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5 key German employment law rulings for 2021

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Kliemt.HR Lawyers, the first port of call in employment law for top-class and future-proof advice.
In 2021, there were a number of noteworthy employment-related court decisions, covering topics from sick notes to leave during short-time work, compliance investigations and transfers of undertakings.

The probative value of sick notes

According to the Federal Labour Court, the probative value of a sick note is questionable if the employee concerned has terminated his or her employment on the day of the sick note and the period of incapacity for work covers the duration of the employee’s notice period exactly.

Where employees give notice of termination voluntarily, for example due to a change of job, sometimes a certificate of incapacity for work is submitted in more or less simultaneously with the notice of termination, meaning the employee spends his or her notice period is (presumably) on sick leave. The employer incurs additional costs due to the employee’s absence during the notice period or to the employee’s holiday entitlements, which cannot be reduced.

Although a medical certificate of incapacity for work is the evidence of sickness required by law, the employer can undermine its probative value. To do so, the employer must show and, if necessary, prove, factual circumstances that give rise to serious doubts about the employee’s inability to work. If the employer succeeds in doing so, it is up to the employee to prove his or her incapacity for work.

According to the Federal Labour Court’s decision, there are at least grounds for serious doubts if the sick note is dated on the day of the dismissal and covers the entire notice period exactly. In the case decided here, the employee did not succeed in providing concrete evidence of his or her inability to work.

As a result of this decision, the probative value of sick notes is now no longer beyond question. The lower courts had not yet seen any reason for serious doubts about the inability to work. In our opinion, these principles and similarly typical facts are to be applied to employer-side dismissals.

BAG dated 8 September 2021 – 5 AZR 149/21

Who covers the cost of lockdowns?

After the Düsseldorf Regional Labour Court initially ruled that in the event of a lockdown to protect the population, the employer alone should bear the risk of a plant closure and continue to pay wages, the Federal Labour Court has now clarified the situation (see here).

In contrast to earlier rulings, the Federal Labour Court ruled that the employer does not bear the risk of lost working hours if, in order to protect the population from serious and fatal disease, all non-essential facilities are closed by official orders. In this case, the normal general risks of running a business were not decisive. Rather, employees’ inability to work was a consequence of official intervention to combat a danger that affected society as a whole.

The decision clarifies that it is the state’s responsibility to provide financial compensation for disadvantages caused by its intervention. This burden cannot be placed unilaterally on employers. Although the introduction of short-time work is the chosen response in most cases, in the case decided here, short-time work was not possible for the employee.

BAG dated 13 October 2021 – 5 AZR 211/21

Short-time work and holiday entitlement

The Federal Labour Court confirmed another much-scrutinised decision of the Düsseldorf Regional Labour Court (LAG Düsseldorf dated 12 March 2021 – 6 Sa 824/20) on the pro rata reduction of statutory holiday entitlement during periods when the obligation to work is completely suspended due to short-time work. The Regional Labour Court ruled that even if short-time work was introduced, the employees concerned were to be treated as part-time employees. As a result, their statutory entitlement to holiday leave should be reduced proportionately to the working time owed. This means there is no holiday entitlement for short-time work periods where employees are not working at all.

In a previously unpublished ruling, the Federal Labour Court confirmed the Düsseldorf Regional Labour Court ruling, aligning itself with the case law of the European Court of Justice, which also assumes a pro rata reduction of the minimum holiday entitlement in these circumstances (pursuant to Article 7 of the Working Time Directive 2003/88/EC).

BAG dated 30 November 2021 – 9 AZR 225/21

Costs of compliance investigations

The Federal Labour Court made another important ruling on the reimbursement of costs of a compliance investigation by the convicted employee. The Federal Labour Court clarified that the costs of a compliance investigation can be reclaimed from an employee after an intentional breach of contractual duty has been established. This also applies to the necessary costs of an external law firm.

Section 12a of the Labour Courts Act, which contains an extensive exclusion of reimbursement of costs including for pre-court legal fees, did not preclude reimbursement. According to its meaning and purpose, s12a of the Labour Courts Act does not apply if investigative measures become necessary as a result of an intentional breach of duty or intentional tort. According to the Federal Labour Court, an employee in this situation should not be protected from a requirement to repay.

The Federal Labour Court did not allow the claim for reimbursement in this specific case, because of the criterion of ‘necessity’. According to this, the only investigation costs that must be reimbursed are those that a ‘reasonable, economically-minded person would have considered not as expedient but as necessary’ according to the circumstances of the case. In the Federal Labour Court’s opinion, the employer had not sufficiently demonstrated necessity. However, if necessity can be demonstrated, the costs of compliance investigation are reimbursable. Employers should therefore carefully check which investigative measures are deemed necessary before starting these investigations and keep a record of them.

BAG dated 29 April 2021 – 8 AZR 276/20

Salary and transfer of undertakings

The Federal Labour Court also ruled that an employee who wanted to continue to receive his salary after objecting to a transfer of an undertaking had to work for the business acquirer at least temporarily on the employer’s instructions.

In the context of a spin-off as transferor of a business, the defendant had agreed with the acquirer of the business that in the event of objections to the transfer, the vacancy arising at the acquirer as a result would be ‘compensated’ for a period of twelve months by employee leasing. The claimant refused to be employed as a temporary worker by the acquirer after objecting to the transfer. After the defendant refused to pay salary, the employee filed a legal action because the employer did not accept his employment services (known as ‘default of acceptance’).

In the event of default of acceptance, the employer owes wages regardless of whether it rejected the employee’s offer of service. However, this is not the case if, pursuant to s615(2) of the Civil Code, the employee rejects a reasonable opportunity to earn a wage.

The position offered as a temporary worker for the acquirer of the undertaking for a limited period of time was reasonable, because the same activities as before were performed at the same place of work for the same remuneration. Section 615(2) of the Civil Code does not focus on what is contractually owed, but on whether there is a reasonable alternative earning opportunity.

This welcome decision is of particular importance for the drafting of M&A company purchase agreements. Objecting to the transfer of undertakings should be significantly less attractive in the future, meaning cost risks from the seller’s point of view should be lessened.

BAG dated 19 May 2021 – 5 AZR 420/20

Tobias Lamß
Attorney - Germany
Kliemt.HR Lawyers