BAG Confirms Invalidity Where Collective Redundancy Notification Is Missing
The Bundesarbeitsgericht (BAG, Federal Labour Court) ruled on 1 April 2026 that a dismissal is invalid if, before it is issued, a collective redundancy notification required under § 17 Abs. 1 KSchG (German Protection Against Dismissal Act) has not been submitted to the competent Agentur für Arbeit (Federal Employment Agency). The decision was issued in proceedings 6 AZR 157/22 and concerns a dismissal in connection with insolvency. The judgment bears the ECLI:DE:BAG:2026:010426.U.6AZR157.22.0.
In the view of the Bundesarbeitsgericht (BAG, Federal Labour Court), this legal consequence follows from an interpretation of § 18 Abs. 1 KSchG (German Protection Against Dismissal Act) in conformity with EU law. This provision transposes Art. 4 of Directive 98/59/EC on collective redundancies into German law. Against this background, the term “Entlassung” in § 18 KSchG must be understood as “dismissal.”
Facts of Proceedings 6 AZR 157/22
Insolvency Proceedings and Dismissal
The claimant had been employed since 1994 by the company that later became the insolvent debtor. Until September 2020, the business had 25 employees; there was no works council. Upon an application dated 29 September 2020, provisional insolvency administration with a reservation of consent was ordered on the same day. The later defendant was appointed as provisional insolvency administrator.
On 1 December 2020, insolvency proceedings were opened. One day later, on 2 December 2020, the defendant insolvency administrator terminated the claimant’s employment relationship. The remaining 22 employment relationships that still existed were also terminated or ended by termination agreements. The defendant did not submit a collective redundancy notification under § 17 Abs. 1 KSchG.
The claimant asserted the absence of the notification in the context of his unfair dismissal claim.
Dispute over the Relevant Size of the Business
The defendant insolvency administrator took the view that, in the case of a business closure, the regular size of the business could not be determined on the basis of the previous staffing level of the business. Rather, the decisive factor should be an assessment at the time when the respective employee’s dismissal takes place. At that time, fewer than 20 employees had actually been employed. Therefore, there had been no obligation to submit a collective redundancy notification.
The Arbeitsgericht Hamburg (Hamburg Labour Court) upheld the claim by judgment of 20 April 2021 – 5 Ca 656/20. The Landesarbeitsgericht Hamburg (Hamburg Higher Labour Court) also confirmed the invalidity of the dismissal. The appeal on points of law filed by the defendant insolvency administrator before the Bundesarbeitsgericht (BAG, Federal Labour Court) was unsuccessful; he was ordered to bear the costs of the appeal on points of law.
Procedural History up to the Decision of the Bundesarbeitsgericht
Referral Procedure and Reference to the CJEU
In the appeal proceedings, the Sixth Senate of the Bundesarbeitsgericht (BAG, Federal Labour Court) initially stayed the dispute pursuant to § 45 Abs. 3 Satz 1 ArbGG (German Labour Courts Act). The reason was an inquiry procedure addressed to the Second Senate of the Bundesarbeitsgericht. The Second Senate referred questions on the interpretation of Art. 4 of Directive 98/59/EC to the Gerichtshof der Europäischen Union (Court of Justice of the European Union).
The Gerichtshof der Europäischen Union (Court of Justice of the European Union) answered this reference by judgment of 30 October 2025. In doing so, it focused on the purpose of the notification procedure under EU law. The competent authority is to be placed in a position, before dismissals in the context of a collective redundancy take effect, to examine possibilities for limiting the adverse consequences.
Significance of the Thresholds under § 17 KSchG
The Bundesarbeitsgericht (BAG, Federal Labour Court) assumed that the dismissal at issue was a dismissal subject to notification within the meaning of § 17 Abs. 1 Satz 1 KSchG. According to the Senate’s decision, the relevant thresholds had been exceeded.
To determine the size of the business, the Senate referred to its earlier decision of 11 May 2023 – 6 AZR 157/22 (A). According to that decision, the size of the business is not to be determined solely by reference to a specific reporting date. Rather, what is decisive is the staffing level characteristic of the business’s regular operations.
Key Findings of the Decision of 1 April 2026
Missing Notification Leads to Invalidity of the Dismissal
The Bundesarbeitsgericht (BAG, Federal Labour Court) clarified that a dismissal that is subject to notification under § 17 Abs. 1 KSchG is invalid if the employer has not submitted a notification to the competent Agentur für Arbeit (Federal Employment Agency) before issuing it. In such a case, the dismissal cannot take effect.
The Senate no longer derives this legal consequence from § 134 BGB (German Civil Code). Rather, it follows from § 18 Abs. 1 KSchG in an interpretation in conformity with EU law. Accordingly, § 18 KSchG itself regulates the consequences arising from a missing or ineffective notification.
“Entlassung” Must Be Understood as “Dismissal”
The Senate follows the interpretation of Directive 98/59/EC by the Gerichtshof der Europäischen Union (Court of Justice of the European Union). According to that interpretation, the competent authority must be informed of the intended collective redundancy before the dismissals are issued. Only on this basis can the authority examine which measures may be considered to limit the consequences of the redundancies.
Against this background, the term “Entlassung” in § 18 KSchG is to be interpreted as “dismissal.” Accordingly, dismissals within the meaning of § 17 Abs. 1 Satz 1 KSchG generally take effect only upon expiry of one month after receipt of an effective notification by the Agentur für Arbeit (Federal Employment Agency), unless the authority shortens the period or extends it pursuant to § 18 Abs. 2 KSchG.
No Decision on All Conceivable Errors in the Notification Procedure
In the proceedings, the Bundesarbeitsgericht (BAG, Federal Labour Court) did not have to decide whether all conceivable errors in the notification procedure always lead to the invalidity of the dismissal. In particular, it remained open whether there can be errors that do not impair the purpose of the notification procedure.
By order of 19 March 2026 – 2 AS 22/23 – the Second Senate stated that, following the decisions of the Gerichtshof der Europäischen Union (Court of Justice of the European Union) of 30 October 2025, it adheres to its view: the absence of an effective collective redundancy notification before the declaration of dismissal leads to the invalidity of the dismissal. A renewed inquiry under § 45 Abs. 3 Satz 1 ArbGG was therefore not necessary.
Parallel Proceedings 6 AZR 152/22
Premature Notification before Completion of Consultations
On the same day, the Bundesarbeitsgericht (BAG, Federal Labour Court) also decided proceedings 6 AZR 152/22. That case did not concern a notification that had been entirely omitted, but rather a notification that had been submitted before the completion of the consultation procedure with the employee representative body. The employer was an aviation company with around 348 employees. The claimant had been employed there as a flight captain since 2012.
The challenged dismissal of the claimant and other pilots was dated 29 July 2020. The dismissals were issued applying the period applicable in insolvency cases under § 113 InsO (German Insolvency Code) of three months to the end of the month. Cabin and ground staff had already been dismissed at the beginning of July 2020.
In addition to the premature notification, the notification was not accompanied by a final statement from the employee representative body, nor was the status of the consultations set out.
Decision of the Bundesarbeitsgericht
The Bundesarbeitsgericht (BAG, Federal Labour Court) upheld the claimant’s appeal on points of law in proceedings 6 AZR 152/22. It found that the employment relationship with defendant no. 1 had not been terminated by the dismissal of 29 July 2020. With regard to defendant no. 2, the claimant withdrew the appeal on points of law; to that extent, the judgment dismissing the claim became final. In the alternative, claims for compensation for disadvantages had been in dispute.
The Bundesarbeitsgericht (BAG, Federal Labour Court) published the two decisions in its press release no. 17/26 of 1 April 2026. In both proceedings, the Sixth Senate, taking into account the case law of the Gerichtshof der Europäischen Union (Court of Justice of the European Union), proceeded on the basis that errors in the notification procedure can lead to the invalidity of the dismissals.
Assessment of the Decision for Collective Redundancies
Return to a Strict Approach Where Notification Is Omitted
For cases in which a required collective redundancy notification is completely omitted, the decision confirms a strict legal consequence. If a notification required under § 17 Abs. 1 KSchG is not submitted before the dismissal is issued, the dismissal is invalid.
The Bundesarbeitsgericht (BAG, Federal Labour Court) thereby ties in with the function of the notification procedure under EU law. The Agentur für Arbeit (Federal Employment Agency) is not to be involved with the intended collective redundancy only after the dismissals have been issued, but in good time before they take effect.
Key points of the decision are:
- A required notification must be submitted before the dismissal is issued.
- § 18 Abs. 1 KSchG must be interpreted in conformity with EU law.
- The term “Entlassung” in § 18 KSchG means dismissal in this context.
- The absence of an effective notification before the declaration of dismissal leads to the invalidity of the dismissal.
- The relevant size of the business is to be determined according to the staffing level characteristic of regular operations.
Subsequent Clarification on Harmless Errors
By judgment of 25 June 2026 – 6 AZR 7/26 – the same Senate further clarified its approach to errors in the notification procedure. According to that judgment, stating a slightly excessive number of employees to be dismissed does not impair the purpose of the notification procedure and leaves the dismissals effective. In that case, the insolvency administrator had notified 34 redundancies, but in fact dismissed only 31 or 32 employees. In addition, the consultation procedure with the works council had been properly conducted and completed before the notification was submitted.
This later decision concerns a different factual scenario. It does not alter the fact that, in proceedings 6 AZR 157/22, the Bundesarbeitsgericht (BAG, Federal Labour Court) assessed the complete absence of a required collective redundancy notification before the declaration of dismissal as a reason for the invalidity of the dismissal.
Significance for Employment Law Issues in Companies
The decision of the Bundesarbeitsgericht (BAG, Federal Labour Court) underscores the high relevance of formal requirements in collective redundancies. Particularly in insolvency and restructuring situations, the thresholds under § 17 KSchG, the timing of the notification and the status of any participation procedures may be decisive for the effectiveness of dismissals.
MTR Legal Rechtsanwälte advises companies, investors and high-net-worth private individuals on employment law issues in connection with restructurings, insolvencies, dismissals and collective redundancies. If you have legal questions regarding the implications of the decision and employment law proceedings, you can find further information at Legal advice in employment law.
