Employment Law29.06.2021 Newsletter
Focus on Labor Law - 2nd quarter 2021
The pandemic is currently losing some of its momentum in our day-to-day social and business life due to the progressing vaccination programme and seasonal peculiarities. However, with the usual delay, individual and collective law issues in connection with the pandemic are now increasingly the subject of labour court decisions. One thing is certain: the phenomenon of a pandemic over the last 15 months has not only posed a considerable challenge to legislators, but also to the labour courts.
In the near future, we can also expect the first decisions of the highest courts, such as the German Federal Supreme Court [Bundesarbeitsgericht - BAG], as many issues are definitely of fundamental importance for the development of labour law in Germany. We will, of course, be informing you about these decisions, just as this "Labour Law Focus" informs you about current judgements and important legal developments.
1.1 No compensation claim of the employer in case of quarantine order of his employee
1.2 No employment claim in case of medically certified inability to wear a mask
1.3 Unlawful threat of extraordinary dismissal
1.4 Reimbursement of legal fees for compliance violations only if proven necessary
1.5 (None) Granting of a copy of data pursuant to Article 15 Section 3 of the GDPR
1.7 Technical equipment of the works council for conducting video conferences
2.1 Company Modernisation Act - overregulation and cost increases included
2.2 Short-time allowance and bridging allowances extended until the end of September
2.3 Participation Strengthening Act - Important Change in Workplace Integration Management
1. New case law
1.1 Employer not entitled to compensation if its employee is ordered to go into quarantine
The employer's claim to a compensation payment under the German Infection Protection Act [Infektionsschutzgesetz - IfSG] is always excluded if the employee has a claim against the employer to the continued payment of wages pursuant to § 616 sentence 1 of the German Civil Code [Bürgerliches Gesetzbuch - BGB] during a period of segregation at home lasting several days.
The claimant runs a chain of bakeries in Rhineland-Palatinate. In March 2020, an employee suspected of being infected was in 14-day segregation at home on grounds of an infection control order. During this time, the claimant reimbursed said employee for her full loss of earnings. Pursuant to § 56 IfSG, the claimant then applied to the defendant, the federal state of Rhineland-Palatinate, for full reimbursement of the compensation payments and the social security contributions. The federal state, in turn, only granted reimbursement for the period as of the sixth day of segregation and otherwise referred to the existing claim to the continued payment of wages pursuant to § 616 sentence 1 BGB. After an unsuccessful opposition procedure, the claimant filed an action for full reimbursement under the IfSG.
By judgement dated 10 May 2021 (docket No. 3 K 107/21.KO), the Administrative Court [Verwaltungsgericht - VG] of Koblenz dismissed the action, however. In the court’s opinion, a reimbursement claim pursuant to § 56 (1) and (5), § 57 (1), sentence 3 IfSG was excluded as there was no loss of earnings in the case at issue. The employee continued to have a claim against the claimant to the continued payment of her wages pursuant to § 616 sentence 1 BGB despite being personally hindered. Pursuant to § 616 sentence 1 BGB, an employee is entitled to the continued payment of wages if he is hindered in the performance of his duties for a relatively insignificant period of time for reasons for which he is not responsible. The official segregation order is a subjective hindrance to performance, since the reason for the loss of work capacity lies in the person of the segregated employee. In light of the long term of employment, the duration of the loss of work capacity which occurred here was also still proportionate. In all events, in cases of a term of employment of at least one year, the chamber considers a period of segregation of no more than 14 days to be a "relatively insignificant period of time" within the meaning of § 616 sentence 1 BGB. Moreover, the risk of the continued payment of wages had been fundamentally calculable for the claimant and could therefore also be reasonably expected of it.
It remains to be seen whether the Higher Administrative Court [Oberverwaltungsgericht - OVG] of Rhineland-Palatinate will also share this opinion. The VG Koblenz at least permitted the appeal because of the matter’s fundamental importance. Until then, employers can only hope for (full) reimbursement of compensation payments under the IfSG if they have contracted out § 616 sentence 1 BGB in the employment contract or if the employment relationship has only existed for a very short time.
Anja Dombrowsky
1.2 No employment claim in case of a medically certified inability to wear a mask
Employers may, on the basis of the employer's right of direction, refuse to employ workers at the company if they refuse to wear a mouth-nose covering, submitting a corresponding medical certificate. In the context of an examination of the appropriateness, the employer's interest in protecting the health of its employees and visitors outweighs the interest of individual employees in being employed.
The claimant is employed by the defendant as an administrative assistant at the town hall. In the course of the COVID-19 pandemic, the defendant ordered that mouth-nose coverings be worn in the town hall. Having submitted a medical certificate, which was confirmed by the defendant's company doctor, the claimant requested exemption from wearing a mouth-nose covering. An alternative employment opportunity could not be found for the claimant, which means that he was incapacitated for work almost continuously since October 2020. By way of a preliminary injunction, the claimant sought his employment at the town hall without being obliged to wear a mask; alternatively, the claimant sought employment in the home office.
By judgement dated 12 April 2021 (docket No. 2 SaGa 1/21), the Regional Labour Court [Landesarbeitsgericht - LAG] of Cologne dismissed the claimant's motions. Irrespective of an existing obligation to wear a mask on grounds of relevant corona protection regulations, the order to wear a mask also falls under the employer's right of direction pursuant to § 106 sentence 1 German Industrial Code [Gewerbeordnung - GewO] and is also appropriate in the present case. Besides protecting other employees and visitors to the town hall from infection, the employer also has to consider the protection of the claimant’s own health. If it is impossible for the claimant to wear a mouth-nose covering, then he is unable to work and therefore cannot be employed. The Regional Labour Court also denied the claimant's right to work from the home office. In the absence of full digitisation, at least a part of his work would still have to be performed at the town hall. Therefore, even partial home office work would not completely eliminate claimant's incapacity for work. Since the German Act on the Continued Payment of Remuneration in Case of Illness [Entgeltfortzahlungsgesetz - EFZG] does not recognise partial incapacity for work, the employer is not obliged to set up a mobile workplace.
On the one hand, the decision confirms that employees may be entitled to continued payment of remuneration on grounds of incapacity for work due to illness if they submit a sufficiently substantiated medical mask-exemption certificate. At the same time, the Regional Labour Court provides interesting indications as to when mandatory operational reasons within the meaning of § 28 b (7) sentence 1 IfSG could oppose the provision of home office employment.
Jennifer Bold
1.3 Unlawful threat of extraordinary dismissal
If the employer threatens an extraordinary dismissal if the parties do not conclude a termination agreement [“Aufhebungsvertrag”], this constitutes an unlawful threat if the employer could no longer have effectively declared a dismissal due to the expiry of the deadline under § 626 (2) BGB.
The case decided by the Higher Labour Court of Berlin-Brandenburg concerned a suspicion based on concrete facts to the effect that the claimant (who could not be dismissed by ordinary termination under the collective bargaining agreement) had sold ecstasy tablets on the defendant's premises on at least two occasions. The defendant’s suspicion was based in particular on the evaluation of the video surveillance, which had been agreed at the company, and a hearing conducted on 6 March 2020, in which at least one work colleague confirmed having bought ecstasy from the claimant. In a personnel talk held on 23 March 2020, the claimant was given the option of either signing the submitted termination agreement or otherwise receiving an extraordinary dismissal. He ultimately decided to sign the termination agreement, but challenged it shortly thereafter on the grounds of an unlawful threat.
In its judgement dated 31 March 2021 (23 Sa 1381/20), the Regional Labour Court of Berlin-Brandenburg confirmed the decision of the lower court. The threat of extraordinary dismissal was unlawful. Although the claimant's conduct could well constitute grounds for extraordinary dismissal within the meaning of § 626 (1) BGB, the threat of extraordinary dismissal was unlawful because, on 23 March 2020 - due to the expiry of the two-week deadline under § 623 (2) BGB - the defendant could no longer expect that an extraordinary dismissal that had not been declared until such time would withstand review by the labour court. The chamber also rejected the defendant's objection that the notice period had been suspended due to pandemic-related circumstances. This was not a case of force majeure, nor were these difficulties attributable to the claimant. Therefore, neither the termination agreement nor the subsequent extraordinary dismissal had terminated the employment relationship.
The judgement is in line with the highest court case law of the Federal Supreme Court (BAG) and therefore comes as no great surprise. Only in cases where the basic requirements for extraordinary dismissal are actually met can the employer also threaten this. Even during the corona-related restrictions, employers must carefully consider and comply with preclusion periods. Otherwise, there is a risk of the invalidity of correspondingly "forced" contracts.
Dr. Alexander Willemsen
1.4 Reimbursement of legal fees for compliance violations only if such fees are proven necessary
If the employer has a concrete suspicion that an employee has significantly breached his duty and subsequently commissions an external third party to conduct compliance investigations that convict the employee of the offence, the employer may demand reimbursement of the investigation costs from the employee. However, the obligation to compensate is limited to the "necessary" costs, for which the employer bears the burden of proof (BAG 29 April 2021, docket No. 8 AZR 276/20).
The parties to the employment contract disputed a claim to damages for the reimbursement of investigation costs in connection with allegations of expense and billing fraud. After receiving several anonymous suspicious activity reports alleging compliance violations, the employer hired a specialised law firm to investigate. The law firm submitted an investigation report according to which the claimant had, among other things, invited persons to dinner at the defendant's expense without any business grounds for the invitation and had unlawfully billed travel expenses. The dismissal without notice based on this was successful. The employer's counterclaim to reimbursement of investigation costs, on the other hand, was dismissed.
According to the Federal Supreme Court (BAG), the limit of the compensation obligation is determined by what a reasonable, economically-minded person would have done - not only as an expedient, but as a necessary measure - in the circumstances of the case to eliminate the disruption or prevent the damage. This is not opposed by § 12a (1) sentence 1 of the German Labour Courts Act [Arbeitsgerichtsgesetz - ArbGG], as long as the lawyer's activity exclusively relates to an open-ended internal company investigation. However, the defendant was unable to substantiate which concrete investigations were carried out, when and in what temporal scope and because of which concrete suspicion against the claimant.
Even if compliance investigations in practice focus on a full clarification of the facts, due to the high requirements set by the court, care should be taken to ensure an adequate documentation of the investigative work performed. Furthermore, the request for investigative activities must be open-ended and must not be limited to producing incriminating evidence to justify a dismissal.
Isabel Hexel
1.5 (No) Provision of a copy of data pursuant to Art. 15 (3) GDPR
A request for provision of a copy of data pursuant to Art. 15 (3) GDPR must be sufficiently specific. This is not the case if copies of e-mails are requested, where such e-mails are not designated precisely enough to avoid doubts in the enforcement proceedings (BAG 27 April 2021, docket No. 2 AZR 342/20).
After the defendant had terminated the employment relationship with the claimant, the claimant requested information about his personal data that had been processed by the defendant. Furthermore, the claimant took legal action pursuant to Art. 15 (3) GDPR to additionally obtain copies of all of his e-mail correspondence with the defendant during the employment relationship, as well as all other e-mails in which he was personally mentioned during that period.
Unlike the Labour Court, the Regional Labour Court deemed the claimant's request to be sufficiently specific, as one had to determine by interpretation to what the claim referred. However, according to the Regional Labour Court, the protective purpose of a request under Art. 15 (3) GDPR does not cover the correspondence already known to the claimant, because he had conducted or received such correspondence himself.
The Federal Supreme Court dismissed the claimant's appeal on points of law. The Erfurt judges thereby left open whether the right to be provided with a copy of data pursuant to Art. 15 (3) GDPR can also include the provision of copies of e-mails. In any event, an - assumed - claim has to be asserted by means of a sufficiently specified claim motion pursuant to § 253 (2) No. 2 German Code of Civil Procedure [Zivilprozessordnung - ZPO] or, if this is not possible, within the framework of an action by stages (which did not take place here) pursuant to § 254 ZPO.
Even if the Federal Supreme Court has - only - procedurally resolved the case, employers can at least breathe a sigh of relief. This is because it is not uncommon for employees - in order to exert additional (negotiating) pressure on the employer - to use the claim to be provided with a copy of data during severance negotiations and knowing full well the great organisational effort this requires of the employer. The already enormous effort would have been increased many times over if the Federal Supreme Court had required the employer’s side to fulfil an indefinite request to grant information. As a result, the Federal Supreme Court has strengthened the principles of data protection law with its ruling and prevented an abuse of the rights of the data subject.
Johannes Kaesbach
1.6 The works council chairman who acts without a due and proper works council resolution - attribution according to the principles of prima facie power of attorney?
In its judgement of 15 April 2021, docket No. 11 Sa 490/20, the Düsseldorf Regional Labour Court held the view that a shop agreement with normative effect can also be created with legally binding effect by means of a prima facie power of attorney without a due and proper works council resolution.
The parties disputed whether the claimant, who worked for the defendant as an industrial mechanic, was to be paid in future according to the newly introduced wage group system. The change in the remuneration system would have resulted in a EUR 200 reduction in monthly remuneration for the claimant. The defendant originally classified its employees’ remuneration on the basis of a shop agreement by means of an analytical job evaluation. In the course of a restructuring measure, the defendant decided in 2017 to introduce a new remuneration system. To this end, the defendant conducted meetings and e-mail correspondence with the chairman of the works council and another works council member. The chairman of the works council signed the corresponding shop agreement. However, unbeknown to the defendant, the works council did not pass a works council resolution on this.
In the opinion of the Regional Labour Court of Düsseldorf, the actions of the works council's chairman can certainly be attributed to the works council if - as was the case here - the chairman's external conduct was known or should have been known to the majority of the works council members and the employer could rely on the legal appearance created. The applicability of the prima facie liability follows from the legal nature of shop agreements. The normative effect pursuant to § 77 (4) sentence 1 German Shop Constitution Act [Betriebsverfassungsgesetz - BetrVG] does not oppose any such attribution, but rather specifically requires it so that the subject matter of the normative effect can be determined with legal certainty.
The decision is noteworthy for employers in that it places the risk of a works council’s chairman’s acting without a resolution in the sphere of the works council. However, employers should not prematurely rely on the normative effect of such shop agreements. For example, the 10th chamber of the Regional Labour Court of Düsseldorf (docket No. 10 TaBV 64/17) is of the opinion that the absence of a resolution leads to the invalidity of the shop agreement. As a result of the filed appeal on points of law, the issue is expected to be clarified a highest court level by the Federal Supreme Court in the near future.
Moritz Coché
1.7 Technical equipment for the works council to conduct video conferences
The employer must provide the works council with the necessary information and communication technology pursuant to §§ 129 (1), 40 (2) BetrVG to enable the works council to conduct video conferences.
In its decision dated 14 April 2021, docket No. 15 TaBVGa 401/21, the Regional Labour Court of Berlin-Brandenburg granted the claim of a works council asserted in interim relief proceedings. The works council had demanded that the employer provide it with the necessary information and communication resources to conduct virtual works council meetings and for the day-to-day management of the works council during the pandemic situation pursuant to §§ 129 (1), 40 (2) BetrVG. Specifically, in the case of the eleven-member council, this meant that the works council was entitled to two licences to conduct video conferences, two headsets, two webcams and eleven smartphones. Since in this specific case the regular members of the works council were frequently prevented from attending, the substitute members were also to be provided with appropriate communication devices. However, the works council does not have a claim pursuant to § 40 (2) BetrVG to an advance on costs which would enable it to procure the necessary software and hardware itself.
Unlike the opinion held by the court of first instance, the Regional Labour Court of Berlin-Brandenburg also considered the provision of the requested technology to be urgent. Otherwise, the works council would have to refrain from holding video conferences. In addition, this would mean that, day after day, the works council’s right under § 129 (1) BetrVG would not be realised.
As a result of the recently passed German Works Council Modernisation Act [Betriebsrätemodernisierungsgesetz], according to which works councils will be able to continue to hold virtual works council meetings in the future, while maintaining the priority of face-to-face meetings, these will also be part of everyday life after the pandemic. Consequently, the question of the extent to which the works council can demand the corresponding technical equipment from the employer is expected to arise increasingly in the future. The key issue will always be the necessity of the requested means, whereby there is no "standard equipment" for works councils.
Alexandra Groth
2. Legal developments
2.1 Works Council Modernisation Act - over-regulation and cost increases included
On 18 June 2021, the Betriebsrätemodernisierungsgesetz (Act on the Promotion of Works Council Elections and Works Council Activities) came into force. This will significantly amend the German Shop Constitution Act in several decisive areas.
A key aim of the Act is to encourage the establishment of works councils. In addition to extensive changes in the protection against dismissal, the legislator has also made far-reaching amendments to the German Shop Constitution Act, which, among other things, extend the applicability of the simplified election procedure to companies with up to 100 employees and restrict the contestability of works council elections.
In addition, the digital work of works councils is being expanded. Works council meetings via video and telephone conference will still be feasible and shop agreements can be signed digitally. In addition, co-determination rights concerning the use of artificial intelligence (AI) and the organisation of mobile work are being laid down for the first time. The legislator also makes it clear that the works council is not to be seen as the responsible body in terms of data protection.
The legislator has simultaneously legally anchored accident insurance protection in the home office. The home office is now unquestionably covered by accident insurance. Accident insurance cover is also being extended to journeys made by employees for external childcare purposes.
A detailed summary of the amendment can be found here.
In view of the upcoming works council elections in spring 2022, companies definitely need to inform themselves about the relevant new regulations. Furthermore, the extension of participation rights regarding the use of artificial intelligence and the co-determination regarding mobile work is expected to lead to additional costs.
The regulations that were hoped for in practice, such as the progression of § 129 (2) BetrVG (possibility of conciliation meetings via video and telephone conference) or clarifications concerning the technical monitoring of conduct and performance, are missing in their entirety.
Jörn Kuhn
2.2 Short-time work benefit and bridging aid extended until the end of September
Despite falling infection rates and progressive vaccination, many companies are still heavily burdened by pandemic-related restriction measures. On 9 June 2021, the Federal Cabinet therefore adopted the Third Ordinance Amending the Short-Time Work Benefit Ordinance to extend the facilitated access to short-time work benefit and the full reimbursement of social security contributions until 30 September 2021.
The Amending Ordinance will also allow those companies that introduce short-time work by 30 September 2021 the facilitated access to short-time work benefit that is limited until 31 December 2021 (lowering of minimum requirements, waiver of the build-up of negative working hours, short-time work benefit also for temporary workers).
Furthermore, 100 percent of the social security contributions attributable to the short-time work benefit will continue to be reimbursed until 30 September 2021. Under this scheme, for a limited period until 31 December 2021, 50% percent of social security contributions will be reimbursed in case of companies that have introduced short-time work by 30 September 2021. If short-time work is introduced on or after 1 October 2021, the company will no longer be reimbursed with the social security contributions.
Furthermore, in insolvency cases, the Amending Ordinance generally excludes the reimbursement of social security contributions after a petition to open insolvency proceedings has been filed until the petition has been withdrawn or the court has ruled on the petition. This does not apply if a challenge under insolvency law of the contributions paid is legally excluded. This provision is intended to prevent the Federal Employment Agency from being burdened with a double payment of social security contributions in individual cases (reimbursement under § 2 of the German Short-Time Work Benefit Ordinance [Kurzarbeitergeldverordnung – KugV] and payment under the insolvency benefit provisions pursuant to § 175 of the German Social Code Book III [Sozialgesetzbuch III - SGB III]).
Furthermore, the Cabinet has extended the so-called Bridging Aid III as a central aid instrument under the name of "Bridging Aid III Plus" until the end of September 2021. A new feature of the "Bridging Aid III Plus" programme is a so-called "Restart Premium". Companies that bring employees out of short-time work earlier or hire new employees will in future receive a personnel cost allowance as a subsidy for the resulting increase in personnel costs, as an alternative to the existing flat-rate personnel cost allowance. The grant is staggered and will only be awarded until September 2021.
Jennifer Bold
2.3 Participation Strengthening Act - Important change in business integration management
With the so-called German Participation Strengthening Act [Teilhabestärkungsgesetz - TeilhStG] of 2 June 2021, the legislator has adopted a series of measures to improve participation opportunities for people with disabilities in their everyday and working lives. Even if the title of the Act does not initially suggest this, it does create a need for action on the part of employers in the short term.
In the course of the German Participation Strengthening Act, § 167 (2) of German Social Code Book IX (SGB IX) was also decisively amended with effect from 10 June 2021. It is a known fact that § 167 (2) SGB IX regulates business integration management ([Betriebliche Eingliederungsmanagement - BEM], which the employer is always obliged to carry out if employees – be they severely disabled or not - are incapacitated for work for more than six weeks within one year.
Since 10 June 2021, § 167 (2) SGB IX includes as a new 2nd sentence: "Employees may additionally consult a confidant of their own choice".
Individual voices in the legal literature have already argued that this also refers to legal counsel, meaning, for example, that the employee can now insist on the presence of a lawyer at the BEM meeting. Such a right had always been rejected in previous labour court case law and in the predominant opinion held by the literature - most recently, for example, by the Regional Labour Court of Cologne (judgement of 23 January 2020, docket No. 7 Sa 471/19) with the comment that the participation of a legal representative in the discussions about a BEM would - according to the meaning and purpose of such talks - seem "unhelpful and rather counterproductive”.
Accordingly, many company regulations on BEM explicitly exclude a corresponding right of the employee or restrict the participation of external confidants to persons from within the familiar environment. This will no longer be the case after the law is amended. The relevant shop agreements, BEM guidelines or other company regulations on BEM will therefore have to be adapted to the new legal situation in the short term, as must the BEM invitation letter templates used. Employers will doubtlessly be aware of the thoroughly unfortunate consequences that can arise for them from a BEM that is not attempted or carried out in the proper manner. With the addition of § 167 (2) SGB IX, the legislator has certainly added a further requirement to the numerous requirements for a due and proper BEM.
Kathrin Vossen
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