On January 15, 2025, the Regional Labor Court (Landesarbeitsgericht, LAG) of Mecklenburg-Vorpommern issued an important ruling on the legality of redundancy (Az. 3 SLa 156/24). The central question was whether the elimination of a major contract could justify the dismissal of a long-serving employee, particularly in light of the legal requirements under § 1 (2) and (3) of the German Dismissal Protection Act (Kündigungsschutzgesetz, KSchG). The court affirmed this and ruled that the dismissal was lawful. This decision is noteworthy not only for its detailed analysis of economic reasons for dismissal but also for clarifying the limits of entrepreneurial freedom and the requirements for social selection.
The Facts
The plaintiff had been employed as a dispatcher since January 2021 at a company providing taxi and car rental services, earning an average gross monthly salary of 2,400 euros. Until the end of October 2023, the employer handled almost all call bus services in the Ludwigslust-Parchim district under an exclusive contract, which generated a significant portion of the revenue. Due to the extraordinary termination of this contract by Verkehrsgesellschaft L.-P. mbH, the volume of orders dropped dramatically. Instead of approximately 6,750 trips per month, only about 750 trips had to be scheduled from November 2023 onwards.
The employer subsequently decided to largely discontinue the dispatcher duties and redistribute the remaining tasks among other employees. There were no available positions for the plaintiff, as she neither held a driving license nor was qualified to take on a driver’s role. On April 15, 2024, the plaintiff received a redundancy notice effective May 31, 2024, against which she unsuccessfully appealed.
Legal Analysis
The central legal question was whether the dismissal was justified by “urgent operational requirements” within the meaning of § 1 (2) KSchG. Such requirements exist if the employer’s decision leading to the dismissal is not clearly unreasonable or arbitrary and is based on understandable business reasons.
1. Economic Reasons Due to the Termination of the Major Contract
The court found that the drastic decline in workload due to the termination of the major contract constituted an urgent operational reason. The employer had convincingly demonstrated that the number of dispatcher tasks had dropped from 6,750 to only 750 trips per month. In view of this significant reduction, the decision to eliminate the dispatcher positions was economically justified. The detailed presentation of the revenue decline and the subsequent organizational measures was particularly convincing.
The LAG emphasized that the employer’s decision to no longer employ dispatchers and to distribute the remaining tasks among other employees was not evidently unreasonable or arbitrary. The transfer of tasks to the administrative employee R. and the assumption of certain tasks by the managing director himself were understandable organizational measures.
2. No Obligation to Issue a Change Notice
The plaintiff argued that the employer should have issued a change notice at least to offer her an alternative position. The court rejected this argument, stating that the measures taken by the employer clearly showed that there were no suitable vacant positions available for the plaintiff.
The decision clarifies that a change notice is only mandatory if there is a vacant position that matches the employee’s qualifications. Since the plaintiff had neither the qualifications nor a driving license for the remaining tasks, the employer was not required to issue a change notice. The redistribution of tasks among the remaining employees was both organizationally and economically reasonable.
3. Social Selection: No Legal Error
Another point of contention raised by the plaintiff was the alleged error in the social selection process under § 1 (3) KSchG. She argued that other employees were less socially protected. The LAG dismissed this argument.
The court stressed that the comparability of employees is a key requirement for the social selection process. However, the employees named by the plaintiff, particularly the administrative employee R., were not comparable due to their different duties and qualifications. The decision highlighted that social selection must not be based solely on social criteria such as age, maintenance obligations, and length of service, but that the comparability of duties is also crucial.
Moreover, the court found that the business decision not to employ dispatchers anymore was justified, and therefore, the social selection was limited to the remaining positions for which the plaintiff was not eligible. This aligns with the established case law of the Federal Labor Court (Bundesarbeitsgericht), which requires that social selection be conducted only within comparable groups of employees.
Implications of the Decision for Practice
The decision of the LAG Mecklenburg-Vorpommern has far-reaching consequences for employers and employees. It reinforces entrepreneurial freedom by emphasizing that employers can freely decide which tasks they no longer need in the future, as long as these decisions are based on understandable economic reasons. At the same time, it clarifies the requirements for the burden of proof on employers in cases of redundancy.
In the future, employers must provide particularly careful and detailed proof of why the employment opportunity for the affected employees has ceased. It is not only the plausibility of the economic reasons that matters but also the concrete implementation of the business decision. While social selection remains an important tool for protecting employees, it must not prevent economically sensible measures.
The essence is: A redundancy is lawful if it is understandably based on a business decision and no comparable employees are favored without urgent operational reasons.
Conclusion
The decision of the LAG Mecklenburg-Vorpommern confirms the importance of entrepreneurial freedom in cases of redundancy and clarifies the requirements for the employer’s burden of proof. It makes clear that the judicial review of redundancies must not extend to a substantive evaluation of business decisions but must focus solely on the assessment of their plausibility and reasonableness. For employers, this means a certain level of legal certainty, provided they can substantiate their decisions comprehensively and in detail.
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