Pursuant to the German Dismissal Protection Act (§ 17 Abs.1 KSchG), the employer must submit a mass dismissal notification to the competent employment agency before dismissing more than 5 employees within 30 calendar days in establishments with

– 21 to 59 employees more than 5 employees,

– 60 to 499 employees 10% or more than 26 employees

– at least 500 employees, 30 or more employees

dismissed.

An establishment is any branch, office, place of business or similar with a minimum organisational management structure. It does not depend on the concept of establishment under the German Dismissal Protection Act (§ 23 KSchG) or on whether different employee representative bodies are responsible for carrying out the consultation procedure.

The obligation to notify depends on the number of employees in the enterprise – i.e. not the enterprise itself (so-called thresholds). For the determination of the thresholds, all employees of the enterprise who are employed full-time, part-time or marginally are to be included. Employees in this sense are therefore blue-collar workers, white-collar workers, apprentices, trainees, interns, retrainees and assisting family members. However, members of the board of directors, managing directors and company managers are excluded from this.

Dismissal under the German Dismissal Protection Act (§ 17 of  KSchG) is not only dismissal for operational reasons. Dismissal includes

• all dismissals, i.e. also dismissals for personal reasons or for reasons of conduct
• all notices of change
• all termination agreements, i.e. those concluded at the employer’s instigation
• under certain circumstances also dismissals by the employee himself, i.e. dismissals which the employee has given notice of – if this has been done at the employer’s instigation.

Regarding this, the 6 dismissals are quickly reached and it must be examined exactly in which period these dismissals fall.

If there is a works council in the employer’s business, the participation of the works council is mandatory. Pursuant to the German Dismissal Protection Act (§ 17 Abs. 2 KSchG), the employer must consult with the works council on the notifiable mass dismissal (so-called consultation procedure).

The works council’s opinion must be attached to the mass dismissal notification. If an agreement is not possible, it must be made credible as an alternative that the consultation procedure was initiated in time and completely and the status of the consultations must be presented ( § 17,Abs. 3, sentence 3 of the German Dismissal Protection Act (KSchG)).

The employer must inform the works council in writing, prior to taking any redundancy measures, of the reasons for the planned redundancies, the number and occupational groups of workers to be made redundant, the number of workers employed in the enterprise, the period of time during which the redundancies are to be made and finally the criteria for selecting the workers to be made redundant and the calculation of the severance pay. The employer must negotiate a reconciliation of interests with the works council. If this is not achieved, the employer must, at the works council’s request, draw up a social plan, i.e. an agreement on how to mitigate the disadvantages for the employees.

In a company without a works council, of course, these obligations do not apply. It should be noted here, however, that in the case of imminent mass dismissals, a works council can be set up in a very short time by three employees, which must then also be involved.

The employer must inform the works council as early as possible of the impending redundancies, usually as soon as strategic or managerial decisions have been taken that require the employer to consider or plan mass redundancies. Under no circumstances should the notification be made less than two weeks before the notification is made to the employment agency.

In addition, according to the German Dismissal Protection Act (§ 17 Abs. 3 sentence 6 KSchG), the works council receives a copy of the mass dismissal notification and can then make further statements to the employment agency.

Small businesses with no more than 20 employees are exempt from the obligation to notify collective redundancies. Furthermore, the notification requirement does not apply to seasonal and campaign establishments where the dismissals are due to the nature of the establishments, such as the end of the season or the end of the campaign.

The mass dismissal must be notified in writing to the local employment agency at least 30 days before the first dismissal. This leaves enough time to take into account any changes before the first dismissal and to correct the notification if necessary. The mass dismissal notification must contain the following minimum information:

• Company name / name of employer
• Type and location of the company
• Number and occupational groups of employees to be dismissed
• Number and occupational groups of workers normally employed in the enterprise
• Reasons for planned dismissals; here the motives and motivations must be presented in concrete and factual terms, but not in as much detail as in the dismissal protection proceedings.
• Time period in which the dismissals are to be made / termination or amendment agreements are to be offered,
• Criteria for the social selection of the employees to be dismissed – here it must also be stated whether and to what extent the social selection has been modified, e.g. by excluding top performers or using a points system.

The form “KSchG 1” of the Federal Employment Agency can be used for the mass dismissal notification.

If there is a works council, the employer must obtain its opinion on the planned dismissals and attach it to the dismissal notice.

Furthermore, additional anonymised information should be provided on the employees to be dismissed, for which the form “KSchG 2” of the Federal Employment Agency can be used. This information is primarily used for further job placement.

There is an important pitfall in this question. The threshold for the mass dismissal notice can be reached within any period of 30 days. However, the mass dismissal notification must be made before the notice of termination is given or the termination agreement is concluded. At this point, the consultation procedure with the works council should, at best, already have been completed.

This means that in each individual case it must be checked whether a number of dismissals justifying the duty to notify has been reached within 30 days before or after an intended dismissal.

For example, if on 3 April in a company with 22 employees three are dismissed, and on 28 April another three are dismissed, all six dismissals become notifiable. The notification for the first three dismissals cannot be made up. The first three dismissals therefore become invalid due to the lack of notification and must be pronounced again.

Relevant here is always the receipt of the notice of dismissal, not the expiry of the notice period.

Even if the mass dismissal notice is only a formality, compliance with the form is essential. An invalid mass dismissal notice leads to the invalidity of each individual dismissal in the context of this mass dismissal.

The consequences of an invalid mass dismissal notice were just experienced by the insolvent airline Air Berlin. The Federal Labour Court declared the dismissals of the employed pilots invalid because the mass dismissal notification had been submitted to the locally incompetent Employment Agency.

The notification must therefore be made with the utmost care

Mass redundancies require precise planning and ideal implementation. This includes, on the one hand, checking the legal requirements and, on the other hand, drawing up a strategy and a time schedule. Such a procedure is existentially important for the company, as mistakes in mass dismissal can often lead to repetitions of the measure or to higher severance pay claims. In addition, good planning is also important for the employees, as they may expect a transparent and well-organised implementation in the case of a measure that threatens the existence of the company, such as the loss of a job.

MAYR Kanzlei für Arbeitsrecht provides this topic article as a guide. For individual advice, advice should generally be sought from a specialist lawyer for labour law. We draw your attention to the fact that we can therefore accept no liability for the accuracy and completeness of this contribution.