The employer's obligation to provide compensation if the employee is not informed about the obligation to register as a jobseeker immediately.

from
Karin Thillmann
Lawyer
Specialist in labor law
Specialist in traffic law

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The termination of the employment relationship by the employer and the employee's obligation to register as a jobseeker are inextricably linked in the working world. If the employment agency is keen to be informed at an early stage of the employee's impending unemployment, the employee is obliged to notify the relevant public authorities of his or her resignation in good time. According to § 37 b S.1 SGB III, persons whose compulsory insurance relationship ends are obliged to personally register with the employment agency as job seekers immediately after becoming aware of the termination date. According to sentence 2 of the regulation, however, in the case of a fixed-term employment relationship, the notification must be made no earlier than three months before its termination. If the unemployed person has not registered as a jobseeker immediately, contrary to § 37 SGB III, the unemployment benefit to which the unemployed person is entitled as a result of the claim that arose after the breach of duty is reduced in accordance with § 140 SGB III. The reduction amounts to

EUR 7.00 for an assessment wage of up to EUR 400.00
for an assessment wage of up to EUR 700.00, EUR 35.00 and
for an assessment wage of over EUR 700.00, EUR 50.00

for each day of delayed notification.

The reduction is applied by deducting the reduction amount resulting from sentences 2 and 3 from half of the unemployment benefit. If the employment agency has announced a reduction in the benefit amount, a large number of employees are of the opinion that they can now hold their former employer liable if the latter has failed to provide information on how to report immediately as a jobseeker. Numerous state labor courts have denied such an obligation on the part of employers to pay damages. In a recent judgment dated September 29, 2005 (case reference: 8 AZR 49/05), the Federal Labor Court confirmed the correctness of this higher court ruling.

The Federal Labor Court had to rule on a case in which the plaintiff (employee) had been employed as a temporary agency worker on the basis of several fixed-term employment contracts. In the written employment contracts, the employer did not advise the employee that he had to register as a job seeker with the Federal Employment Agency immediately upon the end of his employment. The employee, who had been unemployed for several months after the expiration of the last fixed-term employment contract with the employer, registered as a job seeker too late. The employment agency thereupon reduced his entitlement to unemployment benefit. The employee then took the view that, because the employer failed to notify him that he should register as a jobseeker without delay, the employer must now pay him compensation in the amount of the difference.

The Federal Labor Court has denied this in the aforementioned judgment. Even though he employer according to § 2 para. 2 sentence 2 no. 3 of the German Social Security Code (SGB III), the employer is required to inform employees in advance, before the termination of the employment relationship, of their obligation to report immediately. However, according to the Federal Labor Court, the employer's failure to provide such information does not result in an obligation to pay damages. The employer's duty to provide information is intended solely to improve the interaction between the employer, the employee and the employment agencies. However, the duty to provide information does not serve to protect the employee's assets. If the employee fails to report as a jobseeker immediately, this is always at his own expense. The employer cannot be held responsible for any failure to report to the employment agency immediately. The employee alone has to bear the negative consequences for him.

The statements represent initial information that was current for the law applicable in Germany at the time of initial publication. The legal situation may have changed since then. Furthermore, the information provided cannot replace individual advice on a specific matter. Please contact us for this purpose.