ECJ ruling on mass redundancy notifications – Strict requirements under German law remain in place, legislators called upon to act

The German implementation of the Mass Redundancy Directive (EU) is also in line with European law with regard to its consequences for the legal validity of employer terminations!

In two judgments handed down on October 30, 2025, the European Court of Justice (ECJ) answered key questions on mass redundancy notifications, thereby providing important clarifications that are of considerable significance for companies undergoing restructuring. Despite the expectation of many employers that EU law might provide for more lenient treatment of formal errors, the risk of dismissals being invalid remains high. The rulings make it clear that the applicable German law, which standardizes the legal invalidity of dismissals in the event of violations of the strict formal requirements of Sections 17 and 18 of the German Employment Protection Act (KSchG), is in conformity with European law. Any change to sanctions for procedural errors is reserved for the German national legislature.

Facts of the case

The preliminary ruling proceedings concerned the frequently problematic question of what legal consequences arise if an employer fails to give notice of mass redundancies or does so incorrectly. The notification procedure is mandatory whenever the statutory thresholds for redundancies are reached within a period of thirty days. The concept of dismissal under EU law covers not only terminations by the employer, but also termination agreements, early retirement solutions, or transfers to an employment and training company. The decisive factor is not the actual termination of the employment relationship, but the date of the notice of termination or the conclusion of the contract (see ECJ, judgment of January 27, 2005 – C-188/03). Before announcing the measures, the employer must carry out a consultation procedure (Section 17 (2) KSchG) with the works council and then submit a complete and correct notification to the responsible employment agency (Section 17 (1) KSchG).

The procedure is not primarily intended to protect individual employees, but rather to enable the labor administration to initiate labor market policy measures at an early stage and to assess the regional impact of a large number of redundancies. In Germany, however, the strict case law of the Federal Labor Court has so far led to violations in the consultation or notification procedure resulting in the nullity of all relevant dismissals. However, this assessment was called into question after the 6th senate of the Federal Labor Court challenged the previous line and suggested a change, while the 2nd senate stuck to its opinion. This led to two parallel referral proceedings pending before the ECJ.

Reasons for the decision

The ECJ first clarified that a termination cannot take effect if the required notification of mass redundancies is missing. The notification is therefore a prerequisite for validity and must be complete before the dismissals are announced or other termination measures are implemented. The ECJ also ruled that failure to provide notification cannot be remedied retroactively—retrospective notification does not render a previously announced dismissal valid. Furthermore, the ECJ emphasized that the employment agency has no decision-making authority over whether a notification is proper. This assessment is the sole responsibility of the courts. Finally, the ECJ pointed out that the Mass Redundancy Directive itself does not specify any particular sanctions for errors in the consultation or notification procedure. Although member states must provide effective, dissuasive, and proportionate sanctions, they are free to determine the form these take. This means that the strict legal consequences in Germany are not prescribed by EU law but are the result of national application of the law – and are therefore potentially subject to change.

Practical note

For business practice, this means that nothing will change in the existing risk situation for the time being. As long as the German legislature does not enact new regulations, there is still a risk that formal errors will render all terminations for an entire reference period invalid. The notification procedure therefore remains a high-risk legal area, forcing companies to prepare and implement each step with extreme care. At the same time, the ECJ's decisions contain a clear appeal to legislators to develop a differentiated and proportionate system of sanctions that meets the actual needs of companies and employees while also complying with EU law requirements. Until such a reform is implemented, the following continues to apply: anyone preparing a mass dismissal must strictly comply with the formal requirements in order to avoid far-reaching legal disadvantages.