Termination periods staggered in accordance with seniority are non-discriminatory in terms of age. This arises from a decision of the Federal Employment Court that the relevant provision in the German Civil Code is not inadmissible unequal treatment because of age and does not infringe EC law.
A 31-year-old employee had been employed as an auxiliary worker at a golf course since July 2008. By letter of 20 December 2011, the company terminated the employment relationship, observing the statutory notice period stipulated in § 622 (2) sentence 1 No. 1 of the German Civil Code, effective as of 31 January 2012.
The statutory notice period is set forth in § 622 (1) of the German Civil Code. The basic dismissal notice period is four weeks (i.e. 28 days) counting back from the 15th or the last day of a calendar month. This notice period increases depending upon the seniority of the employee.
Unjustified Preferential Treatment of Older Employees?
In the present case, the employee did not in principle cast doubt on the validity of this termination, but holds the view that staggering the termination periods based on employees' seniority constitutes preferential treatment of older employees because employees with many years of service naturally are older.
According to her, younger employees like her are put at a disadvantage. Therein lay indirect age discrimination prohibited under European Law, in particular Council Directive 2000/78/EC of 27 November 2000 which served the purpose of establishing a general framework for equal treatment in employment and occupation (Directive 2000/78/EG).
The consequence of this was that the longest possible termination period of seven months, effective at the end of a calendar month, provided under § 622 (2) sentence 1 No. 7 of the Civil Code had to apply to all employees, irrespective of the actual length of service. Therefore, the employment relationship did not end until 31 July 2012.
Legitimate Purpose Covers Indirect Discrimination
The judges of the Federal Labour Court confirmed the decisions of the previous instances containing the conditions that were unfavourable for the employee concerned. They argue that differentiating the termination period in accordance with the length of service leads to indirect discrimination of younger employees.
However, the legitimate aim of extending the notice period on the basis of § 622 (2) sentence 1 of the Civil Code is to grant improved protection against dismissal to employees who have been employed with a company for a longer period of time and are thus, loyal and typically older employees.
The provision as set forth in § 622 of the German Civil Code was declared valid. Employers in Germany have to observe the statutory notice periods when terminating employees. However, an extension of the statutory dismissal notice period in individual employment agreements is permissible for both parties. The notice period for resignation by an employee cannot be longer than that for dismissal by the employer; since otherwise, the contractual provision would constitute impermissible discrimination and thereby be void. Also, all statutory notice periods may be changed in collective bargaining agreements.