Employment Law in Germany: forfeiture of employee’s right to challenge transfer of employment contract
In its judgment of 23 July 2009 - case number 8 AZR 357/08 - the German Federal Labour Court (BAG) had to decide the following case. The claimant employee of a German public company (AG) had been taken over after acquisition by a partnership (OHG). Although he had been previously informed about the employment contract changeover, the information had been inadequate. Afterwards he worked for the partnership for some ten months until finally signing an agreement to terminate the contract. When the partnership filed for bankruptcy before actual termination of the employment contract, the employee claimed survival of his employment contract with the public company on the ground of defective takeover information and for payment from the public company.
The BAG decided that the information regarding the acquisition had been inadequate. However, the employee had forfeited the right to challenge the employment contract changeover because he had signed an agreement to terminate the contract with the partnership, thereby surrendering ("disposing of") the new employment contract.
Especially in tight economic times, acquisitions of distressed companies are expected to be commonplace in CEE. The takeover of employees will play a regular part in these. Because § 613a section 6 BGB originates from a EU directive, the arguments on which the BAG based its decision may also influence interpretation of parallel regulations in EU Member States.
