Speech is Silver, Silence is Gold

15.10.2015

Decision

The Federal Labor Court found in its decision of 23 July 2015 that the dismissal of a 63-year-old employee was discriminatory and thus invalid because the employer had mentioned the employee's "pension entitlement" as grounds for termination in its letter of dismissal (Ref. 6 AZR 457/15). Such mention was reason to assume that the employee had been directly discriminated against on the grounds of age. According to the court, the employer was unable to rebut this presumption by arguing that the volume of work had decreased significantly and that other employees who remained in employment were better qualified. The employer defended its reference to the employee’s "pension entitlement" by arguing that it wished to formulate its termination letter in a "friendly" and "obliging" manner.

Implications for Practice

Once again we have confirmation that employers are best advised to avoid giving reasons when issuing a notice of dismissal. Except in those cases where express reasons for termination are mandatory, such as in the case of the dismissal of trainees or pregnant women, or where a collective agreement necessitates the provision of a reason, it is always best to follow this advice. Since the employer’s business was a small establishment, it did not fall within the scope of the Employment Protection Act (Kündigungsschutzgesetz - KSchG). Thus if it had not been for the unfortunate provision of a reason for termination, the termination would have survived judicial scrutiny without any difficulty. Since, except where the provisions of the Employment Protection Act provide otherwise, it is not necessary to specify reasons for termination, and, in principle, all that is required is that the termination be neither in bad faith nor unconscionable, the reasons advanced by the employer (decline in the volume of work and lack of qualifications on the part of the employee) would probably have helped to ensure the validity of the termination.

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