Germany: Employee has no right of revocation regarding a termination agreement concluded at his private residence
The plaintiff was employed by the defendant as a cleaner. She concluded a termination agreement with the employer at her private residence. The agreement provided for the immediate termination of the employment relationship without any severance payment.
After signing the termination agreement, the employee went to court claiming that the termination agreement did not end her employment in a legally valid way. She argued that she had been sick on the day she signed the agreement. The employee challenged the agreement on the grounds of misinterpretation, fraudulent deceit and unlawful threat. Furthermore, the employee declared to revoke the termination agreement based on German civil law.
The Regional Labor Court had dismissed the employee’s lawsuit. The Federal Labor Court has now overturned this judgement and referred the action back to the Regional Labor Court. However, the Federal Labor Court saw no grounds for a cancellation of the termination agreement due to misinterpretation, fraudulent deceit or unlawful threat. The Court also found that the termination agreement is not subject to revocation.
German Civil Law provides that consumers have the right to revoke contracts concluded in a consumer-business relationship within a period of 14 days. The plaintiff referred to established case law, which recognizes the employee’s consumer status. Nevertheless, the Federal Labor Court ruled that the revocation of a termination agreement is impermissible. According to the intentions of the legislator, the right to revoke contracts under Civil Law does not apply to the field of employment law and in particular, not to termination agreements.
Even though the Federal Labor Court did not follow the employee’s arguments, it did not dismiss the lawsuit, but referred it back to the Regional Labor Court for another review. This is because the Federal Labor Court considered it possible that the employer violated the principle of fair negotiating when concluding the termination agreement. The Regional Labor Court must now review this. The principle of fair negotiating is an ancillary duty arising from the employment relationship. It is, for example, violated in case the employer exposes the employee to a situation of psychological pressure, which makes a free and considered decision significantly more difficult. In the case at hand, the employee claimed she had been sick when signing the termination agreement. Therefore, the Court considered it at least possible that the employer could have knowingly abused the employee’s sickness-related weakness. If this was the case, the termination agreement would be void and the employment relationship would continue. The Regional Labor Court will have to determine this based on the facts of the case.
