The German Federal Labour Court recently decided that dismissals for redundancy reasons can be made even if free positions are available at another business unit abroad.
In the case at hand, an employer decided to move its production from Germany to the Czech Republic. Only the administration department remained in Germany. Thus, the employer dismissed all staff employed in production for redundancy reasons. The claimant argued that her dismissal was unlawful as the employer should have offered her the opportunity to move to the Czech Republic by issuing a “dismissal with the option of altered conditions”. The court, however, decided that the dismissal was lawful.
According to German law, employers may not dismiss an employee for redundancy reasons if the employee can be employed under different conditions, in particular at a different location. Such different condition can also include a move to another work location which would allow the employee to work at the company’s new site. Therefore, if a vacant position exists – even at a different work location – such position has to be offered before a dismissal can be made.
There are two legal ways to enforce such different working conditions unilaterally: if the employment contract permits, the employer may give a simple directive to implement the new conditions. If this is legally impossible, e.g. because the employment contract provides for a specific place of work, the legal way is a so-called “dismissal with the option of altered conditions”. Such “dismissal with the option of altered conditions” has to be considered first by the employer before terminating the employment contract. This gives the employee the opportunity to assess whether such different working conditions are acceptable in his/her situation.
However, these provisions and principles only apply within the borders of the Federal Republic of Germany. The employer is not obliged to offer employment outside Germany if the business is moving abroad.