Primacy of statutory minimum notice periods

BAG, judgment dated 29.1.2015 - 2 AZR 280/14

The law – Section 622 Subsection 2 BGB – provides for minimum periods of notice for termination of the employment relationship by the employer. Deviations in individual contracts are only possible if they are to the benefit of the employee, i. e. only longer notice periods can be effectively agreed. The BAG recently specified the principles according to which the required comparison of favourability is to be carried out.

The BAG was called on to judge the case of a female employee whose contract of employment agreed a reciprocal notice period of “six months to 30 June or 31 December of a year”. At the time the contract was signed, the employee had already been working for the employer for almost 30 years. As a result, the longest statutory minimum notice period under Section 622 Subsection 2 No. 7 BGB was applicable, namely seven months to the end of a calendar month. In December 2012, the employer served notice of ordinary termination for operational reasons, effective as of 30 June 2013.

Comparison of favourability between contractual and statutory periods of notice requires the observance of various principles

In contrast to the LAG Berlin-Brandenburg that had considered termination to 30 June 2013 to be in compliance with the required notice period, the BAG has decided that the notice of termination must be amended to termination to 31 July 2013. By so doing, the BAG has demonstrated clear principles for the assessment of whether a period of notice, agreed in an individual contract, is to be classed as “more favourable” compared to the statutory minimum periods.

“Ensemble comparison” of notice period and termination date

The BAG initially affirmed the previously prevailing opinion that,  when conducting the required comparison of favourability, the agreements made on the period of notice (term) and the termination date (date of taking effect) are to be considered as one unit as a general rule. The BAG speaks of an “ensemble” or “group” comparison. It can regularly be assumed that, when agreeing a specific ending date (here for example 30 June or 31 December), the parties are not pursuing any special, independent goals, but rather ultimately only wish to influence the respectively authoritative notice period overall. Consequently, the employer cannot generally claim that any individual agreement on restricted termination dates will be combined with the longer minimum period as per Section 622 Subsection 2 BGB.

In the case now judged, termination would otherwise not have been able to take effect until 31 December 2013.

Comparison must be carried out in abstract manner, i. e. independently of the specific date of the notice of termination

Rather, the specific case involved checking of whether the agreed shorter period of 6 months, permitting termination only to 30 June or 31 December respectively, was to be regarded as more favourable as an “ensemble” than the longer statutory minimum period of 7 months which, however, unrestrictedly permits termination to the end of each month. According to the principles now established by the BAG, it is not a matter here of which ruling produces a more favourable result at the specific time of the serving of notice of termination. Contrary to an opinion held in part, the fact that the specific serving of notice of termination in December 2012 could take effect on 30 June 2013 according to the contract but not until 31 July 2013 under the law, was not a decisive factor in the dispute.

The predominant favourability during most of a calendar year is not sufficient

It is also of no relevance whether, given abstract consideration over a complete calendar year, the contractual agreement leads more frequently to a more favourable result than the statutory rulings (this was the direction indicated by comments of the BAG in the reasons for its judgment dated 4.7.2011 - 2 AZR 469/00). The LAG had seen this in this way, and had therefore classified the contractual rulings as abstractly more favourable due to the low number of ending dates permitted, with the result that it considered the termination to 30 June 2013 to be effective.

Contractual agreement must always be more favourable

According to the BAG however, contractual rulings can only be asserted as “more favourable” if they always lead to a more favourable result and not just for the majority of the time within a calendar year. As this was not so in the case decided, the BAG was of the opinion that the contractual agreements on the period of notice were ousted overall by the statutory minimum period of 7 months to the end of a month. Thus for example, the employer could have effectively served notice of termination to 31 August 2013 in January 2013.

Summary

Termination agreements in individual contracts will only prevail over the statutory minimum notice periods under Section 622 Subsection 2 BGB if, given an abstract check of the “ensemble” of agreed notice period and any restricting termination dates agreed, they always produce a more favourable result for the employee, irrespective of the specific date of the notice of termination. Otherwise, the law takes priority.