When do managing directors enjoy protection against dismissal?
This question is a perennial issue for employment lawyers. I am currently working on half a dozen cases in which CEOs or MDs who have been fired are fighting for their jobs. The constellations are each very different. In addition to a traditional employment relationship, there is sometimes a position as managing director at one or more companies in the group. After termination, the question arises as to whether the Dismissal Protection Act (Kündigungsschutzgesetz) applies. This in turn depends on e.g. whether the previously existing employment relationship is revived after the dismissal as managing director.
One of the most important cases of the recent years regarding termination protection for General Managers (Geschäftsführers) is the verdict of the Hessian State Labor Court (Hessisches Landesarbeitsgericht), case number 19 Ta 507 / 21. This case I won for my client, who got fired as MD and successfully sued his employer. The Hessian State Labor Court in this decision overruled the verdict of the Labor Court in Frankfurt am Main and stated that my client is protected by the termination protection law even though being a MD. He won the case.
In other constellations that I work on, both an employment relationship and a managing director employment relationship exist side by side, or there is an employment relationship with the parent company and a managing director employment relationship with the subsidiary, possibly even with a further employment relationship with the subsidiary.
It is advisable for both employers/clients and employees/managing directors to work towards a settlement in such complex legal situations. This makes more sense, especially for employers, than having to go through a process that takes years, at the end of which there is a significant risk of having to pay acceptance default wages for years.