introduce "mobile working" did not, at least according to the required summary examination in the summary proceedings, involve a right of co-determination of the works council.

The right of co-determination according to Sec. 87 (1) No. 1 German Works Constitution Act (BetrVG) ("matters relating to the rules of operation of the company and the conduct of employees in the company") does not exist in the view of the Higher Labour Court of Hesse. The introduction of mobile work is inextricably linked to the performance of work and is thus part of the work behaviour that is not subject to co-determination. Work behaviour is affected if the employer determines in more detail which work is to be carried out and how this is to be done. Instructions which directly specify the duty to work are not subject to co-determination.

The right of co-determination under Sec. 87 (1) No. 6 BetrVG ("introduction and use of technical devices designed to monitor the behaviour or performance of employees") is also not relevant in the view of the LAG Hessen. In any case, the activity performed in the "mobile office" does not go any further with regard to this right of co-determination than would an activity at the workplace in the company. Regularly, employees use the same technical equipment that they use at the workplace, so that it is not a question of introducing new technical equipment.

In the opinion of the Higher Labour Court of Hesse, the right of co-determination under Sec. 87 (1) No. 7 BetrVG ("Regulations on the prevention of accidents at work and occupational diseases as well as on health protection within the framework of statutory provisions or accident prevention regulations") was also relevant in principle, but there was no sufficient reason to believe that it prevented the implementation of "mobile working".

The works council is thus not entitled to a general independent injunction and the employer may continue to implement its working model without the involvement of the works council.

Warm ++Stopp++ (labour law) ++Stopp++ greetings from Munich ++Stopp++

Yours Dr Erik Schmid

^{Note: This blog post has already been published in the labour law blog of Dr Erik Schmid at Rehm Verlag (www.rehm-verlag.de).}

Dear Readers,

Compulsory vaccination, compulsory vaccination at the workplace or indirect compulsory vaccination through access restrictions for non-vaccinated persons in restaurants, cinemas, events or even at the workplace is underway. There is (still) no legal regulation and we do not have a supreme court ruling (yet). As always, almost all conceivable and also impossible arguments are put forward. The Offenbach Labour Court made a decision on this in interim injunction proceedings on 4 February 2021 (4 Ga 1/21).

Obligation to take the corona test at the workplace

To prevent the infection of colleagues, customers or patients, various measures have been implemented in workplaces since the beginning of the corona pandemic. Regular hand disinfection, observance of physical distancing, considerable restriction of physical gatherings, wearing of protective masks are now legally and actually accepted. Taking the temperature at the entrance to the company premises is also considered permissible. When deciding whether such measures are permissible, the health protection of employees, customers, patients and residents as well as the protection of the public health system must be weighed against the personal rights and data protection rights of employees. It is currently disputed whether or not there should be compulsory vaccination, especially for certain occupational groups.

A milder remedy than compulsory vaccination is the presentation of a negative corona test. An employer refused to allow one of his employees to enter the factory premises because he refused to take a PCR test. The requirement of the PCR test for entry to the factory premises was provided for in a company agreement.

The employee refused, arguing that the test violated his right to self-determination and was not covered by the right to issue instructions or by the company agreement. In addition, the PCR test was disproportionate because it constituted an invasive intervention in his physical integrity. The employee tried to obtain the continuation of his work activity with the employer and thus access to the factory premises without a PCR test within the framework of summary proceedings.

Offenbach Labour Court of 4 February 2021 – 4 Ga 1/21

The summary proceedings initiated by the employee was unsuccessful. The Labour Court rejected the motion because, in the court's view, the urgency required for summary proceedings did not exist, or at least could not be substantiated by the employee. In weighing the employee's access to the factory premises without a PCR test against the employee's non-employment, the court found the non-employment preferable because an urgent interest in employment was not recognisable. The question of remuneration is thus not settled. If the employee were held to be in the right in the main proceedings, the issue would only be one of employment. The claim for remuneration could persist.

The decision illustrates that issues related to the measures against the corona pandemic depend on many factors. The corona pandemic is certainly considered by the courts to be so serious that employees' rights of self-determination and personal rights are set back further than in the case of previous mass illnesses, such as influenza.

Warm (labour law) greetings from Munich!

Yours Dr Erik Schmid

^{Note: This blog has already been posted in the employment law blog of Erik Schmid at Rehm-Verlag (www.rehm-verlag.de}).

Dear Readers.

A discussion has developed on whether the corona vaccination is mandatory for employees, especially for those in the nursing and medical sector, and whether sanctions under labour law such as warnings or dismissals are permissible in the case of refusal to vaccinate.

Compulsory vaccination? Not (yet) provided for by law

Currently, the vaccine is in short supply. This could be the reason why the legislator has not yet introduced a compulsory corona vaccination. But that could change (soon) if vaccine is available for everyone. Until then, vaccination against the corona virus is voluntary. Section 20 (6) sentence 1 German Infection Protection Act (IfSG) provides for the legal possibility of compulsory vaccination. On this basis, a corresponding mandatory vaccination was introduced in March 2020 by the so-called "Measles Protection Act".

Are employers entitled to impose a corona vaccination?

When considering whether the employer's right to give instructions also extends to the corona vaccination, the interests of the employer (maintenance of business operations, health of employees) and the interests of the employee (right of personality) must be weighed against each other. For previous vaccinations, such as the flu vaccination, the employee's right of personality prevails and it cannot be imposed by the employer by virtue of the right to give instructions. Since the corona pandemic is not comparable to an influenza wave (deaths, course of the disease, overload of the public healthcare system, immunity), the employee's right of personality is further subordinated. In any case, a compulsory vaccination imposed by the employer for (certain groups of) employees is not generally excluded. Especially in the case of medical and nursing staff, a corona vaccination ordered by the employer could be effective. On the one hand, this particularly vulnerable occupational group is a potential multiplier among risk groups, and on the other hand, this occupational group is absolutely essential for maintaining medical care during the pandemic. Should there no longer be sufficient hospital staff available for corona patients, at the latest, compulsory vaccination would have to be considered.

Labour law sanctions in case of refusal of vaccination

Can employees who refuse vaccination be faced with sanctions under labour law? According to the press in recent days, there have already been the first terminations of employment.

Employers are entitled to demand certain prerequisites from their employees for the contractually agreed activity. For instance, the compulsory wearing of helmets on construction sites. If the employee does not put on a helmet, the employee cannot be employed. This can also be applied to the corona vaccination. If the employer only employs vaccinated staff for activities with direct contact with residents and patients, the employer could no longer employ non-vaccinated persons in accordance with the contract. Insofar as other employment opportunities do not exist, the employment of the employee is impossible. The employer would be entitled to sanctions under labour law, such as withholding remuneration or terminating the employment relationship for personal reasons.

Warm and healthy (labour law) greetings from Munich

Best regards
Dr Erik Schmid

My name is not James Bond, but Schmid, Erik Schmid. I am not a double zero agent and do not have the license to kill, if I had it I would not be allowed to write about it. But I am a triple father and licensed to practice law. My car is not armored as is customary for 007. It cannot drive under water, it is rather drinks that are emptied in the back seat of my car. There are no weapons hidden in the seats but Lego and Playmobil figures. In my car there is no ejector seat on which a Bond girl (90-60-90) sits, but there are child seats in which two "Schmid girlies" (8 months, 3 years) romp about. I do not drink vodka martinis neither shaken nor stirred. So I am probably not in a position to save the world in a dinner jacket, but I am well able to present the special features of labour law for employees with children to care for through the glasses of a father and a lawyer in the context of the extension of the lockdown.

Dear Readers.

The lockdown has been extended (for now) until the end of January 2021. This leads to the extension but also to the tightening of the previous measures:

Current decision on the extension of the corona-related measures

• Extension of the restrictions in place until 10 January 2021 until 31 January 2021. This also includes the restrictions on school and day care operations.
• Intensification of the contact restrictions in the private sphere to a maximum of one person not living in one's own household.
• Extension of measures (e.g. 15 kilometre radius around own place of residence) in case of a very high incidence value of 200 and above.

The corona pandemic and the measures are thus also (very) challenging for working parents in 2021, and for their employers as well. The new James Bond will not be in the cinemas any time soon, the next few weeks will instead be dominated by the following:

No Statutory Entitlement to Working in a Home Office in order to Look after Children during School and Day Care Closures

There is (still) no legal entitlement to work from home, regardless of any reason. An entitlement to home office can only arise from the employment contract, a company agreement or a collective agreement.

Symptoms of Illness among Colleagues: No Right to Refuse Performance

There is no right of employees not to attend the workplace for fear of contracting an illness, e.g. even corona, and thus to refuse to perform work. This applies in particular if a hygiene concept is implemented at the workplace.

Right to Refuse Performance in Case of Child Care

A right to refuse to perform work without sanction and, of course, without entitlement to remuneration may exist if the performance of the service obligation under the employment contract is unreasonable (section 275 (3) German Civil Code). Such an unreasonable hardship may exist if the necessary care of a child cannot be ensured in any other way when school and day care centres are closed. In particular, care must also not be possible elsewhere, e.g. by the other spouse, by neighbours, by a "babysitter" or emergency care.

Basically no "Claim for Compensation Substitute"

In principle, there is no entitlement to compensation substitute for the care of a child during school and day care centre closures. As the schools and day care centres are not only closed for a short period of time and there is a need for care for several weeks, the claim for continued payment of wages according to section 616 BGB does not apply. There is also no entitlement to sick pay in case of illness of the child (child care sick pay) during school and day care centre closures, as the child to be cared for does not have to be looked after at home due to illness.

Extension of the Number of So-Called "Child Sick Days"

The German federal and state governments decided on 5 January 2021 to extend the child sickness benefit. It is to be regulated by law that child sickness benefit will be granted for ten additional days per parent (20 additional days for single parents) in 2021. This doubles the number of days. The entitlement is not only to apply to actual illnesses of children, but also to cases in which care of the child at home becomes necessary because, for instance, the school or kindergarten is closed, access to childcare has been restricted or the child is in quarantine due to corona.

Employees' Compensation for Childcare during Lockdown

Employees are entitled to compensation under section 56(1a) German Infection Protection Act (IfSG) if they have to look after their own children during a school or day care centre lockdown. This compensation provision has been extended until 31 March 2021 and expanded to the effect that if a child is quarantined, compensation can also be paid.

Employees receive compensation for loss of earnings in the amount of 67 per cent of their net income, limited to a maximum monthly amount of EUR 2,016.00, in accordance with section 56(1a) IfSG. This entitlement exists for a maximum of ten weeks per parent. Single parents are entitled to up to 20 weeks. Employers must pay out the compensation for a maximum of six weeks and can have this compensation reimbursed by the competent authority.

Warm (labour law) greetings from Munich and let's look forward to "No Time to Die" hopefully soon in the movies.

Best regards

Dr Erik Schmid

Dear Readers.

In 2020 parties are being improvised, for example with Christmas parties in smallest groups or outdoor Christmas parties. Often, Christmas parties in 2020 are being organised virtually. Everyone is sitting alone in the office or at home in front of the screen, while the work Christmas party is held via video conference. No comparison to "normal" Christmas parties, and yet labour law rules also apply to improvised coronavirus Christmas parties.

1. Obligation for the employee to participate in the improvised company coronavirus Christmas party

Also virtual Christmas parties during the coronavirus pandemic often take place in the evenings after work and thus outside working hours. This means that participation in the work Christmas party is not mandatory. An obligation to participate cannot be stipulated in the agreement, nor does such an obligation to participate result from secondary obligations under the employment agreement. This applies even if the Christmas party takes place in whole or in part during normal working hours. An employee who does not participate in the Christmas party does not commit a breach of his or her duty to work. However, employees who do not take part in the Christmas party are obliged to perform the contractually owed work ‑ insofar as the Christmas party takes place (partially) during working hours ‑ with their usual work.

2. (Mis)conduct at the Christmas party

At virtual Christmas parties, people (probably) drink less and dance less. A virtual company Christmas party is still a company event. Although it is voluntary, employees attending the Christmas party are still bound by secondary contractual obligations. Violations may be sanctioned under labour law.

• Gross insulting of the superior by using abusive language ("stupid sod", "asshole", "wanker") and insulting gestures (outstretched middle finger) justifies dismissal for conduct-related (ordinary and possibly extraordinary) reasons. This even applies if abusive language is used outside working hours and away from the premises at the Christmas party in front of colleagues, even if the employee was under the influence of alcohol (Higher Labour Court of Hamm, judgement of 30 June 2004 - 18 Sa 836/04). This must also apply accordingly if the Christmas party takes place as a video conference.
• Violence among employees at the Christmas party can also justify an extraordinary dismissal. On 19 August 2009 (4 BV 13/08), the Osnabrück Labour Court had to decide on the approval of the extraordinary dismissal of a works council member at a Christmas party. The works council member grabbed the microphone at 11 p.m. at the Christmas party with about 200 employees and sang songs. Work colleagues shouted that he should stop, as it sounded terrible. The works council member then left the stage and punched one of his colleagues in the face. Later, the works council member claimed that he had been completely drunk. The Osnabrück Labour Court confirmed the extraordinary dismissal of the works council member. Violence among employees can justify termination without notice, even without a prior warning. It could not be clarified whether the works council member had in fact been completely drunk, in any case he did not show characteristic signs of alcohol abuse. (Virtual) violence is probably hard to imagine at Christmas parties in 2020.
• It is not just a cliché that people "flirt" at Christmas parties. Where boundaries are crossed, it may be a case of sexual harassment, and the harassing employee must also expect extraordinary dismissal. Sexual harassment, i.e. unwelcome conduct of a sexual nature, is, at a Christmas party, for example if an employee is asked whether she is available for an "extramarital affair" or a "threesome" (Higher Regional Court of Frankfurt), or a pat on the bottom (Higher Labour Court of Cologne from 07 July 2005 - 7 Sa 508/04). A "physical" sexual harassment is not possible at virtual Christmas parties 2020, but sexual harassment is conceivable by words, through gestures or with the chat function.

3. Christmas party and accident insurance

Even if the Christmas party is not a compulsory event, it is still a company event and as such the usual insurance cover is provided by the statutory accident insurance. This also applies to a virtual Christmas party, even for staff working from home.

Covered are all activities that are compatible during the event with regard to the community purpose (BSG of 05 July 2016 - B 2 U 19/14 R).  The protective purpose includes all activities related to the Christmas party, e.g. eating, drinking, dancing, preparations, etc. The employer determines the duration of the Christmas party and thus also the scope of the insurance cover. Once the employer officially ends the party, the insurance cover also ends (Social Court of Frankfurt am Main dated 24 January 2006 - S 10 U 2623/03). Still, the insurance cover includes the journey home, even after the Christmas party has ended, provided that the employee goes straight home and does not make any detours and that the accident is not essentially due to other reasons (drugs, absolute unfitness to drive in case of a motor vehicle accident).

4. Employees' entitlement to Christmas presents

The restrictions imposed by the coronavirus pandemic affect Christmas celebrations but not Christmas presents. Can there even be an "entitlement" to Christmas presents? In its judgement of 26 March 2014 (11 Sa 845/13), the Higher Labour Court of Cologne had to decide on an employee's claim for the granting of a Christmas gift, legally on the transfer of ownership of an iPad mini. The employer granted an iPad mini with a value of approximately EUR 400.00 each as a Christmas gift only to those employees who attended the company Christmas party. The employer intended to achieve that more of employees attended the party Of the approximately 100 employees, 75 employees attended the Christmas party and accordingly received an iPad mini. At the time of the Christmas party, the employee bringing action was unfit for work and felt that he was being treated unequally. The Higher Labour Court of Cologne did not find any unequal treatment. The employer had wanted to use the surprise gift to reward voluntary commitment outside working hours. This was not remuneration for work performed. Rather, the employer was entitled to treat employees differently, as the employer was pursuing the goal of making company parties more attractive and motivating employees to participate.

It is to be hoped that 2021 will end without the coronavirus but with Christmas parties.

Best wishes from the Labour & Employment Law Practice Group, and stay well!

Yours Dr Erik Schmid

No more pizza at the Italian restaurant around the corner,
No tarte flambée with bacon at the inn,
Nobody leaves a bar drunk anymore,
But not only leisure time is affected.

The Corona pandemic affects everyone,
Dear readers, unfortunately also the working life,
Mass dismissal, hiring freeze and short-time work,
Home office is spreading in companies.

The workplace moves from the company premises
For hygiene reasons into your own four walls,
No suit at the office, but at home in jeans,
No meetings in then office but webex, zoom and teams.

Restrictions by Covid-19 have been in effect since March,
For newly hired employees this is no joke,
At home alone since his/her first day at work,
Not even among colleagues in the canteen for a break.

A problem may emerge after six months,
How can new employees survive the probationary period?
It is simply not possible to test the employee well,
for the employment relationship from the 7th month onwards, this would be fatal.

Only during the probationary period can the employer
Insist on the short notice period of two weeks,
Is extending the probationary period the bright idea?
No, extension is inadmissible as stated in Section 622 (3) German Civil Code.

Extending the probationary period would not help much either,
The German Protection Against Unfair Dismissals Act begins to apply after six months,
Permitted terminations must then state a reason,
Otherwise the employer cannot part with the employee.

The solution I have in mind is an old acquaintance,
Things get more relaxed during corona around the probationary period.
Termination before the end of the probationary period is recommended
and then choose two or three months more testing.
The maximum six-month probationary period must be outwitted
And "limited" by a long period of notice for a few months.

Best wishes from the Labour & Employment Law Practice Group, and stay healthy!

Yours Dr Erik Schmid

^{Note: This blog has already been posted in the employment law blog of Erik Schmid at Rehm-Verlag (www.rehm-verlag.de}).

Facts

An IT service provider terminated the employment relationship with an employee without notice. The reason was a working time fraud. The employee had been given a laptop to perform his work. During working hours, the employee used his business e-mail account and the Internet very extensively for private purposes. In addition to the employment agreement, the parties had concluded a separate agreement. According to this separate agreement, the employee was not allowed to use the Internet or the business e-mail account for private purposes. It was further agreed that the employer was allowed to exploit the laptop and the data to ensure that the employee complied with this prohibition. The employee wrote a lot of private e-mails from his work laptop in one day and used the Internet privately for an excessive amount of time. When the employer learned about that, it terminated the employment agreement without notice and had the laptop analysed. The analysis revealed significant violations of the ban on private use, with the result that on some days almost no work was done. The employee took action against the termination.

Decision

The Higher Labour Court of Cologne ruled that the termination was effective. It determined that working time fraud had occurred because the employee sent e-mails and visited Internet pages during his working time solely for private purposes. This breach of duty was even more serious because of the extensive private use and the contractual prohibition of private use. In addition, the Higher Labour Court provided important comments on the inadmissibility of evidence. Evidence may be inadmissible if the collection or use of data massively violates the employee's personal rights. Not every encroachment on personal rights leads to the inadmissibility of evidence. The court examined whether evidence was inadmissible in this case and weighed up the mutual interests including the personal rights and the right to produce evidence, whereby the personal rights took a backseat role to the employer's interest in enforcing its legal positions. Further, the data were "only" log file data, i.e. it showed which Internet page was visited and for how long. The Higher Labour Court used Section 26 (1) p. 1 of the German Data Protection Act as the legal basis but determined that the consent was invalid, since the employee's agreement did not meet the strict requirements of the General Data Protection Regulation. The use of data was necessary because there was no less severe and more effective means for the employer to prove the breach of duty.

Practical Consequences

The Higher Labour Court of Cologne has consistently implemented the stipulations of the Federal Labour Court (BAG) and employee data protection. It has drawn up practical guidelines for employers on how they can detect and punish serious breaches of duty.  Employers can issue effective terminations (without notice), even if general personal rights of the employees are affected. In advance, a balancing of interests should always be carried out in order to predict the chances of success of any legal action by the employee.

Practical Advice

The private use of the business e-mail account is a field that is prone to errors. If employers allow private use, they become legally active as telecommunications providers. This has considerable implications for data protection regulations A simple consent of the employee that the employer may also use the data for random control purposes is irrelevant if the employer wants to look into the e-mail account. This may become necessary, for example, if the employee cannot be reached or is suspected of having committed serious breaches of duty. Consent can only ever refer to the employee's part of the e-mail correspondence. The recipient of the employee's e-mails will never have given consent to the employer. Therefore, if an employer does not prohibit the private use of the employee's e-mail account, there are considerable risks associated also with accessing the business e-mail correspondence. Risks occur because the confidentiality of private communications if it is permitted would no longer be guaranteed. For this reason, it is advisable to prohibit the private use of the business e-mail account in order to avoid this situation.

If the private use of the Internet is also to be prohibited, which is also recommended, the exploitation of history data is permissible under data protection law and case law if used to monitor compliance with the prohibition. Employers should therefore contractually agree that private use is prohibited and for what purposes monitoring and exploitation may be carried out. If companies can resort to other means to prove abuse, data exploitation is ruled out. However, employers should generally refrain from consents to the use of data in the employment relationship. The obstacles for effective consent are very high, and the law provides sufficient leeway for the use of data even without consent.

Dr Dominik Sorber

This not only leads to debates in everyday life. Employers are faced with very practical consequences in their companies due to the participation of their employees in those protests. Often the question comes up whether labour law consequences are or maybe should be an adequate response. So far, there have not yet been any court rulings on this subject, especially no decisions by the Supreme courts, which employers could use as a guide. Therefore, even in case of possible breaches of duty by an employee in connection with Covid-19 and the pandemic, the standard principles of labour law must be applied. This post provides an overview of which these are and which are not.

Participation in 'Hygiene Demonstration' as Grounds for Termination?

The participation of an employee in a demonstration against the measures to contain the coronavirus pandemic does not in itself constitute grounds for dismissal. Even if the employer disagrees and may be disturbed by the fact that an employee is at a rally with anti-constitutionalists: An employee's freedom of expression and freedom of action are protected by Article 5 (1) and Article 2 (1) of the German Constitution (Basic Law, GG). In private life, employees are entitled to attend 'hygiene demonstrations'. Employers cannot prohibit that.

Termination Justified In Case of Contact with At-Risk People?

However, the private behaviour of an employee may affect professional life, as a case showed that caused quite a stir in the media:

A nursing home cleaner attended a protest in Berlin against coronavirus restrictions. On the following Monday, she reported sick with symptoms of a cold, unable to work. Since the employee had made no secret of her participation in the protest, the employer had been able to find out about it via Facebook. The employer therefore asked the employee to present a negative coronavirus test, which the employee refused. The employer then issued a termination without notice, the effectiveness of which has not been finally clarified in court.

Still, this case can hardly serve as a blueprint for future, similar cases: Firstly, the case is special due to the contact with at-risk patients in a care facility, which is not given in all sectors. Secondly, the employee was still on her probationary period. A special ground for dismissal was therefore not required, at least not for an ordinary termination.

Dismissal after Posting of 'Coronavirus Joke'

But even in industries where there is no contact with at-risk patients, an employee can endanger colleagues through his or her behaviour, whether by participating in a coronavirus demonstration or through other behaviour in private life. This spring, for example, an employee posted in his WhatsApp status a photo of himself in a cheerful gathering with several friends playing cards more participants than were allowed in a private household at the time and without distance. He chose "Quarantine at my place" as a caption and added a winking smiley face. The employer saw the post and concluded that the employee did not take the coronavirus measures seriously and would in future also not comply with them at the workplace. Since the employer felt it was its duty to protect at-risk persons in the company, the employer gave a dismissal without notice.

Before the labour court, the employee stated that it was a joke and that the date the photo was taken was before the first lockdown. No decision was made: The parties agreed to terminate the employment agreement with the payment of a severance pay. However, it can be assumed that the decision would have been in favour of the employee. Uploading a photo, the date of which is unclear, might not immediately lead to the conclusion that the employee would in future also not comply with hygiene regulations at the workplace. Apart from the question of the extent to which the employer could have fulfilled its burden of presentation and proof, a warning would have had to be considered first.

What are Labour Law Consequences an Employer May Take?

The cases described above show that it is not that easy to terminate an employment agreement with or without notice if the employer wants to take a path that is as legally secure as possible. A termination always has to be the last resort. The employer must have exhausted all other, more lenient measures before it can resort to the last option, a termination. The question is therefore how to proceed if an employee obviously poses a danger to colleagues and third parties, such as patients or nursing home residents, due to his or her behaviour, especially to people who belong to a vulnerable group.

Can an Employer Require Employees to be Tested?

It is conceivable to ask an employee who attended an anti-lockdown protest to take a test and to order that the employee may only return to the workplace with a negative result. Whether this is possible cannot be clearly answered at present due to the unclear legal situation.

Pros and cons have to be weighed up: A test is an encroachment on the employee's personal rights which are protected by basic law. On the other hand, there is the danger to life and limb of other people. The higher this danger is, for example in case of contact with high-risk patients, the more likely it is that the employee would have to undergo a test. However, this question has not yet been clarified, so that no clear answer can be given as to how the employer can proceed in a legally secure manner, should an employee refuse to be tested.

Other Options in Case Testing is Refused?

If the employee refuses testing, an employer could try to have, for this individual case, an obligation clarified in court, in case of doubt in interim proceedings. However, due to time concerns alone, this is unlikely to be an effective means and would probably entail costs rather than benefits. It would be conceivable and in the current situation this seems to be the most practical way to give the employee unpaid leave and not to let the employee return to the workplace. If the employee shows no symptoms after 14 days following the general quarantine recommendations, he or she can return to the workplace. If there are respective agreements in the company, the employee can be asked to work from home to protect colleagues.

But what if the employee regularly takes part in protests against coronavirus restrictions?  Would the employer have to give the employee unpaid leave each time? This could be costly for the employer, as it might then have to provide for a replacement of the work of the employee on unpaid leave again and again.

Warning in Case of Breach of Duty

The legal difficulty lies in distinguishing between the participation in a legal demonstration and the violation of official directives, such as maintaining social distance and wearing a mouth and nose cover. The question of the adequate legal consequences will keep labour lawyers busy for a long time until answers are found.
No warning can be issued for legal behaviour in the spare time. The case is different if the employee violates the orders of the authorities when participating in a demonstration. In this case, the employee commits an administrative offence. Now, an administrative offence in private only has labour law consequences if there is a connection to the activity carried out at work. If official directives are violated, an employer can argue that the employee represents a danger to colleagues and third parties, if any, so that in fact there may be a connection. As a consequence, this behaviour would justify a warning.

Practical Tips

The foregoing shows that termination, even more so termination without notice, is generally not the means of first resort when employees violate measures to contain the pandemic. If an employee violates orders at the workplace, a warning should always be issued for such a violation. In case of recurrence, the employer can then resort to termination. Whether ordinary or extraordinary termination then depends on the individual case. Attending a protest against coronavirus restrictions does not in itself constitute a breach of duty; the employer cannot prohibit participation. It will also probably not be legally enforceable to require subsequent testing. However, since the employee then represents a danger to colleagues and possibly also to third parties, unpaid leave could prevent this danger.

If an employee violates official directives when participating in a demonstration, also this violation can only in the rarest of cases be sufficient to give notice immediately. In addition to unpaid leave as mentioned above, a warning should be issued regarding the employee's conduct on the grounds that the employee has violated collateral obligations under the employment agreement. In case of recurrence, dismissal could then be considered.

Ines Neumann

Dear Readers,

And how can employers react in case of violations of the corona hygiene concept by employees? Showing employees yellow and red cards, putting them in jail, putting them in the hands of the Terminator or taking their driving licence?

Hygiene Concept - Employer's Right to Give Instructions

According to Section 106 Sentence 1 German Trade, Commerce and Industry Regulation Act (GewO), employers have the right to determine the content, place and time of work performance at their own reasonable discretion. This is true at least if these working conditions are not laid down in an employment agreement, works agreement, collective agreement or statutory regulations. The right to give instructions entitles the employer to unilaterally specify the employee's obligation to perform by issuing instructions. Pursuant to the provision under Section 106 Sentence 2 GewO, the right to give instructions also extends to the order and conduct of the employee in the company.

Along with the right to give instructions, the employer also has a duty of care and to avert dangers to its employees.

Insofar as there are no other relevant regulations for the employment relationship, the right to give instructions thus also covers, for instance, the issuing of smoking bans, the carrying out of entrance controls or the wearing of service or protective clothing. Thus the implementation of the corona hygiene concept is also covered by the right to give instructions. The employer is entitled to unilaterally order the wearing of protective masks, the disinfection of hands, the observance of physical distancing, the prohibition of physical meetings, etc.

Violations of the Hygiene Concept

Employees who violate the corona hygiene concept set up by the employer are acting in breach of their duties. Employers can sanction any violations by means of the usual instruments of labour law, such as

• once again expressly order compliance with the hygiene concept,
• issue of a warning letter/ letters or
• ordinary termination for conduct and/or extraordinary termination.

As the employee, contrary to the hygiene concept instructed by the employer, comes in, for instance, not wearing a protective mask and, thus, in a way that is not fit for work and not offering its work performance in accordance with the contract, the employer would also be entitled to release the employee for this period and not to pay the remuneration and thus show the yellow card.

Conduct Outside of Work

"You should not mix business with pleasure". How employees behave in their free time is basically up to them. An employee's misconduct outside work can only have consequences for the employment relationship if it has an effect on the employment relationship or if a reference to the employer is established.

In the case heard by the Osnabrück Labour Court (File No.: 2 Ca 143/20) the employer had issued an extraordinary termination of an employment relationship. The employee concerned posted a photo on his private WhatsApp profile entitled "Quarantine at my place". The photo showed the employee with five other men close together playing cards. The photo was taken during the employee's spare time. Conclusions about the employer could not be drawn from the photo.

No decision has been taken in this case. In such cases further cooperation is often not acceptable for the employer. Employers must assume that such employees do not take the specified corona protection measures seriously and show no willingness to comply with them. The employer must also assume that the employee may also disregard operational protective measures and thus risk the health of colleagues. Resistance to corona measures outside the employment relationship nevertheless remains a grey area and it depends on the individual case. A sanction will be possible in particular if a reference to the employer can be established from the photo, the post or the account.

Stay healthy and warm (labour law) greetings from Munich

Yours, Dr. Erik Schmid

Note: This blog has already been posted in the employment law blog of Erik Schmid at Rehm-Verlag (www.rehm-verlag.de)

Dear Readers,

Corona makes many things in everyday life impossible or difficult, such as holidays, going to the cinema, family celebrations, concerts etc. Corona also makes many things possible in terms of employment law, such as the "telephone AU", the medical certificate of incapacity to work, issued by telephone, without a physical examination by a physician.

Principle: The duties of the sick employee in the event of incapacity for work

Legally speaking, incapacity for work due to illness is deemed to be given if there is a physical or mental condition that is contrary to the regulations, and as a result the work performed can no longer be carried out or can only be carried out at the risk of aggravating the illness.

The employee's duties in the event of incapacity to work due to illness include the duty to notify, the duty to provide evidence and to further recovery. The duty of notification under section 5 (1) sentence 1 of the German Act on Continued Payment of Remuneration (EFZG) is understood to mean the immediate informal communication by the employee to the employer of the incapacity to work and its probable duration. The notification can be made informally, e.g. by telephone, e-mail or WhatsApp. The duty to provide evidence is understood to mean the submission of a medical certificate of incapacity to work in accordance with section 5 (1) sentence 2 EFZG.

Requirements for an effective certificate of incapacity to work

If the incapacity to work due to illness lasts longer than three calendar days, employees have the legal obligation (section 5 (1) sentence 2 EFZG) to submit a medical certificate of incapacity to work to the employer no later than the following working day. The attestation / medical certificate is to be issued by a licensed physician after a thorough examination in person. The AU must state the name of the employee, the beginning and the probable duration of the incapacity to work due to illness. The certificate of incapacity to work must also state when the physician diagnosed the AU and whether it is an initial or follow-up certificate. If only one of these mandatory details is missing, there is no proper certificate of incapacity to work. The medical diagnosis of the illness is not mentioned on the certificate for the employer for reasons of data protection law.

Exception: Sick leave by telephone possible again

For a limited period of time from 19 October 2020, initially until 31 December 2020, patients suffering from minor respiratory diseases can be granted up to seven calendar days of sick leave by telephone, according to a communication of the Federal Joint Committee (G-BA). Physicians in private practice must personally ascertain the patient's condition by means of a detailed telephone examination. A one-time extension of the sick leave can be issued by telephone for a further seven calendar days.

I would wish everyone that the telephone only has to be used to order a pizza and not for obtaining a medical certificate of incapacity to work.

Stay healthy and warm (labour law) greetings from Munich

Yours, Dr Erik Schmid

Note: This blog has already been posted in the employment law blog of Erik Schmid at Rehm-Verlag (www.rehm-verlag.de).

Dear Readers,

At the beginning of 2020, when the coronavirus and its consequences hit the German labour market, regulations were quickly put in place and temporary measures were introduced to overcome the crisis. In particular, special regulations were introduced to facilitate the implementation of short-time work. As the coronavirus continues to have a massive impact on working life, the German government responded with new regulations and extended the period during which short-time allowance can be received. The following applies:

• The short-time allowance will be extended from the current 12 months to a maximum of 24 months in total.
• The corona-related increase in short-time allowance of 70 percent and 77 percent as of the fourth reference month and 80 percent and 87 percent as of the seventh reference month is extended until 31 December 2021 for all employees who became entitled to short-time allowance until 31 March 2021.
• The facilitated access to short-time allowance will remain in place until the end of 2021 if short-time work has been taken up in the applying company by 31 March 2021.
• Employers will continue to receive full reimbursement of the social security contributions incurred during short-time work until mid 2021, thereafter at 50 percent until 31 December 2021, if short-time work was taken up by 30 June 2021.
• Remuneration from low-paid employment that was taken up during short-time work will continue to be exempt from being offset until 31 December 2021.
• Temporary workers also have the option of applying for short-time allowance until 31 December 2021 if short-time work in the temporary employment agency was taken up by 31 March 2021.

The new or rather extended regulations are part of the law on job security in the wake of the Covid-19 pandemic. It is expected to come into force on 1 January 2021.

Stay healthy and warm (labour law) greetings from Munich

Yours, Dr Erik Schmid

Dear Readers,

Yet employers also have a considerable own interest in in-house flu vaccinations. For each employee and each vaccination, the costs of the vaccine and the physician amount to around EUR 20 to EUR 30 plus a few minutes of working time. This is far less expensive for employers than a wave of influenza in the company and the incapacity to work of some or many employees for days and weeks due to illness.

Flu protection is a private matter for the employee

Employers are entitled but not obliged to offer (free) flu vaccinations at the workplace. Employers have a duty of care for their employees and they must do or refrain from doing anything to keep harm away from the employees. This applies, though, in particular to operational risks induced within the company and not to general health risks. Flu vaccination is part of general health care and is a private matter for the employee. There may be exceptions in medical or nursing professions. Flu vaccination may be compulsory to protect patients in hospitals or high-risk residents in nursing homes from the flu.

Liability in case of vaccination damage - BAG dated 21 December 2017 (8 AZR 853/16)

Are employers liable for vaccination damage in the case of voluntary flu vaccinations offered at the workplace if workers face medical problems after vaccination? The BAG had to decide on vaccination damage suffered by an employee after a voluntary flu vaccination at the employer's premises. The employee had suffered severe pain at work as a result of the vaccination, with a permanent and significant restriction of movement in the cervical spine. She was no longer able to work and demanded compensation for pain and suffering from her employer and asserted other claims for material and non-material damages.

Criteria for avoiding employer liability for voluntary flu vaccination

The BAG rejected claims for damages against the employer due to the flu vaccination of the affected employee. As the BAG found, the employer did not conclude a treatment contract with the employees. Thus, the employer did not violate any obligation from a treatment contract or from the existing employment contract. In such a case of voluntary influenza vaccination, the employer was solely responsible for the proper selection of the medical staff carrying out the vaccination. However, there is no duty on the part of the employer to ensure that the attending physician provides proper information or to supervise the physician in carrying out the vaccination. This would not be possible especially given the large number of employers who are not active in the medical field.

Practical advice

Employers who offer flu vaccination at work should ensure that, on the one hand, there is no obligation to vaccinate on a contractual basis but that it is done voluntarily. On the other hand, care should be taken that no treatment contract is made between employer and employee but only between doctor and employee. As a matter of precaution, it can also be considered to cover any damage by insurance.

A time without the flu, stay healthy and warm (labour law) greetings from Munich

Yours,Dr Erik Schmid

Short-time work requires the forecast of only temporary reduction in work volume

Expecting a temporary reduction in the work volume, the prudent entrepreneur decided to introduce short-time work in the first phase of the crisis, although also for short-time working there are many obstacles to overcome. However, once the forecast for the company or part of the company shifts from temporary to permanent, the initial decision which was based on the original assessment of an only temporary reduction in work volume must be revised. As a part of the registration process, the Federal Employment Agency even had to be convinced that the reduction in work volume was only temporary.

Basic requirements for dismissal for operational reasons

In deviation from the requirements for the introduction of short-time working, a permanent loss of work volume is required for announcing dismissals for operational reasons. The underlying decision must in any case be to reduce the number of jobs. According to labour court rulings, the operational requirement for the effective termination of employment relationships is not fulfilled if external or internal operational reasons do not lead to a permanent reduction in the number of workers required. In the currently prevailing situation, both variants can (theoretically) be applied.

Requirement: Change in entrepreneurial decision

If, in the circumstances of the individual case, it is no longer foreseeable that a return to full-time work will occur within a certain period of time, a reduction in work volume can no longer be classified as temporary. Conversely, a dismissal for operational reasons cannot be justified by an only temporary reduction of work. Short-time working and dismissals for operational reasons thus prove at least at first glance to be contradictory and mutually exclusive.

• Internal and external operational events

Additional internal circumstances or external events are required. The so-called self-binding entrepreneurial decision which the employer makes depending upon the number of the necessary employees in the enterprise in direct correlation to the work volume, and which is based thereby on external reasons, must be distinguished from the formative entrepreneurial decision. The important point here is that short-time work was introduced on the occasion of COVID-19 due to external reasons. This is keeping in mind the conditions for the introduction of short-time work also not surprising, since an inevitable event in the sense of Section 96 (1) of the German Social Code III (SGB III) is already defined as coming from the outside. Thus, in this case, the requirement is only fulfilled if an external event has occurred. If, however, now the entrepreneurial decision is made to introduce short-time work, the employer hereby makes a commitment - self-bindingly - as a reaction to external events. In this case, the entrepreneur must state which external circumstances have changed to what extent, making a new corporate decision necessary. In practice, the complexity often increases even more, since a prudent entrepreneur takes exogenous factors into account, i.e. the reason for a reduced work volume comes from outside, but the employer reacts with a formative decision.

• Review of the entrepreneurial decision

According to the established case law of the German Federal Labour Court (BAG), an entrepreneurial decision is not to be examined for its objective justification or its appropriateness, but only for whether it is obviously not objective, unreasonable or arbitrary. Nevertheless, based on the original decision the introduction of short-time work it must be presented in a comprehensible manner which changes have occurred that made a correction necessary or caused it. However, the general rules must apply, and a review may only be carried out on the basis of the aforementioned principle. The Federal Labour Court generally does not rule out the possibility of dismissals for operational reasons during the period of short-time work, but considers the implementation of short-time work to be an indication of the assumption that the reduction of work volume is only temporary. At the same time, however, the Federal Labour Court states that the employer himself can refute the indicative effect by giving concrete evidence. In that case, the employer must explain why the he or she, on the basis of order and personnel planning, no longer (only) assumes a short-term fluctuation in orders but a permanent decline.

Notice of dismissals for operational reasons during ongoing short-time work in the company/business

If jobs are cut and thus a change occurs in operations in terms of Section 111 of the German Works Constitution Act (Betriebsverfassungsgesetz), the effects on the already ongoing, applied for and subsidized short-time work must be clarified. This is easy to answer with respect to the employee who is affected by the job cuts. At the latest at the moment the employee has received a notice of termination, the personal requirements for receiving short-time work compensation according to Section 98 (1) no. 2 SGB III, the temporary reduction in work volume, cease to exist. Consequently, for the employee concerned short-time work and dismissal for operational reasons exclude one another.
The Employment Agency stipulates in their instructions that this is to be the case at the latest from the time when the decision to terminate the employment relationship has become concrete in this respect. However, what happens to employees who are supposed to continue working short-time and are not affected by the staff reduction measure?

• Current pinion and approach of the Federal Employment Agency

In this context, it is sometimes argued that it should not be possible to synchronize short-time work and dismissal for operational reasons for different groups of employees, since from that moment on, the goal of preserving jobs could no longer be achieved. It follows from the technical instructions of the Federal Employment Agency that after an entrepreneurial decision to implement a change in operations that exceeds the thresholds of Section 17 of the German Dismissal Protection Act (Kündigungsschutzgesetz), the conditions for short-time work are no longer met for the entire company. The argument is that, although entrepreneurial considerations and planning are not yet of any particular importance, as soon as implementation measures are taken, the entire company no longer meets the requirements for short-time work.

• Criticism and evaluation

The aforementioned argumentation must be expressly contradicted. If the operational conditions can still be affirmed even after the execution of a staff reduction, it is not evident why enterprises should not be entitled to perform short-time work also in addition to a staff reduction. The consideration of the operational situation alone, after the notice of termination has been given, must show that the requirements in terms of labour and social security law for applying for short-time work and the associated short-time work allowance are still fulfilled. If this is no longer the case, for example because the quota of employees according to Section 96 (1) SGB III is no longer met, the question does not arise. However, if the requirements are still met, the rejection of a further use of short-time work already contradicts its sense and purpose - the preservation of jobs. Just because a part of the jobs is or will be lost without replacement, this does not necessarily mean that the rest of the jobs are secure.

To the extent that only a permanent reduction in the work volume is taken into account by means of restructuring, the element of temporary reduced work volume must nevertheless be affirmed. The restriction of the company's ability to function, more specifically the requirement that a predominant number of jobs must be retained, also appears to be clearly too narrow. Whether or not a remaining business is operationally functioning is not subject to the examination of the Federal Employment Agency. It is also not a requirement for applying for short-time work, at least, it is not reflected in the law and is also not mentioned in the application form. Therefore, if the application for short-time work is maintained or corrected in the line of argumentation, it is neither to be examined nor objected to beyond the normal requirements. An additional requirement that a necessary staff reduction now also must result in maintaining substantial jobs on top of the conditions specified under Section 96 et seq. SGB III would introduce a requirement not provided for by the law. If the requirements to apply short-time work are met, an enterprise may in fact do both: reduce staff and apply for short-time work.

Conclusion

Short-time work and dismissals for operational reasons appear to exclude one another, but they don't.  A partial change in the forecast from "temporary" to "permanent" is not only possible but in many industries a reality. If a company feels compelled to announce dismissals for operational reasons, the change in forecast must be well documented and justified, as the employer may be faced with an increased burden of proof and presentation in subsequent court proceedings.

Dr Kathrin Bürger

Sonja Müller

Note: The article was published in a more detailed version in the magazine DER BETRIEB (DB 2020, p. 271 et seq.).

Question about holiday destination exceptionally permitted

In ordinary times, the employer may not ask his employees about their travel plans for holidays. During the corona pandemic something else applies: This question is now permitted. This is because the employer has a duty of care which also affects the health of colleagues and customers. In the current situation, this duty is given higher priority than the personal rights of employees. Because in case of doubt, employers must take organisational measures in case of a quarantine situation of employees, for instance, to maintain the operations and redistribute tasks. Hence, the question can be asked in the run-up to the journey (possibly combined with a reference to the corresponding consequences for the entitlement to compensation). Employees must truthfully inform the employer of their travel destination. However, the employer cannot prohibit the journey.

No paid leave for quarantine on return from risk area

Travellers to risk areas must have a corona test carried out at their destination or at the latest when entering Germany. Unless a negative test result is obtained, they have to go into a 14-day domestic quarantine on the basis of the regulation on quarantine measures adopted at Federal State level. If employees cannot work during this quarantine, for instance because it is not possible to work in the home office, the returnees do not receive any compensation from the employer during the quarantine period, provided that the trip was a private holiday trip. In this respect, the principle "no work, no pay" applies. Exceptions may exist in accordance with the regulation of the so-called temporary prevention to perform work according to section 616 German Civil Code (BGB) or the claim for compensation according to section 56 of the German Infection Protection Act (IfSG). In this case, the applicability of section 616 BGB must not be excluded under the terms of the employment contract. Furthermore, the employee must not have culpably caused the prevention from work. The regulations of the German Act on Continued Payment of Remuneration (EFZG) are the benchmark for this.

Fault on one's own part

From this follows: If it is known before the start of the journey that the destination is a risk area classified by the Robert Koch Institute (RKI), there is no claim to compensation under section 616 BGB. The same applies according to the IfSG, as section 56 IfSG also depends on whether the employee deliberately caused the quarantine situation or could have avoided it him/herself. Even under the EFZG, if the employee falls ill with the corona virus during the holiday, the entitlement to continued payment of compensation for the period after his/her return home does not apply. Travel to a known risk area is considered to be "fault on one's own part".

The situation is different if the RKI does not declare the destination a risk area until during the trip. Insofar as section 616 BGB is applicable, the claim for compensation continues to exist if a negative corona test result is available within a few days. It has not been conclusively clarified, though, to what extent state compensation under section 56 IfSG is applicable in these cases. If employees fall ill in such a situation, the EFZG applies and employees are generally entitled to continued compensation in the event of illness.

A special feature applies to travel restrictions: If employees are stranded abroad and are therefore unable to start work in time, their entitlement to compensation also lapses. In this respect, fault is not of relevance. The "travel risk" is generally borne by the employee.

Mandatory business trips abroad

If you are travelling on business to a risk area, there are a number of special features that apply before you start your trip and after you return. It is advisable to inform yourself about the risk situation in the destination country on the website of the Federal Foreign Office. Even before departure, the employer has an increased duty of care with regard to the decision to be made between the necessity of the trip and the health protection of the employee. If the business trip is absolutely necessary, the employer must take special protective measures, e.g. instruction regarding hygiene and safety regulations; provision of disinfectants, gloves and mouth protection. After returning from the risk area and the subsequent 14-day home quarantine, the employee's entitlement to compensation continues - unlike during the holiday trip - if the employee is unable to carry out his/her work from the home office. In this case the employee is not at fault, neither according to section 616 BGB nor according to section 56 IfSG.

Become active to avoid a quarantine period without compensation

Where home quarantine is necessary due to returning from holiday in a risk area, employers and employees should make arrangements for flexible working methods such as home office or mobile working during this period. Employees should already take the technical equipment home on the last working day before the start of the holiday in order to be able to work in the home office after the trip if necessary. The employer should also point out to the employee in advance of the trip that there is no entitlement to compensation if the employee goes on holiday to a risk area with subsequent quarantine. This is particularly important if employees cannot carry out their work in the home office.

Employers should also expressly point out to their employees that returning to work without a negative corona test is prohibited. Employees should not return to work until another test with a negative result has been carried out after 7-10 days and the employer has been notified - or the quarantine period has expired. In general, the employer has no duties with regard to the performance of the corona test.

Taking the works council into account

If there is a works council established, it must be involved in travel-return arrangements. This is because both the risk assessment pursuant to section 87 (1) no. 7 German Works Constitution Act (BetrVG) and the occupational health and safety measures to be taken (section 87 (1) no. 7 BetrVG) are subject to co-determination by the works council. In works agreements, the parties can agree on various basic provisions, for instance on mobile working, return concepts and other protective measures. Which measures the employer can implement and order at short notice even without the works council depends on the operatinal specifics of the company. In the case of systemically relevant companies in particular, unilateral orders should be possible, at least temporarily, to protect health without the involvement of the works council. It is acknowledged, for instance, that employers can order health inspections on the basis of the right of direction pursuant to section 106 German Industrial Code (GewO) (Federal Labour Court of 12 August 1999 - 2 AZR 55/99). Still, the employer should actively approach the works council and conclude appropriate regulations in the form of a company agreement with a corresponding hygiene concept.

Dr Michaela Felisiak

Dr Dominik Sorber

^{Note: The article was published in a similar form by LTO on 17 August 2020.}

Please stay! How companies can support employee retention despite short-time work

The coronavirus crisis, and with it short-time work, are already entering their seventh month in some companies. Even if many affected employees have so far shown understanding for the financial restrictions associated with short-time work, patience and solidarity among many are gradually coming to their limits. Due to the lack of prospects and loss of income, the leaving of sought-after skilled workers and top performers in particular is to be expected, if not already observed. However, for employers there are certainly ways and means to counteract fluctuation and keep employees on the job. Still, most of these are not for free. The following blog post outlines possible options for strengthening employee retention despite short-time work.

Statutory increase of short-time allowance

The most favourable ‑ since for the employer free of charge ‑ option of employee retention is the use of the new legal regulation for a gradual increase of the short-time allowance (KUG) until 31 December 2020: The benefit rate refunded by the German employment agency rises from the fourth month of receipt to 70 and/or 77 per cent and from the seventh month of received short-time allowance to 80 and/or 87 per cent. It is a condition that the employee's loss of remuneration must amount to at least 50 per cent, although not necessarily permanently: It is sufficient if this is the case in the fourth or seventh month. After completion of the third or sixth month of receipt, it is therefore checked monthly whether the loss of remuneration amounts to at least 50 percent. The individual months of receipt are decisive when considering the duration of payment, and a receipt of short-time allowance does not have to be uninterrupted. In case of interruptions, the months when short-time allowance was received may be added up, as long as they fall in the period from March to December 2020.

This offers employers the opportunity to control the degree of short-time work in such a way that the loss of remuneration is at least 50 percent, so that the employees meet the requirements for the increase. The prerequisite for this is of course the existence of a corresponding lack of work, and that the co-determination rights of an existing works council are observed.

Voluntary increase of the short-time allowance by the employer

In addition to an increase by the state, employers may also top up the short-time allowance at their own expense. Such top-up payments are exempt from social security and tax up to 80 percent of the net pay difference and are not set off from the short-time allowance. Employer top-ups are particularly interesting for companies that do not benefit from the statutory increase because the level of working time is too high, or because short-time work has not been in effect long enough. A top-up payment does not have to be made on a permanent basis, but can also be granted for individual months. Moreover, the payment has no effect on the thresholds required for the receipt of short-time allowance (at least 10 percent loss of remuneration for at least 10 percent of employees).

In addition to the principle of equal treatment under labour law, the works council's right of co-determination pursuant to Section 87 (1) no. 10 of the German Works Constitution Act (Betriebsverfassungsgesetz, BetrVG) must be observed when introducing and amending voluntary top-up payments. However, it is limited to the principles of distribution; the decision on whether top-up payments are made at all, to what extent the employer wants to make financial means available for this purpose, for what purpose and to which group of persons it wants to provide the service, remains with the employer.

Coronavirus bonus

The special coronavirus-related regulations further allow employers to grant their employees aid and support in the form of a Coronavirus Bonus up to an amount of EUR 1,500 ‑ without tax and social security contributions ‑ to mitigate additional burdens resulting from the coronavirus crisis. The bonus is not limited to certain industries and activities. The tax-free payment is also possible in addition to short-time allowances. Furthermore, the coronavirus bonus is not set off against the short-time allowance.

Like the top-up payment, the coronavirus bonus has no effect on the thresholds required for short-time working. The granting of a coronavirus bonus will therefore likely to be of particular interest to companies whose lack of work is only close to 10 percent, and who nevertheless want to provide a quick and clear positive incentive to their employees.

Again, the principle of equal treatment must also be observed for the coronavirus bonus, so any differentiation between employees would have to be justified. In addition, the works council's right of co-determination applies to the granting of voluntary one-off payments such as the coronavirus bonus in the same way as to the granting of any top-up payments.

But be careful when reallocating or bringing forward vacation or Christmas bonuses

Not rarely employers who want to motivate and financially relieve their employees at short notice, might have the idea to bring the normal pay date forward of a vacation bonus or a Christmas bonus which would be paid anyway. This is financially less drastic for the employer than the payment of an additional increase or a coronavirus bonus.

To bring the pay date forward of one-off payments is however a double-edged sword: Although they can remain unconsidered when calculating the amount of short-time allowance, thus do not reduce the allowance, they do affect the operational threshold values (more than 10 per cent loss of remuneration with at least 10 per cent of the employees) which must be considered for a granting of a short-time allowance. In a worst-case scenario, although well-intentioned, bringing the pay date of the one-off payment forward can, in the month of payment, lead to the loss of claim for short-time allowance for the entire operational unit for which the loss of remuneration was applied for with the employment agency.

Should employers consider such steps, it is advisable to obtain legal advice for each individual case in order to avoid such unintended, fatal consequences.

Dr Corinne Klapper Jasmin Onderscheka

^{Note: This contribution has been published in a similar form in a newsletter of the German Chamber of Industry and Commerce (IHK) Schwaben dated 2 July 2020}

Dear readers.

The corona pandemic is not yet over but restrictions in the world of work are being eased. After a lockdown lasting weeks, companies are now preparing for their employees to return to their offices, salesrooms, construction sites, factories and the football ground. What has to be kept in mind and reserved for the return from the corona lockdown and what will be left of the corona-dominated working conditions.

Initial situation

To make a return from the corona lockdown at all possible, the Federal Government, the federal states and, regionally, the cities and municipalities have issued various regulations. They specify whether the operation of a particular trade is permitted or prohibited, and if so, under what conditions. Irrespective of whether it is retail, workshops, hotel and catering, administration, healthcare, production or development, the focus is always on measures to prevent infection.

Return from the corona lockdown

Employers have an interest in the return of their employees to work, as this can generate turnover. Yet due to the duty of care, the employer is responsible for the health of its employees (section 241 and section 618 German Civil Code (BGB)). Should the statutory accident insurance with the statutory limitation of liability not apply in the event of an employee's illness, the employer is liable according to general principles. Employers therefore have a great interest in protecting their employees from infection at the workplace. The following aspects are to be taken into account in particular:

• Perform a risk assessment,
• Develop a cleaning and hygiene concept,
• Regulations for protective mouth-nose covers and gloves, the disinfection of hands and equipment,
• Regulations on working hours and breaks, e.g. corona shift models and staggered breaks,
• Guidelines for customer visits, events and business trips,
• Contingency plan in case of corona infection of an employee,
• Quarantine and employment bans,
• Information and instruction of employees, control of compliance with the measures, if necessary warning of the employees in case of violations,
• Documentation of regulations and measures as well as information, instruction and control of the employees

What remains of the corona lockdown?

The corona pandemic has already changed the world of work within a short time. For instance, decisions of the works council can be made by telephone or video conference. Due to the corona pandemic, many employees are also currently working in their home offices. As was announced at the end of April 2020, Minister of Labour Huberts Heil has announced that he intends to present a law for a right to a home office by autumn 2020. This law would particularly affect the period after the corona pandemic. According to this law, every employee should have the right to work in a home office if his/her job allows it. Of course this is all "still up in the air".

However, disputes can already arise if the employer wants to restrict or completely end temporary, corona-related regulations such as the home office. Employer and employee should therefore agree on whether and how to return to the original working conditions. This would, for example, be possible with the following instruments:

• automatically by means of a (temporally or materially) limited agreement,
• through a unilateral right of withdrawal,
• by mutual agreement, or
• by dismissal/dismissal with the option of altered conditions of employment.

Corona will keep the working world busy for a long time to come.

Best wishes from the Labour & Employment Law Practice Group, and stay well

Yours, Laila and Dr Erik Schmid

Entries only in exceptional cases

Without an urgent reason, entry to Germany is currently not possible for third-country nationals who do not yet have a long-term right of residence. Exceptions are only made for foreigners with so-called "essential functions or needs", in particular for healthcare staff and researchers as well as for nursing professions and for cross-border commuters, freight transport workers and other necessary areas. According to the BMI, accelerated procedures for skilled workers in the above-mentioned occupations should be given priority. For skilled workers in other professions and trades, on the other hand, there are considerable delays due to travel restrictions and the continued closure of some aliens authorities. According to the BMI, all further accelerated procedures for skilled workers are to be continued by the aliens authorities in accordance with their capacities and in consultation with the employers, to facilitate a speedy decision once the travel restrictions have been lifted.

Simplified procedures for the renewal of existing residence permits

The BMI has provided for simplified procedures in the event that foreign skilled workers are currently employed in Germany with a residence title whose validity has expired. In particular, greater use is to be made of the so-called impact of fiction in section 81 (1) German Residence Act. If the renewal of the residence title is applied for (which can currently also be done informally, e.g. online, by e-mail or telephone), the fictional impact will take effect by operation of law. The previous residence title is thus considered to be valid from the time of its expiry until the decision of the aliens authority. Consequently, the previously permitted employment can continue to be exercised after the expiry of the residence title. The fictional or temporary residence certificate (Fiktionsbescheinigung) is regarded as proof of this. If the certificate cannot be issued by the authority due to the special circumstances, confirmation of receipt of the application for renewal by the authority, in emergencies even electronically without signature and stamp, is sufficient as proof.

Specifics for holders of Schengen visas

Schengen visas are issued for stays of up to 90 days within a 180-day period exclusively for tourist or business purposes. Gainful employment is not permitted on the basis of a Schengen visa. However, due to the restrictions imposed by the corona virus, in particular because of the almost complete cessation of international flight operations, it is currently no longer possible for many holders of Schengen visas to leave Germany and return to their home country. For this reason, the BMI has issued an ordinance exempting holders of Schengen visas from the requirement of a residence permit until 30 June 2020. In fact, the ordinance even allows them to legally pursue gainful employment in exceptional cases.

Extension of the deadline for expiry of residence permits

As a rule, residence titles expire when a foreigner leaves Germany and stays abroad for more than six months. The BMI has also provided for simplified procedures in cases where foreign nationals who have left Germany with a valid residence permit currently have no chance to return to Germany within the six-month period due to the corona virus, e.g. because of cancelled flight connections. Such foreigners are to be granted a generous extension of the deadline, which, due to the particular situation, may not only be granted upon application, as is usually the case, but also by means of a general ruling ex officio.

Short-time work for employees of foreign nationality

When short-time work is introduced, foreign nationals who are employed with a valid residence permit are not subject to the same rules as the other employees in the company. The prerequisite for receiving short-time work allowance is that the foreigner is subject to compulsory social insurance in Germany. For this reason, employees posted from abroad generally do not meet the requirement of an employment relationship subject to compulsory insurance in Germany for entitlement to short-time work allowance; they are subject to the regulations of their country of origin. The introduction of short-time work for foreigners who are subject to social insurance contributions has no effect on the validity of the residence permit. According to the BMI, this also applies in cases in which short-time work causes the salary limit required for the residence title to be temporarily undercut (e.g. in the case of an EU Blue Card) whereas the introduction of short-time work must, however, be a consequence of the corona virus.

Employer's obligation to report in the event of premature termination of employment

With the new German Act for the Immigration of Skilled Workers, the obligations of the employer have been extended. According to the new section 4a (5) German Residence Act, employers are obliged, in the event of premature termination of the employment of a foreign national, to notify the competent aliens authority within four weeks of becoming aware that the employment for which the residence title was issued has been prematurely terminated. t is irrelevant for the employer's duty of notification whether the termination of the employment relationship ends voluntarily or, for instance, through termination by the employer. According to the BMI's application instructions regarding the Immigration of Skilled Workers Act, the period for notification by the employer always begins upon the company's HR department being informed of the termination. If the employer does not at all, not correctly or not in time submit the report, a fine of up to EUR 30,000 can be imposed.

Because of the more difficult working conditions in many companies due to the effects of the corona virus, the BMI has, in its first circular, urged the aliens authorities to refrain from prosecuting a violation if the employer's notification is delayed due to capacity constraints. Nevertheless, it is advisable for employers to report the premature end of the foreigner's employment in good time within the deadline and to document this in writing accordingly.

Conclusion/Practical advice

The Skilled Workers Immigration Act which has only recently come into force appears to be experiencing unexpected starting difficulties after only a short time. Still, the BMI has reacted quickly to the consequences of the corona virus and has provided for effective measures for the aliens authorities as well as for foreign skilled workers which will continue to make their employment possible, even though - as in many other areas - delays may still occur at present. Employees of foreign nationality should inform themselves in good time about which relief measures apply to them and which steps they must take at their competent aliens authority in order not to lose their right of residence and permission to work. Employers must regularly verify, not only when hiring new employees but also in the case of existing employment relationships, whether the foreign employees have a valid residence permit that permits the actual employment in order to avoid illegal employment of foreign nationals.

Dr. Michaela Felisiak

Dr. Martina Schlamp

One of the most frequently asked questions first: Is it even possible to terminate a contract despite short-time work?

The answer is: YES. Dismissals are also possible during short-time work, not only for personal and behavioural reasons, but also for operational reasons. Special principles apply here. If short-time work is performed in a company, this is an argument against a permanent reduction in the need for employment. However, a merely temporary lack of work cannot justify a dismissal for operational reasons. If, however, the need for employment is permanently reduced because other circumstances are later added, the requirements for a dismissal for operational reasons may be met despite short-time work.

Practical advice:

It is absolutely crucial to take a look at the collective bargaining regulations applicable in the company. Collective agreements and works agreements may provide not only for general restrictions on dismissal, but also for the exclusion of dismissals for operational reasons during short-time work.

Prerequisites for dismissal for operational reasons

A dismissal for operational reasons presupposes that the need for the continued employment of an employee due to urgent operational requirements in the company has permanently ceased to exist or will cease to exist by the end of the notice period at the latest. The following requirements must be met:

• A business decision leads to an expected permanent loss of a job/the need for further employment.
• There is no possibility of continued employment in the company for the employee affected by the loss of the job.
• A social selection among comparable employees was carried out properly.  

The business decision can be based on external and internal factors. Examples of external factors are:

• Difficulties/decline in sales volumes
• Loss of orders/reduced order backlog/lack of follow-up orders
• Loss of turnover.

External factors are circumstances independent of the company's organisation and management which have a direct impact on certain jobs. The employer actually has no room for manoeuvre when dismissing employees for external reasons.

Examples of internal factors where the employer has room for manoeuvre are:

• Closure or partial closure of business operations
• Modification or introduction of new working methods/restriction of production
• Change in workflows
• Outsourcing of work to external companies.

Practical advice:

It is usually easier to prove that the job is lost for internal factors. Hence, it should always be examined whether a business decision can be based on internal factors, even if restructuring measures are triggered by external factors.

There must be no possibility of continued employment for the employee threatened by the loss of his or her job. Before a dismissal for operational reasons is announced, it must therefore be examined whether

• the employee who is to be dismissed could continue to be employed in another vacant comparable job in the same establishment or in another establishment of the same company;
• the employee could be continued to be employed after a reasonable amount of retraining or further training,or
• it is possible to continue the employee's employment under modified, and possibly also worse, contractual conditions.

The possibility of continued employment should be examined on a company-wide basis (not only in relation to the specific business operation!). Only vacant jobs are eligible, whereas jobs are considered vacant if they are unoccupied at the time of receipt of the notice of termination, or if it is foreseeable that they will become vacant until the end of the notice period.

Practical advice:

If it is possible to continue employment under modified working conditions, it must be enforced by means of a so-called dismissal with the option of altered conditions (Änderungskündigung). The dismissal with the option of altered conditions has priority over the dismissal terminating the employment (Beendigungskündigung). A mere offer to change the contractual conditions by mutual consent is not sufficient.

The social selection leads to a situation in which it is not mandatory to terminate the employment of the employee whose job is lost, but rather that of the employee who is least in need of social protection among comparable employees. If the decision to terminate the contract violates the principles of social selection, the termination is invalid despite the existence of urgent operational requirements. The following principles apply:

• the social selection must be carried out in relation to the specific business operation
• all comparable, i.e. interchangeable employees of the company (also of a joint establishment (Gemeinschaftsbetrieb)!) according to their activity and the contractual agreements are to be included
• the four legal social criteria are to be weighted: Length of service, age, existing maintenance obligations, existence of a recognised severe disability.

Practical advice:

Individual employees whose continued employment is in the legitimate interest of the company, especially because of their knowledge, skills and performance, may be excluded from the social selection. The same is possible if the removal of employees is necessary to ensure a balanced personnel structure of the company.

Particularities in case of an established works council

If there is a works council in place, the co-determination and participation rights under works constitution law must be respected. They include in particular

• Reconciliation of interests and social plan negotiations if there is a so-called change in operations in companies with more than 20 employees which may result in significant disadvantages for the workforce or significant parts of the workforce (sections 111 et seq. German Works Constitution Act, BetrVG)
• Consultation procedures for the preparation of a mass dismissal notice (Massenentlassungsanzeige) (section 17 German Dismissal Protection Act, KSchG)
• Consultation of the works council on the specific termination (section 102 BetrVG).

The obligation to negotiate a reconciliation of interests and a social plan is triggered by measures which carry a certain weight and either affect the entire company or at least "substantial parts of the company" or are "fundamental". The figures and percentages in section 17 (1) KSchG on the mass dismissal notices serve as a guideline.

While the reconciliation of interests procedure must be carried out in full but a reconciliation of interests itself cannot be enforced before the conciliation body, the social plan is enforceable. Only with a mere reduction of staff do special, increased threshold values apply. If these thresholds are not reached, the social plan is as an exception not enforceable (section 112a BetrVG). The social plan privilege (no enforceability) also applies to operations of a newly founded company in the first four years after its foundation.

Practical advice:

Careful consideration must be given to which body is responsible for the impending negotiations. Works council, central works council or group works council? Negotiating with the wrong body means not properly respecting co-determination rights.

The improper participation of the works council does not lead to the ineffectiveness of the measure taken. If a change in operations is carried out without having attempted to reconcile interests, this leads to individual claims of the employees concerned to a compensation of disadvantages (Nachteilsausgleich) (section 113 BetrVG) which is awarded by the labour courts in the form of a severance payment. Depending on the court district, the works council is also granted a right to injunctive relief to secure the right to negotiations which the works council can also enforce against the company by way of interim legal protection.

Practical advice:

Careful preparation of a staff reduction and realistic time planning help to guide and structure negotiations with the works council. This is also important because there are many ways for works councils to delay negotiations with the employer.

Related discussion:

A representative body for severely disabled employees (Schwerbehindertenvertretung) must be involved before a severely disabled employee is given notice of dismissal. Otherwise a dismissal would be ineffective. The same principles apply to the hearing of the representative body for severely disabled employees as to the hearing of the works council pursuant to section 102 BetrVG.

Mass dismissal notice

If the number of employees affected by the staff reduction exceeds the thresholds of section 17 (1) KSchG, a notifiable mass dismissal is at hand. This is the case if

• in companies with generally more than 20 and less than 60 employees more than five employees,
• in companies with generally at least 60 and less than 500 employees, 10 percent of the employees regularly employed in the business or more than 25 employees, or
• in companies with generally at least 500 employees, at least 30 employees

are dismissed within 30 calendar days. Dismissal in this context means any form of termination of employment relationships initiated by the employer, i.e. also the termination agreement concluded in the course of a change in operations.

The mass dismissal notice must be submitted before the notice of termination is issued. Incorrect information in the so-called mandatory notices cannot be remedied and will lead to the invalidity of the notice. The same applies if the mass dismissal notice is submitted to the non-competent employment agency, or if the internal consultation procedure with the works council has not been carried out properly.

Important:

The internal consultation procedure must actually have been carried out. It is not sufficient to merely include a confirmation in the reconciliation of interests stating that the consultation procedure is considered to have been completed.

Conclusion

Staff reduction measures must be carefully prepared. There are many legal questions that need to be addressed in advance in order to set the right course for implementation. Otherwise, any notices of termination that have been issued may be invalid. Far too often, disregard and non-compliance with formal requirements play a role which is usually expensive, but in most cases avoidable.

Doreen Methfessel

Dear readers.

On 22 April 2020 the grand coalition agreed on an increased short-time working allowance and thereby distributed generous presents. What does that mean?

Initial situation

Short-time working allowance, as a payment out of unemployment insurance, is intended to compensate for the loss of earnings suffered by employees as a result reduced working hours. During a period of short-time working, employees receive ‑ for the work they actually perform ‑ the corresponding remuneration on a pro-rata basis. In addition, employees receive short-time working allowance for the reduction in working hours. The short-time working allowance is calculated on the basis of the net loss of earnings. It generally amounts to 60% of the standard net remuneration (remuneration for services rendered, pauschaliertes Nettoentgelt). If at least one child lives in the employee's household, the short-time allowance generally amounts to 67% of the lost standard net remuneration.

Short-time allowance if working hours are reduced by less than 50%

The statutory increase in short-time working allowance does not apply to employment relationships affected by working hours reduced by less than 50%. If, for example, working hours are reduced by 30% as a result of short-time working, the legal innovation does not take effect and the amount of the short-time allowance remains at 60% or 67% of the standard net remuneration.

Increase in short-time working allowance

In employment relationships in which work is reduced by at least 50%, the short-time working allowance is increased in stages. During the first three months of short-time work, the allowance rates remain 60% / 67%. From the 4th month up to and including the 6th month, the short-time working allowance is increased to 70% of the standard net remuneration, or to 77% of the standard net remuneration if at least one child lives in the household. From the 7th month of short-time work onwards ‑ if at least 50% of regular working hours are lost ‑ the short-time working allowance is increased to 80% of the standard net remuneration, or 87% of the standard net remuneration if there is at least one child living in the employee's household.

This increase in the short-time working allowance, which is extremely expensive for the Federal Government, will only apply temporarily during the coronavirus crisis and thus, according to the current regulation, until 31 December 2020.

Relationship between top-up by agreements and by law

Many employers have "voluntarily" increased the previously existing short-time working allowance (60% / 67%) in works agreements or individual employment contracts. An increase up to 80% was possible without social security contributions. Up to now, an increase without social security contributions has thus been 20% / 13%. At the beginning of the coronavirus in Germany, an increase in short-time working allowance was not foreseeable. The question could therefore arise as to whether the employer's top-up will be paid up to the agreed limit of e.g. 80 % and will thus be credited to the staggered increase, or whether the regulation should be understood to mean that a certain percentage will be added to the currently valid statutory regulation. This could lead to odd results. For example, in the case of employees for whom a 20% increase from 67% to 87% has been granted, who would then receive 107% of the standard net remuneration from the 7th month onwards instead of 87% as provided for by law. This would be strange and cannot be intended. Employees in short-time work would then receive a higher net remuneration for their forced inactivity than employees who work.

In future agreements with works councils and employees on short-time working, however, it is mandatory to take account of statutory increases in top-up amounts.

Great and expensive presents from the Federal Government. Still, it would be even better to be able to celebrate birthday parties again.

Best wishes from the Labour & Employment Law Practice Group. Stay well!

Dr Erik Schmid

No "return" of holidays already approved

If the employer has already approved a specific request for holiday by the employee, there is basically no turning back. Just as the employer cannot revoke the employee's holiday in such a constellation, the employee is not entitled to have the holiday that has already been approved postponed to another period. In accordance with the exceptional possibilities of revocation for employers, which have been recognised by case law for extreme emergencies (e.g. threatened economic collapse of the company), something else would only apply if it were absolutely unacceptable for the employee to continue to take his/her holiday. However, the latter cannot be assumed, even taking into account the current exceptional situation. In particular does it make no difference for the legal assessment whether the employee can use the period of time for which he/she is released from work by the employer for the purpose originally intended by the employee (e.g. for a holiday trip). Such a circumstance falls entirely within the employee's sphere of risk. In addition, the statutory purpose of the holiday leave, which is to provide the employee with time for recreation by relieving him or her of work duties, does not depend on a specific usage of the holiday time. In case of doubt, the employee can also spend a recreational period of time at home.

Practical advice:

Therefore, once the holiday period has been set, it can usually only be reversed by agreement between employer and employee. A written agreement is not required for this purpose, so that once the holiday period has been agreed, it can also be cancelled if the company does not object to the employee taking up work during the originally planned holiday period.

However, since the employer is worthy of protection in its trust that the approved holiday will be realised, it will have to be assumed, taking into account the principles of good faith, that the employee, especially if he/she only works in the home office, must inform the employer informally in advance of his/her activities contrary to the granted holiday. If an employee fails to do so, the employer's waiver of objections to the commencement of work cannot be interpreted as consent to the cancellation of the holiday. Nor can the employee subsequently claim that he or she should be granted holidays at another time for the relevant period during which he or she worked.

Holidays against your will?

Many employers wonder whether they can use the current period of comparatively low workload for their employees to send employees on a kind of forced holiday. The advantage is obvious: Holiday entitlements could be reduced without any significant impact on business processes; employees would be available to the company again at a later stage of the year when the economy as a whole will hopefully regain momentum.

Company holidays not a suitable means

In this context, the organisation of company holidays which some companies know mainly from the time between Christmas and New Year, is often brought into play. This means that all employees, or at least a large part of the staff, are granted holidays for a certain period of time, during which the company as a whole is usually at rest. The duration of the company holidays is deducted from the holiday entitlements of the individual employees in this case.

Practical advice:

In the current situation, however, company holidays are proving to be an unsuitable means of reducing the number of holiday days. This is primarily due to the fact that, according to case law, company holidays must always be announced several months in advance so that employees can adjust to the holiday period and plan their holidays accordingly. If there is a works council, the employee representatives also have an enforceable right of co-determination in the scheduling of company holidays. Finally, an employer would also have to take into account the fact that even when company holidays are introduced, each employee must be given a fixed number of holiday days which he or she may freely dispose of.

Unilateral granting of holidays to avoid a "holiday congestion"

In this respect, the question arises whether an employer can unilaterally grant holidays also outside company holidays and thus reduce holiday entitlements of its staff. In principle, such a procedure is possible to the extent and as long as an employee has not yet claimed holidays for the remaining time of the current holiday year, because only if the employee has already specifically approached the employer for holidays, the employer must take the employee's holiday wishes into account when scheduling the time of the holiday. Through the employer's declaration to grant holidays for a certain period of time and the subsequent release of the employee during the holiday period, the employer can thus basically fulfil the holiday entitlements of its employees.

However, apart from the special conditions applicable to terminated employment relationships, employees are not legally obliged to accept the employer's determination of the holiday period. They can informally object to the granting of holidays at any time - with the effect that the employer cannot fulfill the holiday entitlement with a release from work. No special reasons need to be provided for this. It is sufficient if the employee is planning his or her holiday differently from the employer's expectations.

Appeal for prompt notification of holiday planning as the ideal solution

To avoid atmospheric disturbances within the employment relationship, employers should therefore not wait for their employees to object in the first place. Instead, the following approach is recommended for companies:

• Employees should be encouraged in a communication (ideally in writing or by e-mail) to submit all holiday applications for the current calendar year as soon as possible (e.g. until the end of May). In addition, they should be advised that, firstly, requests for holidays received at a later date may be rejected, particularly for operational reasons, for instance, if a large number of employees have already been granted holidays for certain periods in the second half of the year and the presence of the applicant in the holiday period applied for is indispensable for the employer, and, secondly, that holidays which cannot be approved in 2020 may be carried over to the next calendar year in accordance with the statutory provisions, but will in principle expire without replacement at the end of 31 March 2021.
• According to recent case law, for a holiday to be forfeited, the employer must have specifically enabled the employee to actually take his paid annual holiday (Judgment of the European Court of Justice dated 6 November 2018 - C-684/16; German Federal Labour Court, decision dated 19 February 2019 - 9 AZR 423/16). To this end, the employer must in principle request the employee to apply for holiday and inform him/her clearly and in good time that any holiday not taken of his/her own free will expires at the end of the holiday year or a permissible carryover period. The above-mentioned communication would thus offer the advantage that the employer would at the same time fulfil its obligations to cooperate in the granting of holidays and that holidays not taken in 2020 would thus actually be forfeited.

Additional holiday in case of early taking of holidays

Finally, in order to create an additional incentive to take holidays already at this stage when many employees are less busy, it may be advisable for employers to reward early taking of annual holidays by granting additional holiday days (e.g. one additional day of holiday if at least half of the annual holiday is taken before 30 June, two additional days of holiday if two thirds of the annual holiday is taken before 30 June 2020, etc.). Even when taking into account the principle of equal treatment under labour law, there is nothing to be said against such an offer. In this respect, it would only be relevant to make it clear in communication with employees that this is a corona-specific special regulation which will no longer apply in 2021, when the virus and its effects will hopefully have become manageable.

Dr Johannes Allmendinger

Video and conference calls now also for the works council

As a result of the new legal regulation, works council bodies are now also given the opportunity to pass resolutions via video and conference call for the time being. This opportunity is limited until 31 December 2020 and also covers resolutions already adopted, as the new regulation is to apply retroactively from 1 March 2020. The plausible objective is to avoid the face-to-face meetings associated with high infection risks as far as possible and at the same time to continue to ensure the works council bodies' ability to act and reach decisions.

Previously, sections 33 and 30 BetrVG stipulated that works council meetings could not be held in public and that resolutions could only be passed if a majority of the works council members physically present voted accordingly. Resolutions could not be passed by way of circulation or electronic communication on the basis of the previous legal regulation. For some time now, the thesis has been advocated in literature that resolutions could also be passed by video conference at least if no works council member objected. To date, however, there has been no legal basis for this.

However, the requirement of personal presence inevitably leads to problems in times of corona when large parts of the workforce, including of course the works council members, work from home. Under the existing legal situation to date, the works council would still have had to meet in person for its meetings. Deviating from this, works council meetings and resolutions can now be held via video conferences and conference calls on the basis of the new section 129 BetrVG. In individual cases, the works council chairperson will have to decide whether a meeting must be held in person or whether a meeting can be held via video conference and/or conference call. A prerequisite would then be that the works council members notify the works council chairperson in text form of their participation. Recording of meetings is not permitted and it must always be ensured that third parties do not become aware of the content of such meetings and resolutions. The regulations also apply analogously to the activities of the financial committee and to procedures within the framework of conciliation boards. In addition, it shall also be possible to organise works meetings using audiovisual equipment for a temporary period. In any case, sufficient work for the IT managers should be ensured.

Use of video and teleconferencing systems in compliance with data protection regulations

Naturally, when applying the new regulations the data protection requirements must not be neglected, especially when it comes to ensuring that third parties are not allowed to gain knowledge of the content of meetings and resolutions. When using the video and teleconferencing systems already in place in the company, care must therefore be taken to ensure that certain functionalities are either generally not available, or that existing functionalities which are potentially critical in terms of data protection are deactivated by default. The business version of the conferencing systems should be used, as this offers a higher security standard.

To ensure that only persons authorised to participate dial in, the works council must use the access restriction functions by using a password or the waiting room function. With the waiting room function, the administrator manually grants individual participants access to the virtual meeting room. It is also recommended that a session be "closed" once all participants are in the session. This way, no one from outside the works council can dial in, even if they know the password. The dispatch of a dial-in link that already contains the encrypted password should be avoided if it cannot be ensured that the link is not forwarded to unauthorised persons. In this case, a stricter standard applies with regard to works council work than for use in the general operation of the company.

In addition, recording of meetings is not permitted and may not be made even if all works council members agree to the recording. Section 129 BetrVG expressly forbids this and is in this respect not subject to contrary agreement (abdingbar), since with this regulation not only the legal protection of the personal rights of the works council members but above all the protection of the non-public nature of the works council meeting is aimed at. Chat recordings must also be deleted from the conferencing system after the meeting.

Tracking functions must also be switched off to prevent unauthorised monitoring of works council members during the meeting. Monitoring can be carried out by tracking the presence and activity status (active/inactive/absent) of the respective works council member on the one hand or by means of attention tracking during the meeting on the other. With attention tracking, the administrator can see whether the participant has the conference window actively open or in the foreground of the screen during the session.

Finally, the standard technical and organisational measures must be implemented when using software in order to guarantee the protection of personal data. With respect to conferencing systems, this includes in particular technical precautions which prevent third parties from accessing the webcam, login data or the system itself, the encryption of data (at least via transport encryption, but ideally via end-to-end encryption) and the use of data-minimising default settings. For the sake of data economy, the scope of functions must be limited to what is necessary for communication. As an organisational measure, a guideline can be considered in which specifications for the proper use of the video and teleconferencing system are made, thereby controlling the handling by the works council members which is permitted under data protection and works constitution law. In this context, private use may also be prohibited. In addition, the works council members must be trained accordingly in how to handle the system in compliance with data protection law.

The digital works council?

The long-awaited new regulation by the introduction of the new section 129 BetrVG gives the works council at least temporarily the additional opportunity to make decisions by video or conference call and thus secures its ability to act and its quorum in these difficult times. In particular, the data protection requirements have to be observed. From the employer's point of view, the temporary new regulation is to be welcomed because only effective works council decisions form a solid legal basis, for instance, when it comes to the conclusion of works agreements or a hearing before a notice of termination is issued.

Martin Biebl

Laureen Lee

First of all, two general principles are being presented, which should come as no surprise:

• In the future, regardless of the respective concepts of action, mouth-nose covers should be made available in a company in any case if the required minimum distance cannot be maintained in everyday business. Whether and how quickly companies will be able to obtain these covers is, of course, an open question and is not discussed in the paper. However, the principle fits in with the general turnaround on the subject of compulsory masks.
• In addition, all persons with respiratory symptoms or fever should stay away from work and must be sent home by the employer. In most companies in the country, though, this practice has probably been in place for at least one month anyway. In order to better detect diseases, measures for contactless fever measurement should be taken in the company.

In the further details, the elaboration unfortunately remains vague and undefined. The usual references to the minimum distance to be maintained, increased hygiene and disinfection measures, adapted shift systems, activities in the home office, no multiple occupancy of rooms and the renunciation of business trips and appointments with many participants should not surprise most employers. And it should also be pointed out that companies were already obliged to take protective measures in the workplace even before the paper was published. This already ensues from the general statutory provisions.

Practical advice:

So what remains after reading the paper for employers, managing directors and personnel managers? The conviction that those involved on site, i.e. employers, employees, works councils, company doctors and occupational safety experts, must think intensively about the form pandemic prevention should take in the event of a gradual economic recovery. It must be decided at the workplace and on the basis of operational processes which technical, organisational or personal protective measures are necessary to protect the health of employees and to be able to safely control the company in the fight against the virus. Of course, special attention must also be paid to the frequently mentioned risk groups (older employees, employees with previous illnesses and pregnant women, even though they are probably not a classic corona risk group). When drawing up the company corona action plan, the participation rights of the works council must then again be taken into account. To avoid lengthy decision-making processes, consideration should therefore be given no later than now to setting up a crisis management team in the company. To this end, it must be examined how a crisis team should be staffed and for which topics the works council can for instance form committees so that not always the entire team has to meet. Unfortunately, there is still a lack of binding regulations on digital works council work although initial efforts were made even before Easter. Needless to say, active and regular communication and information for employees is still of utmost importance. Employees must know what measures are currently being taken and what further steps are planned. Experience shows that measures that are jointly supported by the employer and the works council also increase acceptance among the workforce.

Martin Biebl

^{Note: This contribution has been published in a similar form at Beck-online.}

According to the intention of the governing parties the passing of decisions digitally should be possible, at least, for a limited period of time. This follows from a communciation of the Federal Government of 9 April 2020 (Link). Not only works council members but also employers would profit from this facilitation, since the risk of an ineffective works council decision has far-reaching consequences. Just think that a company agreement concerning the introduction of short-time work would be ineffective for formal reasons, since the decision has not been passed properly. Short-time work had not been introducted effectively; and numerous problems and risks woud arise in the case of the reversal of the measures.

With the new rules in the BetrVG the works council members are given the opportunity to pass decisions also via video and telephone conference. Face-to-face meetings should be avoided without reducing the body's capacity to act. Corresponding regulations are designed for spokesmen committees, staff councils and similar co-determination bodies. According to the governing parties, the changes should be adopted already in April and come into force retroactively as of 1 March 2020, and, in so doing, also decisions already passed should be remedied. 

Practical tipp:

This political development is to be welcomed and would provide the business partners with the legal certainty required in times of the corona pandemic.. At present, numerous employers are finally requested by their works councils to make declarations in which the employer ensures that he will not contest or dispute under employment law any works council decisions taken in times of the corona pandemic. In part, websites of works council even contain templates in this respect. In so doing, it is, however, ignored that the risk of the invalidity of a works council decision - notwithstanding of such a declaration given by the employer - could be determined by court and would be completely at the expense of the company. The declaration of the employer vis-à-vis the works council does not bind the labour court nor any employee affected who claims before the court that the hearing before the works council concerning his dismissal pursuant to Section 102 BetrVG had been ineffective or that the company agreement concerning the introduction of short-time work is not based on an effective decision of the works council. This risk could be reduced effectively by the planned regulation. All parties involved would then have a legally certain working basis.

^{Note: The article is published in similar form on beck-online.}

Martin Biebl

It is often hard to reconcile working and taking care of relatives. This places emotional and often financial strain on the individuals concerned, for it is is not yet clear who will pay for financial losses of employees being temporarily unable to work because they take care of their relatives. Employers are faced with the question of how long employees must be released from their work duties on full pay.

The German Home Care Leave Act (Pflegezeitgesetz – PflegeZG) will apply only in rare cases because this Act provides for paid leave (see s2 PflegeZG) only in a sudden situation, i.e. an unexpected and unforeseeable need of care and attention. Whether the current situation falls under that provision is doubtful. Moreover, the right to being released from work duties is limited to a period of ten days and will therefore not be a permanent solution to the current situation.

Once again the discussion about the possible duration of a paid leave thus shifts to s616 of the German Civil Code (Bürgerliches Gesetzbuch – BGB) with its countless decisions on individual cases. However, this provision cannot be the solution here either: The duration of school and kindergarten closures, just like the expected duration of the closure of day care facilities or the lack of care workers, exceeds the periods to which s616 BGB applies. Only a few days can be bridged by this regulation. So even if you take generous decisions allowing up to ten days' leave, you will not get very far with that. The legal consequence of exceeding the permissible period is that there will be no entitlement to continued payment of the remuneration with retroactive effect from the first day. This is precisely why the legislature has reacted so quickly to the closure of schools and kindergartens.

There is a lack of clear regulations with regard to nursing care, especially when it comes to longer periods of time. Because of the clear wording of the new regulation for school and kindergarten closures ("facilities for the care of children or schools"..."children who have not yet reached the age of 12"), it is impossible to apply this provision mutatis mutandis.

Practical advice:

As long as there is no rection of the the legislature, employers and employees will therefore have cover the times of care for relatives by reducing overtime hours, by taking holidays or unpaid leave if there is no situation as provided for in s2 PflegeZG. It is to be hoped that the legislature will offer a solution similar to that for the closure of schools which will relieve the financial burden on relatives without passing the costs on to the employer.

^{Note: This contribution has been published in a similar form at Beck-online.}

Martin Biebl

What is short-time work?

Short-time work means that due to a considerable loss of work, the working hours and, as a consequence, the remuneration are temporarily reduced. The main attraction is that the loss of remuneration is partly compensated by the employment agency in the form of short-time work compensation.

Which corona implications result in a granting of short-time allowance?

Short-time work compensation can be applied for at the employment agency if, due to the epidemics, the workload declines dramatically because, for instance, companies are not allowed to open or supply chains or sales opportunities collapse.

How many employees must be affected and to what extent?

Short-time work may be introduced for all or just some employees. The extent of the reduction in working hours can also vary depending on the employee. Even a reduction of working hours to zero is possible. According to the latest legislative amendments, short-time working compensation can already be drawn if at least 10 percent of the employees of the company or a department of the company suffer a loss of earnings of more than 10 percent in each case.

What other requirements does the short-time work compensation have?

The loss of work due to the corona pandemic and its economic implications, for instance, must be temporary and unavoidable. This presupposes that the holiday entitlements carried over from the previous year must be reduced as a matter of priority. In addition, working time credits must be reduced to the extent permitted by the company. However, there is no longer a need to build up negative balances due to recent legislative amendments. Furthermore, some operational and personal requirements such as the continued existence of the employment relationship without termination notice, must be observed. Finally, the employer must properly report the loss of work to the employment agency.

What is the amount of short-time work compensation and how long is it paid?

Depending on the maintenance obligations, the short-time work compensation amounts to 60 or 67 percent of the net salary difference. The maximum payout period is currently twelve months. It can be extended up to 24 months by the Federal Ministry of Labour through statutory order.

What costs remain with the employer?

If the working time is not reduced to zero, the employer continues to pay the remuneration for the remaining working time base together with the employer's social security contributions.

In addition, social security contributions are due on - non-technically speaking - 80 percent of the remuneration lost as a result of short-time work. Although the employer must first raise and pay this, it is subsequently reimbursed by the Federal Employment Agency - this is also a result of the current legal facilitations to promote short-time work. Depending on the legal basis of short-time work, the employer may ultimately be obliged to make top-up payments on the short-time work compensation.

How is short-time work introduced?

Employers cannot introduce short-time work on their own authority. Rather, this requires a basis in a collective agreement, a works agreement, an employment contract or a supplementary agreement to the contract. The introduction is subject to co-determination pursuant to section 87 (1) No. 3 German Works Constitution Act (BetrVG). Short-time work compensation must be applied for by the employer at the local employment agency.

Conclusion

Short-time work has proven its worth in the 2008/2009 banking crisis and helps companies to save jobs. Today - thanks to the new regulations adopted in record time - it is more in demand than ever.

Dr Corinne Klapper

Due to its systematics, however, the Protection Against Infection Act ‑ rather unknown until today ‑ is not a legal basis for compensation claims for legal entities. Even though very few of us have probably come across the Act regularly until now, the purpose of the compensation provisions contained in the Act become clear very quickly: They regulate compensation for actions by public authorities towards natural persons. At present, this mainly concerns quarantine orders or the imposition of a ban on activity against a specifically designated person (especially employees). In these cases, the Act provides for compensation payments to the person concerned. It is a two-step procedure: First, the employer makes an advance payment and continues to pay salary for a period of up to six weeks. In a second step, Section 56 (5) of the Protection Against Infection Act regulates a claim for reimbursement by the employer against the authority in the amount of the continued salary payment to the employee (the dispute about the application of Section 616 of the German Civil Code (BGB) in these cases will not be discussed here).

A distinction must be made between this and the case where an entire business has to close down as an officially ordered shutdown. In contrast to an individualised quarantine order, the relevant official general order is ultimately directed against all companies in certain sectors of the economy and only indirectly affects the employees working in these sectors. In this case, employers find themselves in the difficult situation that although they are not allowed to open their businesses, remuneration of the employees must continue to be paid almost without exception due to the business risk theory of the Federal Labour Court.

However, this is exactly what the Protection Against Infection Act does not provide compensation for. Compensation is intended for natural persons who are directly affected by actions by public authorities, and not for legal persons where the employer's operational risk is realised.  This can also be justified systematically: Why should employers, in order to avert the aforementioned operational risk, introduce short-time work for their employees, where the employees receive - without top-up payments - only 60 or 67% of the net salary difference, when employers could instead continue to pay the full salary and receive 100% compensation from the public authority. That would render short-time work useless.

In the current crisis, companies already have various instruments to avert or alleviate the financial burden: The introduction of short-time work, loans from the German government-owned development bank KfW, tax deferrals and the emergency aid announced by the federal or state governments. The legislator is debating even more instruments and will make additional financial resources available. However, legal entities cannot expect compensation for loss of turnover or running costs on the basis of the Protection Against Infection Act.

Our expert Martin Biebl will be pleased to answer your questions on this topic.

^{Note: This contribution was published in a similar form in the legal database Beck online on 24 March 2020.}

The legislator has recognised the problem and - subject to the approval of the Bundesrat (federal council) - has now initiated a solution in the form of a new regulation of section 56 of the Infection Protection Act (IfSG) (Bundestag (federal parliament) printed matter 19/18111): The IfSG includes a compensation claim for loss of earnings in the event of official closure of schools and childcare centres, initially limited until the end of the year. This is intended to reduce the loss of remuneration suffered by parents for the duration of care for children up to the age of 12.

To trigger the right to compensation, there must be no other care options or possibilities of paid leave, e.g. by reducing working time credits and probably also remaining holiday credits. The first prerequisite is, thus, a real loss of income due to childcare. However, for periods in which the childcare centre or school would not have been open anyway due to holidays, there is no entitlement to continued payment of the remuneration. Recipients of short-time work compensation will not receive any compensation on the basis of the new regulation. The compensation does not completely offset the loss of remuneration but is based on the increased benefit rate of the short-time work compensation: For the maximum period of six weeks, affected employees receive 67 percent of their net income (capped at EUR 2,016 per month). As is customary under the Infection Protection Act, the procedure is carried out in two steps: First, the employer makes an advance payment and pays the 67 percent to the employee. In the second step, he has the amount reimbursed by the competent authority.

Conclusion

Up to now, the question of the continued payment of remuneration for periods of childcare has been regulated by an individual case law on section 616 of the German Civil Code (BGB) which is particularly complex. Reliable statements were hardly possible and employers and employees were confronted with considerable legal uncertainty. Moreover, in the case of school closures lasting several weeks, the provision of section 616 BGB would not have helped anyway, as its application is limited to a few days. Hence, it is positive that no attempt was made to extend the scope of section 616 BGB in the first place. This approach would have only added to the financial burden on employers in an already tense situation. The solution now created regulates clear conditions of entitlement and does not lead to additional financial burdens for employers. The fulfilment of the prerequisites for entitlement must be proven by the employee at the employer's request.

Statutory requirements as to form and time limits with regard to refund applications are currently not yet known. It remains to be seen whether the already known procedure for reimbursement in case of quarantine orders will be adopted. In this case, applications for reimbursement would have to be submitted to the competent federal state authority within three months. In this context, it should also be examined how any arrangements within the company for paid leave for childcare affect the reimbursement claim. Such arrangements could be found in the collective agreement, a works agreement or the employment contract.

Service and consideration

DUTY TO WORK: Performing work is the employee's key duty of the employment relationship. This holds true also in times of coronavirus. Unless the employee is unable to work due to illness or is in quarantine by order of the authorities, he is obliged to perform work.

RIGHT to refuse performance: Also in an employment relationship employees have a general right to refuse performance if the start-up's interests in the performance of an activity must be considered less important than the start-up's duty of care. For example, in the case of a business trip to an area with a coronavirus risk, the physical integrity of the employee's life and limb on the one hand, and the necessity of the business trip, the possibility of postponing the business trip, or the possibility of a meeting at a neutral location on the other hand must be weighed against each other. The recently tightened federal and state regulations should be examined and observed in each case.

BUSINESS TRIPS: Business trips are part of the duty to work, also in start-ups. The employer may order specific business trips by virtue of his right to give instructions, at least if the travel activity is covered by the employment contract or if a travel activity is typically related to the performed activity. Refusals can lead to warnings and dismissals. At least as long as there are no travel warnings from the Federal Foreign Office for certain regions, business trips may be ordered, provided that this is otherwise reasonable. The travel warnings are currently comprehensive. In many start-ups, business trips are currently prohibited.

continued remuneration: In labour law, the principle of "no wage without work" applies. There are exceptions to this rule, for example during holidays or in the event of incapacity to work due to illness. However, an entitlement to continued payment of remuneration in the event of incapacity to work due to illness only exists if the employee is incapable of work solely as a result of illness, and if the employee is not at fault with regard to the illness. However, there is no entitlement to continued payment of remuneration if employees are healthy and do not appear at work for fear of infection.

Corona at the workplace?

HEALTH PROTECTION: Employers are entitled to order health protection measures. In accordance with the principles of proportionality, it is possible to order regular hand disinfection, the wearing and regular changing of a face mask or disposable gloves.

QUESTIONING ON disease SYMPTOMS: Start-ups may only ask for and process personal data of their employees if this is necessary for "carrying out the employment relationship". In principle, this does not include the question of where employees spent their last holiday (areas affected by coronavirus) or after symptoms of coronavirus disease. However, in the case spreading diseases such as the coronavirus, an exception could be made, in particular to protect the rest of the workforce, to prevent further infection and to maintain business operations. Purely as a precautionary measure, the consent of the interviewed employees should be obtained.

temperature CHECKS: A mandatory temperature check by the start-up without the consent of the employees is an inadmissible violation of the right to privacy. It is even more serious than the question of symptoms of disease, since the employee is denied the "right to lie" due to the right to give instructions.

COMPULSORY VACCINATION: There is currently no vaccine for the coronavirus. Even if there were a possible vaccination, the start-up could not unilaterally order a compulsory vaccination by right to give instructions. This would be disproportionate and would not appear just, and would violate the employees' rights to self-determination with regard to their health.

Countermeasures by the start-up

DUTY of care: The start-up has a duty of care. This means that it must do everything necessary and appropriate to protect the health of its employees. The duty of care can be exercised through the right to give instructions. Employers are entitled and also obliged to prohibit for example business trips to certain regions, to keep employees returning from affected areas away from the workforce for a certain period of time, to cancel or prohibit events with a large number of people or to take other measures, such as providing disinfectant.

duties to ORGANIse: The employer must organise protective measures against the coronavirus and infection of employees based on the duty of care. In practice, employers often order employees to cancel unnecessary business trips and not to attend events with a larger number of people. Further, companies offer work from home on a larger scale and provide disinfectants and other protective measures free of charge.

work from HOME: Start-ups, now also a large number of other businesses and companies, currently work a lot from home. To an extent that there are no yet regulations in the employment contract or in a company agreement on working from home, employees are not entitled to unilaterally decide to work from home. If the employee works from home without first consulting the employer, it is a breach of duty. On the other hand, neither the employer is entitled to unilaterally order home office without a specific regulation. As far as possible, however, in times of the coronavirus it is a reasonable option to work from home.

Start-ups in the crisis

INSTRUMENTS: As labour law instruments in a temporary crisis, start-ups can use short-time work and immediately save liquidity, make use of fluctuation and decide to not fill vacant jobs, use freelancers or temporary workers, compensate for lack of orders or employment through flexible working time models, arrange holiday shutdowns, carry out staff reductions, or bring employees on board and jointly agree to defer, suspend or reduce remuneration.

SHORT-time WORK: Shortfalls of employees due to coronavirus infections and quarantine measures, as well as the likely supply problems with products and services from affected areas and official restrictions by authorities have already led to (strongly) restricted business operations in Germany. These problems can be countered with the instrument of short-time work, which political authorities have been quick to adjust. Temporary short-time work serves to compensate for job losses and preserve jobs, and immediately saves liquidity.

Emergency aid programmes by federal and state governments

THE FEDERAL GOVERNMENT AND THE STATES have established emergency aid programmes for enterprises threatened by economic circumstances endangering their existence as a result of the Coronavirus crisis.

An existence-threatening economic situation must be announced under oath and, upon request, proven by documents. Still, this can be the much-needed financial rescue package for many start-ups.

Please contact Dr Michaela Felisiak and Dr Erik Schmid if you have any questions.

Dear Readers,

Therefore my blog about the "coronavirus-SARS-CoV-2" from a labour law perspective in 26 (actually without X and without Y in 24) letters:
 

A like "Arbeitspflicht" (work duty): Rendering the work performance is the main duty of the employee in an employment relationship. This also applies in times of the coronavirus. The employee is obliged to perform his/her work, unless he/she is incapacitated for work due to illness or is in quarantine officially ordered.

B like "Beschäftigtendatenschutz" (employee data protection): Employers may only ask for and process personal data of their employees if this is "necessary for the implementation of the employment relationship". In principle, this does not include the question, where the employees spent their last holidays (risk areas of the coronavirus) or for symptoms of the coronavirus. In case of epidemics such as the coronavirus, however, there could be an exception, in particular for the protection of the personnel, for the avoidance of further infections and for the maintenance of business operations. As a precautionary measure, the consent of the employees questioned should be obtained.

C like coronavirus: Type of virus which infects vertebrate animals and causes colds among human beings which can be harmless but can also lead to death. The coronavirus will have far-reaching implications for economy and employment.

D like "Dienstreise" (business journey): Business journeys are part of the work duty. The employer can order specific business journeys by virtue of his/her right to give instructions, in any case, if travel is agreed upon in the employment agreement or if travel is typically associated with the profession. In any case, as long as there are no travel warnings of the Federal Foreign Office for certain regions, also business journeys in "coronavirus areas" can be ordered, insofar as this is still consistent with the exercise of reasonable discretion, as a matter of fact.

E like "Entgeltfortzahlung" (continued remuneration): In labour law, the principle "no wage without work" applies. There are exceptions to this, for example during vacation or in case of illness-related incapacity to work. An entitlement to continued payment of the remuneration in case of illness-related incapacity to work, however, does only exist if the employee is incapacitated for work exclusively as a consequence of a disease and if he/she is not at fault with regard to the disease. An entitlement to continued remuneration, however, does not exist if employees are in good health, they do not arrive at the workplace for fear of an infection or were officially quarantined due to a contact with a sick person.

F like "Fürsorgepflicht" (duty of care): The employer has a duty of care. This means that the employer must take all necessary and appropriate measures for the protection of the health of his/her employees. The duty of care can be exercised through the right to give instructions. Employers are entitled and also obliged, for example, to prohibit business journeys to certain regions, to keep employees, who return from risk areas, away from staff for a certain time, to cancel or to prohibit events with a higher number of persons or to take other measures, such as to provide disinfectants.

G like "Gesundheitsschutz" (health protection): Employers are entitled to order the adoption of measures for health protection. In accordance with the principles of proportionality, it can be ordered to disinfect the hands regularly, to wear a face mask or disposable gloves and change them regularly.

H like "home office": In a large number of enterprises and companies, employees are currently working from home increasingly. Insofar as home office has not been regulated up to now in an employment agreement or in a works agreement, the employees are not entitled to work from home unilaterally. If an employee works from home without arranging this with the employer, he/she has breached a duty. On the other hand, the employer is also not entitled unilaterally to order work from home without a specific regulation. As far as possible, however, it is certainly a meaningful opportunity in times of the coronavirus to work from home.

I like "Impfzwang" (compulsory vaccination): There is currently no vaccine for the coronavirus. Even if there was a vaccine, the employer could not order a compulsory vaccination unilaterally by virtue of the right to give instructions. This would be disproportionate and would not be consistent with the exercise of reasonable discretion and would violate the self-determination rights concerning the health of the employees.

J like "Jobcenter" (job centre): The first notifications are being received that also job centres are closed due to the coronavirus. However, open job centres can assist employees and employers with the application for and the implementation of short-time work.

K like "Kurzarbeit" (short-time work): The absence of employees due to the infection with the coronavirus or due to quarantine measures as well as probable delivery problems with products and services from risk areas will lead to a (severe) restriction of the operations process also in Germany. These problems can be addressed by the instrument of short-time work, as it is currently regulated, but also as it will be adjusted by politics. The temporary short-time work is intended to compensate employment slumps and to preserve jobs.

L like "Leistungsverweigerungsrecht" (right to refuse performance): Also in the employment relationship, a general right to refuse performance exists if the interests of the employer in the performance of an activity are to be considered lower than the duty of care of the employer. In the event of a business journey to a coronavirus risk area, for example, the employer has to weigh up the integrity of life and limb of the employee on the one hand against the necessity of the business journey, the possibility to postpone the business journey or the possibility of a meeting at a neutral location on the other hand. For example, in the event of a business journey to a risk area, it could be postponed or a meeting at a neutral location would be possible if the business journey is not absolutely necessary.

M like "Mitteilungspflicht" (reporting obligation): In order to be able to comply with the duty of care in times of the coronavirus, on the one hand employers are entitled to ask, on the other hand employees are obliged to provide information on whether they have been in risk areas over the last 14 days and/or whether they have symptoms of the coronavirus.

N like "Nacharbeit" (rework): Work performance is a so-called "fixed obligation". This means that work has to be performed at the working hours specified by the employer respectively. Work cannot be performed at a later date if it has not been performed by the employee during working hours for fear of an infection.

O like "Organisationspflichten" (organizational duties): The employer has to organize protective measures against the coronavirus and an infection of employees based on the duty of care. In practice, employers often order to cancel not necessary business journeys and not to visit events with a larger number of persons, it is offered to work from home to a greater extent, disinfectants and other protective measures are provided free of charge.

P like "Private Reisen" (private travels): The employer is not entitled to prohibit employees from private travels in their leisure time. Even travels to corona risk areas cannot be prohibited. However, the employer is entitled to order a "quarantine" after their return or to keep the employee away from the company and, for example, to have them work from home. If employees deliberately spend their vacation in a coronavirus risk area and after that do not comply with the employer´s instruction to stay away from the company during the incubation period, he can be held liable for damages.

Q like "Quarantäne" (quarantine): Persons who are not ill, but who have stayed in risk areas or had contact with sick persons, are currently put into quarantine by official orders. During the period of quarantine, employees are unable to perform any or only very limited work. Hence, there is no entitlement to remuneration. This is not a case of continued remuneration. If the quarantine is accompanied by a ban on professional activity, the employee is entitled to compensation from the employer. The employer, for his part, can assert a claim for reimbursement against the authorities.

R like "Rückkehr aus Risikogebiet" (return from a risk area): Based on the employer's right to give instructions and his duty of care, the employer is entitled to prohibit employees who have last been in risk areas privately or on business from working at the workplace for an initial period (regularly 14 days in the case of coronavirus). The employee can either work from home (home office) or be released from work by the employer. The employee's claim to remuneration remains valid.

S like "Schadensersatz" (compensation): Employees who act contrary to the employer's instructions and cause damage to the employer may be liable to pay compensation.

T like "Teneriffa" (Tenerife): Tenerife has drawn attention to itself through the hotel quarantine in the course of the coronavirus. If employees on holiday are quarantined by the local authorities and do not show up at work or do not show up in time after the end of the holidays, they must inform the employer as soon as possible. In this case, the employer is not obliged to pay remuneration.

U like "Überstunden" (overtime): Even during coronavirus, the employer may instruct overtime to a reasonable extent. This also applies in particular if, due to the coronavirus, other employees are incapacitated for work due to illness or are in quarantine and the workload of the remaining employees increases accordingly.

V like "Versetzung" (transfer): The employer is entitled, by virtue of the right to give instructions, to transfer his employees with regard to the content, place and time of the work performance. The right to give instructions can be specified in the employment contract through transfer clauses. Temporary changes to the content, place and time of work performance, for instance during coronavirus, in order to prevent infection among employees and the spread of the virus, may also be a transfer. A transfer is at hand and the works council would have to be involved within the scope of personnel measures pursuant to section 99 German Works Constitution Act (BetrVG) if the transfer is expected to exceed the duration of one month, or if the transfer is associated with significant changes in circumstances regardless of the period.

W like "WHO": The World Health Organization (WHO) constantly publishes up-to-date information on the coronavirus. Employers are entitled to change their instructions according to current events.

Z like "zum Schluss" (at last): Best wishes from the Labour & Employment Law Practice Group and stay healthy!

Dr. Erik Schmid

Can employees simply stay at home?

The most common question is whether the spread of the coronavirus will change anything in terms of the obligation to work. The answer is clear and unambiguous: No, it does not. The current risk situation does not change an employee's general obligation to work. Otherwise, offices would be empty every year because of the flu epidemic, even without Corona. The mere fear of a possible infection does not entitle the employee to not show up for work of his own accord. It also does not authorise him to decide on his own to work from home, if there are no regulations on this matter in the company. Only in extremely exceptional cases, e.g. if suspected cases occur in the company or proven infections exist, the employee may refuse to perform under certain circumstances. However, this is only the case if the employer does not take any protective measures in the event of an increased risk, which is unlikely to happen.

What does the employer have to do in the current Situation?

As long as there are no suspected cases in the company and no infections have been proven, the employer's general duty of care under labour law continues to apply. The employer must take appropriate measures to protect the health of the employees. Currently, the following measures may be considered:

• Reminders to wash hands regularly,
• Tips for washing your hands properly,
• Distribution of disinfectants,
• Prohibition on shaking Hands,
• Recommendation to cough or sneeze into a disposable tissue or into your upper sleeve, as well as
• If necessary, the wearing of breathing or face masks.

What needs to be observed in an emergency

If any suspected cases occur in the company, the employer must take further measures. In this case, affected employees and possibly also their colleagues should be given revocable leave of absence for a period of 14 days (in accordance with the recommendations given by the Robert Koch Institute). An infection may already be suspected if an employee returns from a risk area. However, as long as it is only a suspected case and the employee is not unfit for work, work can be carried out from home during the leave of absence. For the duration of the leave of absence, the employee is entitled to remuneration.

May I ask the employee about his or her holiday Location?

In order to be able to identify suspected cases more easily, the employer also has a justified interest in asking returning employees whether they had been in an affected area or in a place with an increased risk of infection.

Who is going to pay if an employee is ordered into quarantine?

If an employee is ordered into quarantine by an authority or if an official prohibition of work is imposed on him, the employer is generally entitled to reimbursement from the authority ordering the quarantine in accordance with the German Protection Against Infection Act (Infektionsschutzgesetz). However, case law argues that in such cases the employer is obliged to continue to pay the remuneration in accordance with section 616 of the German Civil Code (BGB) anyway, and that a claim for reimbursement is therefore excluded. In this case, the employer would have to pay the salary and would not be entitled to reimbursement.

Therefore, it depends on the individual case and, above all, the duration of the quarantine. It remains to be seen whether the legislator will provide companies with easy and smooth assistance in the short term. Based on the current legal situation, however, it is not to be expected that reimbursement claims will simply be granted. Since reimbursement claims are also subject to certain deadlines, employers should contact the authorities at an early stage and seek advice.

Are business trips still possible?

As of today, there is no legal reason to ban business trips or to cancel business trips that have already been booked, except if the Federal Foreign Office has issued a travel advisory notice for the destination. As long as this situation does not change and no travel advisory notices are issued, business trips can be ordered. Employees may not refuse to go on these business trips. Within Germany, business trips can be ordered.

Practical tip:

Irrespective of the legal situation, it is a question of weighing up whether it is actually necessary to make a business trip due to the general uncertainty. Postponing the trip, or holding the meeting by other means, for example electronically via Skype or web conference, can finally take some of the employees' worries away.

What happens if business operations collapse?

If the number of suspected cases or infections in the company increases and business operations can no longer be maintained, or if the authorities order closure of operations, the question of remuneration of the employees arises. Since the continuation of the business operations is part of the so-called operational risk of the employer, employees must continue to receive their remuneration, even in case of closure of business. In order to avoid economic damage, the ordering of short-time work should therefore also be considered in good time. Before doing so, the employer should also review whether it is possible to reduce overtime or grant vacation days for times of crisis.

What happens if the spread continues to increase?

If the number of cases continues to increase and the authorities, as recently in the Heinsberg district, close down entire cities or regions, further questions arise. If the place of work is located in an officially shut down area, this is equal to a de facto closure of the company. In this case, the operating risk lies with the employer and the employees' remuneration claims continue to exist unchanged. Conversely, if the employee is not himself quarantined due to an official order, but is not allowed to leave his home town, he cannot appear for work. This makes it impossible for him to perform his work. Here too, consideration should be given to working from home. If, however, a home office activity is out of the question, the employee may still be entitled to remuneration in accordance with section 616 BGB (so-called prevention without fault) in individual cases.

What else needs to be considered?

Employers should assess what measures are reasonable and necessary in their company. To avoid insecurities, employees should also be regularly informed about all measures. Since many measures could be subject to the co-determination of the works council, employers should ensure that a body with capacity to act is available as a partner. It may also be advisable to set up a corona panel.

Conclusion

All in all, it is advisable to keep a cool head in the current situation and to take prudent and transparent preparatory measures in the interest of the company and all employees. If several options for action are open, the current situation should be evaluated together with the employees and the solution that best suits the company should be found. In all this, corporate communication is of great importance, because uncertainty and panic are caused mainly by insufficient information.

Martin Biebl will be pleased to answer any further questions.

As always, it strongly depends on the particular case. Let me illustrate the point I would like to make with a vivid example: Can an employer force an employee to enter a building which is on fire? Of course the employer can: if the employer is a fire department and the employee is a firefighter. Of course the employer cannot do this if the employee's job has nothing to do with "buildings on fire", for example if the employee works as a baker, butcher, teacher, shop assistant, painter etc. Based on the example of the coronavirus, I will give an insight into the rights and obligations of employers as well as employees under the employer's right to give instructions.

Definition of the Term "Business Travel"

Business travel is not defined in labour legislation. From a labour-law point of view, business travel can be described as employees performing their work duties at a place outside of their assigned place of work. It does not matter in this respect whether the employees travel within their country or abroad, which mode of transport they choose for their trip (plane, train, car, bicycle) or whether an overnight stay is required. The term business travel covers a five-day trip from Frankfurt to the US by plane as much as a two-hour meeting 20 km away from the usual place of work reached by employees in their own car.

Obligation to Take a Business Trip

Generally speaking, an employee may be obliged to go on business trips if (occasional) travel is agreed upon in the employment agreement or if travel is typically associated with the specific profession. Employers may unilaterally order an employee to take a certain business trip by virtue of their right to give instructions. Under this right, the employer is entitled to specify the employee's work duties in regard to time, place, scope and type of the activities to be carried out.

The Employee's Right of Refusal

The right to give instructions under Sec. 106 German Trade Act (GewO) has its limitations. For example, employment contracts, works agreements or collective agreements might include certain restrictions concerning business travel. Instructions by employers also must not be illegal or improper; an employer cannot instruct an employee to drive a vehicle under the influence of alcohol or without a driving licence. Another limitation is "reasonably exercised discretion". This means a balance has to be struck between the interests of the employee, on the one hand, and the operational interests and/or the employer's interests, on the other hand. When it comes to the interests of the employer, the following factors have to be considered regarding business travel: the urgency of a business trip, the significance of it, the possibility to have a phone call or meetings at a different location instead, possibility of postponing the trip etc. When it comes to the employee, the following factors are to be considered, particularly with the employer's welfare duties in mind: employee's freedom from physical and medical harm, family reasons, duration of a business trip, hazardous situations during such business trip, etc.

If it becomes clear after taking into consideration the interests of both parties that the employee's interests outweigh the employer's interests, then the employee is entitled to refuse a business trip. In this case, the employee will not face any sanctions. If the employer's interests in a certain business trip outweigh the employee's interests, the employee has to follow the employer's instructions and go on the trip. Otherwise it would be deemed as a refusal to work on the part of the employee and the employer would be entitled to sanction these actions with a letter of reprimand or a notice of termination.

Employer's Welfare Duties

Welfare duties are collateral duties and therefore a mandatory part of an employment relationship. Employers are obliged under their welfare duties to only request work performance from their employees if the employees' interests are sufficiently considered in good faith, taking into account corporate and staff matters. The employer's welfare duties include the protection of the employee's life and body, of the employee's property and objects as well as the employee's personal and property rights.

In the case of business travel during times of the coronavirus, the employer's welfare duties, in particular concerning the employee's health or even life, are of primary importance. So in some cases, the necessity of every single business trip might have to be reviewed in terms of its appropriateness and by weighing up all interests. When it comes to business travel to China and/or other parts of Asia, it is not only the employee travelling that the employer has to consider but also all other employees. When an employee returns from a business trip and might be infected with the coronavirus, the employer is also obliged to protect the staff at the usual work location from a potential infection. That said, the following options may be considered:

• Complete ban of business travel to China and/or individual cities/regions
• Business trips to China only in exceptional cases and upon approval by the management board/management
• Possibility to self-quarantine by working from home after a business trip
• Closure of individual businesses/parts of businesses
• Alternatives to business trips, for example meetings at "neutral" locations
• Postponing business trips to a later point in time

So, it is possible for employers to send employees on a business trip to China, or even to the epicentre of the coronavirus in Wuhan, by virtue of their right to give instructions. This is possible, for example, if the employee works in the field of disaster control or medicine in Germany and is supposed to support Chinese hospitals or Chinese authorities in China.

All the best from the labour law team! Let us hope the coronavirus will spare us.

Dr. Erik Schmid

The holiday pay provided for the statutory minimum leave may not be less than the normal remuneration, even in the event of short-time work. However, short-time work may lead to a reduction in the duration of the minimum annual leave.

Facts

In 2015, a German employee was on short-time work for half of the year without having performed any work during this period. According to the Federal Framework Agreement for the Construction Industry (BRTV-Bau) applicable to the employment relationship, employees are entitled to 30 days of annual vacation regardless of short-time work. At the same time, according to the BRTV-Bau, the short-time working periods are taken into account in the amount of remuneration paid for annual leave and therefore the holiday pay is reduced. The employee objected to this reduction by bringing an action before the Labor Court (ArbG) of Verden which appealed to the ECJ. According to the German Federal Vacation Act (BUrlG), the reduction of holiday pay due to short-time work is possible by deviation through a collective agreement - as in the present case. The Verden ArbG asked for clarification as to whether this national regulation under the BUrlG, according to which deviations from the BUrlG may be made in collective agreements, is in conformity with Union law.

Decision

The ECJ first of all stated that under Union law every employee is entitled to a minimum of four weeks' paid annual leave. Two aspects must be taken into account with regard to minimum annual leave. On the one hand, the duration of the minimum annual leave and, on the other, the holiday pay. With regard to the duration of the minimum annual leave under Union law, the ECJ has ruled that no leave entitlement guaranteed under Union law arises in the case of short-time working periods during which no work is done. The employee who filed the complaint would only be entitled to two weeks of minimum annual leave under Union law due to the fact that short-time work accounts for half of the year. However, the ECJ also made it clear that more favourable national provisions remain possible. It is not objectionable under Union law when national legislation or a collective agreement - as in the present case - grants longer annual leave irrespective of whether short-time work is being performed or not.

With regard to holiday pay, the ECJ has ruled that the national regulation must be interpreted in conformity with Union law in such a way that for the duration of the minimum leave guaranteed by Union law, the average of normal pay must be paid even in the case of short-time work. In contrast, Union law does not require additional benefits under collective agreements or the fundamental consideration of overtime when determining normal holiday pay. The ArbG Verden now has to decide how the ECJ decision affects the payment of holiday pay for the employee's 30-day holiday.

Consequences in Practice

The judgment of the European Court of Justice is in line with the recent difficult case law on holiday law. The demands on employers will be further increased. The decision leads to even more bureaucratic work on the employer's side (differentiation between minimum leave under Union law with the possibility of reducing the duration but not the amount of leave and additional contractual or collectively agreed leave with the option of reduction). In the end, the decision does not lead to a noticeable improvement in holiday entitlements from the employee's point of view. In the case at hand, for instance, a Union-law entitlement to further holiday pay may exist only for two weeks of the minimum leave under Union law which the employee has earned, instead of for the entire six-week annual holiday. The ECJ confirms that the purpose of leave under Union law is also to ensure that the employee must earn the minimum leave (with the exception of sickness) and allows the reduction of the minimum leave entitlement in the case of short-time work, which can be regarded as positive from the employer's point of view.

Practical advice:

The decision makes clear how important it is that employers review their employment contracts, but also collective agreements, to ensure that they are up to date and not only make a precise distinction between statutory minimum leave and additional contractual or collectively agreed leave, but also adjust the options for reduction. At the same time, the decision gives rise to a close review of payments of holiday pay.

Maike Pflästerer