Germany: Default in acceptance – contradictory behaviour of the employer after invalid dismissal

The employer in question dismissed the employee without notice while offering the continuation of the employment under different conditions for less remuneration. In case the employee would not accept the dismissal, the employer also offered the continuation of the employment under current conditions for the time of a subsequent litigation regarding the validity of the dismissal. The employee declined the offers and challenged the dismissal in court. He did not work during the time of the court dispute.

After the dismissal was ruled to be invalid, the employee demanded to be paid the remuneration for the period between the dismissal and the start of his new employment under the principle of default in acceptance. As an invalid dismissal without notice typically results in such default in acceptance from which a corresponding claim can arise, the court had to decide whether the employer’s offer to continue the employer prevented the default in acceptance.

Looking at the dismissal, the employer argued that a continuation of the employment at current conditions would be unbearable, accused the employee of misconduct and disparaged him. Because of that the court found that offering the continuation of the employment for the period of the litigation was contradictory behavior on the employer’s part. This allows for the presumption that the offer was not serious. Declining this offer hence neither had an effect on the default in acceptance of the employer, nor did it result in a reduction of the employee’s entitlement based on willfully failing to accept reasonable work. Continuing the employment was considered unbearable for the employee due to the disparagement.

Consequently, the default in acceptance remains and resulted in a payment claim for the employee.

Practical Point

• Offering a process employment to the employee for the duration of the court proceeding regarding the validity of the dismissal can be a suitable way for mitigating default in acceptance risks. However, depending on the circumstances of the dismissal, an offer to continue the employment for the period of subsequent litigation may appear contradictory and thus be deemed not serious. In this constellation, such offer cannot prevent a default in acceptance and a resulting payment claim.
• By offering the continuation of the employment under unchanged conditions, the employer might also undermine the validity of the dismissal as this indicates that continuing the employment is reasonable after all.
• Therefore, employers need to carefully evaluate the suitable options for mitigating default in acceptance risks. One option that has gained practical relevance due to the recent developments in German case law is supplying the dismissed employee with suitable job offers from other employers.