Update on the invalidity of dismissals in the event of errors in the notification procedure for collective redundancies

At a glance

• After the Second Senate had already referred questions regarding errors in the notification procedure for collective redundancies to the European Court of Justice (ECJ) in February 2024, the Sixth Senate has now also submitted a preliminary ruling to the ECJ, thereby supplementing the questions referred by the Second Senate.
• The questions referred by the Sixth Senate relate to the national employment agencies' scope for judgement on the question of whether the collective redundancy notification procedure was carried out successfully and the question of whether an incorrect collective redundancy notification can be remedied.
• The Federal Labour Court now expects answers to various questions relevant to the validity of a dismissal. Whether and, if so, to what extent a change in the Federal Labour Court’s case law can be expected in the future depends on how the ECJ rules on the issues raised.

Whether errors in the notification procedure for collective redundancies necessarily lead to the invalidity of the dismissals is currently the decisive question in pending proceedings of two senates at the Federal Labour Court (Bundesarbeitsgericht). After the Second Senate had already referred a decision on this topic to the ECJ in February 2024, the Sixth Senate has now also submitted a preliminary ruling to the ECJ, thereby supplementing the questions referred by the Second Senate.

Background and questions referred by the Second Senate

At the end of last year, the Sixth Senate asked the Second Senate for a change in case law regarding the strict consequences of errors in the notification procedure for collective redundancies.

Instead of making its own decision on the requested change in case law, the Second Senate decided in its decision of 1 February 2024 (case no. 2 AS 22/23 (A)) to refer the matter to the ECJ for a preliminary ruling. 

The Second Senate's order for reference to the ECJ related to the interpretation of the Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States relating to collective redundancies (Collective Redundancies Directive).

The questions were, ie, (1) when a dismissal becomes effective in the context of a collective redundancy, (2) whether an (error-free) collective redundancy notification is required for this, (3) whether an initially incorrect collective redundancy notification can be remedied and (4) whether the national employment agencies can conclusively assess whether an effective collective redundancy notification exists. 

The Second Senate took the view that a distinction must be made as to whether there was no collective redundancy notification at all or ‘only’ an incorrect collective redundancy notification.

Submission of the Sixth Senate

By order of 23 May 2024 (case no. 6 AZR 152/22 (A)), the Sixth Senate has now requested a further preliminary ruling from the ECJ. The questions referred by the Sixth Senate relate to the national employment agencies' scope for judgement on the question of whether the collective redundancy notification procedure was carried out successfully and the question of whether an incorrect collective redundancy notification can be remedied. In addition, the Sixth Senate requests clarification on the relationship between the provisions in Art. 4 para. 1 and Art. 6 Collective Redundancies Directive. Art. 4 para. 1 Collective Redundancies Directive provides for a ban on dismissal for the duration of the collective redundancy notification procedure, which, in the opinion of the Sixth Senate, cannot be used as a sanction for errors in the notification procedure due to its labour market policy purpose. In contrast, Art. 6 Collective Redundancies Directive stipulates that employees must be able to review the proper implementation of the procedure.

Takeaway for employers

As a result, the Federal Labour Court now expects answers to the following questions relevant to the validity of a dismissal:

• Does an objectively incorrect collective redundancy notification always result in the subsequent dismissal being invalid?
• Does this also apply if the (competent) national employment agency does not object to the collective redundancy notice?
• Can an objectively incorrect collective redundancy notification be rectified or a missing collective redundancy notification be made up for after receipt of the notice of termination, with the result that the termination becomes effective?

Whether and, if so, to what extent a change in the Federal Labour Court’s case law can be expected in the future, depends on how the ECJ will rule on the issues raised.