Does the social partner Covid short-time work agreement render a dismissal during short-time work or the subsequent retention period invalid? This question was controversial in doctrine and case law until recently. In its decisions 8 ObA 48/21y of 22.10.2021 and 8 ObA 50/21t of 29.11.2021, the Supreme Court Clarity created.

The question of whether social partner agreements on short-time work result in individual protection against dismissal has been answered differently not only in doctrine, but also in case law. The OLG Vienna (21.9.2021, 10 Ra 38/21p) answered this question in the affirmative, while the OLG Linz (12.5.2021, 12 Ra 33/21s) answered it in the negative. The proponents – including the Higher Regional Court of Vienna – argued that the social partner agreement not only pursued labor market policy objectives, but was also intended to protect the individual employee. This follows from the wording and purpose of the prohibition of dismissal, which is why a dismissal in breach of the social partner agreement (here: dismissal for operational reasons during short-time work) is legally invalid. Those who deny additional individual protection against dismissal justify this by arguing that short-time work supported by aid primarily pursues labor market policy objectives, namely maintaining the level of employment and avoiding unemployment, and thus not the protection of individuals. The general protection of the status quo under Section 105 ArbVG continues to exist in parallel anyway. The sanctioning of violations of the Corona Short-Time Work Agreement takes place at the level of subsidy law.

The Supreme Court has ruled that dismissals can also be legally effective during short-time work. When concluding a social partner agreement on the introduction of short-time work, an employer undertakes to maintain the number of employees for a certain period of time. However, the requirement to give notice of termination at the earliest after the expiry of the retention period does not trigger any special individual protection against dismissal.

In the case decided by the Supreme Court, the plaintiff had not signed the short-time working agreement. As the plaintiff’s basis for discussion with the defendant’s managing directors was severely shaken, the defendant decided to dismiss the plaintiff (for personal reasons). The resulting reduction in the number of employees was replenished by new hires. The plaintiff demanded, among other things, the payment of compensation for dismissal – based on the retention obligation resulting from the Corona short-time work.

The Supreme Court did not uphold the plaintiff’s appeal and did not award any compensation for dismissal. It based its decision on the purpose of the social partner agreement. This shows that the price of short-time work is the retention of a certain number of employees (but not the retention of individual employees). The individual employees are not granted any special individual protection against dismissal under the social partner agreement. Dismissals are therefore also legally possible during agreed short-time work in accordance with general rules.

In the case underlying the Supreme Court’s decision of 29.11.2021 on 8 ObA 50/21t, the employee had signed the social partner agreement – in contrast to the previous case. Nevertheless, the Supreme Court came to the conclusion that the result reached in 8 ObA 48/21y should also be adhered to in the case to be assessed here, where the agreement was signed by an employee.

However, the loss of aid in the event of a breach of the restrictions on termination should not be disregarded. In addition, employers must of course take into account the general protection against dismissal (in particular § 105 para. 3 no. 2 lit b ArbVG). It must be justifiable why continued employment is operationally impossible despite short-time work support.

Conclusion: Section 37a AMSG in conjunction with the provisions of Section IV para. 2 lit a to c of the first social partner short-time work agreement does not result in the invalidity of a notice of termination issued during short-time work or the subsequent retention period. However, the aid must be taken into account in the context of a challenge to the dismissal (§ 105 ArbVG) when assessing the existence of operational requirements for the dismissal.

Sources:

Supreme Court 22.10.2021, 8 ObA 48/21y

Supreme Court 29.11.2021 to 8 ObA 50/21t