The Cologne Higher Labour Court has ruled an employer should issue a job reference certificate to a former employee dated on the date the employment relationship was terminated. This article explains the decision and the issues it may create for employers.
For many employers, issuing employment certificates is an unwelcome duty. Quite a few larger employers now generate job references using text generators that enable the creation of certificates with just a few mouse clicks. Employees, on the other hand, are usually very anxious to receive a certificate on termination of the employment relationship, which is useful for their professional advancement. In the end, there is often a dispute about supposed trivialities. It is not unusual for sensitivities or mere stubbornness on one or both sides to pave the way to the labour courts.
Also in the context of dismissal protection proceedings, there are hardly any settlements without a provision on the employer's reference. The fact that disputes can only apparently be settled with a reference is shown by a case recently decided by the Higher Labour Court of Cologne. After employer and employee had already reached a settlement on the key points of the employer's reference in proceedings for protection against dismissal, a dispute arose as to the date of issue of the reference. Somewhat surprisingly, the Cologne Higher Labour Court came to the conclusion that a job reference should normally be issued on the day of the legal termination of the employment relationship. This had not been the prevailing opinion so far.
Classification
The employee's entitlement to a job reference generally arises upon termination of the employment relationship. However, the law grants the employee the right to choose between a simple and a ‘qualified' certificate (which contains an assessment of the employee's performance and is usually chosen) in s109 paragraph 1 sentence 3 of the Trade, Commerce and Industry Regulation Act. Therefore, the employer can only fulfil the employee's entitlement to a certificate after the employee has exercised his or her right to choose. Before that, the employer cannot be late in issuing the certificate.
If the employee first exercised his or her right to choose significantly after departure, the vast majority of case law and legal literature has so far assumed that he or she could not demand that the employer backdate the certificate to the day of the legal termination of the employment relationship (see for example the Rheinland-Pfalz Higher Labour Court decision of 11 January 2018). In practice, however, backdating is a common practice.
So far the Federal Labour Court has not had to deal with this question. In a decision from 1992, however, it mentioned, with regard to the principle of the duty of truthfulness that applies to job references, that it was customary in bona fide business dealings to issue written statements with the date on which they were made. In this decision, however, the Federal Labour Court considered backdating to be possible in a special case by correcting a previously issued certificate. The failure to issue the certificate correctly from the outset could, according to the BAG, not be to the employee's detriment, particularly since a certificate issued significantly after the employee had left the company could give the impression that it had only been issued after lengthy disputes with the employer (the BAG certainly saw this problem).
What were the Cologne court's arguments?
The Cologne Higher Labour Court essentially based its decision on three arguments. First, it is a widespread custom to issue certificates of employment on the day of the legal termination of the employment relationship. In ‘real working life', the date of a certificate therefore does not necessarily refer to the date of the physical creation of the certificate. Secondly, the date of the legal termination of the employment relationship as the date of the certificate prevents any speculation about a dispute between the employer and the outgoing employee about the certificate. As a third argument, the Court stated that the date of legal termination is the relevant date for assessing the employee. The date of the certificate (according to the court) also refers to the time at which the employee's performance is assessed
The Cologne court's arguments do not go far enough
The Cologne Higher Labour Court's arguments are not convincing. In fact, it cannot be denied that a certificate which is not dated to the date of resignation can raise questions with potential future employers which can sometimes also have a negative effect on the employee. However, it is nevertheless reasonable to expect an employee to demand that the employer provide the (simple or qualified) job reference at a time directly connected to the termination of the employment relationship. If the employee does not do so, he or she cannot require the employer to backdate the date of issue. Otherwise, some employers would quickly face considerable practical problems. These can arise simply because a new corporate identity has been introduced or the company has changed its name in the meantime. If the obligation to backdate would exist, employers would inevitably have to keep ‘old' stationery available. In addition, one of the appropriate signatories would still have to be employed by the employer. If not, contradictions would be inevitable that could hardly be reconciled with the principles of truthfulness and clarity of testimony.
Conclusion
When creating job references, supposed minor details can quickly trigger disputes. Even if the Cologne Higher Labour Court's decision is not convincing, employers should (if this is not already their usual practice) date references to the day of the legal termination of the employment relationship. This is at least the case if employees request the issue of the certificate to have a direct time connection with the termination of the employment relationship. If, however, there are several weeks or even months between the employee's request for a certificate and the termination of the employment relationship, the employee cannot request a backdated certificate. If practical problems do not arise, employers should nevertheless consider backdating. This prevents disputes and does not generally have legal downsides.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
