An employee who is duly dismissed and released from their duties is not generally considered as intentionally failing to seek other income by not entering into another employment relationship before the end of their notice period.

Facts

The parties were in dispute over the defendant’s deduction of “omitted alternative income” from the employee’s claims for outstanding wages, on the basis that the defendant believed that the claimant had acted maliciously by not entering into another employment relationship before the end of their notice period. The claimant was employed by the defendant as a senior consultant since November 2019. The defendant terminated the employment relationship with effect from 30 June 2023 by a letter dated 29 March 2023 and released the claimant from his obligation to perform his work, also discharging his remaining holiday entitlement. After receiving notice of termination, the claimant registered as a job seeker at the beginning of April; he received the first job offers from the employment agency at the beginning of July. During the period of release, i.e. May and June, the defendant sent the claimant a total of 43 job vacancies that may have been suitable, which were offered online by job portals or companies. The claimant applied for only seven of these job vacancies after the end of June 2023, after the defendant had stopped paying the claimant remuneration in June 2023.The claimant brought an action seeking payment of this outstanding remuneration. The defendant applied for dismissal of the action and argued that the claimant had been obliged to apply for the job offers made available to him during the period of release in a timely manner. As he had not done this, he had to accept that, pursuant to section 615 sentence 2 German Civil Code, the defendant was able to take into account for June 2023 deemed income in the amount of remuneration that he had previously received from the defendant. The Labour Court dismissed the action, but the Regional Labour Court upheld the claimant’s appeal.

Decision

The defendant’s appeal to the Federal Labour Court was unsuccessful. The Federal Labour Court first of all confirmed that the defendant was in default of acceptance (Annahmeverzug) as it had unilaterally released the claimant from work during the notice period. Consequently, the claimant was entitled to the agreed remuneration for the entire duration of the notice period pursuant to section 615 sentence 1 German Civil Code in conjunction with section 611a para. 2 German Civil Code. He did not have to accept a deduction of ‘omitted alternative income’ pursuant to section 615 sentence 2 German Civil Code, because a deduction of income would only be justified if the employee had failed to act in good faith (‘maliciously’). Based on the equity rule in section 615 sentence 2 German Civil Code, the extent of the employee’s responsibility to generate other income cannot be assessed without taking into account the employer’s obligations.  In this case, the defendant had not demonstrated that it would have been unreasonable to employ the claimant during the period of notice. Therefore, the claimant was under no obligation to enter into another employment relationship before the end of the notice period to generate income and relieve the defendant of its financial burden.

(BAG, 12 February 2025 – 5 AZR 127/24)

Practical tip

This decision shows that the Federal Labour Court’s recent strict case law on the obligations of employees after expiry of the notice period does not apply to a period of release. The employees’ position during a period of release has thereby been strengthened and secured by the Federal Labour Court.