TERMINATION FOR PERSONAL-RELATED REASONS DURING THE RETENTION PERIOD AFTER COVID 19 SHORT-TIME WORK

Overview

According to the social partner agreement (“Sozialpartnervereinbarung”), which must be concluded to apply for COVID-19 short-time work, the employer may in principle only give notice of termination after the expiry of the one-month retention period (“Behaltefrist”) after the end of the short-time work. An exception is a case of termination for personal-related reasons. Thereby, the employer has to maintain the number of employees status (“Beschäftigtenstand”) by hiring a new employee. In its decision rendered on 12 May 2021, 12 Ra 33/21s, the Higher Regional Court Linz as the Court of Appeal assessed under which circumstances such a personal-related reason for termination exists.

Facts

The plaintiff was employed by the defendant employer in a car wash business. All employees of the company were on short-time work from 2 March 2020 to 13 April 2020. According to the social partner agreement, notices of termination may in principle only be given after the expiry of the one-month retention period. However, terminations by the employer for personal-related reasons – combined with an obligation to maintain the number of employees – are admissible.

The employment relationship of the plaintiff ended by termination by the employer during the one-month retention period. Afterwards, the position was filled by a new employee. The reason for the termination was that the plaintiff behaved in an unfriendly manner towards a customer who complained that her license plate holder had been damaged by the car wash. Contrary to an explicit internal instruction to replace damaged license plate holder for free, the plaintiff requested a tip for the replacement. Specifically, the employee addressed the customer, "That will cost you at least two coffees." After the customer's friend asked where coffee could be bought, the plaintiff gave no answer apart from shrugging his shoulders. He demonstratively stood with the customers until they handed him EUR 5.

In his complaint, the plaintiff claimed for compensation for termination because the termination would not be permissible due to the social partner agreement. The Court of First Instance objected the action because the social partner agreement did not provide any individual protection against termination for the individual employee. Therefore, the employee would not be entitled to compensation for termination. The Court of Appeal upheld the objection of the action and ruled that the termination was justified due to personal-related reasons.

Personal-related reasons for termination

In one of its earlier decisions, the Court of Appeal already commented on the question of whether the social partner agreement establishes individual protection against termination. In line with most doctrinal opinions published up to the time of the decision, the individual protection against termination was denied. The Court of Appeal therefore did not deal with this issue in more detail, especially since the question of individual protection against termination was not relevant to the decision in the case at hand anyway. In the case of the plaintiff, there was a personal-related reason for termination, which justified the termination if the number of employees was refilled with a replacement. The requirement for a person-related reason for termination was not particularly high because the reasons did not have to be those that would also justify termination with immediate effect for serious cause. In this case, the differentiation in the social partner agreement between a termination with immediate effect for serious cause without the obligation for the employer to maintain the number of employees, and a personal-related termination with the obligation for the employer to maintain the number of employees would be pointless.

The social partner agreement does not define precisely what is meant by personal-related reasons for termination. However, Sec 105 para 3 subpara 2 of the Labor Constitution Act (Arbeitsverfassungsgesetz - ArbVG) is a comparable reference, which also refers to "reasons relating to the person of the employee" when assessing the social unfairness of a termination, although only after a significant impairment of the employee's interests has been identified. These person-related reasons must cause a further employment relationship to become disadvantageous for the employer to a significant extent.

As situated in the behavior of the employee, breaches of duty in dealing with customers are suitable for fulfilling these conditions for termination, whereby the customers’ complaints must be credible verified and justified. Unfriendly behavior towards customers and a disrespectful manner conflicts with a customer service that is oriented towards the needs of the customers. According to experience, this does not lead to a complaint, but to a change to another provider.

Violation of instructions of the employer

Contrary to the clear instruction, the plaintiff not only discussed with the customer that the damage could not come from the car wash, he also behaved in an unfriendly manner. As a one-time incident, this would not justify a termination for personal-related reasons in the sense of the above yet, especially since he changed the licence plate holder without complaint. However, the plaintiff did not leave it at that, instead he mentioned "at least two coffees" as costs incurred and stood demonstratively there until he was handed EUR 5. The employer's explicit instruction, however, was to provide a replacement for free. This violation of the clear instruction affects the business interests in such a way that even to a reasonable business owner a termination would appear to be adequate. Especially in times of crisis, an employer must be able to trust that his employees will bind customers to the business by providing a correspondingly good service.

Practical note

The social partner agreement does not define in more detail what is meant by personal‑related reasons for termination during COVID-19 short-time work. However, Sec 105 para 3 subpara 2 ArbVG can be used as a comparable reference. These person-related reasons must cause a further employment relationship to become disadvantageous for the employer to a significant extent. This must be assessed on a case-by-case basis.