A spotlight on Germany
We have significant experience in providing strategic legal support for matters in jurisdictions all over the world. The following snapshot is an example of recent issues we have dealt with in Germany.
Something that is not always known by senior personnel who are not based in Germany, but who have management responsibility and direct reports within Germany, is that the remedy that an unfairly dismissed employee can claim is reinstatement into their old role. In addition to this, if successful they would be awarded back-payment of salaries between the date of termination and the date of reinstatement.
So, where an employee does bring a claim, the ultimate risk is that the employee will simply return to the workplace, resulting in exactly the opposite outcome that the employer wanted (and costing the business significant legal fees in the process).
This, combined with the high threshold to demonstrate a fair basis for termination and that due process has been followed under German law, means that what might be seen as a “fair” dismissal elsewhere in the world can result in extremely costly and disruptive litigation in Germany.
We have a huge amount of first-hand experience advising employers and managers how to navigate the complex and technical requirements to achieve dismissals fairly in Germany. We also have substantial recent experience in managing the German labour court litigation process, where an employee was able to claim unfair dismissal (amongst a number of other claims) even though the employer had evidence of gross misconduct (because there is such a high burden of proof on the employer). We were able to devise a strategic plan that meant progressing the litigation to a point in which it gave the employer the best platform to resolve the matter in a way that was both cost effective for the employer, as well as attractive to the employee. In addition, we are now on call for any future cases so we can help the client to avoid litigation at all.
Works council matters in Germany are notoriously tricky, and require detailed management within a prescriptive legal framework that requires employers to follow particular processes and timescales before taking action in relation to a huge range of HR and management decisions (these are often set out in Works Agreements). This can catch businesses unaware, where decisions are taken outside of Germany, because even relatively low-level issues, such as updating work software programmes, could be caught by the requirements.
It is crucial to be alive to these matters properly from the outset, because the relevant timescales and requirements can have a huge impact on the achievement of group-wide projects for global businesses by commercial deadlines. In some circumstances, works councils have the power to take legal action to block projects or invalidate company decisions, and so it is vital to be aware of the issues, to take advice at an early stage, and to balance commercial and legal requirements.
A recent example we have managed was in relation to the implementation of a new internal process and policy that had the potential to be extremely controversial with the works council (as there was a long-standing works agreement governing the old process and policy). We were able to achieve the introduction of the new policy, which has brought significant benefits to the business commercially, through early planning and strategic negotiations, while also maintaining a good working relationship with the works council.