Necessary content of a letter of notification pursuant to Section 613a (5) of the German Civil Code

The Federal Labor Court has confirmed that a letter of notification in connection with a transfer of a business must also contain information on the collectively agreed standards which are generally applicable to the acquirer of the business. However, an employee not covered by collective bargaining agreements does not have to be informed about a collective bargaining agreement that does not apply to him either at the seller or at the acquirer of the business or that does not apply to him on the basis of a reference clause in his employment contract.

Facts

The parties disputed whether an employment relationship still existed between them after an employee affected by a transfer of a business had objected to the transfer of his employment relationship to a business acquirer.

The plaintiff, an employee not covered by collective bargaining agreements and who is not a member of a trade union and whose employment contract does not refer to collective bargaining agreements, had objected to the transfer of his employment relationship to a business acquirer in a letter dated May 13, 2019. However, the previous employer had already informed the employee of the transfer of his employment relationship as of February 1, 2017 in a letter dated December 2, 2016. At that time, the operating resources of the business unit to which the plaintiff belonged were also transferred to the business acquirer; from that time, the plaintiff performed his work exclusively for the business acquirer.

On August 2, 2019, the employee filed an action with the labor court and requested a declaration that his employment relationship existed with the legal successor of his previous employer. He held the opinion that his objection to the transfer of the employment relationship had been made within the time limit because the letter of notification had been incorrect and therefore the one-month period according to Section 613a (6) sentence 1 of the German Civil Code (BGB) had not begun to run. The defendant filed a motion to dismiss the action, arguing that the plaintiff's objection was late and that the letter of notification was in order.

The Labor Court had dismissed the action, the Regional Labor Court had granted it.

Reasons for decision

The Federal Labor Court overruled the judgment of the Regional Labor Court and, like the Labor Court before, dismissed the action because an employment relationship no longer existed between the parties after the transfer of the business since the plaintiff had not objected to the transfer of his employment relationship within the one-month period.

The Federal Labor Court states that the transferor and/or transferee must inform an employee in such a way that the employee can "get a picture" of the subject matter of the (partial) transfer of the business and the person of the transferee as well as of the circumstances specified in Section 613a (5) of the German Civil Code (Bürgerliches Gesetzbuch - "BGB"). This is also intended to give the employee the opportunity to make further inquiries and, if necessary, to seek advice in order to then decide on this basis whether to object to the transfer of his employment relationship. The legal consequences about which information is to be provided in accordance with Section 613a (5) No. 3 BGB include, first of all, the legal consequences arising directly from the transfer of the business as such. This requires, among other things, a reference to the entry of the transferee into the rights and obligations arising from the existing employment relationship (Section 613a (1) sentence 1 BGB), to the joint and several liability of the transferee and the vendor pursuant to Section 613a (2) BGB and, in principle, also to the situation under termination law. The rights and obligations applicable at the transferee also include the applicability of collective bargaining standards and the question of the extent to which collective bargaining agreements and works agreements applicable at the transferor are superseded by collective bargaining agreements applicable at the transferee.

The letter of notification for the plaintiff did not contain any information on the applicability of a specific collective bargaining agreement to non-tariff employees, but this was not necessary because this agreement had not applied to the plaintiff's employment relationship either before or after the transfer of the business. Neither the plaintiff nor the acquirer were bound by collective bargaining agreements and the plaintiff's employment contract also did not contain a reference clause to collective bargaining agreements.

Among other things, the Federal Labor Court did not object to the fact that no different information letters had been prepared for individual groups of employees (employees covered by collective bargaining agreements/non-tariff employees), but that all groups had been informed by means of a single letter. Information can therefore also be provided in a standard letter, which must nevertheless cover any special features of the employment relationship. The Federal Labor Court clarified that an employer cannot be required to provide comprehensive legal advice in individual cases.

Notes for practice

The Federal Labor Court confirmed that the information provided was proper. As a result, this is correct and also good, because the requirements for the necessary content of a proper notification have always increased. Therefore, the preparation of such a letter is also considered to be very risky.

After this decision, however, no all-clear can be given to employers. On the contrary, it also shows how closely the Federal Labor Court examines the content of a notification letter, which is why notifications must be prepared with great care. In case of doubt, more rather than too little should be included in a letter of instruction, but this carries the risk that what is communicated more must also be correct. Moreover, it remains difficult to draw the line between what is still a necessary content of an instruction letter and what is not necessary  comprehensive legal advice remains difficult.