Federal Labour Court set new rules for summary dismissal

Judgment of the Federal Labour Court of 10th June 2010 – Case 2 AZR 541/09

In Principle, summary dismissal according to § 626 Ciovil Code (CC) will take place in circumstances amounting to an important reason which justifies summary termination, § 626 para. 2 CC. Such reason will be considered a just cause if the employer cannot be reasonably expected to continue the contractual relationship until its designated end or the end of the regular period of notice.

Said unacceptability is assessed objectively in the light of all circumstances and has to balance the interests of both parties involved, § 626 (1) CC. According to the constant jurisdiction of the Federal Labour Court of Germany a summary dismissal is excused if:

1. There is a reason abstractly appropriate as justification of extraordinary termination
2. the reason concretely suffice as justification of extraordinary termination in the specific case.

Extraordinary dismissal will be justified in case of severe breaches of contract, e.g. refusal to perform work, criminal offences and persistent violations of work rules. While each case has to be individually decided, there is extensive case law on the matter.

In June 2010 the Federal Labour Court has changed in a very recent decision its almost 25 year old jurisdiction of consistent rulings in favour of employers. The ruling was made in a case involving a cashier who was accused of stealing a deposit receipt for empty bottles worth 1.50 Euro. The company summarily dismissed the cashier who worked over 20 years for the company. The dismissal was subsequently confirmed to be legally fair and valid at first instance and in the first level appeal. However, the Federal Labour Court found the dismissal to be unlawful, ruling that summary dismissal in such cases will not always be justified. Factors such as the amount involved and the employee's length of service need to be taken into consideration.

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