Germany: Default Of Acceptance Wages After Dismissal – Welcome Decision For Employers

Just as the year draws to a close, there is one more piece of good news for employers: it was often the case to date that employees registered with the employment agency as unemployed after being dismissed by their employer. There, claims to default of acceptance wages were asserted. Frequently, either no or insufficient efforts to apply for jobs were made in such cases. In its decision of 30 September 2022 - 6 Sa 280/22, the Regional Labour Court [Landesarbeitsgericht, LAG] of Berlin-Brandenburg "certified" that an employee had made insufficient efforts to apply for a job and dismissed his claim to default of acceptance wages.

What happened?

The defendant employer had issued several invalid notices of termination to the plaintiff employee. The employee had subsequently claimed default of acceptance wages for the period from May 2017 up to and including April 2021. The employer rejected this with reference to Sec. 11 no. 2 of the German Unfair Dismissals Act [Kündigungsschutzgesetz, KSchG]. It was of the opinion that the employee could have been employed elsewhere during the periods in dispute. In consideration of the placement offers, he had not made sufficient efforts to apply for jobs and had therefore maliciously failed to generate earnings elsewhere. .

Berlin-Brandenburg Regional Labour Court rules in favour of the employer

Both the Labour Court [Arbeitsgericht, ArbG] and the Regional Labour Court ruled in the employer's favour. The employee had to disclose the individual placement offers of the employment agency in response to a claim to information asserted by the employer. It turned out that the employee had shown only few and insufficient efforts to apply for jobs, despite having received a considerable number of placement offers. On average, the employee had not even submitted one application per week, despite the fact that, according to the Regional Labour Court, he "was without work during the period in question and thus could and should have made efforts to apply in the scope of a full-time position". The applications were also inadequate in terms of their content.

The employer had therefore presented sufficient indications of a malicious failure to generate earnings elsewhere pursuant to Sec. 11 no. 2 KSchG. The employee thus came away empty-handed.

What the decision means for employers

Employees who have registered with the employment agency as unemployed after being dismissed by their employer often show little effort to find a new employment opportunity. Instead, frequently only claims to default of acceptance wages have been asserted to date. In cases where the invalidity of the dismissal was subsequently established with legally binding effect, employers often found themselves exposed to considerable claims to default of acceptance wages.

However, Sec. 11 no. 2 KSchG stipulates that the amount that the employee could have earned if he had not maliciously failed to accept a job could reasonably be expected to be credited against his claim to compensation for default of acceptance. The employment agency generally makes placement offers to the employee concerned. If the employee then makes no or only insufficient efforts to apply for a job, this may justify the objection of a malicious omission pursuant to Sec. 11 no. 2 KSchG in individual cases and reduce the claim to default of acceptance wages.

However, the employer first requires knowledge of the placement offers of the employment agency. In its ruling of 27 May 2020 - 5 AZR 387/19, the Federal Labour Court granted employers a corresponding right to information and strengthened their position. The employer may subsequently - depending on the circumstances - support its objection pursuant to Sec. 11 no. 2 KSchG on the basis of the placement offers. In this case, it is the employee's responsibility to demonstrate, by way of a graduated burden of representation and proof, why a contract was not concluded or why it would have been unreasonable for him to conclude such a contract.

Outlook

The decision of the Berlin-Brandenburg Regional Labour Court is to be welcomed, as it clearly rejects the previous practice of "sitting back and relaxing" after registering as unemployed. The judgement is not yet legally binding. Since the legal criteria used by the Regional Labour Court as a basis for the burden of representation and proof reflect the case law of the Federal Labour Court [Bundesarbeitsgericht, BAG], there is a good chance here that the Federal Labour Court will confirm the decision.

Employers are well advised not to rashly accept any claims to default of acceptance wages, but to consider the objection of a malicious omission pursuant to Sec. 11 no. 2 KSchG. Since procedural peculiarities and the respective circumstances of the individual case must be taken into account when defending against claims to default of acceptance wages, employers are advised to seek legal advice.

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.