In its ruling of March 29, 2023 (Ref.: 5 AZR 255/22), the German Federal Labor Court issued a decision on the relationship between termination without notice and default pay. An employer is behaving contradictorily if it initially terminates the employment relationship without notice and invokes the unreasonableness of continued employment, but then offers the employee continued employment in the subsequent unfair dismissal proceedings "in order to avoid default of acceptance".
The plaintiff employee was employed by the defendant company as a technical manager. The employer issued a notice of termination without notice to the plaintiff employee and offered him the continuation of the employment relationship with a job as software developer and a significantly lower remuneration. In the letter of termination, the employer also requested the employee to resume work at a certain point in time in the event of "rejection of the extraordinary termination". After the plaintiff employee failed to show up for work, the defendant company again gave extraordinary notice of termination. The plaintiff employee also failed to comply with a request for further work performance contained in this termination letter. The employee's action for protection against dismissal was successful. It was ruled that both the dismissal with notice of change and the extraordinary termination notice were invalid.
However, since the defendant employer subsequently refused to pay a default of acceptance wage, the employee also asserted this claim in court. However, both the Labor Court and the Regional Labor Court rejected this claim. The plaintiff employee had not accepted the employer's offer to continue working. He was therefore not willing to perform within the meaning of § 297 BGB.
However, the appeal subsequently allowed by the Federal Labor Court was successful. The court stated that the defendant company had been in default of acceptance by issuing the termination without notice. An additional offer of employment by the plaintiff employee was not required. It could not be assumed that the employer seriously intended to continue employing the employee. Because still in the notice protection process it had submitted that a further employment of the plaintiff employee was unreasonable for it. The employer therefore behaved in a contradictory manner. The legal assessment of the Regional Labor Court is incorrect. It cannot be deduced from the plaintiff employee's rejection of the offer to continue working alone that the employee was actually unwilling to perform(cf. Sec. 297 BGB).
Consequently, not every rejection of an offer of continued employment means that an employer does not have to pay default of acceptance. Companies should therefore examine such offers very carefully and also fit them into their overall process and separation strategy.