If a manager with responsibility for personnel matters, assures an employee near the end of their probation period that they will be retained, but soon terminates employment without valid reason, this inconsistency violates good faith and renders the termination void under Section 242 of the German Civil Code.
Facts of the case
The parties are in dispute over the validity of a termination during the probationary period. The claimant entered into an employment relationship with the defendant on 15 June 2023 as a commercial lawyer in the Legal/Compliance department, subject to a six‑month probationary period and a two‑week notice period. Shortly before the expiry of both the probationary period and the waiting period under section 1(1) of the Protection Against Dismissal Act (Kündigungsschutzgesetz – KSchG), the competent head of department—who was also a holder of a commercial power of attorney (Prokurist) and the manager responsible for personnel matters—stated to the claimant during a regular meeting (Jour Fixe) on 17 November 2023 that they would “of course” keep him on.
In the following month, on 4 December 2023, the defendant consulted the works council regarding an intended termination of the claimant during the probationary period. One of the reasons given for the termination was that the claimant failed to meet performance expectations. After the works council had given its consent, the defendant issued a letter dated 8 December 2023, signed “ppa.” by the head of department, stating that the claimant’s employment would be officially terminated as of 22 December 2023.
No adverse incidents occurred regarding the claimant’s employment between the head of department’s assurance of continued employment and the subsequent termination. The claimant brought an action for protection against dismissal challenging the probationary termination, arguing that the termination violated the principle of good faith in light of the statement made by the head of department during the Jour Fixe. The Labour Court dismissed the claim.
Decision
The appeal before the Higher Labour Court (LAG) was upheld. The termination was void due to a breach of the principle of good faith pursuant to section 242 of the German Civil Code (BGB). Although the Protection Against Dismissal Act did not apply because the statutory waiting period had not been fulfilled at the time the notice of termination was received, a termination may nevertheless violate good faith under section 242 BGB during the probationary period if it amounts to an abuse of rights as a result of inconsistent conduct.
In particular, an impermissible exercise of rights occurs where the employer, through its conduct, has led the employee to reasonably expect that the employment relationship would continue for a longer period of time only for the relationship to be abruptly terminated. If the employer has indicated to the employee that dismissal is not anticipated, it constitutes a breach of section 242 BGB for the employer to terminate the employment shortly thereafter. Exceptions may apply if the employer could rely on a specific objective reason that arose subsequently.
The court classified the conduct of the defendant as an abuse of rights. The assurance given by the head of department shortly before the end of the probationary period that the claimant would “of course” be retained established a legitimate expectation on the claimant’s part, which was thwarted without any objective justification. As no adverse circumstances arose between the assurance and the subsequent termination, the court held that the dismissal was contrary to good faith and therefore void. Rather, through the statement made by the head of department, the defendant had created a legitimate expectation on the employee’s side that the probationary period had been “successfully completed” and that the employment relationship would fall under the protection of the Protection Against Dismissal Act. Leave to appeal was not granted.
(LAG Düsseldorf, 14 January 2025 – 3 SLa 317/24)
Practical Tip
Managers with responsibility for personnel issues should exercise particular caution when making statements that build trust. Binding assurances should only be given after careful review and internal agreement in order to avoid subsequent conflicts and legal disputes. It is also advisable to maintain complete documentation of all discussions and agreements to ensure transparency and legal certainty.