Joint operations formed by two or more organisations bring additional labour law challenges in the event of planned mass redundancies. This article shows how the notification of a collective dismissal in a joint operation can be made as legally secure as possible despite the additional complexity.
Determination of the threshold values
Whether a reduction in staff is notifiable under s17 of the Consumer Protection Act depends on the thresholds set out in that section. The numbers of employees must be determined for each operation (i.e. a site, an office or similar unit with a certain degree of independence in organisation). The concept of an operation must be interpreted in conformity with EU law. In principle, however, a joint operation within the meaning of s1(2) of the Works Constitution Act (i.e. an operation in which employees of two or more organisations work together in one organisation) is also to be regarded as an ‘operation' within the meaning of s17(1) of the Protection Against Dismissal Act. This is also the assumption in the relevant guideline from the German Employment Agency (BfA).
Occasionally there are doubts whether the employees of several enterprises form a joint operation, or which of several organisations at a location is part of an existing joint operation. In this case, all possible alternatives should be calculated as a matter of precaution. If, for example, the redundancies in one company, viewed in isolation, do not exceed the required threshold, but the (presumed) joint operation has a sufficient number of redundancies in relation to the number of employees to meet the threshold, it is advisable to notify all planned redundancies as a precautionary measure.
However, the employer should not presume the existence of a joint operation too easily. As the Federal Labour Court recently ruled on Air Berlin, a notification of mass redundancies with a clearly wrong definition of the affected operation is invalid (so that the dismissals mentioned in this notification are also invalid) . A precautionary notification should only be made when there are significant indications of a joint operation. In order to avoid being factually bound to the argumentation in later dismissal proceedings, the employer should also disclose any existing doubts it has regarding the existence of a joint operation to the Employment Agency and clarify that the notification is made as a precautionary measure.
Content of the notification(s)
If the organisation concerned decide to make a notification based on the assumption that there is a joint operation, the notification should be structured as follows:
- Each organisation should submit a separate notification. One could argue that one company may file a notification for all employees on behalf of all the companies involved. This seems reasonable, as otherwise the employment agency would be informed twice. However, this procedure is not legally secure, especially since s17 Protection Against Dismissal Act imposes the duty of notification on ‘the employer'.
- All employees must be included in the respective notifications, i.e. each organisation must include the employees of the other organisation of the joint operation . At least, this is the view of the Lower Saxony Regional Labour Court.
- If a company participating in the joint venture does not dismiss any employees, it would appear logical that this company does not file a notification. Nevertheless, according to the above principles, it would only be consistent if this company also filed a notification in order not to call into question the effectiveness of the other notifications. In any case, such a report would not be detrimental.
- Although not required by law, employment agencies occasionally request a breakdown of the employees (both for the employees usually employed and those to be dismissed) by the respective companies. This ‘service' should be provided by the employer as a precautionary measure in order to prevent possible inquiries from the agency and to ensure it receives the desired confirmation from the Employment Agency that the notification has been received in full as soon as possible.
Finally, in order to make the content of the notification(s) more comprehensible for the Employment Agency (and also for any subsequent dismissal protection proceedings), a short accompanying letter to the Employment Agency is advisable in addition to the intended form, which discloses the employer's own conclusions regarding the joint operation and the requirement for double notification. Even if a notification by both organisations was not necessary, this approach (in line with the case law on double notification where local jurisdiction is unclear) should prevent discussions on whether the additional notification was incorrect.
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.