Where an employer offers a severance payment that is to be paid in
certain circumstances where an employee refrains from filing a claim for
unfair dismissal, it is not then obliged to pay the severance payment
if the employee fails to refrain from filing a claim

Under German law, an employee wishing to challenge any dismissal
must file a court claim within three weeks of the dismissal. Where an
employee does not file such a claim within this three week time period
the court will automatically rule that the dismissal was legally valid
(according to § 7 KSchG) even if the dismissal was, in fact, unfair.

Under the provisions of § 1a KSchG, an employer may offer an
employee a severance payment in circumstances where the employee is
being dismissed due to redundancy.

§ 1a KSchG provides that the employee is entitled to a severance
payment if he must allow a period of three weeks to elapse after receipt
of the relevant termination notice from his employer (§ 4, 1 KSchG)
before filing any claim with the Labour Court (which would ordinarily
claim that the employment contract is not terminated by the dismissal).

The entitlement to a severance payment in line with § 1a KSchG is
intended to offer an employee who is given notice, for reasons of
redundancy, a financial incentive to refrain from filing a claim against
unfair dismissal.  This, in turn, benefits the employer and protects it
from potentially time consuming and costly legal arguments about the
particular reason(s) for dismissal.  Furthermore, it removes any risk of
the employer losing the legal dispute and finding itself in the
situation where the employment contract with the dismissed employee
continues to be in effect. In such circumstances, the employer would
then have to pay the dismissed employee all wages which would have
accrued to him during the period of the hearing of the claim (without
having had any corresponding performance of duties from the employee).

Background

In this case, an employee had received a notice of termination,
under which the employer intended to pay a severance payment in line
with § 1a KSchG.

Initially, the employee allowed the stipulated three week period to
elapse without filing a claim.  However, he changed his mind and
subsequently filed a claim against the dismissal, arguing that he had
received the notice of termination later than he, in fact, had. On the
basis of this argument, the employee’s claim for  protection against
dismissal would still meet the three week period set out in § 4 (1)
KSchG.  However, the employee later abandoned his claim and his
dismissal was found to be valid.

In an additional claim, the employee subsequently demanded the
termination payment, to which he considered he was entitled under § 1a
KSchG, from his former employer.  He argued that he had let the three
week period elapse, as required.

The Federal Labour Court rejected the employee’s claim.  The Court
found that it is not the wording of § 1a KSchG which was decisive but
its purpose, which was to protect the employer against a legal claim for
dismissal. In filing his claim, the employee had demonstrated that he
did not accept the dismissal and, as such, the employer had been
subjected to a legal claim, defeating the purpose of § 1a KSchG. In such
circumstances, the employee was therefore no longer entitled to a
termination payment from the employer.

BAG 20th August, 2009, Az.: 2 AZR 267/08

For further information or to discuss any of the issues raised,
please contact Stefanie Andrelang (stefanie.andrelang@keller-menz.de)
on +49 89 24 22 30 0.

This article was produced by, and re-produced with kind permission
of, our correspondent firm in Germany, Keller Menz Rechtsanwälte.  www.keller-menz.de