Successful restructuring measures in Germany, the more so if they result in RIF (reduction in force) proceedings, require very careful preparation, close observation of strict deadlines as well as very diligent processes with regard to works council information and consultation procedures.
In the event that the number of affected staff exceeds the collective dismissal filing requirements, extra care is essential in particular for larger entities and globally operating employers: any formal mistakes by them will result in the terminations being null and void. To make things worse, by the end of last year the German Federal Employment Agency (Bundesagentur für Arbeit/ the Agency) introduced new forms and spreadsheets for German employers to fill in and file with the Agency prior to implementing any terminations in the course of mass dismissal.
The relevant dismissal/ termination thresholds for notification of the Agency in the event of mass dismissals – within 30 calendar days – are:
Number of staff Planned Layoffs
21-59 more than 5 employees
60-499 more than 25 employees or 10%
500 or more at least 30 employees
In RIF scenarios of the aforementioned size, the employer must notify the Agency prior to giving notice to the affected employees – otherwise the dismissal is invalid. Further note that this rule also applies to terminations rendered by employees but caused or initiated by the employer as well as mutual separation agreements. Both of the cases mentioned above qualify for the above listed thresholds.
The new forms introduced by the Agency increase the administrative burden and efforts for large companies as they require detailed listings and categorization of affected employees into 1286 (!) Berufsklassen, classes of occupation (it used to be 144 so-called Berufsgruppen, groups of occupation) – just to stress one of the major changes. The importance and relevance of providing the Agency with a complete and correct mass dismissal filing can`t be stressed too much: any mistake in filling out the forms may result in the terminations being considered null and void.
Also employers must be aware that using other forms for their filings may result in a delay at the level of the Agency and might cause costly effects with regard to notice periods. If in doubt how the forms should be handled it is advisable to contact counsel early on to avoid time pressure and potential expensive delays.”
Bryan Cave LLP has a team of knowledgeable lawyers and other professionals prepared to help employers assess their dismissal obligations. If you or your organization would like more information on this or any other employment issue, please contact an attorney in the Labor and Employment practice group.