How to file a mass reduncancy ­notification

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For most people the sky is the limit. For employers who file a mass redundancy notification the Federal Labor Court is. Whilst there have been multiple disputes and lawsuits about the correct form of filing a mass redundancy notification, the question of which operational organization must issue such, was generally not the most appealing one. However, employers must take a minute or two to think about this as well; something that Air Berlin has learned the hard way.

Deviating operational organizations have no impact
When Air Berlin struggled with insolvency and had to issue several terminations, the slippery slope began. The first question which arose was what exactly an operation is in terms of the German Dismissal Protection Act. Since a different organizational form was agreed upon through a collective bargaining agreement, Air Berlin had the impression that the organization of employees can deviate from the place of work.
Up to now, the Federal Labor Court has based its examination of whether and where a notification of mass redundancies is to be filed, on the Works Constitution Act and its operative form in section 4 of the Works Constitution Act (see BAG, December 13, 2012 – 6 AZR 348/11). This is also the reference used by the Dismissal Protection Act in such sense. The European Court of Justice however assumes that an operation under the law of the European Union does not need to meet the requirements that Germany has. Therefore, an operational organization does not need to have legal, economic, financial, administrative or technological autonomy. It was also irrelevant whether it had a management authorized to dismiss (ECJ of October, 26, 2006 – C-270/05 [Athinaïki Chartopoïïa]). This is in complete contradiction to the German point of view.

Back to the roots for involving employee representation
Besides the aforementioned question however, another issue was solved by the Federal Labor Court. On the basis of a ruling of the Berlin-Brandenburg Regional Labor Court (July 11, 2019 – 21 Sa 2100/18), the question arose as to whether the representative body for severely disabled persons must also be included in the consultation procedure prior to issuing the mass redundancy notification. Pursuant to section 17 para 2 Dismissal Protection Act, the works council must be informed of the reasons for the planned redundancy, the number and occupational groups of employees usually employed and dismissed, the period during which the dismissals are to take place, the criteria for selection of employees as well as the criteria for calculating severance payments. While § 17 para 2 Dismissal Protection Act explicitly states “works council”, the Berlin-Brandenburg Regional Labor Court came to the conclusion that the underlying EU directive merely says “employee representation”. The fact that in Germany involving an employee representation generally means a works council does not imply that any other employee representative body does not need to be involved. Hence, the representative body for severely disabled persons must also be included in the procedure
Although this was not even a question, before the Regional Labor Court invented it, clarity was sought as this meant double work for employers. Also, the representative body for severely disabled persons was often overburdened. Now the Federal Labor Court ruled that the involvement of the works council is sufficient. This is due to the fact that the directive is not clear as to which employee representation must be involved. Apparently each member state can regulate this itself. Since Germany has decided that the works council is the right body to be involved, there is no need to include another or further employee representations in the process.

For mass redundancy notifications precautionary measures are key. In such Air Berlin rulings it was stipulated that employers should simply submit several notifications in case of doubt and leave the rest to the authorities. This is obviously unsatisfactory but could help to prevent the terminations. Due to the fact that all notices of termination are invalid, in the absence of a mass redundancy notification, employers should live by the motto: better safe than sorry.
Another takeaway is that employers should not rely on any statements made by the Employment Agencies; Air Berlin did so and the Employment Agency instructed them to issue the mass redundancy notification in accordance with the organizational structures – which Air Berlin did. The rest is history.

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