How to avoid (or win) court challenges of terminations alleged to be retaliatory
In brief
Employees are frequently challenging terminations of their employment relationships by claiming that these constitute an unlawful retaliatory measure by the employer. However, these allegations are often unjustified, and they can lead to uncomfortable consequences for companies, such as reinstatement, financial losses and reputational damages.
What is the problem?
If employees raise justified claims during their employment relationship (e.g., for unpaid remuneration) or point out grievances (e.g., in a whistle-blower report), they should not risk being terminated by the employer as a form of “revenge”. Therefore, the law provides that such “retaliatory terminations” can be challenged before a court. If an employee wins the court case, the termination is invalid, and the employee must be reinstated. In addition, there is a risk of administrative fines of up to EUR 40,000 if the termination was issued as a retaliatory action for submitting a whistle-blower report.
However, this — technically useful — legal protection is increasingly being abused by employees who challenge the termination of their employment relationship before a court by making the generic and often unjustified allegation that the termination constitutes an unlawful retaliatory measure. This claim is often linked to an accusation of discrimination or mobbing. The main problem is that employees do not have to prove this allegation in court but merely have to demonstrate its “credibility”. As the allegation only has to be somehow reasonable, this creates a considerable incentive for employees to prematurely and proactively challenge the termination as “retaliatory”. This puts employers in a tricky situation.
How to react in court proceedings
As a result, employers must defend themselves against these allegations in court by demonstrating and providing specific evidence that the termination of the employment relationship was not motivated by retaliation but by another motive. Other motives are primarily economic reasons, e.g., the redundancy of a position due to a major restructuring. Performance or behavioural deficits can also be other (permissible) reasons for a termination.
Although a reason does not need to be provided for a termination to be legally valid, if an employee claims that the termination was retaliatory, employers should have objective reasons for the termination to hand. Thus, it is recommended that the reasons for a termination be well documented before the notice of termination is issued.
Employees can generally challenge terminations before a court due to an alleged retaliatory action within 14 days. If an employee claims to have been terminated for making a whistle-blowing report, there is no specified deadline for challenging the termination in court.
How to avoid (and win) lawsuits
To avoid or — if a lawsuit has already been filed — to win legal proceedings, we recommend the following:
- Check whether affected employees have recently raised an employment-related claim.
- Check whether affected employees have recently issued a whistle-blowing report.
- Ensure that employee claims or whistle-blowing reports have been adequately investigated.
- Ensure that the termination does not relate to the employee claim or whistle-blowing report.
- Make sure that there is a longer period of time between raising the claim or issuing a whistle-blower report and giving notice of termination.
- Make sure that the termination is based on objective reasons and that there is evidence for that.
