Missed exclusion deadline – a glimmer of hope!

In practice, almost all employment contracts contain exclusion periods. Exclusion periods are periods within which a claim must be asserted against the other contracting party (1st stage) and, if necessary, sued for (2nd stage), otherwise the claims expire and no longer exist.
Every employee and also every legal advisor must therefore pay the utmost attention to keeping an eye on the exclusion periods in the event of claims not being met by the employer. Any inattention in this regard will have fatal consequences with the final loss of your claim.

In particular, ongoing settlement negotiations sometimes cause employees to shy away from asserting their claims in court. They often trust that they can still find an amicable solution with the employer and do not want to jeopardize the negotiation climate.
Sometimes this takes revenge. If your employment contract contains a two-stage exclusion period, i.e. also requires a timely assertion of the claim in court, and this deadline has now expired, employers sometimes have little concern about relying on the expiry of the exclusion period despite the settlement negotiations that have taken place.
Until now, the only way out for the employee was to claim that the employer's argument was unfaithful. However, breach of trust is an absolutely exceptional case and can rarely be adequately explained and proven in a legal dispute.
The Federal Labor Court has now ensured more justice in such cases with a recent ruling dated June 20, 2018 (ref.: 5 AZR 262/17).
What happened?
The plaintiff in this case had demanded holiday pay and overtime pay from his (former) employer after the end of his employment relationship. The employer rejected this, but at the same time promised an amicable solution. The claims were subsequently negotiated, but unsuccessfully. After the negotiations failed, the plaintiff filed a lawsuit. The problem: His employment contract contained a 3-month exclusion period for asserting claims arising from the employment relationship in court, and this had now expired. The employer now referred to the expiry of the exclusion period and refused any payments.
The plaintiff was unsuccessful in both the first instance and the second instance because he had not filed his claims in a timely manner. That's why they went under. The ongoing settlement negotiations have not changed this.
The Federal Labor Court saw this differently. In the case of a 2-stage exclusion period, which also provides for a specific deadline for asserting a claim in court, the exclusion period is suspended in accordance with Section 203 Sentence 1 BGB as long as the parties are in settlement negotiations out of court. The period of settlement negotiations is not included in the exclusion period in accordance with Section 209 of the German Civil Code (BGB). However, Section 203 Sentence 2 of the German Civil Code (BGB), which stipulates that the statute of limitations occurs at the earliest 3 months after the end of the suspension, does not apply correspondingly to exclusion periods in employment contracts.
Contrary to the opinion of the lower courts, the plaintiff's claims were therefore not forfeited. The legal dispute was referred back to the state labor court due to the need for further clarification.
In the future, exclusion periods that have not yet expired cannot lead to the forfeiture of claims during ongoing settlement negotiations between the employment contract parties. The exclusion period only continues after the settlement negotiations fail. The remaining period of time for filing a lawsuit can of course be extremely short, which is why extreme caution is required here.
It should also be noted that every employee and legal advisor would do well to obtain express assurances from the other party during ongoing settlement negotiations that they will not invoke the second stage of the exclusion period. Exactly when settlement negotiations began and when they ended can be difficult to explain and prove in individual cases.
It is unclear to what extent the decision of the Federal Labor Court also applies to the first stage of an exclusion period, which usually states that claims arising from the employment relationship must be asserted in text form against the other contracting party within a certain period of time. In practice, settlement negotiations are often only likely to begin after a claim has been asserted out of court in text form, so that from the outset the settlement negotiations can only concern the second stage of the exclusion period for asserting it in court. However, it is conceivable that a claim is only asserted verbally by the employee and then entered into settlement negotiations. In these cases, one cannot rely on the fact that the decision of the Federal Labor Court to suspend the first stage of the exclusion period for the out-of-court assertion of the claim applies. Rather, despite ongoing settlement negotiations, the claim must be expressly asserted again in text form or the other party must be asked to make an explicit declaration that they will not invoke exclusion periods.