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LAG Düsseldorf on social selection in the event of gradual closure of operations

The  Düsseldorf Regional Labor Court decided in its judgment of January 09.01.2024, 3 (Az: 529 Sa 23/XNUMX) on social selection in the event of phased company closures. According to this, the employer has no free choice as to whom to terminate sooner or later in the event of a phased closure of the company. In principle, the employees most worthy of social protection are to be employed in the processing work.

1. FACTS

The plaintiff employee had been employed by the defendant, a company active in the production and sale of aluminum castings, since 2012. Most recently, the defendant employed almost 600 workers in its only company. On March 01, 2022, self-administration insolvency proceedings were opened against the defendant's assets. The administrator and the creditors' committee agreed to cease business activities on December 31, 2022.

After the negotiations to conclude a reconciliation of interests were declared to have failed by the arbitration board's ruling on November 24, 2022, the defendant submitted applications on November 28, 2022 for official approval of termination for operational reasons in accordance with SGB IX (severely disabled people) and BEEG (parental leave). The employees were given the opportunity to move to a transfer company. In December 2022, the defendant issued operational termination notices to all employees, unless the end of the employment relationship was determined for other reasons.

As of January 01, 2023, all employees have been irrevocably laid off. However, the employees of the processing team, which consisted of 53 employees and of which the plaintiff was a member, were excluded from this. The defendant gave notice of termination to 13 people as of March 31, 2023 and notice of termination to the remaining 40 people as of June 30, 2023. The defendant terminated the plaintiff's employment relationship with a letter dated December 16, 2022 to March 31, 2023. The plaintiff took this termination to court.

The Solingen labor court upheld the dismissal protection claim. The defendant's appeal before the Düsseldorf Regional Labor Court was unsuccessful. The appeal to the BAG was not permitted.

2. DECISION

According to the State Labor Court, the plaintiff could not rely on the invalidity of the termination due to an improper mass dismissal notice in accordance with. § 17 KSchG iVm § 134 BGB appointed. Any errors in this context do not constitute a reason for ineffectiveness because the purpose of the notification is not the individual protection of employees. 

According to the LAG, the termination was due to improper social selection (Section 1 Para. 3 KSchG) legally ineffective. When a company is shut down in stages, the employer has no free choice as to whom to terminate sooner or later. In principle, the employees most worthy of social protection should be employed in the processing work. In the present case, according to the LAG, the defendant carried out the social selection methodically incorrectly because it incorrectly formed the comparison groups. 

These should not have been formed based on the activities originally carried out, but rather should have been carried out based on the activities still occurring in the resolution team, about which the defendant only provided incomplete information. Furthermore, the defendant did not state which tasks and how long they took in the processing team, which requirement profiles were required and how a comparison should be made on this basis. The defendant has not refuted the resulting presumption of incorrect social selection.

3. CONCLUSION 

The decision of the LAG Düsseldorf illustrates the relevance of correctly carried out social selection in the event of operational dismissals. Employers are therefore advised to carry out and document careful social selection in the event of dismissals for operational reasons, including in the context of gradual company closures, in order to prevent legal disputes or to be able to prove that the social selection has been error-free in the event of dismissal protection lawsuits.

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