Requirements for mass dismissal notifications
The mass dismissal notification is regulated in Section 17 of the German Employment Protection Act (KSchG). The law states that employers must inform not only the works council but, above all, the responsible employment agency if the employment relationships of multiple employees will be terminated within a short period of time.
The issue of mass dismissal notifications affects not only large companies and corporations but also small and medium-sized enterprises with 20 or more employees. However, the law only applies if more than five people will be dismissed within 30 calendar days.
Section 17 (4) of the Employment Protection Act (KSchG) also stipulates formal requirements for mass dismissal notifications: In addition to diverse mandatory information, the employer, in agreement with the works council, should also inform the employment agency about the gender, age, occupation, and nationality of the people affected.
Until now, it was undisputed that only violating the mandatory provisions of Section 17 (4) of the German Employment Protection Act (KSchG) would render the mass dismissal notice and, therefore, the terminations invalid. The unanimous opinion was that missing non-mandatory information would not have any legal consequences for the mass dismissal notification or the terminations.
The Hessian State Labor Court made optional information into mandatory information
This legal assessment of the mandatory and optional information for a mass dismissal notification had remained undisputed until now. Even forms used by employment agencies for mass dismissal notifications include the note that missing optional information has no effect on the effectiveness of the mass dismissal notification.
Only the Hessian State Labor Court reached a different ruling in June 2021 in two cases and attracted a lot of attention (Ref: 14 Sa 1228/20, Ref.: 14 Sa 1225/20).
In both cases, the court declared mass dismissal notifications and the corresponding terminations invalid because optional information was missing.
The Federal Labor Court clarifies the issue: “Optional” remains “optional”, “mandatory” remains “mandatory”
In one of these cases, the Federal Labor Court overturned the ruling issued by the Hessian State Labor Court and referred the case back to the court.
In this case, the court did not have to decide on these questions of optional and mandatory information and the effects if such information was omitted. This is because other reasons resulted in the case being referred back to the State Labor Court.
Nevertheless, the Federal Labor Court clearly expressed its legal opinion on the matter: In line with the clear intention of the legislator, missing optional information in a mass dismissal notification does not make the mass dismissal notification invalid.
It is difficult to imagine a clearer statement by the court.
By drawing a clear line, the Federal Labor Court ensured one thing above all: clarity. A welcome result for everyone who has to tackle with the already extensive requirements for a correct mass dismissal notification. Because a “must” remains a “must”, a “should” remains a “should”.
Summary of the key facts:
- Mass dismissal notifications may also be necessary even in the case of multiple layoffs within a short period of time at SMEs with 20 or more employees.
- Specific information must be included in a mass dismissal notification. If this mandatory information is missing, the mass dismissal notification and the terminations are invalid.
- Optional information is a different situation: If this information is not included, this does not make either the mass dismissal notification or the terminations invalid. The Federal Labor Court has now explicitly confirmed this in its ruling.
