- DLA Piper

GERMANY
AUGUST 2012
Be Aware
Newsletter Employment
CONTENTS
I.Providing incorrect information
as indicator of discrimination
II.No limitation of payment in lieu
of vacation according to the
German Federal Leave Act
(Bundesurlaubsgesetz – BUrlG)
III.Compensation payment for
non-binding competition
restraint
IV.Permissible question of severe
disability during the course of
employment
INTRODUCTION
In this issue of BE AWARE we would like to give you a brief overview of the
latest developments in German employment law.
Especially we would like to draw your attention to two recent judgements of
the Federal Labour Court. By decision of 21 June 2012 – 8 AZR 364/11 the
Federal Labour Court ruled that providing incorrect information as well as
contradictory behaviour in the course of a personnel measure may be an
indicator for discrimination. Furthermore the judgement of 19 June 2012 –
9 AZR 652/10 is of practical relevance, as it affirmed that the theory of
surrogation in regard to the payment in lieu of vacation is no longer pursued.
The Federal Labour Court clarified that the payment in lieu of vacation of an
employee capable of working is a purely monetary claim and as such not
subject to the statutory time limit of the German Federal Leave Act
(Bundesurlaubsgesetz – BUrlG).
I. Providing incorrect information as indicator of
discrimination
According to the Federal Labour Court, incorrect or contradictory reasons
given by the employer to the employee in regard to a personnel measure may
indicate discrimination.
In the underlying decision the plaintiff of Turkish origin was employed on a
fixed-term basis as an office employee, initially for the period of 1 February till
31 December 2008. In October 2008 a staff meeting took place, where also
working mistakes of the plaintiff were discussed.
Nevertheless, in November 2008 the parties agreed to
the extension of the employment relationship until
31 January 2010. In September 2009 the plaintiff was
informed that employment on a permanent basis or the
prolongation of the employment relationship beyond
31 January 2010 would not come into question. Hereupon
the plaintiff claimed discrimination on the grounds of
ethnic origin. The employer in his position as defendant
negated this without providing any reasons. At the end of
the employment relationship the employer issued a
reference letter with the performance appraisal “to our
fullest satisfaction” for the plaintiff. The plaintiff alleged
before court, the contract was not prolonged because of
her ethnic origin. She claimed compensation and
reparation for discrimination from the employer.
The defendant defended himself that an employment
relationship on a permanent basis did not come into
question due to the plaintiff’s insufficient working
performance.
The higher labour court of Rhineland-Palatinate as
the court of second instance has decided in favour of the
plaintiff and ordered the defendant to pay compensation.
The Federal Labour Court has set aside the judgment and
referred the case back, because the sentencing of the
defendant could not be based on the reasons given by
the higher labour court. The higher labour court would
have to clarify whether the allegation of the defendant,
the employment relationship was not prolonged due to
insufficient working performance, might be an indicator
for discrimination. This might be the case, if the given
information by the defendant was incorrect or
contradictory to his other behaviour. Accordingly, it needs
to be examined whether the issued performance letter or
the reason one could not prolong the employment
relationship due to insufficient working performance
was incorrect.
Conclusion
Regarding this decision employers are once again well
advised not to give any reasons in case a fixed-term
contract is – without reason – not prolonged. However, if
an employer provides information about the underlying
reasons, it must be ensured, that the information is
(i) correct and (ii) that the information is not contradictory
to the employer’s actions. As seen in that case, this can
happen easily, especially if the employer – as usually in
practice – issues a favourable performance letter, even
though he was not satisfied with the working performance.
02 | Be Aware Newsletter Employment – August 2012
II. No limitation of payment in lieu of
vacation according to the German
Federal Leave Act
(Bundesurlaubsgesetz – BUrlG)
Vacation must generally be granted and taken during the
on-going calendar year (sec. 7 par. 3 s. 1 of the German
Federal Leave Act (Bundesurlaubsgesetz – BUrlG)).
A transfer to the following year is permissible, if urgent
operational reasons or reasons within the person of the
employee justify the transfer. However, in this case the
vacation must be taken within the first three months of the
following year (sec. 7 par. 3 s. 3 of the German Federal
Leave Act (Bundesurlaubsgesetz – BUrlG)). According to
the Federal Labour Court this time limit was so far also
applicable to the claim of payment in lieu of vacation.
This was attributable to the fact that according to the
former opinion of the Federal Labour Court, the payment
in lieu was a surrogation for vacation entitlements that
could not be realised due to the end of the employment
relationship. Due to European law stipulations (compare
so called Schulz-Hoff-Decision of the European Court of
Justice) the Federal Labour Court was forced to give up its
theory on surrogation for cases in which the employee was
not capable of working beyond the statutory time limit for
the transfer of vacation entitlements. Now the Federal
Labour Court clarified, that the same applies to the
vacation entitlements of an employee who is capable of
working. Also an employee capable of working does not
need to claim payment in lieu of vacation within the
statutory time limits of the German Federal Leave Act
(Bundesurlaubsgesetz – BUrlG).
The plaintiff of the underlying decision was employed by the
employer as defendant since January 2008. The employment
relationship between the parties ended on 31 July 2008 by
judgement of the labour court. At this point of time the
plaintiff was entitled to sixteen vacation days. In January
2009 the plaintiff claimed payment in lieu for vacation.
The labour court as well as the higher labour court
did dismiss the claim of payment in lieu of vacation
by stating the claim of payment in lieu was forfeited
by 31 December 2008. The appeal of the plaintiff was
successful. In continuation of its former jurisdiction
the Federal Labour Court found that the claim of
payment in lieu of vacation as a purely monetary claim
is not subject to the statutory time limits of the German
Federal Leave Act (Bundesurlaubsgesetz – BUrlG).
This applies regardless whether the employee was
or was not capable of working.
Conclusion
Conclusion
As a purely monetary claim payment in lieu of vacation
is no longer subject to the statutory time limits of the
German Federal Leave Act (Bundesurlaubsgesetz –
BUrlG). Employers should be aware of the fact that they
might be confronted with claims of payment in lieu at a
later time. The general limitation periods for claims do
apply, as far as there are no relevant preclusive periods
that are applicable to the employment relationship.
The decision shows that in cases of doubt regarding the
binding character of a competition restraint, employers
should, at the beginning of the restraint period, ask the
specific employee to declare whether he intends to comply
with the competition restraint or not. Otherwise employers
may face subsequent unexpected claims. An appeal is
already pending before the Federal Labour Court.
Therefore it remains to be seen whether the Federal
Labour Court maintains its opinion or adheres to the
opinion of the higher labour court Hamm.
In a further decision of 7 August 2012 (9 AZR 353/10) the
Federal Labour Court again had the chance to reaffirm its
jurisdiction on vacation. In this case the Federal Labour
Court ruled that vacation entitlements do also arise if the
employee is incapable of working due to sickness and
received pension because of a reduction in earning
capacity during that period of time. This would also apply,
if a regulation of a collective agreement stipulates that the
employment relationship is suspended while the employee
receives pension for a limited period of time.
III. Compensation payment for
non-binding competition restraint
With decision of 14 February 2012 (14 Sa 1385/11) the
higher labour court Hamm ruled, that in case of a
non-binding restraint of trade a deliberate decision of the
employee already at the beginning of the restraint of
the trade period which is final and covers the entire period
of the restraint of trade is not necessary. For the claim of
compensation payment to arise it is sufficient, if the
employee did comply with the competition restraint and
fulfilled his obligations thereof. With this decision the
higher labour court Hamm contradicts the opinion of
the Federal Labour Court, which predicates a claim
of compensation payment on the definite decision of the
employee to comply with the competition restraint at
the beginning of the restraint period.
The parties did agree upon a post-contractual competition
restraint. Due to various deficiencies the higher labour
court qualified the competition restraint as non-binding.
At the end of the employment relationship between the
plaintiff and the defendant at 31 July 2010, the plaintiff at
first registered as unemployed and received unemployment
benefits. Only in December 2010 the plaintiff claimed
payment of compensation payment from the defendant.
The higher labour court considers that the plaintiff is
entitled to compensation payment, because he would have
complied with the competition restraint. A deliberate
decision of the employee already at the beginning of the
restraint of the trade period which is final and covers the
entire period of the restraint of trade would not be
necessary.
IV. Permissible question of severe
disability during the course of
employment
The Federal Labour Court ruled that in an existing
employment relationship, at least after six months, i.e. after
the special protection from dismissal applies, it is permissible
to ask whether the employee is severely disabled.
The severely disabled plaintiff was employed on a fixedterm basis. The employer had no knowledge about the
disability of the plaintiff. During the opening of insolvency
proceedings against the employer the preliminary
insolvency administrator handed out questionnaires to all
employees to complete and check their personnel data in
order to prepare for social selection. The questionnaire
entailed inter alia the question about the status of severe
disability or equivalence. The plaintiff negated his
severe disability. After the opening of insolvency
proceedings the insolvency administrator terminated the
employment relationship with the plaintiff. Thereupon
the plaintiff sued for dismissal protection. While stating for
the first time that he was severely disabled, he supported his
action by alleging the termination was void, because the
Integration Office did not agree.
Already the higher labour court ruled that the plaintiff
cannot rely on special protection from dismissal, because
he untruthfully negated the question of severe disability.
The Federal Labour Court agreed with this opinion.
In preparation of dismissals the defendant was allowed to
ask the plaintiff about a severe disability, at least after the
elapse of the waiting period of six months. The defendant
had a legitimate interest, as he needed to know about a
severe disability in regard to the social selection as well as
to be able to observe the regulations on special protection
from dismissal. The question was not discriminatory and
did furthermore comply with data protection provisions.
Due to his contradictory behaviour the plaintiff is –
according to the principle of good faith – not allowed to
rely on the provisions of special protection from dismissal
of severe disabled persons.
Be Aware Newsletter Employment – August 2012 | 03
Conclusion
Even though the Federal Labour Court has ruled that the
question of severe disability is permissible, employers
should only ask about disability if there is a legitimate
interest. This is to avoid any impression of discrimination.
Please note, that the question of severe disability
should still not be asked during the application process.
The Federal Labour Court did not explicitly decide about
this controversial question. However, the provided reasons
give a hint that a question about severe disability during
the application process is impermissible, as it is provided
that at this stage, the applicant is not yet subject to the
special statutory protection from dismissal of severe
disabled persons.
04 | Be Aware Newsletter Employment – August 2012
Your contact persons
Cologne
Dr. Bernd Borgmann, LL.M.
Fachanwalt für Arbeitsrecht
[email protected]
Dr. Andreas Imping
Fachanwalt für Arbeitsrecht
[email protected]
Frankfurt
Michael Magotsch, LL.M.
[email protected]
Dr. Jens Kirchner
Fachanwalt für Arbeitsrecht
[email protected]
Hamburg
Volker von Alvensleben
Fachanwalt für Arbeitsrecht
[email protected]
Dr. Kai Bodenstedt, LL.M.
Fachanwalt für Arbeitsrecht
[email protected]
Munich
Pascal Kremp, LL.M.
Fachanwalt für Arbeitsrecht
[email protected]
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