If an employer intends to give notice in connection with collective redundancies, the notification will only be legally valid under Sections 17 and 18 of the Dismissal Protection Act (Kündigungs-schutzgesetz - “KSchG”) provided

(i) the intra-company consultation procedure (involvement of the competent workers’ council) has been observed; and

(ii) the relevant local Employment Agency has been notified prior to giving notice to the employees.

Early notification
Under section 17 subsection 1 sentence 1 KSchG, an employer employing more than 20 employees is obliged to notify the BFA prior to giving notice to a minimum number of employees in accordance with the KSchG within 30 calendar days. In line with previous case law of the Federal Labour Court (Bundesarbeitsgericht - BAG) as well as the administrative practice of the BFA, the term “dismissal” did not refer to the date notice was declared to the employee but to the point in time when the employment was actually terminated, i.e. expiration of the date to which notice was given. There is no basis for this case law and administrative practice any more after the ECJ held that articles 2-4 of Directive 98/59/EC of 20th July 1998 on the approximation of the laws of the Member States relating to collective redundancies must be interpreted in that the employer’s giving notice constituted the event of “dismissal”. This interpretation of the directive has a direct effect on German law as national courts and authorities are bound to interpret sections 17 and 18 KSchG in conformity with European law. Thus, the competent administrative (public) authorities as well as labour courts are bound to interpret “dismissal” within the meaning of section 17 KSchG in terms of the date notice is given as such rather than the actual point in time at which the notice takes effect (termination date).

As a result, German employers planning collective redundancies must notify the BFA under section 17 subsection 1 sentence 1 KSchG prior to giving notice to their employees. If this is not done, the notice will be void.

Stricter interpretation of “dismissal”
The ECJ justified its interpretation of the term “dismissal” in that the consultation and notification obligation foreseen in the Directive (being implemented into German law by section 17 KSchG) served the purpose of avoiding collective redundancies or at least to minimize the number of redundancies. This purpose could not be achieved if consultation with employees’ representatives (i.e. the workers’ council) was sought only after the employer had taken his decision, i.e. notice had been given.