The commercial vehicle manufacturer Schmitz Cargobull is apparently planning to cut up to 500 jobs, raising questions about severance for operational redundancy. For the affected employees, the question arises: What rights do I have in such a workforce reduction? Often the focus is on severance for operational redundancy – but there are many other aspects employees should be aware of. This article explains the key legal foundations – from operational dismissal via social selection to the unfair dismissal claim.
Operational Dismissal: What Employees Need to Know
An operational dismissal occurs when the employer terminates the employment relationship for reasons lying within the sphere of the business. Examples include order declines, restructuring, rationalization measures, or plant closures. At Schmitz Cargobull, capacities are allegedly being reduced, which can lead to job losses.
For an operational dismissal to be effective, three conditions must be met: First, there must be an urgent operational necessity that necessitates the dismissal. Second, the dismissal must be proportionate, meaning no milder measures such as transfer or short‑time work are viable. Third, the social selection must be carried out correctly. If any of these requirements is missing, the dismissal is ineffective.
Employees should know that an operational dismissal is not automatically lawful. The employer must substantiate the reasons and document the social selection transparently. Often, flaws can be found that make an unfair dismissal claim promising. However, if no claim is filed with the labour court within three weeks of receiving the dismissal notice, the dismissal becomes effective and the protection against dismissal is lost.
Severance for Operational Redundancy: When and How Much?
There is no automatic statutory entitlement to severance for operational redundancy. However, several routes can lead to a severance payment. The most common is a social plan negotiated between the works council and the employer. In larger companies with a works council, a social plan is typical in mass layoffs. The amount of severance is then based on the social plan’s rules, which often link to length of service, age, and salary.
Another option is a settlement agreement. Many employers offer such an agreement in the context of workforce reductions to avoid unfair dismissal claims. The severance is then negotiated individually. As a rule of thumb, the formula often used is half a gross monthly salary per year of service. This formula is not a legal entitlement but a guideline that serves as a basis for negotiation. Section 1a of the Dismissal Protection Act also provides for severance if the employer expressly cites operational grounds for the dismissal and offers a severance to the employee – but here, too, it is a voluntary offer the employer may make.
Social Selection: Who Is Affected by the Workforce Reduction?
In an operational dismissal, the employer must conduct a social selection. This means they may not decide arbitrarily who is laid off; they must consider social factors. These include, in particular, length of service, age, maintenance obligations, and any severe disability. Employees with greater protection needs should preferably be spared from dismissal.
The social selection is a frequent point of attack in unfair dismissal claims. Employers often make mistakes, for example by incorrectly weighting the need for social protection or by excluding certain employee groups from the selection. Moreover, the comparability of the jobs plays a role: only employees who can be deployed in the same job or the same area are to be included in the social selection.
Affected employees should have the social selection reviewed. If it was flawed, the dismissal may be ineffective. An employment‑law attorney can give an initial assessment and evaluate the prospects of a claim.
Information and Hearing Rights of the Works Council
In companies with a works council, this body has a right to be heard before any dismissal. The employer must inform the works council of the dismissal reasons and consult it. If the hearing is not conducted properly, the dismissal is ineffective. In mass layoffs – as planned at Schmitz Cargobull – additional obligations apply: the works council must be informed of the intended dismissals, and an interest agreement and a social plan must be negotiated.
The works council also has co‑determination rights when drawing up the social plan. If no agreement is reached, the conciliation board decides. For employees it is important to know that the works council represents their interests but does not replace their individual legal position. Even if the works council consents to the dismissal, the individual employee may still file an unfair dismissal claim.
Information rights also exist towards the employer: the employer must inform the affected employees about the reasons for the dismissal and the possibility of a claim. In practice, employees often receive only a formal letter. It is therefore advisable to inform yourself comprehensively and seek legal advice.
Unfair Dismissal Claim: The Right Path for Employees
Anyone who has received an operational dismissal and considers it unjustified must file an unfair dismissal claim with the labour court within three weeks of receiving the notice. This deadline is set by law and cannot be extended. Missing it usually means the dismissal stands, even if it was substantively unfounded.
The aim of the claim is to establish that the employment relationship has not been terminated. In practice, however, a settlement is often reached: the employer pays a severance and the employment relationship ends on a specific date. The amount of severance is then determined in the settlement – frequently higher than the employer’s original offer. The severance can therefore be exceeded through this route.
An unfair dismissal claim involves costs that depend on the amount in dispute. Employees with low income may be eligible for legal aid. Alternatively, litigation funding can be considered, which assumes the cost risk. Even in a severance within an unfair dismissal claim, the amount is a matter of negotiation. Those who wish to pursue an unfair dismissal claim successfully should seek early legal advice from an attorney.
Importance of Timely Advice from Employment‑Law Specialists
In a workforce reduction like the one at Schmitz Cargobull, employees face complex decisions. Should I accept the dismissal? Is an unfair dismissal claim worthwhile? How high could the severance be? These questions are hard to answer without expert counsel. An employment‑law specialist can assess the prospects, review the social selection, and recommend the right strategy.
The costs for an attorney are often modest in the initial consultation. Many lawyers offer a free first assessment. It is important to engage counsel early – ideally before the three‑week deadline expires. Even when negotiating a settlement agreement or a social plan, legal advice is useful to obtain an appropriate severance.
For employees who shy away from the cost risk of a claim, litigation funding is an option. A litigation funder such as RechtStark covers the procedure’s costs if the claim has sufficient prospects of success. In the event of success, the funder receives a share of the awarded severance. This also enables financially weaker employees to enforce their rights.
Conclusion: Know Your Rights and Take Action
A workforce reduction is a stressful situation for affected employees. Yet clear legal frameworks exist that protect workers. Anyone receiving an operational dismissal should examine the grounds for dismissal, question the social selection, and keep the three‑week deadline for an unfair dismissal claim in mind. The severance is not automatically guaranteed, but in many cases it is negotiable – especially with legal support. Seek early advice and do not hesitate to assert your rights.
Note: This article is for general information purposes only and does not replace individual legal advice. For a free initial assessment of whether litigation funding may be an option for your case, you can contact RechtStark.