A company has indications that an employee has behaved ‘improperly’. An internal investigation is initiated. In the process, specific suspicions are substantiated. These may be enough to justify an effective extraordinary dismissal. At the same time, there is good reason to believe that further misconduct by this employee could be uncovered if further investigations were conducted.
Question: should the employment relationship be terminated as soon as the first suspicions are substantiated or should further investigations be carried out first?
Answer: it is preferable to terminate the employment relationship earlier, when individual suspicions are substantiated, rather than later.
The time frame for internal investigations is mainly determined by the notice period (s626 paragraph 2 of the German Civil Code). According to this, notice of termination must be given within two weeks of the conclusion of the investigation. In the event of dismissal on the grounds of a suspicion of misconduct, this period begins to run when the employer has reasonably certain knowledge of facts that are decisive for the dismissal. Representatives of dismissed employees often complain that this time limit has not been observed. This leads to intense disputes about compliance with this time limit: when did the employer have sufficiently robust indications of misconduct? What did the employer have to investigate and at what speed before the termination was issued? When were the investigations completed?
From the employer’s point of view, a dispute over these points should be avoided if possible. After all, the mere need to provide a justification regarding timing could be detrimental: the effectiveness of the termination is at stake, and this could weaken the employer’s negotiating position in settlement talks. If only in the interests of staying clearly within the authorised notice period and to limit points of contention from the outset, notice should tend to be given earlier rather than later.
‘Early’ notice of termination still gives the employer the opportunity to use later findings from an internal investigation. In addition to issuing a renewed notice of dismissal on suspicion of the commission of an offence, the employer can consider what is known as ‘subsequent insertion of grounds for dismissal’ In this context, the employer can also refer to circumstances that became known to it only after the notice of dismissal was issued. The employer could even completely change the grounds for dismissal. This was recently confirmed by the Federal Labour Court (Federal Labour Court of 12 January 2021 – 2 AZN 724/20).
This means that if the employer comes across ‘better’ (possibly completely different) reasons for dismissal in the course of an internal investigation after the notice of dismissal has been given, it can cite these as reasons for the dismissal provided certain conditions are met. In these circumstances, the employer does not have to give a new notice of termination, which would start the notice period running again.
Example: in the course of investigations, a suspicion that an employee has misappropriated the employer’s property is substantiated. The employer then gives extraordinary notice of dismissal. During further investigations, it is discovered by chance that the employee has sexually harassed female colleagues. In these circumstances, the employer can justify the dismissal for which notice has already been given with the accusation of sexual harassment, even if the dismissal would have been invalid on the basis of the accusation of embezzlement.
In order to be able to add the reasons for termination discovered later from internal investigations to justify it, the following prerequisites must be met: