In Germany, a notice of termination needs to be given “by the employer”. As “the employer” is nowadays usually not a natural person, companies need to be aware of the formal requirements to adhere to if the notice of termination is to be signed by a company representative.

If the dismissal is not signed by a board member or a proxy holder registered in the German Commercial Register, the dismissal can validly be signed by an authorized person, provided that a (written) authorization signed by a competent board member is presented when the notice of termination is delivered. Please note that, generally speaking, the dismissed employee may reject the dismissal if no originally signed authorization is presented. As a consequence of such rejection the termination is invalid. Often this leads to an extended notice period if a new notice letter (including the required authorization) cannot be delivered within the same month.

There is one important exception to the requirement of the presentation of an authorization: the employee cannot validly reject the termination if the employer has notified him/her about the authorization in advance. As the Head of HR (but not any HR manager) usually has such authorization, it is sufficient to notify the employee about this person’s identity. However, please note that, in case of a dispute, the employer needs to prove this notification.

In a recently decided case, the employer could not prove that the dismissed employee knew about the HR manager’s authorization to sign a letter of termination, as the HR manager was employed at another group company with responsibility for all group companies. In particular, it was not sufficient that the same HR manager had signed the employment contract, because the authorization to sign employment contracts and the authorization to sign a notice of termination can be split.

In a nutshell: To avoid an employee’s rejection of a termination letter signed by a person authorized by the company, always add a written authorization originally signed by a competent board member when delivering the letter of termination.

Leave a Reply

Your email address will not be published. Required fields are marked *