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It is a typical situation of daily HR work in Germany. The six month (probationary) period of newly hired employee is nearing its end, but a final decision on the extension of the employment relationship has not yet been taken. The employer is not 100 % sure about the employees performance, but would like to give him another chance. Another case is a long-term sickness during the probation period, which does not yet allow a proper performance evaluation. The problem is, that after six month continued employment many employees (in entities with more than 10 employees) enjoy full protection against dismissal.

The Regional Labour Court Baden-Württemberg now had to decide a case, in which the employer in such situation had decided to give notice to an employee shortly before the end of the six month period. He did – however – not made use of the comparatively short notice period provided for in the Commercial Code, but opted for a longer notice period explaining in the termination letter that this has been done to give an opportunity to the employee to better his performance. Further it was explained, that - in case of satisfactorily performance - the employment relationship would be continued.

The Regional Labour Court Baden-Württemberg did not object against this procedure in its decision of May 6th 2015 (LAG Baden-Württemberg, Urteil vom 06.05.2015 – 4 Sa 94/14). This decision together with an earlier decision of the Federal Labour Court about a similar approach by an employer in the context of a settlement agreement offers valuable guidance for employers, in which circumstances an "extension" of the probationary period might be permitted.

FACTS OF THE CASE

The employer had given notice to the employee during the first six months of employment, whereby the notice period was substantially longer than the minimum allowed by law. Due to the fact, that the employee in the first six months of employment does not enjoy any protection against dismissal the court of first instance had dismissed the claim. The employee appealed and argued, that due to the decision of the Federal Labour Court of March 7th 2002 (2 AZR 92/01) an extension of the notice period is only allowed, if the employee has been granted a right to continue the employment relationship in case of satisfactory performance.

DECISION

The Regional Labour Court Baden-Württemberg has rejected the appeal. It first of all confirmed that the employee did not enjoy any protection against dismissal and further stated, that the termination had not been arbitrary or unlawful. An arbitrary termination could only be established, if the primary intention would have been to deny the employee protection against dismissal, although the employer actually wants to continue the employment relationship. As in the case of a termination agreement it has to be determined, whether the sole reason has been to continue the employment relationship for a limited period of time.

In the decision of the Federal Labour Court, which was quoted by the employee in his appeal, the court had stated, that a termination with a longer (than the minimum) notice period (up to the maximum allowed by law or collective bargaining agreement) is permitted, if a chance is given to the employee to continue to the employment relationship in case of satisfactory performance.

In the present case the Regional Labour Court Baden-Württemberg referred to the wording of the termination letter, which clearly stated that the employee is, by granting a longer notice period, given a chance to perform and continue the employment relationship. The Court especially stated, that it is not necessary to grant a definite right for the employee to continue employment in case of satisfactory performance, since the definition of "satisfactory" must anyway be in its sole discretion by the employer.

WHAT TO TAKE AWAY

First of all it needs to be stated, that in case of any uncertainty about the qualification and performance of a new employee a termination issued in the first six months of employment is always the safest and thus recommendable way.

In exceptional cases the employer may – however – opt for a termination with a longer notice period, provided – however – that two conditions are met. First of all the (longer) notice period may not exceed the maximum notice period stipulated by law or collective bargaining agreement and secondly it must be clearly stated by the employee, that the longer notice period is in the interest of the employee (due to the fact that he is given more time to the perform satisfactorily). It is recommended for employers in such situation to clearly document the intention to give the employee a second chance in order to avoid a termination dispute at a later point in time, when the employee has not fulfilled the expectations and is dismissed at the end of the (longer) notice period.