Protection of confidence by the BAG as violation of the Basic Law

BVerfG, judgment dated 10.12.2014 - 2 BvR 1549/07

If German labour courts wish to protect an employer in his trust in their previous case law now that a decision of the ECJ obliges them to alter their previous case law, they must first allow the ECJ to clarify whether this granting of protection of confidence is itself consistent with EU law.

From 1973 onwards, the established case law of the Federal Labour Court took the view that “dismissal”, as defined in Sections 17, 18 KSchG (Protection against Dismissal Act), was to be understood not as the serving of notice of termination, but rather the actual ending of the employment relationship intended through this. The notification of a mass dismissal need not therefore be made before serving of notice of termination.

Decision of the ECJ

In its judgment dated 27 January 2005, the European Court of Justice (ECJ) decided that this case law was not compatible with Art. 1 to Art. 4 of the European Union Collective Redundancies Directive. Under European law, the term “dismissal” must be interpreted such that it is understood as meaning not the actual dismissal but rather the serving of notice of termination.

U-turn and protection of confidence

The case law of the labour courts agreed with this decision and made a corresponding U-turn. To avoid unfairness, resulting from the fact that employers had trusted in the case law of the German labour courts when serving notice of termination prior to 27 January 2005, the Federal Labour Court granted one such employer protection of confidence. This employer had served the notice of termination, involved in the legal dispute, before 27 January 2005. The requirement under EU law is not applicable to “old cases” from the period prior to the decision of the European Court of Justice dated 27 January 2005. According to the Federal Labour Court, this was a requirement under the rule of law.

Problem of jurisdiction

The corresponding decision of the Federal Labour Court dated 1 February 2007 – 2 AZR 15/06 – was attacked by the losing employee in these proceedings through a constitutional complaint. The employee invoked his fundamental right to justice under Art. 101 Subsection 1 Sentence 2 Basic Law. Only the European Court of Justice had to decide on the temporal scope of the European Union law. The jurisdiction of the Federal Labour Court had not been established in this matter. As a result, his case had been withdrawn from the lawful judge.

Decision of the BVerfG

The Federal Constitutional Court has agreed with this argumentation, has set aside the decision of the Federal Labour Court and referred the matter back to the Federal Labour Court for a decision. It will now be the task of the Federal Labour Court to submit the question to the ECJ before reaching its own decision, and to obtain an answer from the ECJ as to whether it is consistent with EU law if national courts wish to protect trust in their previous case law that is not consistent with EU law.

Summary

The question remains unclarified of whether an addressee of a rule, trusting in incorrect interpretation of Sections 17, 18 KSchG by the German labour courts in violation of EU law, can or must be protected. Corresponding clarification by the ECJ is still outstanding.