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Questions which are frequently asked with reference to labour law issues

Should the written notice of termination of an employment be sent to the employee by way of registered mail with personal delivery?

Service of a notice of termination by way of registered mail with personal delivery is not normally recommended, as the registered letter is not deemed to have been effectively and validly served and received, if and when such notice is merely dropped in the mail box, but only at the moment where such registered mail is actually picked up at the post office collecting point. 


In order to safeguard timely receipt, the employer should, as far as this is possible, personally hand the notice of termination over to the employee and have the employee acknowledge receipt of this notice of termination on the copy of the same - with indication of date.


As it happens quite frequently that employees refuse to confirm receipt of the notice of termination in writing for the reason that they believe that they thus acknowledge the termination as being legally valid, it is recommended that another staff member be requested to be present as a witness for the fact that the notice of termination of the employment has in fact been handed over to the person concerned.


If there is no possibility to hand the notice of termination over to the employee in the presence of a witness or witnesses, it is recommended to have the notice of termination delivered by a carrier. In order to obtain a proper documentation of evidential value for the due and timely receipt of the notice of termination for purposes of potential future judicial proceedings which are aimed at achieving protection against the employee’s dismissal, the carrier ought to write a record certifying such delivery.

Does the employer have a liability in relation to the employee for damage to property and financial loss?

It goes without saying that the employer does have a liability in relation to its employees when it comes to damage to property and financial loss which was caused by the employer’s fault. Over and above that the employer may have a so-called absolute liability concerning damage which was caused for the employee as a consequence of the use of an employee’s private property for purposes of the company’s risk-involving business operations.In these cases the employer is liable regardless of fault on the employer’s part, as this is to be seen from the viewpoint of a reimbursement of expenses or indemnity (Section 60 of the German Civil Code).


According to the standards stipulated by the rulings  of the Federal German Labor Court it is held that the employer has an absolute liability in those cases where the damage concerned is not part of the employee’s general life risks (e.g. damage done to clothing, spectacles or watch while  employee is engaged in work), but rather of the company’s risk-involving business operations (in cases where the use of the employee’s property is work-induced, i.e. where the damage is caused as and while such work is or was performed).


It is under the aspects of absolute liability that the employer also has to reimburse any such damage which was caused to the employee’s private motor vehicle by an accident which was not due to the employee’s fault, if such vehicle was used with the employer’s consent in the field of operations of the latter. It is deemed to be such a use which is within the employer’s field of operations if an employee would have had to use a vehicle of his own and would thus have had to bear the appurtenant risk of an accident and if the employer would have had to use his own vehicle and would thus have had to bear the risk of an accident of the same, if it were not for the use of the employee’s vehicle (Federal German Labor Court 14. Dec. 1995 – 8 AZR 875/949.


Jurisprudence has it, however, that there is no such thing as the employer’s liability to indemnify the employee if the employee has to personally pay for the damage for the reason that the employee receives a specific indemnity as an adequate compensation for the risks involved in the use of his or her own vehicle.


According to the ruling entered on 30 April 1992 by the Federal German Labor Court ( 8 AZR 409/91) the employer who pays to the employee the fiscally allowed flat kilometrage rate  as a reimbursement for the use of the employee’s private car for the purpose of complying with the obligations set forth in the employee’s employment contract, only has to pay for and cover those costs of the downgrading in the employee’s third-party liability insurance, which were caused by an accident which occurred during the employee’s job performance, if this was separately agreed upon between the parties to the respective employment contract. 


If the parties to the employment contract have agreed upon a flat kilometrage rate and if the employee was free to chose his car and the third-party liability insurance company it is, in case of doubt, to be assumed that payment of the flat kilometrage rate also includes an indemnity for inreased payments for the employee’s third-party liability insurance coverage, which are due to such downgrading (Federal German Labor Court, Ruling dated 30 April 1992). So far there has not yet been any jurisprudence ruling which decided whether or not the payment of the fiscally allowed flat kilometrage rate also includes an indemnity for the damage which is caused by downgrading as far as fully comprehensive automobile insurances are concerned.


The employer’s liability may, in addition, be restricted or excluded if the employee has him - or herself caused the thus occasioned damage by his or her own fault (Section 254 of the German Civil Code, mutatis mutandis). Yet it will in so far be necessary to also consider those principles concerning in-company compensation for damage, which were developed by current jurisprudence.


This means to say that the employee cannot assert any claim(s) for damage if he or she has caused such a damage due to gross negligence, that a division of the damage has to be made in cases of medium negligence, and that the employer will have sole liability in cases where the employee’s negligence is only of a minimum character.


Since it is a prerequisite for an unrestricted claim for damages that the employee did not cause the damage by gross negligence, the employee is also the party who has the burden of specification and proof for those facts and circumstances which exclude a grossly negligent causation of the damage.



Does the employee have a liability in relation to the employer for damage which the employee has caused while performing his or her job

As a rule it can be said that an employee who causes a damage in performing his job only has a limited liability for such damage.


According to the principles which are outlined by the rulings of the Federal German Labor Court with reference to the so-called in-company compensation for damage an employee is not liable in cases of only minimal negligence, in cases of medium negligence his liability is only proportionate to a part of the damage, and it is only in case of grossly negligently or wilfully caused damage that an employee is liable for the full amount of the damage so caused.


In this context it is to be noted that that jurisprudence has it even in cases of a reproach of gross negligence that it holds that it is necessary to limit the employee’s obligation of liability for compensation for damage if it is found that there is a clear disproportion between the employee’s income and the amount of the damage.


Another liability privilege is applicable for damage for which insurance coverage is available. According to jurisprudence premises an employer must first of all have recourse to existing insurances and has in addition thereto have himself treated in such a way as if he himself had concluded reasonable and customary insurance coverage contracts.


Is it allowed for the employer to give notice of termination of the employment of an employee on the grounds of illness while the employee is on sick leave because he or she is unable to work

As a matter of principle an employee’s inability to work because of illness does not constitute an impediment to give notice of termination of the employment contract.  


Accordingly an employer may give notice of termination of an employment contract also while an employee is on sick-leave. It is only in exceptional cases that a notice of termination which was given „at the wrong time“ may result in that the notice of termination is invalid.


Thus a notice of termination of an employment can be considered to be invalid for the reason that it was served upon the employee on the day of a work accident while the employee was in hospital (Bremen State Labor Court 20 Oct. 1985 – 4 Sa 151/85).