The ELA is proud to welcome our newest member firm: LOGOS  in Iceland!
The ELA is proud to welcome our newest member firm: LOGOS  in Iceland!


Redundancies on operational grounds are invalid where temporary workers are in constant use

Submitted by Firm:

Judgment of the District Labour Court of Cologne of 2 September 2020 in Case 5 Sa 295/20

The use of temporary workers to cover a non-fluctuating, constant (base) volume of work will prevent the dismissal of a core worker based on a reduced volume of orders.

Facts of the case

In addition to its core workforce, the employer continuously employed eight temporary workers with only a few breaks, such as for factory holidays and shutdowns.  As a result of the reduction in the volume of orders from a key customer and the ensuing surplus in staff, the employer terminated the employment of a core employee on operational grounds. The company continued to employ temporary workers as reserve personnel.

The judgment

The District Labour Court (Landesarbeitsgericht) of Cologne held that the termination of employment was void. In the Court’s view, there was an alternative job opportunity for the employee whose employment had been terminated. As long as temporary workers were only used to cover “order peaks”, there would not be an alternative position. However, where, as was the case here, the temporary workers were used to cover a consistent (base) volume of work, one could assume that there was a “free” position in favour of a core employee. The temporary worker was not employed merely as reserve personnel. The (regular) volume of work could be handled primarily by the core workers in this case.

Consequences for practice

The ratio of the judgment is in line with the general principles of unfair dismissal law. It also corresponds to the accepted guidelines of the law on fixed-term employment contracts. Accordingly, there will not be justified grounds for a fixed-term worker as a replacement when it can be concluded from continuous fixed-term contracts that there is a permanent need. The same is true for agency workers: if temporary workers are continuously employed, one can conclude that there is a permanent need. Conversely, in this case, it is assumed that there is no employment for cover purposes.

Our tip

Before issuing letters of termination, determine whether temporary workers are being used. The relevant workers will be those working in a position that would be suitable for the employee whose employment is about to be terminated in terms of qualifications, skills and experience and therefore might be an alternative position for continued employment. If at least one of the relevant temporary workers is employed not simply to cover order peaks but in a “permanent position”, the company must either refrain from terminating the employment for operational reasons as intended, or the use of agency workers must first cease. The question of whether a position filled by a temporary worker is a “permanent position” can be difficult to answer and can lead to not insignificant risks in any action against unfair dismissal. It will depend on whether the position is included in regular HR planning, which will attest to a certain permanence of the employment. In line with the provisions of the German Temporary Employment Act (Arbeitnehmerüberlassungsgesetzes, AÜG), the specific person working in a position is not decisive; instead, it will depend on whether the specific position is filled by a temporary worker. It is important to undertake a review not just of the work but of the whole company; in contrast to social selection, the employer’s whole company is the statutory point of reference for the search for alternative positions of employment.

Author: Dr Thomas Lambrich