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LABOUR LAW

Termination without notice for presenting a forged vaccination certificate

The Labour Court of Cologne ruled that the termination of an employment relationship without notice was effective because the employee had presented a forged vaccination certificate to the employer.
The dismissed employee had worked in the field of workplace health promotion as a skilled worker for client companies, which included nursing homes.
The employer had informed the employees of his company that from November 2021 only fully vaccinated employees would be allowed to attend customer appointments on site.
The employee had declared to her supervisor that she was vaccinated and submitted the vaccination certificate to the human resources department in early December 21.
The employee had also disregarded the 2-G rule (vaccinated or recovered) during customer contacts in violation of instructions.
The employer found out that the vaccination certificate was forged and therefore terminated the employment relationship without notice.
The employee's action for protection against the termination was now dismissed. The extraordinary termination without notice was justified by an important reason.
On the one hand, the disregard of the 2G rule was not only contrary to instructions, but also constituted a considerable violation of the employee's obligation to protect the employer's interests. Secondly, the employee attempted to prove her untrue claim of full vaccination protection by submitting a false vaccination certificate, so that she forfeited the trust necessary for even a temporary continuation of the employment relationship.

(Judgement: Cologne Labour Court Judgement of 23.03.2022, Ref. 18 CA 6830/21)

Contestability of a termination agreement

The Federal Labour Court (Bundesarbeitsgericht, BAG) had to deal with the question of whether a termination agreement is voidable if the employer only offers the termination agreement to the employee if the employee signs it immediately. (Judgment of 24.2.2022)

Guiding principle of the BAG:

A termination agreement may have been concluded in breach of the requirement of fair negotiation. Whether this is the case is to be decided on the basis of the overall circumstances of the concrete negotiation situation in each individual case. The mere fact that the employer makes the conclusion of a termination agreement dependent on the immediate acceptance of its offer does not in itself constitute a breach of duty pursuant to section 311 (2) no. 1 in conjunction with section 241 (2) of the German Civil Code, even if this results in the employee neither having a period of reflection nor being able to seek requested legal advice.

This decision was based on the following facts (abridged):

An employee was accused by the employer of having acted in breach of her employment contract (faking an increased sales profit by changing/reducing the purchase prices). The employee was presented with a termination agreement and asked to sign it immediately. After a break of about 10 minutes, the employee signed the termination agreement.

The employee challenged this contract on the grounds of unlawful threat, claiming that she had been threatened with extraordinary dismissal and the filing of criminal charges if she did not sign the termination agreement. Her request to be given a longer period to think it over and to be able to seek legal advice had not been granted. The employer had thus violated the requirement of fair negotiation.

The BAG ruled against the employee on the grounds that the alleged threat was not unlawful. In the present case, a reasonable employer could seriously consider both the declaration of an extraordinary dismissal and the filing of criminal charges. The employee's freedom of decision was not violated by the fact that the employer only submitted the termination agreement for immediate acceptance in accordance with section 147 (1) sentence 1 of the German Civil Code and that the plaintiff therefore had to decide on acceptance immediately.

 

Evidential value of the certificate of incapacity for work

It is not always helpful to submit a certificate of incapacity for work as proof of an alleged incapacity for work. The Federal Labour Court had to decide on the following case (according to the press release of the BAG):

The plaintiff had been employed by the defendant as a commercial employee since the end of August 2018. On 8 February 2019, the plaintiff terminated the employment relationship with effect from 22 February 2019 and submitted to the defendant a certificate of incapacity for work dated 8 February 2019 and marked as an initial certificate. The defendant refused to continue to pay remuneration. The probative value of the certificate of incapacity to work was shaken because it covered exactly the remaining term of the employment relationship after the plaintiff's self-termination. The plaintiff, on the other hand, argued that she had been properly on sick leave and had been facing a burn-out. The lower courts upheld the claim for continued payment of wages for the period from 8 February to 22 February 2019.


The defendant's appeal, which was subsequently allowed by the senate, was successful. The plaintiff initially proved her alleged incapacity for work in the period in dispute by means of a certificate of incapacity for work. This is the evidence provided for by law. The employer can undermine its probative value if he presents and, if necessary, proves factual circumstances that give rise to serious doubts about the inability to work. If the employer succeeds in doing so, the employee must substantiate and prove that he or she was unable to work. The evidence can be provided in particular by questioning the attending physician after he has been released from the duty of confidentiality. According to these principles, the defendant has shaken the probative value of the certificate of incapacity for work. The coincidence between the notice of 8 February to 22 February 2019 and the incapacity for work certified on 8 February to 22 February 2019 gives rise to a serious doubt as to the certified incapacity for work. The plaintiff did not meet her burden of proof on the existence of an incapacity to work in a sufficiently concrete manner during the proceedings - even after the senate had pointed this out. The action was therefore to be dismissed.

Conclusion:

If an employee terminates his employment relationship and is certified as being incapable of working on the day of the termination, this can shake the probative value of the certificate of incapacity to work, in particular if the certified incapacity to work precisely covers the duration of the notice period.

Federal Labour Court, Judgment of 8 September 2021 - 5 AZR 149/21 -
Previous instance: Lower Saxony Regional Labour Court, Judgment of 13 October 2020 - 10 Sa 619/19

Inheritance tax

If a domestic heir acquires under Italian inheritance law, domestic inheritance tax arises at the time of the decedent's death and not only upon the heir's acceptance of the inheritance as required under Italian law (according to the German Federal Fiscal Court in its ruling of November 17, 2021).

Is a reduction of holiday during short-time work legal?

This question was disputed and was now heard today by the Federal Labour Court (ref.: 9 AZR 225/21). The lower courts (Düsseldorf Regional Labour Court of 12 March 2021, Ref.: 6 Sa 824/20) had already answered this question in the affirmative. Today, the Federal Labour Court (Bundesarbeitsgericht, BAG) followed this opinion.

The zero working days lost during short-time work can therefore be reduced proportionately. The reason given is that the duty to work is suspended during this time and therefore no holiday entitlement can arise.

According to the judgement handed down today, there is no pro rata holiday entitlement for periods without compulsory work.

The judges referred, among other things, to European law requirements and a decision of the European Court of Justice (ECJ 13.12.2018, RS. C-385/17), according to which employees are only entitled to holiday entitlement for periods during which they actually worked.

 

And another referral to the ECJ concerning leave

In order to clarify the question of whether and under which conditions the entitlement to paid annual leave of an employee who has suffered a full reduction in earning capacity in the course of the leave year can lapse 15 months after the end of the leave year or, as the case may be, at a later point in time, the Ninth Senate of the Federal Labour Court has submitted a reference for a preliminary ruling to the Court of Justice of the European Union.

Case:

The plaintiff, who is recognised as a severely disabled person, has been employed as a freight driver by the defendant since 2000. Since 1 December 2014, he has been receiving a pension for full reduction in earning capacity, which was most recently extended until August 2019. He claimed, inter alia, that he was still entitled to 34 working days of holiday from 2014 against the defendant. These claims had not lapsed because the defendant had not fulfilled its obligations to cooperate in granting and claiming leave (see ECJ, judgments in Cases C-619/16 and C-684/16 of 6.11.2018). In contrast, the defendant took the view that the plaintiff's leave not taken in 2014 expired at the end of 31 March 2016. If the employee - like the plaintiff in this case due to full incapacity for work - is unable to take his leave for a long time for health reasons, the forfeiture occurs 15 months after the end of the leave year irrespective of the fulfilment of the obligations to cooperate.
The lower courts dismissed the action. For the Ninth Senate, the decision as to whether the plaintiff's leave from 2014 expired on 31 March 2016 or, as the case may be, on a later date, depends on the interpretation of Union law, which is reserved for the Court of Justice of the European Union.
According to section 7(3) BUrlG, leave must be granted and taken in the current calendar year. A transfer of leave to the first three months of the following calendar year is only permissible if justified by urgent operational reasons or reasons relating to the employee. The Ninth Senate of the Federal Labour Court has interpreted this provision on several occasions in conformity with EU law.
Following the decision of the Court of Justice of the European Union of 6 November 2018 (- C-684/16 - [Max Planck Society for the Advancement of Science]) on Article 7 of Directive 2003/88/EC (Working Time Directive) as well as on Article 31(2) of the Charter of Fundamental Rights of the European Union, the Ninth Senate has recognised that, in principle, the entitlement to the statutory minimum leave can only be exercised pursuant to Section 7 para. 3 BUrlG expires at the end of the calendar year or of a permissible carry-over period only if the employer has previously specifically requested the employee to take his leave in due time in the leave year and has informed him that it may otherwise expire and the employee has nevertheless not taken the leave of his own free will (cf. in this regard Press Release of the Federal Labour Court No. 9/19 of 19 February 2019).
In the event that the employee was prevented from working in the holiday year for health reasons, the Ninth Senate also understands § 7.3 BUrlG in accordance with the decision of the Court of Justice of the European Union of 22 November 2011 (- C-214/10 - [KHS]) to the effect that statutory holiday entitlements expire 15 months after the end of the holiday year in the event of continued incapacity for work (cf. in this regard Press Release of the Federal Labour Court No. 56/12 of 7 August 2012).
For the decision of the legal dispute, it is now necessary for the Court of Justice of the European Union to clarify whether European Union law also permits the expiry of the holiday entitlement after the expiry of this 15-month period or, as the case may be, a longer period, if the employer has not fulfilled its obligations to cooperate in the holiday year, although the employee could have taken at least part of the holiday in the holiday year until the time of the occurrence of the full incapacity.

 

News on sick leave

The Federal Labour Court (Bundesarbeitsgericht - BAG) has made a landmark decision on the question of the probative value of the certificate of incapacity for work:

Facts (abridged):

The plaintiff had been employed by the defendant as a commercial employee since the end of August 2018. On 8 February 2019, the plaintiff terminated the employment relationship with effect from 22 February 2019 and submitted to the defendant a certificate of incapacity for work dated 8 February 2019 and marked as an initial certificate. The defendant refused to continue to pay remuneration. The probative value of the certificate of incapacity to work was shaken because it covered exactly the remaining term of the employment relationship after the plaintiff's self-termination. The plaintiff, on the other hand, argued that she had been properly on sick leave and had been facing a burn-out. The lower courts upheld the claim for continued payment of wages for the period from 8 February to 22 February 2019.

The defendant's appeal was successful. The plaintiff initially proved her alleged incapacity for work during the period in dispute by means of a certificate of incapacity for work. This is the evidence provided for by law. The employer can undermine its probative value if he presents and, if necessary, proves factual circumstances that give rise to serious doubts about the inability to work. If the employer succeeds in doing so, the employee must substantiate and prove that he or she was unable to work. The evidence can be provided in particular by questioning the attending physician after he has been released from the duty of confidentiality. According to these principles, the defendant has shaken the probative value of the certificate of incapacity for work. The coincidence between the notice of 8 February to 22 February 2019 and the incapacity for work certified on 8 February to 22 February 2019 gives rise to a serious doubt as to the certified incapacity for work. The plaintiff did not meet her burden of proof on the existence of an incapacity to work in a sufficiently concrete manner during the proceedings - even after the senate had pointed this out. The action was therefore to be dismissed.

Conclusion:

If an employee terminates his employment relationship and on the day of the termination he is certified as being incapable of working, this can undermine the probative value of the certificate of incapacity to work, in particular if the certified incapacity to work precisely covers the duration of the notice period.

Current situation

There are already judgements that focus on the question of whether the pandemic crisis is sufficient to justify a dismissal.

In order to justify a dismissal for operational reasons, the employer must explain in detail that and why a permanent decline in orders is to be expected. A mere reference to a pandemic-related decline in turnover is not sufficient, according to the Labour Court of Berlin (judgement of 05.11.2020, ref.: 38 Ca 4569/20).

Even in pandemic times, a dismissal for operational reasons must be properly - i.e. plausibly and comprehensibly - justified. In the case to be decided by the Labour Court, the employer had only made a general reference to the pandemic, which was not sufficient.

In the opinion of the Berlin Labour Court, if short-time work is carried out in the company, this speaks against a permanently reduced need for employment.

The Berlin Labour Court has already dealt with the pandemic-related dismissal several times, dismissing the claims all together. The mere reference to a decline in turnover is too unspecific and is also not sufficient to justify an operational reason (judgements of 25.08.2020, ref. 34 Ca 6664/20, 34 Ca 6667/20 and 34 Ca 6668/20).

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The Siegburg Labour Court has ruled that the employer can require its employees to wear mouth-nose protection at the workplace. A medical certificate for exemption from the mask requirement must contain a concrete justification.

In the opinion of the Siegburg Labour Court judgement of 16.12.2020, ref. 4 Ga 18/20), the health and infection protection of all employees and visitors outweighs the plaintiff's interest in employment without a face visor or mouth-nose protection.

The Labour Court also ruled that an exempting certificate must contain concrete and comprehensible information as to why a mask cannot be worn.

 

When do vacation days expire?

This major controversial question was supposed to be decided by the German Federal Labor Court (Bundesarbeitsgericht, BAG); however, we still have to wait for a decision: On 29.9.2020, the BAG suspended an appeal procedure on the existence of vacation compensation claims and submitted it to the European Court of Justice (ECJ) for a preliminary ruling. The decision of the ECJ will have a decisive impact on the question of whether employees can accumulate vacation entitlements for an unlimited period of time and still take vacation that was not taken several years ago or have it compensated when their employment relationship ends.

The fact that vacation entitlements do not expire if the employer did not comply with its obligation to cooperate was already decided in a landmark decision by the BAG in 2019.
The question was now whether in these cases the old vacation claims do not prescribe at all, thus accumulating until the employer starts the prescription by his obligation to cooperate (so the LAG Düsseldorf) or whether the regular prescription of 3 years applies here.

Employers can incur considerable additional costs if an unlimited accumulation of past vacation claims would be possible. The outcome at the European Court of Justice can therefore only be expected with excitement, but until then the employer should play it safe and inform the employees in time about their existing vacation and further request them to take the vacation in the calendar year (if necessary until March 31st of the following year).

LAW OF SUCCESSION

Gift

A gift made ten years ago is in principle no longer to be taken into account in the compulsory portion of an heir's estate.

However, with the 10-year period according to § 2325 III BGB, details are again important:

Does this also apply if a testator continues to live, for example, in the donated property? The answer to this question can be found in a recent ruling of the BGH (Supreme Court of Germany).

Decisive for the final execution of the gift is whether the testator formally relinquishes his legal status and does not remain in the "enjoyment" of the given object in economic terms either.

The testator must actually separate the given object from his or her assets. With the gift, he must have created a condition which means a real loss for him.

However, there must be a period of ten years between the gift and the death of the testator, so that a so-called right to a supplementary compulsory portion does not intervene after this death.

This right means that a person entitled to the compulsory portion can calculate his or her right to the compulsory portion as if the gift had not been made. If, for example, the estate consists of several houses, and one house was given away by way of a gift during the testator's lifetime, but less than 10 years before his or her death, the property is added to the estate in terms of value, even though it did not belong to the testator at all in the end.

In any case, when it comes to the 10-year period, it is always necessary to look closely at how far the testator really gave away the given-away property.

Even after the 10-year period has expired, those entitled to a compulsory portion can often still hope that a given item will be added to the estate and thus significantly increase their compulsory portion.

ECONOMIC, COMMERCIAL AND CORPORATE LAW

Pandemic and corporate law conversions

During the pandemic, we assisted in numerous merger and transformation processes. In the face of the crisis and numerous conversion projects, the legislator had extended to twelve months the eight-month deadline, according to which the business register court may only register the transaction if the balance sheet has been drawn up on a reference date no more than eight months prior to the filing. This extension now applies unchanged for the year 2021. Nevertheless, we advice to start conversion procedures early enough in order not to get caught in the pressure of the end of the year.

Insolvency applications must be filed again!

The suspension of the obligation to file for insolvency for over-indebted companies has ended since 1.5.2021 in Germany. In the event of over-indebtedness, an insolvency petition must be filed no later than six weeks after the occurrence of over-indebtedness. The Act to Mitigate the Consequences of the COVID 19 Pandemic provided for a suspension of the obligation to file for insolvency for companies affected by the pandemic until 30 September 2020. For over-indebted companies, the suspension was initially extended until 31.12.2020 and finally until 30.4.2021.

Affected companies should seek legal advice.

The new “Law on the further shortening of the residual debt discharge procedure”

The pandemic seems to be manageable and the economy is on the upswing again. Together with
you we want to look confidently into the future and master the challenges. The legislator also
remains active with the new “Law on the further shortening of the residual debt
discharge procedure”, as does Ministry of Justice with the plan to extend the suspension of
the obligation to file for insolvency until March 2021.

The government draft of a law to further shorten the residual debt discharge procedure
provides for a reduction of the procedure from currently six to three years in the future. The
fulfilment of special conditions such as the coverage of the costs of the proceedings or the
fulfilment of minimum satisfaction requirements is to be waived in future.

The three-year residual debt discharge procedure is to apply to all insolvency proceedings
applied for from October 1, 2020, in order to support those debtors who have become
insolvent as a result of the current situation in making a fresh start. The residual debt
discharge proceedings applied for between 17 December 2019 and 1 October 2020 are to be
gradually shortened.

The shortened procedure should in principle be open to all debtors, i.e. in particular, as
before, also to entrepreneurs.

In the event of renewed insolvency, the government draft proposes to extend the blocking
period for the renewed attainment of residual debt discharge from currently ten to eleven
years and the residual debt discharge procedure from currently three to five years.
Furthermore, debtors are to be more strongly encouraged to hand over acquired assets in
the so-called "good conduct phase". In addition, it should be possible in future to refuse
discharge of residual debt if inappropriate liabilities are created during the "good conduct
phase".

Finally, the government draft provides that bans on activities which have been issued solely
as a result of the debtor's insolvency will automatically cease to apply after granting residual debt discharge.

Obligation to file for insolvency is suspended for a longer period

An amendment to the COVID-19 Insolvency Suspension Act (COVInsAG) extends the suspension of the obligation to file for insolvency in cases of overindebtedness for the period from 1 October 2020 to 31 December 2020.

The Federal Ministry of Justice justifies this as follows: The pandemic has not yet been overcome and many companies are therefore at risk of insolvency. In order to continue to give companies the opportunity to restructure and finance themselves by making use of state aid offers and through out-of-court negotiations, the obligation to file for insolvency should continue to be suspended. The further suspension would only apply to companies that are over-indebted but not insolvent due to the pandemic.

As the Insolvency Code also offers opportunities to take advantage of a legal protection shield and to restructure the company, we are sceptical whether this is the right way forward.

FAMILY LAW

Separation

A separation raises various legal issues for the spouses. This also applies to the further procedure concerning the marital home.

If the flat is owned by the spouses, the spouse who remains in the flat must have a residential value added to his or her income for the rent-free use of the flat as a non-cash benefit.

In the year of separation, the so-called appropriate residential value is taken as a basis, which corresponds to the costs of a smaller rented flat corresponding to the marital standard of living. From this residential value, he can deduct any instalments for a property loan up to the limit of the negative residential value.

If the family home is a rented dwelling and both spouses are tenants, it depends on whether the spouse's remaining in the dwelling represents a housing situation chosen by him or her.

This is usually the case if the spouses agreed on the departure of one of them and the whereabouts of the other. In this case, it is justified that the remaining spouse is responsible for the rent alone in the internal relationship - at least after expiry of the period of notice. This means that he or she cannot claim half of the rent as a reduction in income.

The legal situation is different if the housing situation is imposed. In this case, at least for the duration of the notice period, the spouses' proportionate liability for the rent obligations remains.

If the spouse remaining in the flat owes the spouse who has moved out separation support, he or she can usually deduct half of the rent payments for the former married flat from his or her income. The maintenance claim of the other spouse is reduced accordingly. Only if the spouse remains in the flat even after the end of the notice period can it be assumed that he or she has chosen a chosen housing situation and is therefore solely liable.

 

Access rights and pandemic

Even in times of the pandemic, the arrangements made between the parents or decided by the court regarding the contact with the child apply as before.

Recent decisions by the Higher Regional Court of Brandenburg do not indicate requirements regarding certain masks as a protective measure against infection vis-à-vis the parents.

As a rule, there is no entitlement to compliance with the distance rules during contact. It should be self-evident that the parents comply with the applicable official measures when organising contact in order to protect themselves, the children and third parties from infection.

 

GENERAL CIVIL LAW

Important change in German law of obligations for 2022!

After 20 years, the German Civil Code is subject to profound changes in the General Law of Obligations, especially in the Law of Sales.

Fines

The Act on the Implementation of the so-called European Modernisation Directive or Omnibus Directive regulates general information obligations for online traders with effect from 28 May 2022. In order to enforce consumer protection, fine provisions are introduced for a culpable violation of consumer interests. This concerns, for example, the use of general terms and conditions clauses that are invalid according to the law, the non-fulfilment of information obligations or the non-fulfilment of certain obligations of the trader after an effective revocation of the contractual declaration by the consumer. 

Paying with data

As early as the beginning of 2022, the law implementing the European Digital Content Directive extends consumer-protective regulations to consumer contracts (B2C) in which the consumer does not pay a fee in return but provides personal data or undertakes to do so, unless this data is used exclusively for the performance of the contract.

This takes into account justified demands to attach a higher value to consumers' data.

The "Digital Products Contract”

The law implementing the European Digital Content Directive covers so called "contracts for digital products".

 These products are

  1. digital content, e.g. software (computer programs, apps), audio files and video files,
  2. digital services, social media services (e.g. Instagram, TicToc, Facebook etc.), messenger services, streaming services (e.g. Spotify), cloud storage, cloud computing services, sales, booking, mediation or rating portals.

It remains to be seen whether an independent contract type "digital products" will develop in practice or whether the regulations will be based on other contract types of the special law of obligations of the BGB.  Such a contract type is only conceivable for consumer contracts (B2C), because the legislator has created a regulation for contracts on digital products in the B2B area only for recourse issues.

Contract for goods with digital elements

The above-mentioned contracts on digital products are to be distinguished from sales contracts on "goods with digital elements". The implementation of the European Sale of Goods Directive creates changes in the sale of consumer goods (B2C). Goods with digital elements are movable goods that contain digital products. This includes electronic devices, especially so-called "smart" devices, such as smartphones, navigation devices, lawn robots or certain refrigerators.

Besides, the so called "package contract" is regulated, if a consumer purchases e.g. both a Playstation and various digital games, and the "other contract for goods with digital elements".

Update and upgrade obligation

The new law for consumers provides for an update and upgrade obligation of the trader. If this obligation is not fulfilled, a product defect is said to exist, also in the case of sales contracts for goods with digital elements.

In practice, especially security updates are of great importance for the buyer. The obligation to update exists either for the agreed period or for the period in which the consumer can expect an update according to the type and purpose of the digital product.

Right of amendment of the trader

The trader has a limited right of modification in contracts for the permanent provision of a digital product.

There must be a valid reason for this, in particular necessary adaptations of the digital product to a new technical environment, increased user numbers or operational reasons. The consumer must not incur any costs as a result of the change and must be informed about it in a clear, comprehensible and timely manner.

All new regulations should be urgently taken into account by businesses that contract with consumers in the above-mentioned areas in their contracts and conduct. Compliance is being expanded to include further important elements.

The lawyers Dr. Einhaus & Partner are prepared for you.

INTERNATIONAL AND EUROPEAN LAW

(INTERNATIONAL) TAX LAW

Inheritance tax

If a domestic heir acquires under Italian inheritance law, domestic inheritance tax arises at the time of the decedent's death and not only upon the heir's acceptance of the inheritance as required under Italian law (according to the German Federal Fiscal Court in its ruling of November 17, 2021).

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