How is remote work regulated?
Normally, the place where an employee must perform their work obligations is clearly defined: at the company, whether on the factory floor or in the office unless their work takes place outside of the company (such as sales representatives and field service, etc.).
If the place of work is not regulated in the employment contract or in a collective agreement, employers have the right to determine the place of work within the scope of their right to issue instructions.
Case law has not yet conclusively clarified the extent to which this covers remote working arrangements. Given that employers do not have the employees’ homes at their disposal, they may not unilaterally order employees to work from home.
Return to the office as an instruction?
Many employers currently want to have their employees back on site again. But can employers unilaterally throw remote work regulations out the window, even if they are not expressly regulated in contracts and agreements?
The Munich Higher Labor Court (LAG) confirmed this (decision dated August 26, 2021, Ref.: 3 SaGa 13/21).
However, the Cologne Higher Labor Court has now also addressed this issue:
An employer wanted to order an employee back into the office instead of working from home via a unilateral instruction. However, the office was located 500 km away from the company’s previous location and the employee was expected to return within a few weeks. To make sure that this would be successful, the employer added a notice of dismissal for variation of contract in case this process was deemed to be an ineffective transfer.
The employee filed a complaint against both arguing that such a significant change in the place of work at such short notice could not be decided unilaterally. After all, his employer had permitted him to perform around 80% of his work from home.
The Cologne Higher Labor Court (decision dated July 11, 2024, Ref.: 6 Sa 579/23) agreed. When exercising the right to issue instructions, the instructions must comply with the principles of reasonable discretion. In the case before the court, demanding that the employee return to work at an office 500 km away does not reflect this principle.
Nor was including the dismissal for variation of contract as an alternative effective. The court saw no urgent operational requirements requiring the man to work on site again.
As a consequence of this ruling, the employee was allowed to continue working from home 80% of the time.
What does this mean for employers?
If employers want to bring employees back into the office from remote work, they need to bear in mind several factors.
If an employment contract, collective agreement or company agreement contains explicit regulations governing remote work, these cannot be unilaterally amended. Therefore, employers are urged to thoroughly check whether these agreements contain provisions permitting unilateral revocation, a partial termination option or a time limit. Otherwise, the company needs to reach an agreement with the employee. If the parties fail to agree, the only option would be to terminate the employment contract.
If clear contractual or collective provisions do not exist and remote work has been assigned or permitted within the scope of the employers’ right to issue instructions, it is generally conceivable that employers can unilaterally instruct employees to return to the company instead of working from home.
However, this is only possible within the bounds of reasonable discretion. At the same time, reasonable discretion is a question of the individual case.
Summary of the key facts:
- If there are clear remote work regulations, companies need to check whether they include provisions governing revocation, partial termination or time limits.
- In the absence of these specific provisions, companies may be able to instruct employees to return to the workplace in line with their right to issue instructions. However, companies are also required to observe the limits of reasonable discretion.
