Definition and legal basis of notifiable dismissals
Notifiable dismissals are a legally regulated procedure under German employment law in connection with the termination of employment relationships on a larger scale. The purpose of these regulations is to mitigate the economic and social consequences of mass dismissals for employees and to notify the Federal Employment Agency early on in order to enable labor market policy measures. The central legal basis is Section 17 of the Protection Against Dismissal Act (KSchG) in conjunction with supplementary EU legal requirements.
General definition
A dismissal subject to notification is understood to mean the termination of a large number of employment relationships by the employer within a certain period, which must be reported due to a legal obligation. In this context, “dismissal” is to be understood in a broader legal sense. It covers not only terminations but also other forms of ending the employment relationship, such as through a termination agreement, provided they are initiated by the employer.
Legal basis and scope
Section 17 KSchG – Notification to the Employment Agency
Section 17 KSchG regulates at what thresholds and under what conditions an employer is obliged to notify the Federal Employment Agency of mass dismissals before such dismissals are carried out. The regulation differentiates according to the number of employees regularly employed in an establishment and the number of persons to be dismissed within 30 calendar days:
- In establishments with more than 20 and less than 60 employees: notification is required for more than 5 dismissals.
- In establishments with at least 60 and less than 500 employees: notification is required for 10% of the regularly employed or more than 25 employees.
- In establishments with at least 500 employees: notification is required for at least 30 dismissals.
Exclusion: Small businesses with fewer than 20 employees are not subject to this notification requirement. The decisive factor is always the actual number of employees in the establishment, not in the entire company.
EU Directives
At the European level, Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States relating to collective redundancies is decisive. This directive obliges Member States to provide comparable regulations for the protection of affected employees.
Scope of the notification requirement
The following are subject to notification:
- ordinary as well as extraordinary terminations by the employer,
- termination agreements initiated by the employer,
- Non-renewal of fixed-term employment contracts, insofar as this is connected to a mass dismissal.
Note: Voluntary resignations by employees or terminations for other reasons (e.g. death) are not subject to notification.
Consultation with the works council
Prior to notification, the works council must be fully informed and consulted in accordance with Section 17 (2) KSchG. The employer must seek consultation on possibilities to avoid or limit redundancies and to mitigate their consequences. The outcome must be documented in a written report, which is to be submitted to the Federal Employment Agency together with the notification.
Detailed procedure for notifiable dismissals
Content and form of the notification
The notification to the Employment Agency must include the following information:
- Name and location of the company and establishment,
- Reasons for the planned dismissals,
- Number and occupational groups of employees to be dismissed and the total number of employees,
- Period during which the dismissals are to take place,
- Criteria for selecting the employees to be dismissed,
- Information on planned social measures (e.g. transfer company, social plan).
The notification must be made in writing and, in principle, before the first affected termination takes place.
Blocking period and prohibition of termination
According to Section 18 KSchG, terminations may only be effected after the notification has been received by the Federal Employment Agency. In addition, there is a blocking period of one month commencing upon receipt of the complete notification, unless the Federal Employment Agency extends or shortens this period.
A termination made without timely and complete notification is void pursuant to Section 134 BGB (invalid).
Involvement of the Employment Agency
The Federal Employment Agency receives the report, verifies the requirements, and may, if necessary, make proposals to avoid or limit the dismissals. The aim is to promote alternative employment opportunities or qualification measures.
Legal protection and sanctions
Legal consequences of a missing or incorrect notification
If the notification is late, incomplete, or not submitted at all, all terminations made within the relevant period are void as they violate a legal prohibition. Employees can file an action for protection against dismissal within the notice periods to have the invalidity established.
Regulatory offences
A violation of the notification requirement constitutes a regulatory offence under Section 23 (1) KSchG, which can be sanctioned with a fine of up to 10,000 euros.
Relationship to other employment law regulations
Relation to social plan
In the case of notifiable dismissals in establishments with a works council, there is also a regular obligation to negotiate a social plan (Section 112 BetrVG). This has its own legal significance and is closely linked to the mass dismissal notification procedure.
Supersession by reconciliation of interests
The implementation of a reconciliation of interests does not remove the notification requirement, but it can mean that subsequent individual terminations will be deemed “socially justified” under the premise of a coordinated overall concept.
Documentation and notification obligations
Employers are obliged to keep a record of the proper execution of the notification procedure and to provide the affected employees with a copy of the notification and the documents submitted to the works council upon request.
Summary and practical importance
Notifiable dismissals are a central element of protection against collective redundancy. Their aim is to ensure the protection of employees in the event of major workforce reductions and to enable public authorities to deploy labor market policy measures in a timely manner. The strict formal requirements and far-reaching legal consequences in the event of violations highlight the great practical importance of these regulations for both employers and employees.
See also
- Protection Against Dismissal Act
- Collective Redundancies Directive (EU)
- Works Constitution Act: Social Plan & Reconciliation of Interests
Frequently asked questions
What deadlines must be observed for notifiable dismissals?
Strict deadlines must be observed for notifiable dismissals under the Protection Against Dismissal Act (Section 17 KSchG). First, notification of the intended dismissals must be made to the responsible Employment Agency before the terminations are issued. The terminations themselves may not be issued until 30 days after the complete notification has been received by the Employment Agency, unless the Employment Agency expressly agrees to an earlier date (Section 17 (3) KSchG). If this deadline is not met, the terminations issued are void pursuant to Section 134 BGB in conjunction with Section 17 (1-3) KSchG. Further deadlines may arise from applicable collective agreements or company agreements, particularly regarding social selection and involvement of the works council.
What information must the notification of a notifiable dismissal contain?
The notification must contain certain minimum formal information in accordance with Section 17 (3) KSchG. In addition to information about the company (name, registered office, type of activity, and number of employees), the reasons for the planned dismissals must be stated in detail. Information about the number and occupational groups of the employees to be dismissed, and the period during which the dismissals are to take place, must also be provided. The notification must also include information about the criteria and the process for social selection, as well as the outcome of information and consultation with the works council. Missing, inadequate, or incorrect information may render the notification and thus the subsequent terminations invalid. It is strongly recommended to use the forms provided by the Employment Agency to avoid formal errors.
What role does the works council play in notifiable dismissals?
The works council plays a central role in the procedure for notifiable dismissals. According to Section 17 (2) KSchG, the employer is obliged to inform the works council early and fully about the intended dismissals. The works council must be informed about the reasons for the planned terminations, the number and occupational groups of the employees to be dismissed, and the period of the terminations. In addition, the employer must consult with the works council about options for avoiding or limiting dismissals and mitigating their consequences. The result of these consultations must be attached in writing to the notification to the Employment Agency. A breach of these participation obligations renders the dismissal notifications invalid and may give rise to claims for damages.
Who is subject to the notification requirement in cases of mass dismissal?
The notification requirement applies to all employers who operate a business or department and who intend to dismiss a certain number of employees within 30 calendar days. The thresholds depend on the number of people employed in the establishment: for establishments with more than 20 and fewer than 60 employees, the requirement applies from five dismissals; for 60 to fewer than 500 employees, from 10% or at least 25 employees; and for 500 or more employees, from at least 30 dismissals (Section 17 (1) KSchG). If these thresholds are not met, the notification requirement does not apply. Special rules apply for branch or group structures and in the case of group-wide consideration.
What sanctions can result from violations of the notification requirement?
Violations of the notification requirement under Section 17 KSchG have serious legal consequences. Terminations made without prior notification or in breach of the statutory deadlines are void under Section 134 BGB due to violation of the law. Any terminations already issued are thus ineffective, and the employment relationships continue. In addition, deliberate breaches under Section 404 (2) No. 6 SGB III constitute a regulatory offence and may be sanctioned with a fine of up to 30,000 euros. There is also a risk of claims for damages by affected employees due to unlawful termination of employment.
What exceptions exist to the notification requirement?
Certain dismissals are not subject to the notification requirement under Section 17 KSchG. These include, among others, employees who have not yet reached their 25th birthday and whose employment lasted no more than six months. Seasonal dismissals, for example in the case of weather-related work stoppages or fixed-term project work, are also exempt from notification, provided this is clearly regulated in the employment contract. Employers of micro-businesses with generally fewer than 21 employees are also exempt from the notification requirement. Finally, termination agreements outside the legal criteria for mass dismissal notification may also be exempt from the notification requirement if the termination is exclusively by mutual agreement.
What is the significance of the confirmation from the Employment Agency?
The Employment Agency provides written confirmation of receipt of the proper notification. This confirmation of receipt is of central importance to the employer because it sets the relevant deadline for the prohibition of termination (Section 17 (3) KSchG). This means that the 30-day blocking period, during which dismissals cannot be issued, does not begin until this confirmation has been received. Any dismissal before this confirmation is invalid. In exceptional cases, the Employment Agency may shorten this period or grant permission for termination upon application. If this confirmation is missing or the dismissal still occurs before the end of the blocking period, the dismissals are also invalid.
