Germany: Conduct-related Dismissals cannot be Based on Reasons subject to a Prior Written Warning
In the case at hand, the employer had served an ordinary notice of termination to the employee. The employee was employed as a cleaner at the employer’s campgrounds. In addition to the campgrounds, the employer also operated an electronics business under a different company, but at the same registered seat and with a centralised personnel management. Prior to the dismissal, disagreements arose between the parties because the employer was not satisfied with the employee’s performance and conduct. Against this background, the employer issued a written warning to the employee for insufficient work performance and alleged racist statements.
The court first reviewed whether the German Dismissal Protection Act (Kündigungsschutzgesetz – KSchG) applied to the employee. Protection under the Dismissal Protection Act is only granted, if:
- a business establishment generally employees more than ten employees; and
- the employee in question has worked in the same company or business establishment for six months, without interruption.
With regard to the campgrounds themselves, where the employee worked as a cleaner, these requirements were not met, because less than ten employees were employed there. However, the court found that the employees employed in the electronics business also had to be taken into account with regard to the applicability of the Dismissal Protection Act as the campgrounds and the electronics business were to be considered as a so-called joint establishment. Such joint establishments exist when several companies jointly use the operating resources as well as the employees. In the case at hand, the operational and personnel decisions for both businesses were made from the same office. As both businesses together employed more than ten employees, the court considered the Dismissal Protection Act to be applicable.
Based on the requirements of the Dismissal Protection Act, the court ruled that the dismissal in question was unfounded. The employer wanted to terminate the employment relationship for reasons of conduct. Conduct-related reasons for dismissal require a willful breach of contract and usually require a prior written warning. German case law imposes certain requirements on warnings. These must describe the exact circumstances and point out the extent to which duties from the employment relationship have been violated. Furthermore, employees must be urged to comply with their duties in the future and potential further legal actions in case of any further misconduct must be pointed out.
In the case hand, the employer had issued a written warning, but argued with the same violations to justify the dismissal. As these violations had been “used up” by making them subject of a written warning, they were not suitable for justifying the dismissal.
Key Action Points for Human Resources and In-house Counsel
- Conduct-related dismissals usually require a misconduct, a prior written warning and another misconduct, which may then justify the dismissal. The repeated misconduct and the prior warning are ideally connected in terms of subject matter.
- A written warning must be precise in order to be considered legally valid. As the existence of a valid prior written warning can be decisive in a legal proceeding on the validity of a subsequent termination for misconduct, it is essential that the warning is drafted carefully in order to meet the legal requirements.