European Restructuring Monitor (ERM)
Eurofound's ERM database on restructuring-related legal regulations provides information on regulations in the Member States of the European Union and Norway which are explicitly or implicitly linked to anticipating and managing change.
Article 17 - Obligation to report
The definition of collective dismissals is provided in the Employment Protection Act in the article stipulating that the employer has to announce the dismissal to the public authorities (federal employment agency) and to the company's works council.
To fall within the scope of national legislation, an employer (company or establishment) with more than 20 workers (includes trainees in vocational training; excludes contracted home workers and the self-employed) must plan to make redundant more than 5 people within 30 days. Certain employees are not considered as members of staff when calculating the size of the workforce, such as senior executives or managers, heads of businesses and CEOs.
The minimum number of redundancies is 6 in establishments with 21 to 59 employees, 10% of employees (or 26 employees) in companies with 60 to 499 employees, and 30 if there are 500 or more employees. By definition, the act applies to any economically independent or dependent establishment. At least, the employer has to inform the works council and the federal employment agency about the reasons for the planned layoffs, the number and professional groups of employees to be laid off, the number and professional groups of employees usually employed, the period in which the layoffs are to take place, the criteria envisaged for the selection of employees to be dismissed, the criteria provided for calculating any severance payments. The law foresees the opportunity for employers and the works council to advise on ways to avoid or limit layoffs and mitigate their consequences.
The law does not specify eligible reasons for redundancies and operational difficulties are considered as a sufficient condition to justify collective redundancies, provided the works council has been informed and consulted.
It has proven successful in avoiding collective dismissals to have the economic reasons for planned dismissals audited by experts. In turn, the results of this are in many cases the basis for economically grounded suggestions to avoid dismissals. Workers in companies with works councils are in better position compared to those without one.
Eurofound (2015), Germany: Definition of collective dismissal, Restructuring legislation database, Dublin, https://apps.eurofound.europa.eu/legislationdb/definition-of-collective-dismissal/germany
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