BAG answers open question for diaconal employers

Extraordinary termination for operational reasons is possible in the scope of application of the AVR Diakonie Deutschland

From our Labour Law department

In its ruling of 27 April 2021 (2nd Senate, 2 AZR 357/20), the Federal Labour Court clarified important issues in the area of dismissal for operational reasons for diaconal organisations that apply the employment contract guidelines of Diakonie Deutschland (AVR.DD, hereinafter “AVR”).

This is because, similar to the public sector, where the collective bargaining agreement “BAT” used to apply and today the “TVöD” applies in its various versions, the AVR also provide that after a period of employment of 15 years and reaching the age of 40, ordinary termination by the employer is no longer possible. Such employees can then only be dismissed by extraordinary dismissal if there is good cause within the meaning of Sec. 626 Civil Code (BGB). In addition, reference is made to Section 31 AVR, which provides for “termination without notice” only for reasons in the person or conduct of the employee.

Until now, it was unclear whether these provisions of the AVR allow for a dismissal for operational reasons (as well as giving notice with the aim to change the contractual conditions) with an expiry period or whether a dismissal for operational reasons is completely excluded due to the AVR’s concept. This was the argument of the plaintiff in the present legal dispute and he referred to what he considered to be a similar concept in Section 55 of the BAT for the civil service. The exclusion of ordinary dismissal would be so strong that a position similar to that of a civil servant had to be assumed and the employer could therefore only dismiss in very few exceptional cases, namely if even continued employment in other departments/companies (with another employer) was no longer possible. It is obvious that these cases are unlikely to occur in practice.

However, the BAG now rejected this argument and clarified that the AVR do not provide for such a high level of protection. In particular, the AVR do not impose an obligation on the employer to try to place the employee concerned with other employers. This could at most be an argument in an individual case if the employment relationship provided for a group-related obligation of the employer to continue employment. However, this did not follow directly from the AVR.

The decision is also of great interest beyond this now clarified question, as it also clarifies further procedural matters. For example, the BAG points out that in contrast to ordinary dismissal for operational reasons, due to the necessity of good cause, the employer is required to show in the proceedings that there was no possibility of employment in another equivalent position and that the dismissal (or the notice with the aim to change the conditions) was therefore mandatory. Therefore, the employer must not declare that there is a lack for continued employment possibilities in general and then to wait for the plaintiff’s further submissions on this assertion.

It is also important that the court points out that the works council is to be involved according to Section 38 Act on Diaconal Works Councils (“MVG”) as in the case of an ordinary dismissal (although it is phenotypically about an extraordinary, “without notice” dismissal). Albeit this was certainly obvious, it had not been sufficiently clarified so far through the jurisprudence either. In addition, the court pointed out that the participation of the works council under the MVG is characterized by the principle of consensus and that the case law from the area of works council law on the so-called fiction of approval before the expiry of the deadline is therefore not applicable here. This refers to cases in which the works council already indicates before the expiry of the hearing period that it has taken a final position on the employer’s intention to terminate the employment contract and the termination is then served  before the expiry of the period. According to the BAG, this should not be applicable in the area of the AVR/MVG. Here, a declaration by the MAV is necessary in any case, unless it is assumed due to the expiry of the two-week period or has been replaced by a church court’s order.

This is an extremely important decision of the BAG for all diaconal employers, which is to be assessed positively, as in our view it correctly confirms the possibility of dismissal for operational reasons even in the case of employees who can, basically, only be dismissed without notice.

If you have any further questions, please do not hesitate to contact our Labour Law experts.