Federal Labor Court on termination without notice and default of acceptance

If the employer terminates the employment relationship without notice because it believes that it cannot reasonably be expected to continue the employment relationship, but at the same time offers the employee continued employment under unchanged conditions during the proceedings for protection against unfair dismissal “in order to avoid default of acceptance”, it is behaving inconsistently. In such a case, there is a factual presumption that the offer of employment is not serious. This presumption can be invalidated by the reasons for the termination to the certainty or by corresponding explanations of the employer.

The plaintiff was employed by the defendant as a technical manager since August 16, 2018 and earned 5,250.00 euros gross per month. In a letter dated December 2, 2019, the defendant issued a notice of termination without notice, offering the plaintiff a new employment contract as a software developer in return for a reduction in gross monthly compensation to EUR 3,750.00. Further, the termination letter states, “in the event that you reject the extraordinary termination (i.e. in the event that you assume an undissolved employment relationship) or in the event that we accept the following offer, we expect you to start work on 05.12.2019 no later than 12:00 CET”. The plaintiff rejected the offer of change and also did not show up for work. Thereupon, the defendant terminated the employment relationship again in a letter dated December 14, 2019, namely “extraordinarily as of December 17, 2019, at 12:00 a.m. CET.” It also pointed out that “in the event of rejection of this extraordinary termination” it expected the plaintiff “to start work on 17.12.2019 at 12:00 CET at the latest”. The plaintiff did not comply. In the proceedings for protection against dismissal brought by him, it was legally established that both notices of termination did not terminate the employment relationship of the parties.

After the defendant only paid remuneration of EUR 765.14 gross for the month of December 2019 and the plaintiff was not able to establish a new employment relationship until April 1, 2020, he brought an action for compensation for default in acceptance, demanding payment of the salary agreed in the employment contract less the unemployment benefit received until he started the new employment. He believed that the defendant had been in default of acceptance during the period in dispute due to its invalid notices of termination. He could not be expected to continue working for the defendant under changed or even the original working conditions, if the defendant had seriously offered this at all. The defendant had unjustifiably accused him of multiple misconduct and disparaged his person in extensive explanations in order to justify its termination without notice. For its part, it had claimed that it could not reasonably be expected to continue employing the plaintiff. In contrast, the defendant argued that it was not in default of acceptance because the plaintiff had not continued to work for it during the proceedings to protect against dismissal. The plaintiff himself had assumed that continued employment was reasonable because he had filed an application for provisional continued employment in the proceedings for protection against dismissal.

The labor court dismissed the action. The Land Labour Court rejected the applicant’s appeal. It assumed that the plaintiff was not entitled to compensation for default of acceptance despite the defendant’s invalid notices of termination because he had not accepted the defendant’s offer to continue working for it during the proceedings for protection against unfair dismissal. The plaintiff is therefore not willing to perform within the meaning of the law. § 297 of the German Civil Code (BGB).

The plaintiff’s appeal, which was subsequently allowed by the Fifth Senate of the Federal Labor Court, was successful. The defendant was in default of acceptance due to its invalid notices of termination without notice, without the need for an offer of employment by the plaintiff. Because the defendant itself assumed that it could not be expected to continue employing the plaintiff, its contradictory conduct gives rise to a factual presumption that it did not make the plaintiff a serious offer of employment in the proceedings. The deviating assessment by the Regional Labor Court is based on only selective consideration of the parties’ submissions and is therefore not justifiable. Furthermore, the rejection of such an “offer” does not indicate a lack of will to perform on the part of the plaintiff within the meaning of the German Civil Code. § 297 of the German Civil Code (BGB). The only possibility would be that he would have to accept credit for maliciously omitted earnings in accordance with § 11 No. 2 KSchG. In the case in dispute, however, this was not possible because the plaintiff could not reasonably be expected to be employed by the defendant in court due to the accusations made against him in the context of the dismissals and the disparagement of his person. This is not precluded by the fact that the plaintiff applied for provisional continued employment in the unfair dismissal proceedings. This application was directed at the process employment after the invalidity of the terminations had been established. Only if the plaintiff had refused further employment in such a case would he have acted inconsistently on his part. Here, however, it was a question of continued employment in the period up to the first-instance decision. It makes a difference whether the employee is to continue working despite the (serious) accusations made against him in the context of a termination for reasons of conduct or whether he can return to work “rehabilitated”, as it were, after winning the first instance in the proceedings for protection against dismissal.