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The German Federal Labor Court has now ruled that employers may not simply stop paying salaries if employees released from work do not look for a new job or take up new employment within their notice period.
Do employees have to actively look for a new job during their notice period? No, decided the German Federal Labor Court (BAG) in its judgment of February 12, 2025 (5 AZR 127/24). In the case in question, the plaintiff was employed as a senior consultant. He received ordinary notice of termination and was irrevocably released from work during the three-month notice period.
His employer sent him 43 job offers, but the dismissed employee did not apply for seven of them until the end of the notice period. Thereupon, the employer stopped paying the salary for the last month and invoked Art. 615 sentence 2 of the German Civil Code (BGB), according to which remuneration can be waived if an employee maliciously refrains from earning money from other sources. Ultimately, the employee had failed to apply promptly for the job offers sent to him during his leave of absence.
The BAG disagreed with this reasoning. As the employer had unilaterally released the employee from his work, the former was in default of acceptance and was still obliged to pay salary for the entire duration of the notice period (Art. 615 sentence 1 in conjunction with Art. 611a (2) BGB). The judges clarified that the employee was not obliged to start and earn money from a new job before the end of the notice period in order to reduce the former employer’s financial burden. The employer had not demonstrated that it would have been unreasonable to expect it to fulfill the plaintiff’s employment claim, which also existed during the notice period. In March 2023, the BAG had already ruled on the alleged malicious failure to earn money from other sources in another case (decision of March 29, 2023, case no. 5 AZR 255/22). Such case concerned the period after the end of the regular employment relationship. However, the current case is significantly different, as the employer stopped paying remuneration before the official end of the employment relationship.
Employers should differentiate between two periods when it comes to the question of compensation for default of acceptance:
With the current decision, the BAG emphasized the high requirements for the employer’s burden of presentation and proof when demonstrating the (un)reasonableness of employment in order to defend against claims for compensation for default of acceptance in the case of leaves of absence. Employers should continue to examine leaves of absence carefully and document their reasons and circumstances comprehensively.
With our labor law update, we regularly inform you about current developments in case law and legislation:
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Kerstin Weckert
Partner
Attorney-at-Law (Rechtsanwältin), Specialist Lawyer in Labor Law, Licencié en droit, Mag. iur.
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