Federal Labour Court, 21.11.2013, Ref.: 6 AZR 979/11
Who is actually the right addressee?
Why the question of substantive legitimisation is crucial in dismissal protection proceedings during insolvency
There are legal issues that are hardly considered in everyday life - until you suddenly find yourself in the middle of them. One of them is: Who must an action for unfair dismissal actually be brought against if the employer is insolvent?
At first, this sounds like a side note from the jungle of paragraphs. In practice, however, it can decide whether a lawsuit is successful at all.
Let's imagine the whole thing as a relay race: When insolvency proceedings are opened, the employer hands over the baton - i.e. the administration and responsibility - to the insolvency administrator. But what happens when the administrator hands the baton back again? This is exactly what the Federal Labour Court (BAG) had to clarify in a case from 2013.
Why does material legitimacy play such an important role?
In civil and labour law, it is not enough that a claim may exist. It is also decisive who is authorised to assert it and against whom it is directed.
Two terms take centre stage:
-
Active legitimisation: Can the plaintiff enforce the law?
-
Passive legitimisationIs the action being brought against the right person?
These lines quickly become blurred, especially when a company becomes insolvent. The Insolvency Code gives the administrator far-reaching powers - but not always and not without restrictions.
What does the law say?
Two regulations play together here:
-
§ Section 108 (1) InsO says: Employment relationships remain in place despite insolvency.
-
§ Section 80 (1) InsO explains: When insolvency proceedings are opened, the insolvency administrator assumes the role of employer.
Sounds clear, doesn't it? But then Section 35 (2) InsO comes into play: the administrator can release an independent activity of the debtor. This means that responsibility for this activity - and everything associated with it - falls back to the debtor.
The case: Dismissal protection proceedings in the border area
A brief outline of the process to make the situation more tangible:
-
A sole trader operates a courier service.
-
He cancels a driver's contract without notice - five days before insolvency proceedings are opened.
-
Once the insolvency proceedings have been opened, the insolvency administrator immediately hands the self-employed activity back to the entrepreneur.
-
The driver files an action for unfair dismissal - but against the insolvency administrator.
At this point, the central question arises: Who is still responsible for the employment relationship after the activity has been released? The administrator or the entrepreneur again?
The BAG's response
The Federal Labour Court ruled clearly: The insolvency administrator was not the correct addressee of the claim.
Why?
Because the release of the self-employed activity affects not only the operational business, but also the associated employment relationships. With the release, the employer position reverts to the original entrepreneur - even if they are in the middle of insolvency.
That was certain:
The action should have been directed against the entrepreneur as the debtor, not against the insolvency administrator.
What does this mean for employees and employers?
Such cases show how quickly the wrong addressee can be caught out in practice. The risk is particularly high when a self-employed activity is released from the insolvency estate. If you make the wrong claim here, you risk losing valuable time - and sometimes the entire process.
The following can be taken away for practical use:
What employees should look out for
-
Check whether the insolvency administrator has authorised the activity.
-
If yes: The Debtor is once again the responsible employer.
-
The action must then be brought against the debtor - even if the cancellation was declared before the release.
What employers and debtors need to consider
-
A release in accordance with Section 35 (2) InsO means responsibility - also in terms of labour law.
-
Employment relationships that have already been established „migrate“ back with them.
-
A release does not result in a legal vacuum; rather, it means a return to responsibility.
A picture at the end
You could say that insolvency manages the company like a house that is suddenly placed under the care of the state. However, if the insolvency administrator releases part of the house - let's say the workshop on the ground floor - then the original owner is once again the landlord. So if you want to sue because of a dripping sprinkler, you have to go to the person holding the key.
Source: Federal Labor Court
Important Note: The content of this article has been prepared to the best of our knowledge and belief. However, due to the complexity and constant evolution of the subject matter, we must exclude liability and warranty. Important Notice: The content of this article has been created to the best of our knowledge and understanding. However, due to the complexity and constant changes in the subject matter, we must exclude any liability and warranty.
If you need legal advice, feel free to call us at 0221 – 80187670 or email us at info@mth-partner.de.
