Betriebsbedingte Kündigung des Arbeitsvertrages

Under the Dismissal Protection Act, there must be a reason for termination in order to properly terminate the employment contract. This can be a behavioral, personal or operational reason for termination.

The reason for termination for operational reasons is of great importance in practice. This is always relevant, for example, when large-scale restructuring within a company or group involves mass layoffs.
However, the employer's mere assertion that there are operational reasons for terminating the employment contract is not sufficient to establish a reason for termination. Rather, labor court jurisprudence has developed detailed requirements that a dismissal for operational reasons must meet. If the operational termination of the employment contract announced by the employer does not meet these requirements, it is invalid.
Knowledge of the requirements for dismissal for operational reasons set out by labor court case law is therefore necessary in order to be able to assess what options are available to take action against termination of employment for operational reasons. In most cases, a dispute about the effectiveness of a dismissal for operational reasons will result in an amicable termination of the employment relationship against payment of an appropriate severance payment. For this purpose, it is often sufficient to point out legal risks to the employer at certain points in the labor court's review of a dismissal for operational reasons. The following illustration also provides an introduction to this.

Elimination of the need for employment

The basic requirement for any dismissal for operational reasons is that there is no longer any need for employment. This can no longer apply due to external or internal reasons (BAG, judgment of July 10, 2008, Ref. 2 AZR 418/06).
External causes can include, for example, a lack of orders, a decline in sales or delivery blockages. If the employer cites external causes, he must not only explain these himself and, if necessary, prove them, but also that they specifically led to the loss of a certain number of jobs. This proof is often extremely difficult to provide. Employers therefore rarely cite external causes for the loss of employment needs.
Employers more often cite an internal cause for the job loss, i.e. a business decision. An entrepreneurial decision is a concept for adapting personnel requirements to work requirements. Typical business decisions include, for example, the introduction of new work or production methods; the decision to outsource individual production areas or work that was previously carried out internally; or to shut down a business or a business department. If the employer relies on such a business decision, it can only be reviewed to a very limited extent by the labor courts, namely as to whether it is obviously unobjective, unreasonable or arbitrary (BAG, judgment of December 16, 2004, Ref.: 2 AZR 66/04). This is extremely rarely the case in practice. The labor court does not examine whether the entrepreneur's decision is appropriate. However, the employer must clarify the business decision in terms of its organizational feasibility and its durability so that the court can at least carry out a limited review.
If activities that were previously carried out internally are outsourced, it must always be carefully checked whether there is a transfer of operations. If this is the case, the employment relationship cannot be effectively terminated for operational reasons. Rather, the employment relationship is transferred to the purchaser of the business by virtue of the law under unchanged working conditions (BAG, judgment of January 22, 1998, Ref.: 8 AZR 243/95).
A dismissal for operational reasons is also ineffective if the employee can continue to be employed at another job in the same company or in another company company. If there is a vacant, equivalent job in the company, the employer must generally transfer the employee to this job before issuing a dismissal for operational reasons. If only lower-value jobs are available, the employer is not allowed to give notice of termination for operational reasons. Rather, he is then referred to assigning the employee the lower-value job by way of termination notice. This so-called priority of the change notice over the termination notice follows from the principle of proportionality that governs the entire protection against dismissal law (BAG, judgment of March 26, 2015, Ref.: 2 AZR 417/14). The employer must therefore always choose the mildest possible remedy.
If the company uses temporary workers permanently and not just temporarily, these temporary workers may have to be terminated as a matter of priority before the company's own employees are terminated.
The limit of the obligation to continue employment is generally the company. There is no group-related obligation to continue to work in other companies within a group (apart from exceptional cases) (BAG, judgment of October 18, 2012, Ref.: 6 AZR 41/11).
If, according to the above principles, a vacant position of equal or lower value can be identified in the company in which it would have been possible for the terminated employee to continue to work, this opens up good prospects of taking action against a dismissal for operational reasons.

Social selection

According to the Dismissal Protection Act, the employer must still carry out a so-called social selection even if jobs are basically eliminated and there is no other employment opportunity. As part of this social selection, it must be determined which employees ultimately have to be terminated due to the loss of employment opportunities. It doesn't matter whose job has specifically been lost. Rather, it depends on which of the group of comparable employees is least worthy of social protection according to the principles of social selection.
The first question that arises is that of comparability. Comparable are those employees who are interchangeable according to job-related characteristics (i.e. according to their skills and knowledge and their contractually owed tasks) (BAG, judgment of October 25, 2012, Ref.: 2 AZR 552/11). This is the case not only in identical jobs, but also when an employee can also carry out the other job of a colleague after their job and training. However, social selection always only takes place at the same level of the company hierarchy. Superiors and subordinate employees are therefore not to be included in the social selection. The prerequisite is always that an employee can be assigned another job according to their employment contract. However, in practice this is usually the case.
The social selection is only company-related (BAG, judgment of June 2, 2005, Ref.: 2 AZR 158/04). So not all comparable employees of a company should be included in the social selection, but only those of the employing company. In contrast, social selection is not limited to specific company departments.
Within the group of comparable employees, it must be examined which are the least worthy of social protection based on their social data (length of service, age, maintenance obligations and possible severe disabilities). The weighting of the social data relative to each other is not fixed. The employer has a certain degree of discretion (BAG, judgment of January 29, 2015, Ref.: 2 AZR 164/14). Employers generally use points schemes, especially in the case of major restructuring measures involving extensive staff reductions. It should be noted that not every employee can claim incorrect social selection, but only those who would not have been dismissed if the social selection had been correct. It is therefore not enough to simply demonstrate that a comparable employee who is less worthy of social protection than yourself has remained in the company. It must also be demonstrated that if the social selection process had been correct, one would not have been counted among the employees to be terminated.
However, if it can be determined that the employer erroneously terminated an employee who was more worthy of social protection, the complaint of improper social selection usually represents a promising opportunity to highlight legal risks for the employer in the dismissal protection process.

Burden of presentation and proof

Of considerable importance for the legal prospects when taking action against a dismissal for operational reasons is the so-called burden of presentation and proof, i.e. the question of whether the employee or the employer has to present certain facts in the process and prove them in the event of a dispute. This is designed to be quite favorable for the employee.
The employer bears the full burden of proof for the loss of the job for external or internal reasons. The employee must first generally explain other employment opportunities in vacant positions. However, it is then up to the employer to explain in detail and, if necessary, to prove that there is no such vacant position in the company. With regard to social selection, the employee generally bears the burden of presentation and proof. However, in response to a general complaint from the employee, the employer must specifically state which employees it included in the social selection and which criteria it used to make the social selection.
There are special circumstances if, in the event of a major restructuring, a reconciliation of interests with a list of names was concluded with the works council. If the employee concerned is on the list of names, it is assumed that his termination is due to urgent operational requirements. The social selection can then only be checked for gross errors. Here the chances of success are somewhat lower. Nevertheless, it is worth taking a closer look, as there may still be starting points in individual cases.

Works council hearing

In companies with a works council, the works council must be consulted before a dismissal for operational reasons is announced. A completely missing or inadequately conducted works council hearing will result in the invalidity of the dismissal for operational reasons.
The works council must be informed of the job loss and the internal or external reasons for this before termination for operational reasons. The works council must also be informed of the criteria for the social selection and the employees who were included in the social selection by the employer. When examining a works council hearing, there are often still opportunities to take action against a dismissal for operational reasons even if all other prerequisites (loss of the need for employment and proper social selection) are present.

Conclusion

The requirements that case law sets for the effectiveness of a termination of the employment contract for operational reasons are quite high. There is usually a significant legal risk for employers in the process. This needs to be shown. If this is successful, there is a good chance of at least achieving an appropriate severance payment for the employee. Since there is a short deadline of only three weeks for filing a dismissal protection claim and after this deadline has expired, the invalidity of a dismissal can no longer be asserted for procedural reasons, it is advisable to have the employment contract checked in detail immediately after receiving a termination for operational reasons. whether and what prospects of success there are for taking action against the termination.