The most important things at a glance
- A notice of change aims to continue the employment relationship under altered working conditions.
- A notice of change is equivalent to a „normal“ notice of termination, so legal requirements for effectiveness must be observed.
- If an amendment to the contract is issued, there are different reaction options, depending on the goal.
Note: The term „employee“ below includes all genders (m/f/d) and is used for improved readability..
What is a modification termination?
An amendment termination does not primarily aim to dissolve the employment relationship. Rather, the continuation of the employment relationship under changed—usually worse—conditions is the main focus.
Specifically, the employer wants to eliminate individual parts of the employment contract through a modification termination. Examples include changes to working hours, place of work, or duties, and consequently, pay. The employer can also use a modification termination to unilaterally eliminate the obligation to pay Christmas bonuses or other gratuities, provided the legal requirements for a modification termination are met. A modification termination becomes necessary when the changes desired by the employer can no longer be achieved through their managerial authority according to § 106 of the German Trade Regulation Act (GewO). What falls within their managerial authority is determined by the employment contract, meaning to which duties has the employee contractually committed?
Example:
The employment contract contains the clause:
„...will be hired as an accountant.“
A transfer as an administrator to sales is not possible within the scope of the employer's right of direction, as a mandatory activity only arises in the accounting department. In this case, a termination with an offer of new employment terms is required to „transfer“ the employee to sales.
The clause
„[Name] is appointed as an administrative assistant in accounting and may also be entrusted with other comparable tasks,“ authorizing the employee to be transferred to sales as an administrative assistant within the scope of the employer's right of direction. The transfer must be „exercised reasonably, i.e., it must not be arbitrary.".
What exactly is a notice of termination with modification?
A termination with an offer to change employment terms is understood as the employer terminating the current employment relationship. Simultaneously, the employee is offered a new proposal to continue the employment relationship under modified conditions.
A notice of termination with proposed changes therefore comprises two elements. Firstly, a termination notice and, secondly, an offer to amend. Both of these elements must be evident from the content of the termination letter. Since every termination is subject to the written form requirement, this naturally also applies to a notice of termination with proposed changes.
Reasons for a termination by the employee
In labor law, dismissals primarily occur for 3 reasons, namely due to behavioral, – personal, or operational Founding.
Termination notices due to behavioral reasons are rather rare, as these reasons allow for immediate termination. In the case of a change of employment conditions, the employer must prove that the employee has breached their contractual obligations arising from the
Even reasons related to the individual justify a complete dissolution of the employment relationship, meaning that a termination and offer of new terms of employment also represents an exception here. However, if the employer wishes to issue a termination and offer of new terms of employment, they must prove that the employment relationship can only be continued under changed conditions due to reasons related to the employee.
In the case of a termination for operational reasons, the employer must demonstrate that urgent operational reasons necessitate modifying the employment relationship through a notice of modification.
Important: Even if a notice of amendment is socially justified, it can still be ineffective if it goes beyond the actual objective and contains unnecessary changes. It follows that the employer may only make changes that are necessary with regard to the reason for termination.
When is a termination with an offer of new terms effective?
In relation to termination of employment, the notice of change in employment conditions represents a milder alternative. For reasons of proportionality, the employer must therefore generally examine whether continued employment of the employee under changed conditions is not possible before issuing a termination notice.
Since the termination for reasons of change is treated the same as a „normal“ termination, the works council must also be involved here before notice is given.
Furthermore, the termination must be sufficiently concrete. This means the employee must be able to discern from the offer what conditions will apply to him in the future and from when the changed conditions will take effect. If the amendment termination is not concrete enough, it is invalid for that reason alone, and a social justification is therefore no longer relevant. If several alternative amendment terminations are issued, it must be clear in what relation they stand to each other and from when which offer is to apply.
In addition, the employer must comply with certain deadlines. This applies in particular to notice periods.
Finally, the termination of employment with a change in terms must be socially justified. The respective requirements depend on the reasons for which the employee was terminated.
It should also be noted that there are groups of persons who can only be dismissed under extraordinary circumstances. This applies, for example, to works council members, pregnant women, or severely disabled persons (§ 15 KSchG, § 9 MUSchG, SGB IX). Furthermore, this can also be stipulated in a collective agreement. Dismissal is only possible in these cases if there is an important reason. In such cases, the employer must also observe special prerequisites: for instance, when dismissing a severely disabled person, the consent of the main welfare office must be obtained (after 6 months of employment), and when dismissing a pregnant employee, the consent of the upper state supervisory authority is required).
Received a notice of change to my contract – what can I do?
The following will show you how an objection to a notice of termination might turn out. However, please note that a lawsuit challenging the termination is only possible if the personal and objective scope of the Protection Against Dismissal Act applies. At this point, we would like to refer you to our article on Unfair dismissal lawsuit refer.
Unconditional acceptance
It is up to the employee, based on the principle of freedom of contract, to accept the amendment offer. The employment relationship is then modified accordingly and continued under the changed conditions. In doing so, the employer may set a deadline for acceptance, which must be adhered to. In any case, the deadline of § 2 KSchG of 3 weeks must be observed. This deadline specifies the period within which a declaration and a lawsuit must be filed if the employee does not agree to the change in their working conditions.
Rejection
If the employee does not respond to the offer of amendment and does not file a lawsuit with the labor court within the deadline, the employment relationship will be terminated in its entirety.
3. Provisional assumption
It may be tactically advisable to accept the amended terms subject to a reservation. The reservation is intended to allow a court to determine whether the changes to the terms of employment are socially justified or not. However, it is important to note that the reservation must be declared within three weeks of receiving the notice of change. In this case, it is necessary to comply with formal requirements. For evidentiary purposes, it is advisable to document everything in writing.
In addition to declaring acceptance under reservation, the employee must file a lawsuit for protection against dismissal with the labor court within 3 weeks of receiving the notice of change. The court will then examine the social justification for the modifications to the employment contract desired by the employer.
The court will only examine whether the amended termination was socially justified or not.
– If it determines that the termination was not justified, the employment relationship shall continue under the old terms.
– If it determines that the termination was justified, the employment relationship will continue under the new terms.
4. No Acceptance Subject to Reservation
If the employee does not agree with the amended termination, they have the option not to accept it under reservation, but to still file a lawsuit against the amended termination in due time.
The court only examines whether the amended termination is socially justified or not.
– If it determines that the termination was not justified, the employment relationship continues under the old terms.
– If it determines that the termination was justified, the employment relationship is terminated.
5. Unconditional Acceptance
If the employee agrees to the amended termination agreement and is willing to work under the new conditions, they should accept by the deadline specified by the employer. In any case, acceptance must occur within three weeks of receiving the amended termination notice if the employee wishes to work under the new conditions.
Conclusion
Behind a termination for operational reasons, a variety of issues that are not immediately easy to understand are often hidden. Since most employees are not familiar with this type of termination, it is advisable to engage with this topic in order to make the right decision in case of doubt.
We are happy to assist you with this. If you are affected by a notice of amendment, prompt action is required to be able to initiate appropriate legal steps in a timely manner. Therefore, do not hesitate to contact us. Our firm consists of specialized lawyers, who will competently assist you in all matters of labor law and provide you with targeted and solution-oriented legal advice.