No remuneration during corona-related company closure

When the Corona virus spread in Germany at the beginning of the year 2020, company closures were one of the first measures to prevent larger gatherings of people. In a statement by the Federal Ministry of Labour and Social Affairs dated February 26, 2020it was announced that the employer shall be obliged to continue to pay salaries in accordance with sec. 615 of the German Civil Code (BGB) in the event of a shutdown. 

Principles of operational risk

Sec. 615 sentences 1, 3 of the German Civil Code (BGB) stipulates that in the case of a so-called "operational risk" the employer is obliged to continue to pay remuneration if, through no fault of his own, he is unable to employ the workforce for operational reasons and has to entirely or partially close down the business.

Typical cases of operational risk are interruptions of electricity or gas supply, lack of raw materials, fire, flood, frost and other natural disasters. In its decision of October 13, 2021 - 5 AZR 211/21, the Federal Labour Court (Bundesarbeitsgericht, BAG) had to deal with the question of whether an employer who had to temporarily close its business due to a government-imposed general "lockdown" to combat the Corona pandemic still had to pay remuneration to its employees.

Concrete case of the BAG

In April 2020, the employer's shop had been closed due to the "General Decree on the Prohibition of Events, Meetings and the Opening of Certain Establishments for the Containment of the Coronavirus" of the Free Hanseatic City of Bremen of March 23, 2020. Therefore, the plaintiff, an employee working in sales, could not work and did not receive any remuneration. The peculiarity was that, as a marginal employee, she could not receive short-time allowance. The plaintiff believed that the closure of the business due to official directives was a case of operational risk to be borne by the employer, so that she was entitled to continued payment of remuneration.

The Verden Labour Court followed this opinion and considered Sec. 615 BGB to be relevant even in the case of pandemic closures ordered by the state. The employer's appeal against this decision was unsuccessful. The Higher Labour Court of Lower Saxony (LAG Niedersachen) upheld the ruling and recognised the closure of the company due to the pandemic as a cost risk that was borne by the employer.

Decision of the BAG: Pandemic is not a operational risk

The appeal before the BAG turned things around for the employer: According to the ruling of the BAG, the risk of work being lost due to public measures to protect the population from dangerous diseases, during which all non-essential facilities are closed, is not to be borne by the employer. The BAG justifies this by stating that in the case of a pandemic there is no operational risk inherent in business operations. In such cases, the employer's failure to provide work is rather the consequence of a sovereign intervention to combat a dangerous situation. In this respect, the employer does not have to pay the employee for the period of closure due to the pandemic.

Consequences for employees and employers

The case was special because the employee was affected by a gap in the social security system. During the pandemic, employment relationships outside the 450-EUR range were regularly covered by short-time allowance, which is not possible as far as marginally employed workers are concerned.
The decision is to be welcomed and clarifies the cases of operational risk for the future.

While this ruling will facilitate the handling of comparable situations in future, the question of retroactive consequences arises. Provided that preclusion periods do not already apply, the employer can, in principle, reclaim gratuitously paid salaries from the employee until the statute of limitations begins to run. In practice, however, the employer will in most cases be confronted with the defense of unjust enrichment by the employee. This must be examined individually for each case.