The German Federal Labor Court (BAG) recently held, that employers are not prevented from using grounds which failed to justify a termination in order to file for a subsidiary motion to end employment.

Under German dismissal law, employees can only be dismissed on socially justified grounds. If an employee brings a claim relating to their dismissal and the Court finds that the employer cannot demonstrate a satisfactory socially justified reason, the dismissal will be invalid meaning the employer will have to re-employ them and they will be awarded back pay. However German dismissal law also provides for a remedy to allow employers to file a motion to end employment with employees during wrongful dismissal proceedings. Where the courts find that employment was not effectively terminated by the dismissal, but the employer cannot reasonably be expected to continue employing the plaintiff, the Court shall upon the employer’s motion dissolve the employment relationship. As a result the employer may be ordered by the court to make an appropriate severance payment (Sec. 9 KSchG/ Wrongful Dismissal Act).

Until now, German courts held that employers may only justify such a motion on grounds which were not already considered in the wrongful dismissal proceedings, for example the termination itself has irreparably damaged the relationship between the parties. Now the BAG held, that employees who have been dishonest in the wrongful dismissal proceedings are not entitled to this protection.

In the case in question, the employee was employed at a company manufacturing battery cells under extreme explosive and fire risks. While on his night shift with another employee, security guards detected that both workers were taking night rests at the same time and they were both smoking against strict company policy. The company confronted the employees and terminated their employment. In the wrongful dismissal proceedings, the employee denied having slept and smoked while on duty. The company failed to prove socially justified reasons for terminating the employee and finally filed a motion to end employment, arguing that the ongoing open lies in court made it unacceptable to continue employing him.

The Federal Labor Court held that if the plaintiff tried to retain termination protection by using false statements and continuing to openly lie in court, the company may base a motion to end employment on such intentionally wrong evidence. In such cases the appeal court – to which the case was referred – must take this criminal behavior of an employee in consideration when ruling on the terms of ending employment including any – substantially reduced – potential severance. For the company in this case it meant that lies did in fact “travel far” – from the first instance through to the appeal, and that patience and persistence resulted in a favorable judgement in the end.

Employers in German wrongful dismissal litigation should therefore careful observe the behavior of the plaintiff (and his/her counsel) to consider filing respective subsidiary motions to end employment despite losing the wrongful termination proceedings.

Bryan Cave Leighton Paisner LLP has a team of knowledgeable lawyers and other professionals prepared to help employers meet their obligations. If you or your organization would like more information on the BAG or any other employment issue, please contact an attorney in the Employment and Labor practice group.