Termination Email From The United States To Germany – Valid After All?

Effectively serving notice of termination is rarely a mere formality. German employment law regularly presents employers with significant practical challenges in this respect. These include the strict written-form requirement (“wet ink”) under Section 623 of the German Civil Code. Problems arise where those authorized to give notice are located abroad and time is of the essence, for example where the probationary waiting period is about to expire or where termination for cause is contemplated. Arranging for the timely signature of the termination letter and then delivering the original across national borders is, in practice, often associated with considerable – at times extremely high – administrative effort, substantial costs, and a heightened risk of error.

Federal Labor Court: Purpose of Form over Formalism – Exceptions to the Strict Written-Form Requirement May Be Possible in Cross-Border Cases 

Against this background, a recent judgement of the German Federal Labor Court merits particular attention, although it has not yet received the level of practical consideration it deserves. On August 22, 2024 (docket no. 2 AZR 251/23), the BAG held that, in cross-border situations, the termination of an employment relationship of an employee who mainly works in Germany does not necessarily have to comply with the written-form requirement under Section 623 BGB.

What was the case about? 

The claimant was a flight attendant employed by an international airline headquartered in Chicago, Illinois in the United States. He was stationed in Germany at Frankfurt Airport. From there, he regularly operated long-haul flights between Germany and the United States. The parties had agreed in the employment contract that U.S. law would apply. Due to the economic impact of the COVID-19 pandemic, the company had to implement extensive restructuring measures. The airline decided to close the Frankfurt base at which the claimant was employed. In order to terminate the claimant’s employment relationship, the airline sent him a termination letter at the end of September 2020 that had not been signed by hand. The claimant received the termination letter on October 14, 2020. The claimant brought an unfair dismissal action challenging the termination. Among other arguments, he asserted that the termination was void for lack of form because it did not bear a handwritten signature.

What did the BAG rule?

According to the BAG, the termination was valid. In particular, it did not violate the formal requirement under Section 623 BGB.

In cross-border cases, the first question is which law applies. Conflict-of-law rules contain a special provision for formal requirements (Article 11 of the Rome I Regulation). Under that provision, it is sufficient if the termination complies with the formal requirements of the state in which it was made. Since the termination notice was prepared in the United States and sent from there to the claimant, the relevant formal requirements were not those under German law, including Section 623 BGB, but rather those under U.S. law. Because U.S. law did not impose any formal requirements for the validity of a termination of employment contracts, the termination did not require the strict written-form requirement under Section 623 BGB and was therefore formally valid. According to the BAG, Section 623 BGB also does not constitute a so-called overriding mandatory provision within the meaning of Article 9(1) of the Rome I Regulation that must be applied irrespective of the otherwise applicable law. Although the written-form requirement serves legal certainty and relieves the courts, the BAG held that this did not amount to such a weighty public-interest concern that Section 623 BGB had to be applied mandatorily in the case at hand.

Room for Discretion and Its Limits: What Is Possible – and What Is Not? 

The BAG’s ruling opens up interesting flexibility in cross-border cases that may help alleviate the practical “burden” often associated with the strict written-form requirement under Section 623 BGB. For U.S. employers in particular, the decision creates new alternatives for action. Accordingly, termination by email – or even by telephone – by the person authorized to give notice may now also be considered where that person:

• Resides in the United States and also habitually works there; or
• Habitually works and resides outside the United States but gives notice of termination while temporarily present in the United States (for example, during vacation or a business trip); or
• Habitually lives and works in the United States and gives notice of termination during a visit to Germany.

Notwithstanding the above, it remains necessary to assess carefully in each individual case, before giving notice of termination, which law applies to the specific employment relationship. Not every legal system has such limited or no formal requirements. Particularly where termination is declared by telephone or email, documentation of the termination notice is especially important. It should be recorded in detail (i) who gave notice of termination, (ii) to whom notice was given, (iii) when notice was given, and (iv) with what content. Ideally, the termination notice should be corroborated by witnesses to minimize the risk of future evidentiary difficulties. Finally, the available flexibility does not extend to situations involving an abuse of rights. It would likely be impermissible for the person authorized to terminate to travel abroad solely for the purpose of deliberately circumventing the German written-form requirement. In such a scenario, the conduct would likely amount to an abuse of rights – with the result that the employer could not invoke the formal requirements of foreign law.

Finally, it should be noted that a termination that does not meet the requirements of Section 623 BGB does not trigger the time limit for bringing an unfair dismissal claim (Section 4 sentence 1 of the German Protection Against Dismissal Act). The statutory three-week period requires receipt of a “written” termination notice. If termination is declared only by telephone or email, this period is not triggered. Employees may therefore have the validity of the termination reviewed by a court long after notice has been given, subject only to the limits of forfeiture. It should also be taken into account that the scope for flexibility may be limited in the case of employment contracts which – consistent with the German Evidence Act – expressly provide for written form for notices of termination and explicitly refer to Section 623 BGB. Such a contractual provision may result in the employer voluntarily subjecting itself to stricter formal requirements irrespective of the substantive law otherwise applicable.

As a precautionary measure, it is also advisable to issue a further written notice of termination. In any judicial review, however, the first – non-written – termination must then generally be examined first. Provided it is otherwise valid, that termination may in many cases already have ended the employment relationship at an earlier point in time.

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.