Legal framework
If an employer fails to re-employ an employee who is fit for work and willing to work following an invalid dismissal, the employer is, in principle, liable to pay compensation for default of acceptance (Section 615, first sentence, in conjunction with Section 611a(2) of the German Civil Code (BGB)). However, under Section 11(2) of the Employment Protection Act (KSchG), any earnings that the employee forgoes by maliciously refusing to accept reasonable work are also taken into account. This refers to culpable, deliberate inaction, not intent to cause harm.
This also applies to ‘litigation employment’: the employer giving notice offers temporary, paid work during the proceedings under the Employment Protection Act without withdrawing their notice of termination.
The case
A picker who had been employed since 1993 threw a plastic hammer in the direction of a colleague. The hammer struck a roller shutter next to the colleague and broke. The external sequence of events was undisputed; the intent to cause injury was disputed.
Following ordinary dismissal with effect from 31 August 2023, the employer offered in writing to employ the employee in their previous role until the proceedings were legally concluded. A fixed-term contract was to be drawn up following a declaration of willingness. The employee remained silent. He later won the unfair dismissal case and claimed compensation for delay in acceptance for the period from September 2023 to June 2024.
The ruling
The Hamm Regional Labour Court (LAG) upheld the dismissal of the claims for payment: the employee had maliciously failed to earn reasonable earnings. The deduction for this covered the entire claim. It was not a lack of willingness to work, but the deduction under Section 11(2) of the German Unfair Dismissal Protection Act (KSchG) that was decisive.
The Regional Labour Court did not consider an offer of contract that was immediately capable of being accepted to be necessary. The nature of the work and the terms and conditions could be determined by the employee’s previous area of responsibility; the remuneration was derived from the previous terms and conditions and, supplementarily, from Section 612(2) of the German Civil Code (BGB). In the event of any ambiguities, the employee should have sought clarification. The general question of the offer was still unresolved at the highest court level; the Regional Labour Court even considered the letter to be capable of being accepted in the alternative. The appeal was not allowed.
The dismissal on grounds of conduct did not automatically render the employment relationship unreasonable. The undisputed facts of the case were, in themselves, sufficient grounds for dismissal; the court regarded the dispute over intent as a matter of legal classification. Furthermore, prior to making the offer, the employer had distanced itself from an alleged accusation of attempted murder made by its authorised representative. The validity of the dismissal and the reasonableness of the employment relationship remained separate issues.
Practical relevance
Check at an early stage: employment during proceedings is an underutilised means of limiting risk. Consider this as early as the planning stage of the dismissal: if the offer is accepted, the employee receives work in return for remuneration; in the event of a malicious refusal, the earnings that could have been achieved may reduce any claims for back pay. Claims that have already arisen are not retroactively waived.
Make a specific offer and document it: The initiative lies with the employer. Specify the role, place of work, working hours, remuneration, start date and duration, where possible on the same terms as before. Document receipt and the response; set a reasonable deadline for a reply.
Ensure the offer is genuine and reasonable: You must be genuinely willing to take up the employment. Mere token offers are of no help (Federal Labour Court, judgement of 29 March 2023 – 5 AZR 255/22). The grounds for dismissal and the offer of reinstatement must be consistent; particularly in cases involving allegations of misconduct, a case-by-case assessment and the protection of other employees remain essential. The offer does not automatically end the period of default in acceptance.
Ensure the agreement is legally sound: Make it clear that the dismissal remains in force. In the case of a separate fixed-term contract, the grounds for the fixed term and the termination clause must be carefully drafted; the written form must be observed before work commences (Section 14(4) of the Fixed-Term Employment Act (TzBfG)). Otherwise, there is a risk of an indefinite contract (Section 16 TzBfG).
Key points in brief
- Winning an unfair dismissal case does not guarantee back pay.
- Reasonable employment during legal proceedings can significantly limit the risk of default of acceptance – even following dismissal on grounds of conduct.
- A sincere, clear offer and legally sound agreements are crucial.
