Subsequently adduced grounds for termination

24.06.2020

Extraordinary termination pursuant to Section 626 (2) BGB can only be declared within two weeks after knowledge is obtained of the factual circumstances justifying the termination. 

The decision

However, in a surprising judgment at the end of last year, the District Labour Court of Cologne decided that extraordinary termination with subsequently adduced grounds for termination during wrongful dismissal litigation can be effective even if the declaration of termination did not meet the legal cut-off period of two weeks (District Labour Court of Cologne, 16/10/2019 – 5 Sa 221/19). 

In the case underlying the decision, an employee engaged as a school director was dismissed by the employer without notice. The factual circumstances that caused the employer to terminate the contract without notice are unclear. During the wrongful dismissal litigation, the employer claimed that report card marks had been changed independently without holding a report card conference as prescribed. However, the employer terminating the contract only obtained knowledge of the inadmissible changes to report card marks after the extraordinary dismissal had been announced.

The District Labour Court judged the inadmissible changes to report marks as a serious breach of duty justifying extraordinary termination. In the view of the court, it is irrelevant that the employer only obtained knowledge of the grounds for termination after the dismissal had been announced. Instead, it is sufficient that the subsequently adduced grounds for termination objectively existed at the time the dismissal was announced. The decision thus no longer depends on whether the termination originally based on different grounds was declared within the legal cut-off period of two weeks. 

Practical relevance

The decision of the District Labour Court contradicts the established jurisprudence of the Federal Labour Court. Admittedly, the Federal Labour Court has also ruled that the two-week cut-off period in Section 626 (2) BGB does not apply to subsequently adduced grounds for termination that already existed at the time the dismissal was announced but only became known at a later point in time (e.g. Federal Labour Court 6/09/2007 – 2 AZR 264/06, NZA 2008, 636). Nevertheless, the Federal Labour Court only views subsequently adduced grounds for termination as admissible if the (insufficient) grounds that originally motivated the employer to terminate the contract were not time-barred, that is, the termination was declared within two weeks after obtaining knowledge of the original circumstances for termination. If the two-week statutory cut-off has been met, additional grounds for termination can be subsequently adduced as long as they objectively existed at the time the dismissal was announced. The Federal Labour Court based this decision not only on the wording of Section 626 (2) BGB but also the meaning and purpose of this regulation. The employee should be allowed to know soon after a breach of duty – namely within two weeks – whether or not the employer will use this occasion to terminate the contract. This prevents the employee from constantly fearing extraordinary termination and potentially being subjected to pressure. Unreasonable uncertainty for the employee concerning the continuation of employment cannot be an issue in the case of subsequently adduced grounds for termination, since the employment relationship has already ended anyway. Accordingly, there is no need to apply the cut-off period to subsequently adduced grounds for termination. 

The District Labour Court is now proceeding one step further by viewing the legal cut-off period of two weeks as unnecessary for subsequently adduced grounds even with respect to the original grounds for termination. Applying the jurisprudence of the District Labour Court would thus create the possibility for employers to declare extraordinary termination without initially indicating good cause, in the hopes that significant grounds justifying termination would subsequently become known. More detailed clarification is required to determine how this outcome can be reconciled both with the wording of Section 626 (2) BGB as well as the meaning and purpose of the cut-off period regulated in that provision. It remains to be seen what the Federal Labour Court will decide in the pending appeal proceedings. In any case, it is urgently recommended to observe the legal cut-off period and to continue declaring extraordinary terminations within two weeks after obtaining knowledge of the decisive factual circumstances underlying the dismissal.