Extraordinary termination based on strong suspicion BAG, judgment dated 20.3.2014, 2 AZR 1037/12

Extraordinary termination based on strong suspicion is also possible without prior hearing of the employee in exceptional circumstances.

The suspicion of contract-violating conduct can destroy the trust in an employee that is required for continuation of the employment relationship. If the employer wishes to use this as the basis for termination, he has a fundamental obligation to hear the employee concerning the accusations against him/her before serving notice of termination. This can result in significant time delays. These delays can mean that extraordinary termination without notice is no longer possible due to the time lapse, and that the only remaining possibility is ordinary termination. In its decision worth reading dated 20 March 2014, the Federal Labour Court (BAG) concerned itself with various questions related to this subject area.

The starting point for the considerations of the BAG is Section 626 Subsection 2 Sentence 1 BGB (German Civil Code). This states that extraordinary termination is only possible within two weeks. Under Subsection 2 Sentence 2, the period begins on the date on which the party entitled to terminate gains knowledge of the authoritative facts for the termination. This is the case as soon as he has reliable and as complete knowledge as possible concerning the relevant facts, which enables him to decide whether he should continue the employment relationship or not. If only indications are available initially, the party entitled to terminate can carry out further investigations at his free discretion after due assessment of the circumstances, and can also hear the person concerned, without triggering the period as per Section 626 Subsection 2 BGB.

Deadline for a hearing, maximum one week as a rule

If the employer opts for a hearing – this is optional in the case of termination for gross misconduct – this must take place within a short deadline which must not normally exceed one week. The BAG has now decided that exceeding of this deadline is admissible in exceptional circumstances, if the employee is unable to attend an initial hearing date set – for example as a result of a rehabilitation measure – and therefore requests a written hearing, which the employer grants, and the hearing procedure lasts a total of ten days as a result.

Hearing can only be dispensed with in exceptional circumstances

In the event of termination based on strong suspicion, the hearing is obligatory and can only be waived in exceptional circumstances. To date, this was by all means supposed to apply if the employee declares that he/she will not comment on the accusation made against him/her and does not state any relevant reason for this.

The BAG has now supplemented its case law to include the scenario of the employer setting an appropriate deadline for comment, but which the employee allows to pass – possibly even involuntarily, for example due to illness. The employer can then proceed directly with termination even without a hearing and thus stop this “playing for time”. Alternatively, the employer can wait for the employee to recover and then conduct the hearing. The BAG is of the opinion that, in such cases, sufficient special circumstances will normally apply which delay the start of the period as per Section 626 Subsection 2 BGB for a correspondingly long length of time.

Summary

The situation remains that, before termination based on strong suspicion, the employer must hear the employee concerning the accusations made against him/her. Only in exceptional cases does the obligation to hear not apply. A regular possibility will be to base dismissal on both “proven” violation of obligations (termination for gross misconduct) as well as on the “strong suspicion” of corresponding misconduct. Nevertheless, the Works Council (if one exists) must then be involved in both aspects. In the event of extraordinary termination based on strong suspicion, the hearing must take place within a period of one week as a rule. Only in exceptional circumstances can this period be exceeded. The employer should also serve notice of ordinary termination as a precautionary measure.