Employers no longer obliged to offer positions in overseas branches for forced redundancies

Estimated reading time 3 minutes

Under German law, redundancy dismissals must be based on compelling operational reasons and, in order to avoid wrongful termination of employment, the employer must prove that the position now being made redundant permanently ceases to exist and offer the employee any alternative vacant positions within the company.

Recent developments

A recent Federal Labour Court decision has established that the employer’s obligation to offer employees alternative positions during termination does not extend to those available in foreign branches of a company, even if the job description/s are comparable to those now being made redundant in Germany.  Although similar jobs might be available in a foreign branch, the offer to find alternative positions within the company is only limited to national operations. In certain situations, if an employer has conveyed available (and relevant) vacancies in foreign branches to the employee (either explicitly or implicitly by conduct), the employer might be bound to follow through with exploring this before giving notice of a redundancy dismissal.  An example of this is where an employer has indicated that they will not terminate an employee’s employment, and instead make use of their ‘right to give instructions’ (“Direktionsrecht”).  This allows the employer to exercise discretionary authority to relocate the employee within a group company, irrespective of whether the employee requested the transfer or not. However, the employer’s ‘right to give instructions’ generally does not include the right to employ an employee abroad, and the employer may be held liable for not exercising their discretionary power properly when making a unilateral decision for the employee.

What action should be taken?

It would be difficult to take legal action against employers for unfair dismissal on the basis that the employee was not explicitly offered available vacancies abroad, even though the employer had previously conveyed they would.  The employer can always argue that they were not obliged to offer alternative employment abroad, but only to give the employee notice of a redundancy dismissal. If the employer does not want to offer an alternative abroad, they should clarify with the employee in writing that no such positions will be offered.

Further information

For further information or to discuss any of the issues raised, please contact Stefanie Andrelang on +49 (0) 89 2422300, Keller Menz.

Further reading

Decision of Federal Labour Court dated 24 September 2015 – 2 AZR 3/14

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