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The principle of fair negotiation in termination agreements – when is it violated?

Gebot fairen Verhandelns

If you, as an employee, have signed a termination agreement, it is not easy to withdraw from it. This is once again illustrated by another decision of the Federal Labor Court on the "The requirement of fair negotiation“ in the termination agreement.

The court found that this principle had not been violated in the case at hand, even though the underlying conditions were not entirely "fair." At least from a lay perspective. However, strict legal standards must be applied to a violation of the principle of fair negotiations.

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Employer appears with lawyer and termination agreement

The Federal Labor Court’s decision on the requirement of fair negotiations was based on the following case:

At the end of 2019, the company's managing director summoned a sales team coordinator from the building services department to his office. He confronted her with the accusation that she had Unjustified purchase prices changed in the computer systemto create the illusion of higher sales profit.

During the interview, the employee was not only confronted by the company’s managing director. lawyer for labor law was also present – presumably to give legal weight to the employer’s demands.

The managing director presented the employee with a Termination agreement for immediate signature which provided for a termination with a relatively short notice period until November 30, 2019. He gave the team coordinator a choice: either she signs the termination agreement immediately, or there is a extraordinary termination without notice associated with a criminal complaint.

The employee asked for time to consider the termination agreement and wanted to seek legal advice on it. However, the managing director refused. Her only option was to sign the termination agreement immediately. Otherwise, the announced consequences would follow.

The parties then have a ten-minute break They sat opposite each other in silence. Finally, the employee signed the termination agreement and terminated the employment relationship effective November 30, 2019.

Shortly afterwards, she declared the Avoidance of the contract due to unlawful threatShe subsequently asserted the continued existence of the employment relationship before the labor court.

Federal Labor Court: No violation of the “principle of fair negotiations”

The lower courts initially assessed the legal situation differently. The Labor Court upheld the claim, while the Hamm Regional Labor Court dismissed it. The employee's appeal to the Federal Labor Court was unsuccessful.

The Federal Labor Court initially saw no unlawful threat, because the managing director was entitled to take the specific threats into consideration. A reasonable employer would have, in such a case, extraordinary termination and consider filing a criminal complaint. Therefore, the court ruled, there could be no question of any unlawfulness.

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Nor did the employer violate the principle of fair negotiation by denying the employee the Obtaining legal advice refused. The employer therefore did not violate this order.

The fact that the managing director only gave the employee the Possibility of immediate acceptance of the offer to conclude a termination agreement, ka violation of the principle of fair negotiation. In this respect, too, there was a breach of his legal obligations under Section 311 paragraph 2 no. 1 BGB combined with Section 241 para. 2 German Civil Code not given.

The principle of fair negotiation – what does it actually mean?

The Federal Labor Court's decision is in line with previous decisions. The landmark ruling on the requirement of fair negotiations was already handed down in 2019. At that time, the court ruled that in the context of termination negotiations no unfair negotiation situations may be created.

The principle of fair negotiation is intended to protect employees below the threshold of genuine lack of will by Freedom of decision in contract negotiations.

A situation is considered unfair if a psychological pressure situation is created or exploited in a way that makes it significantly more difficult or even impossible for the contractual partner to make a free and considered decision.

These include, for example, Exploitation of an objectively recognizable physical or psychological weakness or insufficient Language skills. The use of a moment of surprise (Visiting an employee at home) may constitute unfair treatment.

However, it is only a Minimum level of fairness. Therefore, there is no violation of the principle of fair negotiations if

  • the acceptance of the offer to conclude the termination agreement is only possible immediately and the employee has no time to consider it,
  • the employee has not been granted any right of withdrawal or revocation, or
  • he has no opportunity to obtain legal advice before signing.

The point isn't to create a particularly pleasant negotiating environment for employees. Rather, it's "only" about ensuring a minimum level of fairness prior to the conclusion of the contract.

Federal Labor Court, judgment of 7 February 2019 – 6 AZR 75/18

Classification of the BAG decision on the requirement of fair negotiations

Did the Federal Labor Court correctly rule that the principle of fair negotiation was not violated in this case? There are two reasons for doubt about this.

Firstly, the employee was not just sitting opposite the managing director, but a Lawyer for employment lawThis should be on the part of the employee for additional pressure and emphasized the signing of the termination agreement. Even if the details of the conversation remained contentious, lawyers generally do not hold back in such discussions, but rather push for the conclusion of termination agreements. Because this is ultimately in the interest of their clients – the employers.

In other contexts, it is recognized that the involvement of a lawyer by a party who already has more negotiating power can lead to an unfair negotiation situation. Why this should be different in the context of a termination agreement may not be obvious at first glance. Freedom of choice is regularly at least lowered in such situations due to the particularly prevailing pressure.

In addition, employees can only sign the termination agreement sign immediately This may have increased the pressure on her side and significantly reduced her freedom of choice.

However, not every pressure situation automatically leads to such an unfair negotiation situation. In such constellations, employees are always influenced, so that the result is a Violation of the principle of fair negotiation only in exceptional cases comes into consideration. The interests here are diametrically opposed, and the question is what level of fairness one demands of the employer in such situations.

From my point of view Such an exception did not apply here. The employees could have avoided the situation by simply saying "no." For the sake of fair negotiation, the employer was not required to facilitate the most pleasant negotiations possible, in which they could have weighed the pros and cons of signing – after prior, comprehensive consultation.

Podcast episode on the requirement of fair negotiations in termination agreements