Short-time work continues due to the Corona situation, and occasionally an employment relationship now has to be terminated despite the short-time work.
This is where the first problem arises, which many employers are not aware of. The short-time work allowance (Kurzarbeitergeld) paid by the Federal Employment Agency (Bundesagentur für Arbeit) is subject to certain requirements, including the condition that the employment relationship has not been terminated by notice or by a termination agreement.
As a result, the entitlement to short-time work allowance ceases to apply. This means that the Federal Employment Agency is no longer obliged to pay the short-time work allowance; instead, the employer is once again obliged to pay the salary.
Now the second problem arises, because it is questionable at this point in what amount the wage claim against the employer is revived. Must the employer now again pay the full wage as it was before the short-time work, or only the reduced wage in the amount of the short-time work allowance already received?
Unfortunately, a legally binding answer does not currently appear to be possible, as neither a statutory basis nor court decisions on this issue exist.
First, it must be checked whether a collective bargaining agreement (Tarifvertrag) applies and contains provisions on this topic. If this is the case, no further difficulties arise. Everything is then governed by the collective bargaining provision.
If this is not the case, a result can only be reached by way of interpretation.
In our view, the two components of the short-time work allowance must be considered here.
The short-time work allowance consists, on the one hand, of the employment-contract level between employer and employee and, on the other hand, of the social-insurance-law level, on which the Federal Employment Agency is interposed.
In an older decision, the BAG assumes that the lapse of the requirements for short-time work allowance vis-à-vis the Federal Employment Agency has no decisive effect on the employment-contract level.
This, however, presupposes that the short-time work was previously validly agreed between employer and employee.
This means that, in principle, the consequences of short-time work — i.e. reduced working hours and accordingly the payment of a reduced wage — remain in place. The employer therefore has to pay the wage in the amount of the short-time work allowance and not the full wage.
In our view, this result is also legally comprehensible, as otherwise the non-dismissed employee, who is still receiving short-time work allowance, would be significantly worse off than the dismissed employee, who is precisely no longer available.
However, we point out once again that this result is not currently binding and merely reflects our legal opinion.
We are of course happy to answer any questions you may have!
Frequently asked questions
Frequently asked questions
Does the entitlement to Kurzarbeitergeld (short-time work allowance) lapse if the employment relationship is terminated?
Yes. Kurzarbeitergeld from the Bundesagentur für Arbeit (Federal Employment Agency) is subject to the condition that the employment relationship has neither been terminated nor ended by a mutual termination agreement. If notice of termination is given, the entitlement to Kurzarbeitergeld lapses, and the employer must once again pay the wages itself.
What wage must the employer pay following a termination during short-time work?
There is currently no binding statutory rule or supreme court decision on this point. Under the prevailing interpretation and an older BAG ruling, validly agreed short-time work continues to apply, meaning the employer owes only the reduced wage in the amount of the previous short-time work allowance – not the full pre-short-time-work salary.
What role does a collective bargaining agreement play in dismissals during short-time work?
If an applicable collective bargaining agreement exists and contains provisions on wage payments upon dismissal during short-time work, those provisions take precedence. The amount of the wage claim is then determined by the collective agreement, without requiring further interpretation.
Why does the reduced wage entitlement remain in place even when short-time work allowance ceases?
Short-time work involves two levels: the employment contract level between employer and employee, and the social security level with the Bundesagentur für Arbeit (Federal Employment Agency). If only the social security level ceases to apply, the validly agreed short-time work remains effective at the contractual level. Otherwise, a dismissed employee would be in a better position than a colleague still employed under short-time work arrangements.
Is the interpretation regarding wage levels in cases of termination during short-time work legally binding?
No. There is currently neither a clear statutory basis nor recent court rulings specifically addressing this constellation. The interpretation that only the reduced wage is owed is a legal assessment and may be evaluated differently by a court in individual cases.