09. Jan 17

Dismissal with the option of altered conditions of employment: Clarity of revised offer

A notice of dismissal with the option of altered conditions of employment terminates the employment relationship as constituted based on the conditions in place up until that point in time. At the same time, an offer is made to continue the employment relationship with revised conditions.

GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: It is not only possible to partially terminate employment contracts. If there is a desire to change individual conditions of an employment contract but employer and employee cannot reach an agreement on this, dismissal with the option of altered conditions of employment is also a possibility. While this does terminate the employment contract, the employee also receives an offer to continue the employment relationship based on different conditions. If the employee does not accept this offer, then the full termination of the employment contract stands.

This type of dismissal with altered conditions is subject to the same legal provisions as standard ordinary notices of dismissal. If the German Kündigungsschutzgesetz (Employment Protection Act) needs to be observed, the employer must provide an objective reason for terminating the employment contract, such as dismissal on grounds of personal capability, for operational reasons or due to conduct.

It is important to ensure that the revised offer is presented in sufficiently clear and exact terms. That was the verdict of the Bundesarbeitsgericht (BAG), Germany’s Federal Labour Court, in its ruling of February 17, 2016 (Az.: 2 AZR 613/14). The BAG pointed out that this kind of dismissal with revised conditions is a legal transaction consisting of two declarations of intent. In addition to the notice of termination, the Court went on to say that there also needs to be an identified or identifiable offer to continue the employment relationship under revised conditions.

It held that the revised offer must be as specific as possible so that the employee can readily accept it. To this end, it needs to be clear which contractual terms shall definitely apply going forward. Only then is the employee able to arrive at a balanced decision as to whether to accept or reject the offer, even in the face of short deadlines. The BAG therefore ruled that any ambiguities in the offer would be at the expense of the employer and render the revised conditions invalid.

Thus, a revised offer to continue the employment relationship under different terms in a placement and qualification unit based on the conditions as laid out in a collective agreement is not sufficiently clear if the collective agreement is not yet available at the time notice of the dismissal with the option of altered conditions of employment is given.

Employers should always ensure that notices of dismissal are drawn up carefully and that there are appropriate reasons justifying the dismissal so that the notice is effective. This not only applies to dismissal with the option of altered conditions of employment, but also ordinary and exceptional notices of dismissal. Lawyers who are experienced in the field of employment law can advise on all issues pertaining to the workplace.

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