Is the employer allowed to threaten termination without notice or criminal charges if a termination agreement is not accepted?

The German Federal Labor Court (Bundesarbeitsgericht, BAG) recently had to decide whether an employer may link their offer of a termination agreement with the indication that they will terminate the employment relationship without notice and file criminal charges against the employee in the event of non-acceptance (BAG, ruling dated February 24, 2022, Case No. 6 AZR 333/21). This could lead to a situation in which the employee would not have sufficient time to consider the matter calmly and would not have the opportunity, for example, to consult a lawyer for employment law. The BAG concluded that such action by the employer may be permissible if the threat made by the employer cannot be classified as unlawful.

Facts of the case

In the case to be decided, the parties involved disputed the continuation of the employment relationship after a termination agreement had been signed. The employee had been employed by the employer for several years as a sales employee and had most likely manipulated both purchase and sales prices to the employer’s detriment. In a personnel meeting, the employer subsequently presented the employee with a termination agreement, combined with the condition that she could only sign it immediately. Otherwise, the employee would have to expect termination of her employment without notice and criminal charges. The employee then initially signed the termination agreement, but later challenged it in court on the grounds of unlawful threat. This was ultimately unsuccessful.

Reasons given by the court

In German labor law, a contract can be challenged if a contractual partner has been unlawfully induced to agree by threat or if the employer has created or exploited a situation of psychological pressure in order to specifically restrict the employee’s free decision in his favor. In the present case, however, the labor court came to the conclusion that there was no such illegality, since the employer had concrete suspicions of serious breaches of duty and it therefore appeared justified to seriously consider severe sanctions and also to disclose this to the employee. In view of this background, the employer could not be accused of having negotiated unfairly or of having inadmissibly forced the employee out of the employment relationship by interfering with her freedom of decision.

What does this mean in practice ?

Consequently, in the context of termination negotiations, there is no general obligation on the part of the employer to conceal their own interests, to grant the employee time to think things over or to create a relaxed negotiating atmosphere. In the event of serious misconduct on the part of the employee, the employer may rather threaten the employee with permissible sanctions, even if this would result in considerable adverse effects and would put the employee under considerable time and action pressure.