German Federal Labour Court, dated September 22, 2016, docket number 2 AZR 276/16

A decision of the German Federal Labour Court (Bundesarbeitsgericht) on 22 September 2016 considered that the employer may stop the consultation procedure with the Works Council about mass dismissals if the Works Council did not show willingness to negotiate measures to avoid mass dismissals within the framework of sec. 17 para. 2 of the Protection Against Dismissal Act (Kündigungsschutzgesetz).

After the only customer of the employer terminated all assignments, the employer decided to shut down the business and terminated all employment contracts after declaring a mass dismissal at the employment agency.

Some claims of employees for unfair dismissal were successful, due to the fact that the labour court considered there had been a failure of the mass dismissal procedure. The employer then implemented a second consultation procedure with the Works Council in which the Works Council did not show any interest in the implementation of measures to re-open the business. The employer stopped the consultation with the works council and terminated all employment contracts a second time.

The Federal Labour Court ruled that the second dismissals of the employees were valid. Since the Works Council did not show any further willingness to negotiate, the employer was allowed to assume that the consultation procedure with the works council had failed.

With this judgement the Federal Labour Court ruled on important practical issues regarding mass dismissals. However the unwillingness of the Works Council to engage in negotiation should be documented properly for reasons of proof.