When a company like Manroland sets up new firms and 70 employees file redundancy protection claims, many are left wondering about severance pay in company spin-offs. Many workers feel insecure when their employer suddenly splits into multiple companies. What does this mean for their employment contracts? What rights do they have? And how can they secure a fair severance package? This article provides an overview.
The Manroland Case: Four New Companies, 70 Redundancy Protection Claims
The news that Manroland’s owner has set up four new companies and filed redundancy protection claims against 70 employees has unsettled many workers. Such corporate structures are not uncommon in practice: companies are split up to sell off business units or restructure them. For the affected employees, this raises the question of whether their employment contracts are secure and what rights they have.
The details of the case are still unclear, but the number of redundancy protection claims shows that many employees are fighting against the termination of their employment contracts. This is an important sign: Those who have been laid off do not have to stand by idly. A redundancy protection claim can check the validity of the termination.
Company Spin-Offs and Termination: Your Rights Under § 613a BGB
§ 613a BGB applies in the case of a company spin-off or business transfer. After that, the new owner takes over the rights and obligations from the existing employment contracts. This means: If a company transfers a business unit to a new company, the employment contracts automatically transfer to the new company. The employee has the right to object to the transfer, but in that case, their employment contract with the old employer ends.
Important: A termination made because of the business transfer is invalid (§ 613a Abs. 4 BGB). This means the employer cannot terminate employment simply because the business is being transferred. However, they can terminate for other reasons, such as operational restructuring. In such cases, the provisions of the Termination Protection Act must be observed, particularly the social selection procedure. If you want to know more about the social selection procedure, read our article on Social Selection and Severance Pay.
In the case of new company setups, it must be checked whether a business transfer actually took place. If the new company continues the economic unit, then yes. If it is a pure new setup without taking over business assets, then no. It depends on the circumstances. A specialist labor lawyer can assess this in individual cases.
Why Redundancy Protection Claims Are Often Useful in New Company Setups
If employees are laid off because their employer is setting up new companies, they should check if the termination is lawful. Such structures are often used to get rid of troublesome employees or to bypass the social selection procedure. A redundancy protection claim can then be useful because it can check the validity of the termination.
The claim must be filed with the labor court within three weeks of receiving the termination notice (§ 4 Termination Protection Act). This deadline is crucial. Those who miss it lose their right to redundancy protection. Therefore, in doubt, you should act immediately and seek legal advice. The cost of a claim can be high, but there is legal aid or litigation funders like RechtStark that can mitigate the risk.
A redundancy protection claim also has a negotiating deterrent effect: Many employers are then willing to pay severance pay to avoid a lengthy legal dispute. This can be financially beneficial for you.
Severance Pay in Company Spin-Offs: What to Expect
Severance pay in company spin-offs is not automatically legally guaranteed. There is no general right to severance pay when a company is split up. However, employees have good chances of receiving severance pay in many cases, for example if the employer terminates employment for operational reasons and observes the social selection procedure. In such cases, they can offer severance pay under § 1a Termination Protection Act, which is usually 0.5 gross monthly salaries per year of employment. But this is only a guideline, not a guarantee.
In practice, severance pay is often agreed upon in a settlement before the labor court. The amount depends on many factors, such as length of service, age, maintenance obligations, and the chances of success of the claim. The company’s financial situation also plays a role. If you want to know more about similar situations, read our article on Severance Pay in Mergers.
Severance pay can also be useful if you are already expecting a termination. However, you should not accept an offer too quickly but have it checked whether it is fair. An experienced lawyer can help you assess the value of your claim.
How to Protect Your Rights: Steps After Termination
If you have received a termination notice, you should follow these steps:
- Check the termination notice for formal errors, e.g., whether it is in writing and contains a signature.
- Observe the three-week claim deadline – it starts when you receive the termination notice.
- Seek immediate legal assistance, ideally a specialist labor lawyer.
- File a redundancy protection claim with the labor court within the deadline if the termination appears unjustified.
- Negotiate severance pay if further employment is not possible.
These steps can help you protect your rights. For more tips on avoiding errors and securing your severance pay, see our article Avoiding Termination Errors.
RechtStark as Your Partner in Redundancy Protection Claims
RechtStark is a litigation funder that supports employees with redundancy protection claims. We assess your chances of success and cover the costs of legal proceedings if the assessment is positive. This means: You can enforce your rights without taking on financial risk. You only pay if you win – and then only a agreed portion.
We are not a law firm and do not represent you in court. Instead, we work with independent specialist labor lawyers who represent your interests. Our task is to secure the financing so that you can focus on the essentials: your professional future.
If you have been affected by a termination and are unsure whether a claim is worth it, you can contact us without obligation. We will assess your case and give you an opinion.
Conclusion: Don’t Let Company Restructures Unsettle You
Company restructures and spin-offs are often unsettling for employees. But they have rights that protect them. A redundancy protection claim can check the validity of the termination and often lead to severance pay. Even if severance pay in company spin-offs is not guaranteed, you have a good chance of achieving a fair solution with a claim.
Don’t let complex corporate structures intimidate you. Seek legal advice and protect your deadlines. With the support of litigation funders like RechtStark, you can minimize your risk and enforce your rights consistently.
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.