Termination Without Notice

Secret conversation recording as retrospective grounds for termination without notice

(Higher Labor Court Hamburg, decision dated July 22, 2015 – 6 Sa 77/14)

If at the point of receiving notification of extraordinary termination there are other objective reasons for termination, which do not come to the attention of the employer until after the notice of termination, the employer may base the extraordinary termination on such retrospective grounds for dismissal.

The plaintiff, date of birth 04.02.1966, had been in the employment of the defending employer as a “Sales/Project Management Employee” since October 04, 1995. The defendant did not have a Works Council in place. The defendant terminated the employment relationship between the parties without notice on March 13, 2014, as opposed to duly, which would have been as of September 30, 2014, on the grounds of poor performance on the part of the plaintiff as a result of failure to make use of her full potential. After having lodged in due time an appeal against the judgment of the court of first instance, the Labor Court of Hamburg, which granted an unfair termination claim, it came to the attention of the defendant in December 2014 that the plaintiff had secretly recorded a staff appraisal held with the defendant on November 20, 2013 on her cell phone. The defendant introduced this issue into the appeal proceedings as an additional reason for termination as a mean of justification for her termination.

The Higher Labor Court of Hamburg rejected the complaint of unfair termination and found the employment relationship between the parties to have been effectively concluded by means of the defendant’s extraordinary termination of March 13, 2014. The ruling of the Higher Labor Court found the retrospective reason for termination, secretly recording a meeting submitted by the defendant to the court of appeal, to be a compelling reason for termination without notice in the sense of Section 626 (1) of the German Civil Code (BGB). The validity of an extraordinary termination rests solely on whether or not, on objective assessment, the actual circumstances prevalent at the time of its issuance rendered a continuation of the employment contract unacceptable and the employer could therefore base the termination without notice on retrospective grounds for termination, and indeed on such grounds as would justify a separate – new – termination. The condition for this is that the new objective reason for termination was already in existence before notification of termination, just not yet known to the employer at that point (cf. Federal Labor Court, April 10, 2014 – 2 AZR 684/13 – juris; Federal Labor Court May 23, 2013 – 2 AZR 102/12 – juris). The defendant should retrospectively submit the undisputed fact that a secret recording took place during the meeting to the court of appeals, because this fact was already given at the point of notice of termination, but at that point not yet known to the defendant. The fact that there is no connection between the retrospectively submitted reason for termination and the reason originally given, citing poor performance as a result of failure to make use of full potential, has no bearing on this. The Higher Labor Court followed the judgment of the Federal Labor Court, which did not require any inherent connection between the original grounds for termination and the retrospective grounds for termination (Federal Labor Court May 23, 2013 – 2 AZR 102/12 – juris). There is no need for compliance with the provisions set out in Section 626 (2) of the German Civil Code (BGB), according to which a termination without notice may only be issued within two weeks of gaining awareness of the circumstances involved in the termination because, from its very wording alone, the deadline for providing notice applies exclusively to the assertion of the right of termination. If the termination is declared in due time, as it was in the case underlying the ruling, Section 626 (2) Clause 1 of the German Civil Code (BGB) does not rule out any subsequent submission of retrospectively discovered grounds (cf. Federal Labor Court May 23, 2013 – 2 AZR 102/12 – juris).

Practical Recommendations:

Upon gaining awareness of any new circumstances regarding termination, the employer should check very carefully whether these happened objectively before or after any termination without notice already issued by the latter. If the circumstances are doubtful, an additional termination should be issued in any case. If there is a Works Council in place, it should be noted that the employer may only use those grounds on which it consulted the Works Council before declaring any termination. Therefore, if the employer becomes aware of any reasons for termination retrospectively, it must issue an additional termination after prior consultation with the Works Council. The decision of the Higher Labor Court is not yet final because the plaintiff has lodged a complaint with the Federal Labor Court against the nonallowance of appeal.