Unemployment benefit after dismissal?

It is good for an employee if the labour courts have upheld his claim against dismissal: He keeps his job and the employer has to pay him back wages. However, the employee who has been unfairly dismissed must take into account what he or she has received in the meantime in the form of social security benefits, or what he or she has earned elsewhere – or at least what he or she could have earned. Such a managerial employee was not able to convince the Federal Labour Court today that managers like him generally do not have to register with the employment office.

 

Unfair dismissal

The case in Erfurt was brought by a managerial employee: the armaments procurement expert had been transferred against his will, refused to work there and was subsequently dismissed. He won the case in the first instance. Now he wants almost 175,000 euros in back pay. But the employer resisted because the man had not registered as a jobseeker with the employment agency. The Celle Labour Court, on the other hand, found the defendant in default of acceptance. This was because the employee had not been obliged to contact the agency. In any case, no bad faith could be assumed, as positions like his were usually not filled through employment agencies, but through headhunters. And just because he “trades in used cars in a way that qualifies as a hobby under tax law”, he could not be accused of “permanently and primarily mutating into a used car salesman”.

“Not only through headhunters

The Regional Labour Court of Lower Saxony took a completely different view: because the manager had deliberately failed to register as unemployed and had thus breached his social security obligation (Section 38 (1) of the Third Book of the Social Code (SGB III)), he had completely lost his right to compensation for failure to accept a job. After all, an employee could be expected under labour law to do what the Social Code required him to do anyway. In the view of the judges in Hanover, the fact that there had previously been an ineffective transfer and then a dismissal made no difference – this was precisely what § 11 of the Unfair Dismissals Act required. According to this provision, the person concerned must also be deprived of “what he could have earned if he had not maliciously refused to accept a job that was reasonable for him”. And the fact that high-ranking management positions are exclusively filled by external service providers is a “shot in the dark”. The judges also disagreed with the plaintiff’s argument that he would have suffered damage to his image if he had gone to the authorities: after all, he would not have had to mention this in his CV. At most, he would have had to explain longer gaps in his CV – and these could be avoided by registering as unemployed and the ensuing placement activities rather than by not doing so.

No sufficient arguments

The BAG has now overturned this decision and referred the case back for a new hearing. As the NJW has heard from the parties to the proceedings, the LAG’s assessment of the overall circumstances was apparently not sufficient. The mere refusal to report to the authorities was not enough for the judges in Erfurt to deny the man full back pay, as their colleagues in Hanover had done. The importance of the case had already been pointed out by lawyer Jan Kern in a review of the lower court’s decision: As far as can be seen, this is the first time that a higher court has consistently continued the case law of the Fifth BAG Senate (ArbRAktuell 2020, 447) on the relationship between the obligation to report under § 38 of the Third Book of the Social Code (Sozialgesetzbuch III – SGB III) and malicious failure to earn elsewhere, he wrote (ArbRAktuell 2022, 128). In practice, claims for failure to take up employment would only arise if the dismissed employee had registered as a jobseeker. However, an ex-employee would usually not succeed in proving that the employment agency would not have offered him any or only lower-paid jobs if he had contacted it. Kern’s advice: Employers should demand information about registration as a jobseeker in the event of a failure to take up a job. Employees, on the other hand, are strongly advised to comply with this obligation under social law, as otherwise there is usually no entitlement to a salary in the event of failure to accept a job (oral proceedings of 12 October 2012 – 5 AZR 30/22).