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Incorrect works council hearing in the event of dismissal due to illness

In a ruling dated January 10, 2024 (case no. 3 Sa 74/23), the Schleswig-Holstein Regional Labor Court ruled that the dismissal due to illness at issue in this case was invalid due to an incorrect works council hearing.

Facts of the case

The ruling of the Schleswig-Holstein Regional Labor Court (Landesarbeitsgericht, “LAG”) is based on the following facts: The plaintiff had been employed by the defendant employer as an accountant with a weekly working time of 35 hours since August 1, 2020. The plaintiff had been permanently unable to work since December 6, 2021. From October 2021 on, the plaintiff was temporarily unable to work several times due to illness. From mid-August 2022 to mid-October 2022, she received acute inpatient treatment and was discharged from work since.

The defendant initiated a company integration management program in accordance with Section 167 (2) German Social Code IX (Sozialgesetzbuch IX, “SGB IX”) before the dismissal due to illness was announced. To this end, the plaintiff was initially invited to a company integration management program (betriebliches Wiedereingliederungsmanagement, “BEM”) in June 2022. However, the plaintiff declined the offer due to her acute state of health. Then, on October 26, 2022, the defendant again invited the plaintiff to a company integration management meeting. The plaintiff also declined this invitation.

Finally, on November 4, 2022, the works council was consulted on the plaintiff's dismissal due to illness and agreed to it. The defendant then issued a letter of termination due to illness towards the plaintiff on November 10, 2022.

The plaintiff filed an action for unfair dismissal against this dismissal due to illness with the Elmshorn Labor Court. The labor court upheld the action in a ruling dated April 5, 2023 (Ref. 2 Ca 1330 d/22). The defendant appealed against the judgment of the labor court to the Schleswig-Holstein Regional Labor Court (LAG). The appeal was unsuccessful.

Reasons for the decision

The LAG Schleswig-Holstein confirmed the ruling of the Elmshorn Labor Court that the dismissal for illness issued by the defendant was invalid pursuant to Section 1 (1) of the Employment Protection Act (Kündigungschutzgesetz, “KSchG”) as it was not socially justified.

The social justification of dismissals due to illness must be examined in three stages. In the event of a long-term illness, a dismissal is socially justified within the meaning of Section 1 (2) KSchG if there is a negative forecast regarding the expected duration of the incapacity to work (first stage), a significant impairment of operational interests based on this can be determined (second stage) and a weighing of interests shows that the operational impairments lead to a burden on the employer that is no longer reasonably acceptable (third stage).

In the present case, the employer had invoked the allegedly necessary employment of another employee at the plaintiff's workplace. In his opinion, he could not reasonably be expected to double staffing. However, it was unclear to the LAG why the defendant had to rely on a permanent internal solution instead of trying to find an external temporary solution. The LAG specifically invoked the lack of any submission that the defendant had made unsuccessful efforts in this regard. Furthermore, it was not explained why the position of accountant could not be filled by a substitute for a maximum of two years.

The LAG was also of the opinion that the works council had not been properly consulted, as the defendant had failed to explain why the original position could not have been kept free for the plaintiff's return through temporary appointments. In addition, the works council had not been informed about the permanent double staffing of the plaintiff's position, although from the employer's point of view this was the main reason for the dismissal.

Note for the practice

The judgment of the LAG Schleswig-Holstein once again confirms that it is not easy for the employer to justify a dismissal due to illness. Care must be taken during the works council hearing, which must know all the facts so that it can form an opinion on the balance of interests. From a legal perspective, it is therefore advisable for every employer to prepare thoroughly for an intended dismissal due to illness at a very early stage.

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