Decision of the European Court of Justice – Less employee protection in the event of mass layoffs?

The case:

The basis of the procedure was the mass dismissal in a company in Lower Saxony that went bankrupt in 2019. The plaintiff had worked there as a welder for 18 years until the company got into financial difficulties. The appointed insolvency administrator came to the conclusion that a mass layoff was unavoidable and had to be initiated. As required by law, the insolvency administrator informed the Works Council about this. But even the Works Council saw no way of preventing the layoffs. In the event of collective redundancy, the employer must send a copy of the information given to the Works Council to the local employment agency. However, the insolvency administrator failed to do this. The plaintiff, who had lost his job as a result of the insolvency, took this as an opportunity to bring an action for protection against unfair dismissal. He argued that his dismissal was invalid because the employment agency had not been informed.

The decision of the ECJ:

The ECJ did not follow the arguments of the employee. It judged that the breach of the prescribed information obligation towards the employment agency did not lead to the termination being ineffective. The written information from the employment agency does not serve to grant individual protection to the employees concerned. Rather, the purpose of the information is that the authority can prepare for upcoming redundancies and their consequences (further qualifications for employees, etc.). This means that the failure to notify the employment agency has no effect on the individual notices of termination. The Federal Labour Court must now come to a final judgment in the underlying case.

Consequence for practice:

Whether the judgment of the ECJ generally means less employee protection in the event of mass layoffs is an open question. Because now the decision is again up to the Federal Labour Court. The judgment of the ECJ initially only affects the legal consequences of violating the obligation to transmit according to Section 17 (3) sentence 1 Protection against dismissal. It is also unclear how breaches of the consultation procedure and the obligation to report mass redundancies are to be dealt with. It is possible that the Federal Labour Court will move away from its previous case law, namely the ineffectiveness of individual terminations in the event of errors in the notification of collective redundancies, and adjust its case law after this judgement.

Source: (orginal German)

Legally responsible for content: Reinhard Assmann (GTL), Anne Kiesow (CGB)


About WOW

WOW was founded as a Social Christian trade union and finds inspiration in the spiritual believe that man and universe were created by God or by persuasions coinciding with that. The increase of intercultural contacts provided opportunities for the WOW to expand and broaden its view with visions of other religious backgrounds. WOW does so in a joint attempt to build a world community based on freedom, dignity, justice and solidarity.

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