A Complete Win of our Lawfirm at the Frankfurt Labour Court – Dismissal for Operational Reasons
The case
Our client had been employed since 2024 as a manager in a consulting-related practice area of a company in the private equity sector. The employer terminated the employment relationship with ordinary notice, relying on urgent operational requirements.
The reasoning followed a pattern that recurs frequently in restructurings: the management board had decided to streamline existing structures, to focus the service portfolio on recurring core modules and to consolidate the practice’s seven former sub-areas into three. As a result, the need for one full-time position had allegedly ceased at both senior manager and manager level; support provided to more experienced colleagues by less experienced staff was said to be required only “to a significantly reduced extent”. There were said to be no alternative employment opportunities, and the social selection was said to have gone against our client.
We filed an unfair dismissal claim within the statutory deadline and asserted the payment claims by way of an extension of the claim during the pending proceedings.
The outcome
The Labour Court granted the claim:
- a declaration that the employment relationship had not been terminated by the dismissal;
- an order for continued employment on the existing contractual terms in the previous position until the unfair dismissal proceedings are finally concluded;
- a five-figure award for wages during the employer’s default of acceptance covering five months (gross, less the unemployment benefit received), plus interest;
- full costs to be borne by the employer.
The judgment is final.
Why the dismissal failed: the burden of pleading
The decisive lever lay neither in the social selection nor in the discrimination arguments – the court did not need to reach either. It lay in the employer’s burden of pleading under section 1(2) sentence 4 of the German Unfair Dismissal Act (KSchG).
The entrepreneurial decision itself is largely free. It is not reviewed for objective justification or expediency, but only as to whether it is manifestly unobjective, unreasonable or arbitrary (Federal Labour Court, judgment of 16 December 2010 – 2 AZR 770/09; judgment of 31 July 2014 – 2 AZR 422/13). The Federal Labour Court has recently reaffirmed this freedom expressly: the organisational decision need not itself be “urgent”, and whether a transfer of tasks pays off economically is irrelevant (judgment of 28 February 2023 – 2 AZR 227/22).
What is fully reviewable, however, is implementation. The courts will in every case examine whether the decision was actually carried out and whether it in fact caused the need to employ the specific employee to cease (judgment of 7 July 2011 – 2 AZR 12/10).
And this is precisely where redistribution concepts break. Where the entrepreneurial decision amounts to eliminating a position or a hierarchical level while redistributing the tasks among the remaining staff, the employer must set out in detail, on the basis of a coherent forecast, how its planning affects the expected volume of work. It must explain how the remaining employees can perform that work without exceeding their obligations – that is, within their contractually owed regular weekly working time (judgments of 24 May 2012 – 2 AZR 124/11; 23 February 2012 – 2 AZR 548/10; 20 December 2012 – 2 AZR 887/11).
In the case decided here, the three sub-areas that were retained consisted precisely of the fields in which our client had worked – and tasks at manager level continued to arise there. On the employer’s own account, the tasks were simply redistributed among the remaining managers. There was no submission whatsoever on the time shares of our client’s previous activities, nor on which activities of the remaining managers had fallen away as a result of the realignment. Stating that a particular share of work would in future be required only “to a significantly reduced extent” is not sufficient without a concrete quantification in terms of time.
The core message: a restructuring narrative is no substitute for figures. An employer who cuts positions and redistributes tasks has to do the arithmetic, not tell a story.
Default of acceptance: the claim that runs quietly alongside
The employer falls into default of acceptance when the notice period expires (sections 615, 293 BGB). Where the employer’s dismissal is invalid, no offer of work by the employee is required (section 296 BGB; judgment of 15 March 2013 – 5 AZR 130/12). Unemployment benefit received is set off; to that extent the claim passes to the Federal Employment Agency.
The employer’s most relevant line of defence in practice is the objection that the employee maliciously failed to earn elsewhere (section 11 no. 2 KSchG, section 615 sentence 2 BGB). The Fifth Senate has sharpened this line considerably in recent years:
- The burden of pleading and proof lies in principle with the employer. If it sends the dismissed employee job advertisements, those must contain all the information needed to assess reasonableness – in particular the nature and content of the work, the place of work and the earning opportunities. Only then does a secondary burden of pleading fall on the employee, who must explain how he engaged with the offers and what he did (judgments of 15 January 2025 – 5 AZR 273/24; 7 February 2024 – 5 AZR 177/23; 12 October 2022 – 5 AZR 30/22).
- Where the employee has been irrevocably released from work, malicious failure to earn elsewhere will generally not arise before the notice period expires (judgment of 12 February 2025 – 5 AZR 127/24).
- Where there are concrete indications, the employer may request information about the job referrals made by the Employment Agency (judgment of 27 May 2020 – 5 AZR 387/19).
Practical note: applications and the assessment of job advertisements sent by the employer should be documented from the outset. Anyone who starts doing so only once the objection is raised in court is arguing in hindsight.
What employees should take away
- The three-week deadline is absolute. Anyone who does not file within three weeks of receiving the dismissal will be treated as if the dismissal had been valid from the outset (sections 4, 7 KSchG) – however weak it may be on the merits.
- Assert payment claims early. Wages during default of acceptance are often the economically most significant element. They should be made the subject of an order within the pending proceedings, not afterwards.
- Demand figures where tasks are redistributed. The question is not “was a decision taken?” but “how is the work to be done in future within normal working hours?”.
- Take the employer’s job referrals seriously. They frequently serve to prepare the malicious-failure objection. Review them, document them, respond in substance.
- Winning is not the end. Returning to the workplace raises its own questions – place of work, right to issue instructions, continued payment of remuneration. These belong in the litigation strategy from day one.
Note: this article is based on proceedings conducted by our firm. The account is anonymised; names, party designations, file numbers and identifying details have been omitted or altered. Every employment dispute depends on the circumstances of the individual case, and no particular outcome in other proceedings can be inferred from the result described. This article provides general information and does not replace legal advice.
Have you received a dismissal, or are you facing a restructuring?
Asma Hussain-Hämäläinen, Rechtsanwältin and Fachanwältin für Arbeitsrecht (certified specialist in employment law), Eschborn, represents employees and managing directors throughout Germany.