Germany Update: Wage entitlement despite rejected offer of continued employment and non-performance

If an employer terminates without notice and believes that the continuation of the employment relationship cannot be reasonably expected of him but at the same time offers continued employment during the dismissal protection process, he is behaving contradictorily in the opinion of the Federal Labor Court (BAG, judgment of 29.03.2023 – 5 AZR 255/22). Despite the offer, he is in default of acceptance and has to pay default of acceptance wages.

Background

The labour law principle of “no work, no pay” has some exceptions. For example, in the event of an ineffective dismissal, employers are generally obliged to pay the unjustly dismissed employee the wages for the period during which the work was not performed as a result of the dismissal. During this time, the employer is in default of acceptance. The employee is not obliged to perform in arrears despite non-performance and entitlement to his wages. In order to limit this economic risk due to the default of acceptance, employers are happy to offer continued employment for the duration of the labor court dispute.

Decision

The plaintiff had been employed by the defendant as a technical manager for about 1.5 years when he was given notice of termination without notice. The defendant offered the plaintiff a new employment contract as a software developer with a monthly remuneration reduced by 1,500.00 euros. According to the BAG’s press release, the notice of termination continues, “in the event of your rejection of the extraordinary termination (i.e. in the event that you assume an unterminated employment relationship) or in the event of acceptance of the following offer, we expect you to start work on 05.12.2019 at 12:00 noon CET at the latest”. The plaintiff rejected the offer of amendment. He also stopped showing up for work. The defendant then terminated the employment relationship again and pointed out that “in the event of rejection of this extraordinary termination” it expected the plaintiff “to start work on 17.12.2019 at the latest at 12:00 noon CET”. The plaintiff still did not show up for work. The labour court found that both dismissals did not terminate the employment relationship.

The plaintiff now demanded the contractually agreed remuneration until the start of new employment in April 2020 due to default of acceptance. He justified this by saying that he could not reasonably be expected to continue his employment. In any case, the offer was not serious. The defendant had wrongly accused him of manifold misconduct and degraded him in order to justify the dismissals without notice. The defendant had also argued that his employment was no longer reasonable for her.

The first instances still found that the plaintiff was not entitled to default of acceptance wages despite the invalid terminations. He had failed to accept the offer of continued employment during the dismissal protection process.

Before the BAG, however, the plaintiff was successful. He is entitled to compensation for default of acceptance. The BAG did not accept the legal opinions of the lower courts. On the one hand, the defendant offered continued employment; on the other hand, it itself assumed that it could not reasonably be expected to continue the plaintiff’s employment. This behavior is contradictory. As a result, there is an actual presumption that the offer of continued employment was not meant seriously. The defendant has not succeeded in rebutting this presumption.

Result

The BAG’s decision is consistent. If the employer terminates the contract without notice for behavioural reasons, he excludes the reasonableness of further cooperation. An offer of continued employment that is nevertheless made is, therefore, to be regarded as contradictory conduct. In order to minimize economic risks, an offer of continued employment for tactical reasons is understandable. However, employers should keep in mind that an offer of continued employment makes it much more difficult to justify dismissal in the process. According to the decision of the Federal Labour Court, such an offer, at least in the case of termination without notice, does not necessarily help in the dispute over claims for default of acceptance wages.

By MELCHERS, Germany, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact germany@transatlanticlaw.com

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