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Mass Dismissal Filings in Germany – Be Aware

June 8, 2017

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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

Employers Should Accept Resignations As Soon As Possible

Although an employee can claim constructive termination, it is always beneficial for an employer to accept, as soon as possible and in writing, an employee’s resignation.  By doing so, the employer creates a clear record that an employee was not fired and limits the potential claims which an employee can assert against the employer.

This point was recently illustrated in Featherstone v. Southern California Permanente Medical Group.  In that case, the ultimate issue was whether a resignation is an “adverse action” under California’s anti-discrimination law, the Fair Employment and Housing Act.  In that case, Ms. Featherstone tendered her resignation on December 23, 2013, and it was immediately accepted.  The court recognized that general contract rules apply to resignations and that “a resignation is an offer which may be withdrawn prior to its acceptance.”  In that circumstance, however, though Ms. Featherstone subsequently tried to rescind her resignation, the court held that she was no longer able to rescind the resignation (which was an offer) because it had already been accepted.

Of equal importance, the court held that the refusal of the company to allow Ms. Featherstone to rescind her resignation was not an “adverse employment action” and, therefore, she had no claim under the Fair Employment and Housing Act for discrimination and/or retaliation because both such claims require an adverse employment action.

Take Aways:

  • An employer should accept an employee’s resignation as soon as possible and in writing;
  • Not every perceived wrong by an employee constitutes an adverse employment action
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