What is a change notice in Germany?

An employer can use a change notice (Änderungskündigung) to revise the previous contractual conditions by canceling the existing labor contract and simultaneously proposing a new contract with amended terms. It is really a dismissal with an option of altered conditions of employment. However, the aim is not to fire the employee, but to adjust his or her working conditions. It is therefore primarily a question of reorganising the employment agreement in order to keep the employee in the company. However, if the employee rejects the new offer, the employment relationship ends automatically after the notice period. Provided of course, that the termination withstands legal scrutiny.

Requirements for an effective change notice

A dismissal with notice of change of contract can enable employers to adapt employment contracts to changed conditions. The following conditions must be met for a notice of termination to be effective:

Involvement of the works council

The works council must be consulted in all companies in which it exists before a dismissal with notice of change is issued. It should be informed about the planned offer of change and the reasons for the planed modification. If the employer fails to consult the works council, the dismissal will be invalid.

Unambiguousness of the offer

It must be unambiguous to the employee from the offer of change which working conditions will apply to them in the future and when the changes are to take effect. If this clarity is lacking, the dismissal with notice of change is invalid for this reason alone. Whether there is a social justification is then irrelevant. The case law of the Federal Labour Court stipulates that offers that are unclear or refer too generally to collective agreements, for example, do not have the necessary clarity.

Compliance with notice periods

The applicable notice periods must be observed both for changes to the terms and conditions of employment and for the termination of the employment relationship. According to the case law of the Federal Labour Court, an employee does not have to accept a premature change to the terms and conditions of employment.

Social justification

The effectiveness of a dismissal with notice of change depends on its social justification (Section 2 KSchG). This means that a change must be unavoidable for personal, behavioural or operational reasons and the changed conditions must be appropriately justified. The criteria for social justification vary depending on the reason for dismissal.

• In the case of personal reasons, the employer must demonstrate that the employee will no longer be able to fulfil their duties in their previous job.
• In the case of behavioural reasons, it must be shown that a breach by the employee makes the change necessary, whereby a prior warning is usually required.
• In the case of operational reasons, it must be proven that it is not possible to continue employment at the previous workplace.

“Fairness” of the change

Even if a dismissal with notice of change is generally socially justified, it can still be invalid if it makes unnecessary changes that go beyond what is fair and necessary. The employer may only make changes that are strictly necessary. If, for example, the new task could be fulfilled at the old workplace, a dismissal that provides for a change of location is invalid (BAG – Ref. 2 AZR 147/07). The same applies to the introduction of shift and weekend work if there are insufficient reasons and the restriction to necessary changes is therefore disregarded (LAG Hamburg, 15 March 2021 – Ref: 5 Sa 67/20).

Legal bases for a change notice

Notice of termination is an important aspect of labour law that deals with changes to working conditions. In order to better understand the legal basis, we should take a closer look at the relevant sections of German labour law:

1. § Section 2 of the Dismissal Protection Act (KSchG). This section regulates the basic requirements for an effective dismissal with notice of change and the social selection criteria.
2. § Section 1 (2) KSchG. This deals with dismissal with notice of change for operational reasons and the requirements for this.
3. § Section 102 of the Works Constitution Act (BetrVG). This section concerns the consultation of the works council prior to a dismissal with notice of change.
4. § Section 623 of the German Civil Code (BGB). This paragraph stipulates the written form for notices of termination and therefore also for notices of change.

What options do employees have?

Employees face various options when confronted with a dismissal with notice of change. If your employment relationship lies within the scope of the German Protection against Dismissal Act (KSchG), you can:

1. Unconditionally accept of the offer of change: You accept the new job offer without any objections. Then your employment relationship will continue under modified conditions. The employer has thus realised his intentions without any legal conflicts.
2. Accept with reservation. The employee has the option of accepting the offer of change on condition that a court confirms its “fairness”. In other words, that the new working conditions are socially justified. In doing so, the employee rejects the cancellation of the job with the previous terms.
   It is important that the employee makes this reservation known within the statutory notice period. At the latest within three weeks of receiving the notice of change. You can do this informally, i.e. verbally or in writing. A lawyer will always recommend a written formfor reasons of verifiability. A legal dispute initiated by the employee due to the dismissal with notice of change can also be interpreted as an expression of the reservation. Provided that the corresponding statement of claim is submitted to the employer within the above-mentioned period

Other options

1. Rejection of the offer and action for protection against dismissal if necessary. If an employee does not respond to the employer’s offer of change, this will result in the end of their employment relationship due to the notice of change issued. As with a normal dismissal, the employee then has the right to file an action for protection against dismissal. You need to file this with the court within three weeks from receipt of the letter of dismissal.
2. Action for protection against change notice: You accept the offer of change “subject to” Section 2 KSchG. Then you can file an action for protection against change. The employee must file an action for protection against change with the labour court. However, he or she must do so no later than three weeks after receiving the notice of dismissal. As part of this action, the court examines whether the modified working conditions are “socially justified”.

Practical examples: What can such termination look like in practice?

Change notices are used in various situations. Here are some practical examples:

• Adjusting working hours: A company wants to change its opening hours and needs employees to work longer evenings. A dismissal with notice of change is therefore issued in order to adjust the working hours.
• Relocation of workplace: A company relocates and requires employees to work at the new location. In this case, employers use a change notice to change the place of work.
• New areas of responsibility: An employee is to work in a different department or position in the future. The change notice ensures that the employee accepts the new tasks.
• Salary adjustment: In difficult economic times, employers even use a change notice to reduce the salary.
• Change in working conditions: A company wants to change working conditions, e.g. by switching to home office or teleworking.