Mass layoffs – who counts?

Managing directors and interns are considered employees according to § 17 of the German Protection Against Dismissal Act (KSchG)
(European Court of Justice, decision dated July 9, 2015 – C 229/14)

In the case pending before the Labor Court Verden, the parties disagree about operationally-related terminations. Including the plaintiff, the employer employed 18 workers, a managing director and an intern. Due to economic losses the company terminated all positions of employment for compelling operational reasons and also closed all operations. The employer did not submit a mass layoff notification to the German Federal Employment Agency (§ 17 para. 1 no. 1 of the Protection Against Dismissal Act – KSchG) – duty of disclosure in companies with more than twenty employees. In the court proceedings of protection against dismissal, the plaintiff claimed the employer was obliged to announce mass layoffs and, since the employer indisputably did not comply with that obligation, the termination was ineffective. The plaintiff claimed that the employer’s managing director and a hired intern must also be taken into account to determine the threshold value. Labor Court Verden forwarded the case to the European Court of Justice (ECJ, § 267 AEUV) with the question what types of workers are employees in the legal sense of § 17 para. 1, no. 1 of the KSch. Read on…