Senior employees – how are they placed in terms of labor law?

You dismiss colleagues, enjoy protection against dismissal yourself – and can still be fired. They are close to employers – and sit on the employee bench in supervisory boards. Senior employees: both players and pawns.

Senior employees - career ladder

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Senior employees and employers

More than any other group in industrial society, managerial employees are at risk of social declassification. This was recognized almost 50 years ago by the then President of the Federal Labor Court, Professor Dr. Gerhard Mueller. Little has changed in this regard to this day.

Outwardly, especially larger companies show themselves employee-friendly as never before. Home office, part-time work and company sports programs – hardly anything is too expensive for companies to compete for skilled workers and a place in the hit parade of the most popular employers.

But woe, the so hotly courted employees with leadership function have arrived in the company or even several years of meritorious established: then other sides are raised, quoted already in 2015 the "world" the Berlin specialist lawyer for labor law Christoph Abeln. Illegal transfers, deprivation of duties, managerial powers and demotions – all not uncommon.

One reason for the increasingly rude tone among managers: "The ruder, the better – that’s how you educate those who are allowed to stay," says the labor law expert.

Neither position of the employer nor that of an employee

Senior executives are close to the employer because of their position, function and duties; on the other hand, they sit on the employee bench of companies subject to the Co-Determination Act of 1976 in the form of a guaranteed seat.

But what is a leading employee? The decisive factors for determining whether an employee is a managerial employee are

  • the Dismissal Protection Act (KSchG) and
  • the Works Constitution Act (BetrVG).

Here’s how the Dismissal Protection Act defines managerial employees

According to § 14 para. 2 KSchG and the case law on this subject, senior executives are required to independent hiring or firing Entitled to a significant number of employees.

While the executive employee in this sense generally enjoys protection against dismissal. They can challenge a dismissal by bringing an action for protection against dismissal before the labor court. However, this is of little use to him in practice. In this case, the employer can file a so-called dissolution petition. The employer does not even have to justify this dissolution request. The court will then dissolve the employment relationship against payment of severance pay. This is usually based on the rule of thumb, half gross monthly salary per year of service with the company. The executive employee cannot prevent the termination of the employment relationship.

This is how the Works Constitution Act defines managerial employees

Senior executives are not covered by the provisions of the KSchG under the German Works Constitution Act § 5 para. 3 BetrVG, who, according to the employment contract and position in the company or in the business

  • is entitled to independently hire and terminate employees employed in the company or in the company department (§ 5 para. 3 no. 1 BetrVG),
  • General power of attorney or, in relation to the employer, has not insignificant procuration (§ 5 para. 3 No. 2 BetrVG),
  • regularly performs or significantly influences other tasks, essentially free of instructions, which are of importance for the existence and development of the company or a business and the performance of which requires special experience and knowledge (§ 5 para. 3 No. 3 BetrVG).

Works Constitution Act not applicable to managerial employees

With a few exceptions, the provisions of the Works Constitution Act do not apply to managerial employees in this sense. If there are still doubts as to whether an employee is a managerial employee after reviewing the aspects mentioned in the BetrVG, a further examination of the following criteria is carried out:

  • Assignment of the employee to senior executives in the last elections to employee representative bodies,
  • Belongs to a management level with predominantly senior employees,
  • Regular annual salary customary in the company for senior executives,
  • As a rule, salary three times as high as under Section 18 of the Fourth Book of the German Social Code (SGB IV): 109.620 euros p. a. old federal states, 97.020 Euro p. a. new federal states.

Senior executives are not covered by social plan

Non-applicability of the provisions of the Works Constitution Act can have serious consequences for managerial employees, in particular in the event of a change in operations, even existential consequences.

Employer and works council may expressly agree to grant any claims under a social compensation plan to executive employees as well.

If they do not agree on this, managers lose their jobs in the event of drastic measures such as z. B. a plant shutdown, they lose their jobs without financial compensation. Since they are not employees within the meaning of the Works Constitution Act, they also have no right to be included in a social compensation plan.

Works council does not represent their interests

Senior executives are also not covered by the Works Constitution Act in the area of individual personnel measures. The employer can transfer them without the consent of the works council.

In the event of a termination, only a notification of the employer to the works council is required. Formal hearing of works council pursuant to Sec. 102 BetrVG with notification of reasons for termination need not be held.

Recommendation of the editors

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