Termination – works council hearing

Closing statement by the works council (Federal Labor Court, decision dated April 25, 2016 – 2 AZR 345/15)

The Federal Labor Court dealt with the issue of when the works council hearing that is mandatory before issuing a termination pursuant to sec. 102 Works Constitution Act (BetrVG) is concluded prematurely based on a statement by the works council. The works council is required to state its concerns against the intended termination in writing at the latest within one week (sec. 102 para. 2 sent. 1 BetrVG). If the employer terminates the employment relationship prior to the expiry of this period, the termination is invalid – unless the works council has issued a prior definitive statement.

The Federal Labor Court decided on the following case: The employer consulted the works council to issue a constructive dismissal. On the sixth day after the hearing letter was submitted to the works council, the works council objected against the intended constructive dismissal and at the same time requested additional details on the employee’s salary. The employer did not fulfill this request and over the course of the seventh day, the employee received the termination.

The Federal Labor Court decided that the termination is invalid because it was issued prior to expiry of the one week period of sec. 102 para. 3 BetrVG. For the statement of the works council was not definitive. The Federal Labor Court did not justify this based only on the additional request for salary details, however. The Federal Labor Court more precisely defined its judgment by ruling that a statement by the works council during the hearing proceedings prior to expiry of the waiting period only has a period-shortening effect, provided that it is unambiguously clear that it involves a conclusive statement. If the works council did not expressly communicate this, the obvious conclusion based on the statement of the works council must be that the works council does not wish to respond again up to the expiry of the hearing deadline – not even to “merely” supplement the justification of its decision already announced. In earlier decisions, the Federal Labor Court considered it to be sufficient that the employer (merely) had legitimate reasons to assume that the works council did not desire any further discussion. The Federal Labor Court no longer explicitly holds this position.

Practical recommendations:

The decision of the Federal Labor Court once again elucidates how important it is to engage in diligent preparation of terminations, also in terms of timing. In consequence of the decision of the Federal Labor Court, employers shall only consider the statement of the works council as definitive if the works council has expressly and definitively defined it as such and approved the termination without reservation. The matter subject to the judgment demonstrates that even an objection by the works council within the one-week period does not have a period-shortening effect if at the same time additional information is requested. The employer can no longer merely rely on the statement containing the result of the works council resolution by the chairman of the works council. Because according to the Federal Labor Court, there may still be the possibility of a new resolution of the works council or a supplement to the reasons for the decision communicated by the chairman. The works council chairman is required to make a decisive clarification that the works council does not wish to respond to the intended termination under any circumstances – only if the employer has received this precise information is he allowed to issue the termination prior to expiry of the one-week period.

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Tags: #Labour law, #Newsletter Employment Law 4/16

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