In its judgment of March 7, 2002 (2 AZR 93/01), the Federal Labor Court ruled that an extension of the probationary period by 4 months was permissible.
Until now, every boss who employs more than five workers had to conclusively test a newly hired employee within six months. After 6 months of employment, the protection against dismissal under the German Dismissal Protection Act comes into effect, so that the employee can only be dismissed if there is a legal reason for dismissal. After the protection against unfair dismissal has been triggered, it is almost impossible to terminate the contract due to poor performance, as it is often difficult to prove a lack of performance and in most cases there is no effective, relevant warning.
Some employers have already tried to circumvent this unfortunate situation by retrospectively limiting an originally open-ended contract of employment or by mutually agreeing an extension of the probationary period with the employee. All these attempts at circumvention failed due to the rulings of the Federal Labor Court, which viewed this as a way of getting around the statutory protection against unfair dismissal.
On March 7, 2002, the Federal Labor Court allowed the following exception to the previously ironclad principle:
An employee with an open-ended contract was unable to convince in the first 6 months of probation, so that the employer wanted to terminate the employment relationship. In a conversation with the employee, the latter gave reasons that promised successful induction within the next 4 months. The parties then agreed to terminate the employment relationship after four months. Furthermore, the employee was promised that he would be rehired if he met the requirements during these four months.
The Federal Labor Court views this case differently than all previous cases, since the employment relationship can be terminated without cause within the first six months and the amicable termination within the first six months is equivalent to such a termination. The extension of the notice period from two weeks to four months is also not objectionable, as the longest collectively agreed notice period would not be exceeded as a result. The employee should be given a further chance to prove himself in this way, and this is not objectionable. The Federal Labor Court explicitly leaves open the question of whether an extension of the notice period would be accepted if it is solely or predominantly in the interest of the employer or exceeds the longest collectively agreed notice period.
It is therefore strongly recommended not to extend the notice period beyond 4 months. Furthermore, it should be documented that the extension is intended to give the employee a further chance to prove himself or herself or to enable him or her to apply for a job while already in employment.
The decision of the Federal Labor Court is based on a termination agreement dated June 30, 1999. Due to the change in the law on January 1, 2002 (modernization of the law of obligations and other areas of law), well-known voices in the literature assume that termination agreements are now subject to the provisions of consumer contracts. This would give the employee a right of withdrawal that he could exercise for an unlimited period of time if the termination agreement did not contain a revocation instruction that met the legal requirements. After the completion of the sixth month of his employment relationship, the employee could declare the revocation of the termination agreement. He would then be in an employment relationship with protection against dismissal. The employer would then face the same problem as before.
To avoid this risk, the employment relationship should be terminated in writing within the first six months with a notice period of four months to the end of the month. The letter of termination should point out that the performance shown so far is insufficient and that the longer notice period is granted as a further chance to prove oneself. In this context, the employee may be offered the prospect of re-employment if they prove themselves.
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.