Basics of Protection Against Dismissal in a Newly Created Employment Relationship
Protection against dismissal is one of the central tools of employee protection in German labor law. The key regime here is the Dismissal Protection Act (KSchG), which regulates under which conditions an employment relationship can be terminated on the part of the employer. The primary focus is on the question of when protection against dismissal begins for repeatedly entered work relationships or when there is a continuous contractual relationship with interim interruptions.
The Waiting Period According to § 1 Abs. 1 KSchG and Its Significance
Legal Scope of the Waiting Period
According to § 1 Abs. 1 KSchG, the law applies to employment relationships if they have existed for more than six months without interruption. The provision thereby regulates a waiting period during which an employee does not yet enjoy protection against ordinary dismissals according to the KSchG. For corporate practice, it is crucial in which cases this waiting period starts anew.
Resumption of an Employment Relationship After Contract Termination
If a previously terminated employment relationship is re-established in identical or modified form, the question arises whether the period of employment spent before the interruption can be credited to the waiting period. A significant ruling by the Federal Labor Court from 2005 addresses this question (BAG, Judgment of 27.10.2005 – 2 AZR 614/04). The core issue in the judgment was whether and to what extent, in a formally new employment relationship, previously rendered service times from a preceding contract can be taken into account.
The Decision of the BAG of 27.10.2005
Facts and Course of Proceedings
In the procedure, an employee was initially employed in an employment relationship that was properly terminated. Immediately thereafter, a new employment contract was concluded with the same employer—regardless of whether the exercised activity or contract content was similar. Shortly into the new employment relationship, the employer issued a termination. The employee based the claim on the protection against dismissal already fulfilled by the previous employment period; the employer, however, pointed to the necessity of a renewed waiting period.
Legal Assessment by the Federal Labor Court
The Federal Labor Court clarified that protection against dismissal according to § 1 II KSchG arises only after an uninterrupted employment duration of six months in the affected employment relationship. If a new employment relationship is established after even a brief interruption, the waiting period begins to run anew according to the clear wording of the regulation. Previous employment periods from earlier employment relationships cannot be credited unless it is the continuation of the same employment relationship. What matters is solely the period of the current contract in effect. Determinative for this is the legal reappointment of the contractual relationship, regardless of whether employer and employee are identical and/or there is an immediate temporal connection.
Differentiation in Interruptions and Contract Continuations
A distinction is to be made between the mere interruption of an existing employment relationship and its legal continuation or amendment. Only if the contractual relationship can legally be classified as continuing—such as in temporary, employee-initiated pauses (e.g., maternity leave, parental leave)—is the waiting period not interrupted. In contrast, effective termination and subsequent reestablishment lead to a new start of the waiting period. The motives of the contractual parties remain irrelevant.
Consequential Effects for Labor and Corporate Practice
Relevance for Restructuring and Business Transfers
The decision of the Federal Labor Court has significant practical implications, especially for corporate restructuring, mergers, or intra-group transfers involving the legal reestablishment of an employment relationship. In cases of business transfers according to § 613a BGB, the question regularly arises whether the protection mechanisms of the KSchG apply directly or a new waiting period is initiated. Companies and investors should carefully plan the labor law framework in corporate transactions.
Legal Certainty and Clear Contract Design
The clear line of case law provides legal certainty for both employers and employees but at the same time reduces the options to deviate from the statutory model through contract practice or voluntary agreements. Only through seamless contract continuity can the waiting period according to KSchG be preserved beyond the original employment relationship.
Outlook
The judgment of the Federal Labor Court emphasizes that upon concluding a new employment contract—even between the same parties and even with a seamless transition—the statutory waiting period for general dismissal protection is fundamentally reset. This also affects complex constellations of internal corporate transfers and plays a significant role in the context of corporate restructuring and acquisitions. For detailed questions regarding the applicability and interpretation of the Dismissal Protection Act in conjunction with corporate law arrangements, it is advisable to seek the assessment of specialized law firms. Over the “},{Legal Advice in Corporate Law from MTR Legal Attorneys, individual solutions can be explored and tailored strategies for your company can be developed.
