Dozens of employees are laid off in a company. Among them is a woman who will retire within the next two years. In the opinion of the insolvency administrator, this justifies putting the employee on the selection list for dismissals. She fights back and goes to the highest German labor court.
Employees whose retirement age is not far away can face bad luck if they are made redundant as a result of company bankruptcies. The Federal Labor Court in Erfurt ruled (6 AZR 31/22) that the social selection should also take into account the proximity to retirement in addition to other criteria. “When weighting age, it can be taken into account at the expense of the employee that he is already receiving an (early) pension without deduction due to age,” explained the highest German labor judge in a case from North Rhine-Westphalia.
This also applies “if the employee is close to retirement because he can receive such a deduction-free pension or the standard old-age pension at the latest within two years after the intended end of the employment relationship,” the judges explained. Only an old-age pension for severely disabled people should not be taken into account.
The dispute concerned mass redundancies at a steel company in North Rhine-Westphalia. Due to insolvency, operations were shut down in 2020 and then shut down at the end of May 2021. Initially, 61 of the 396 employees were laid off. According to the law, social criteria must be taken into account when making such a selection. If there is a works council, it makes the choice with the employer.
The plaintiff’s name was also on the shortlist. With her lawsuit, she referred to her age of 63 at the time. A colleague who was not terminated was much younger and had not been employed in the company for nearly as long. The insolvency administrator nevertheless considered the selection to be justified. Because the plaintiff was the only one who had the opportunity to draw a pension without deductions for long-term insured persons from December 2020.
In the first two court instances, the woman was still successful with her action for protection against dismissal. The federal judges declared the selection criterion of age to be ambivalent. The need for social protection increases with age due to poorer job opportunities. However, it will drop again if employees can have a replacement income in the form of a pension without deductions within two years of the end of their employment, they explained. In the case of a social selection, the parties to the company would therefore have some leeway.
