German Federal Labour Court facilitates mass lay-off notification

In its ruling of 19 May 2022 pertaining to case 2 AZR 467/21, the Federal Labour Court (BAG) found that the act of omitting the so-called desired information as specified in section 17(3)(5) of the German Employment Protection Act (KSchG), in and of itself, didn’t result in the invalidity of a mass lay-off notification given to the German Employment Agency by the employer.

With a company size of 21 employees and more, employers are required to notify the Federal Employment Agency of so-called mass lay-offs (section 17(1) KSchG). If the employer fails to submit a necessary mass lay-off notification or if such notification is incorrect, this will lead to the invalidity of the notices of termination given.

To date, employers have had to look at which pieces of information are mandatory and which are voluntary. The reason for this is that the courts have not been in agreement as to which missing or incomplete information will lead to a notice of termination becoming invalid.

Pursuant to section 17(3) KSchG, the notification must contain certain information (required) and shall contain other information (desired). The required information includes the employer’s name, the address and the type of the business, the reasons for the lay-offs, the number and job categories of the employees to be laid off, the total number of employees, the criteria used to select the employees to be laid off, and the time period in which the lay-offs are to occur. The desired information includes the gender, age, occupation and nationality of the employee to be laid off.

However, in the case to be decided by the Federal Labour Court, the employer omitted the desired information in its notification. This kind of information is explicitly marked as voluntary by the Federal Employment Agency in its forms.

The Federal Labour Court has now confirmed the case law of the European Court of Justice stating that the information specified in section 17(3)(5) KSchG does not have to be included in the notification pursuant to Art. 3(1)(4) of Directive 98/59/EC and that, therefore, an omission of the desired information does not result in the invalidity of the mass lay-off notification.

This decision is of considerable importance, as the lower courts have so far had different answers to this question.

The lower court (Hessian Higher Labour Court) has ruled that mass lay-off notifications omitting the desired information result in an invalidity, too.

As a reason for this, the Hessian Higher Labour Court has stated that a mass lay-off notification is to contain all useful information available to the employer. In this context, no distinction is to be made between desired and required information. The legislature has deemed both categories of information appropriate. The distinction between the wording must and shall is owed to the fact alone that the required information is always available to the employer, while the desired information does not originate in the employer’s domain and, therefore, only needs to be stated to the extent available. In consequence, the Hessian Higher Labour Court has deemed the terminations given notice of invalid.

Legal certainty for employers

The BAG’s decision is very much appreciated from an employer’s point of view, not least because it is the very pieces of desired information that are often missing and can only be obtained with great effort, if at all. Thus, an employer-friendly decision has been made with regard to the mass lay-off procedure, which has been long overdue and confirms that national courts should not disregard an ECJ decision.