Sep 13, 2019 | Uncategorized
In the case of mass dismissals, an employer is allowed to go ahead and sign termination notices before the notice of collective dismissal has been received by Germany”s Federal Employment Agency, the Agentur für Arbeit. That was the verdict of the Bundesarbeitsgericht, Germany”s Federal Labor Court.
Employers need to make sure that termination notices are issued effectively. This is all the more important in the case of mass dismissals. We at the commercial law firm MTR Rechtsanwälte https://www.mtrlegal.com/en.html note that termination notices may be ineffective if the employer makes a mistake.
One aspect that has proven to be particularly problematic for employers is the short window between the required submission of the notice of collective dismissal to the Agentur für Arbeit and the timely delivery of the termination notices. A ruling by the Bundesarbeitsgericht from June 13, 2019 relieves pressure on employers in this regard (Az.: 6 AZR 459/18). The BAG ruled that the employer is allowed to go ahead and sign the termination notices before the notice of collective dismissal has been received by the Agentur für Arbeit. It went on to state that for termination to be effective within the framework of a collective dismissal process, it is sufficient for the Employment Agency to have received the notice before the termination letter reaches the employee.
In the instant case, the employer”s company became the subject of insolvency proceedings in June 2017. The Agentur für Arbeit received the notice of collective dismissal on June 26, 2017. In a letter written the same day, the employer issued its employees with ordinary notices of termination with effect from September 30, 2017. The termination notices were received by the employees on June 27, 2017.
One employee lodged an action for unfair dismissal. Citing the case law of the Court of Justice of the European Union, he argued that the employer had been obliged to first discharge its duty to notify the Employment Agency before reaching a decision on whether to terminate the employment relationship. Consequently, the termination letter should not have been signed until after the notice of collective dismissal reached the Employment Agency. The claim was successful before the Landesarbeitsgericht, i.e. the Regional Labor Court.
Yet the ruling was later overturned by the Bundesarbeitsgericht. It held that the notification procedure is designed to inform the Agentur für Arbeit of a pending notice of collective dismissal so that it can prepare itself accordingly; though it is not the Employment Agency”s place to influence the employer”s decision. The BAG noted, however, that the termination notice must not reach the employee until after the notice of collective dismissal has been received by the Employment Agency.
There are a number of legal pitfalls that one needs to be aware of when it comes to dismissals. Lawyers with experience in the field of employment and labor law can offer advice.
https://www.mtrlegal.com/en/legal-advice/employment-law.html
Sep 12, 2019 | Uncategorized
Commercial agents are entitled to an indemnity following termination of the contractual relationship. As a prerequisite, however, their work for the company as a commercial agent must have been their main occupation.
If a commercial agency agreement is terminated, the outgoing commercial agent is normally entitled to an indemnity for the business contacts they established that remain in place after their departure. We at the commercial law firm MTR Rechtsanwälte www.mtrlegal.com/en (https://www.mtrlegal.com/en.html) note, however, that the right to an indemnity requires that the commercial agent have pursued this activity as their main occupation and that the work not merely represent a second job.
Whether a commercial agent”s activity represents their primary or secondary occupation does not simply come down to the commercial agency agreement. The most important criterium is whether the individual in question works predominantly as a commercial agent and derives the greater part of their income from this role. According to a ruling of the Oberlandesgericht (OLG) Düsseldorf, the Higher Regional Court of Düsseldorf, this is the decisive factor in evaluating whether activity as a commercial agent represents a person”s primary or secondary occupation (Az.: 16 U 61/16).
In the instant case, the parties were in disagreement over an indemnity payment to the commercial agent. The plaintiff had worked for many years for the defendant as a commercial agent brokering insurance. This was initially a second job before it became his main occupation. Extraordinary notice terminating the agreement was later issued after the plaintiff committed a breach of duty.
The defendant insurance company refused to pay an indemnity, claiming that the plaintiff”s work as an insurance agent was only a secondary occupation. This view was upheld by the OLG Düsseldorf.
The OLG first noted that the restrictions on someone working as a commercial agent as a second job only come into consideration if the relevant person is, in fact, only working for the company as an agent as a second job and not as their main occupation. This is to be determined on a case-by-case basis. It held that in the present case the plaintiff”s work for the company had at times indisputably been his main occupation and that he then received another contract implying second job status at his own request, but that the arrangements from the primary occupation continued to apply. Notwithstanding this, whether the plaintiff”s activity was still his main occupation was to be assessed on the basis of the so-called “Übergewichtstheorie” (predominance theory). The Court went on to clarify that the most important factors that distinguish a primary from a secondary occupation are time and remuneration, with greater importance attributed to time. However, the plaintiff was unable to provide evidence showing that this was his main occupation.
Lawyers with experience in the field of commercial law can advise companies and commercial agents.
https://www.mtrlegal.com/en/legal-advice/commercial-law.html
Sep 11, 2019 | Uncategorized
A seller of real estate who fraudulently conceals defects cannot invoke a contractually agreed disclaimer of warranties. That was the verdict of the Oberlandesgericht (OLG) Frankfurt, the Higher Regional Court of Frankfurt (Az. 29 U 183/17).
A contract for the purchase of real estate usually includes a disclaimer of warranties to protect the seller. We at the commercial law firm MTR Rechtsanwälte www.mtrlegal.com/en (https://www.mtrlegal.com/en.html) note, however, that the seller cannot invoke the disclaimer of warranties if they have fraudulently concealed known defects in the property. This was confirmed by the OLG Frankfurt in a judgment from January 21, 2019.
In the instant case, the seller of real estate was sued for damages by the purchasers. The house had been tendered by a broker. The exposé stated that the building was fully fit for habitation and that the top floor had expansion potential. There were no indications of serious defects. Following a thorough inspection of the property, the purchase contract was signed.
It was only after the transfer that the purchasers discovered that the attic stairs and roof truss were heavily infested with longhorn beetles. Parts of the damaged areas were masked with foil during the inspection. The building was also heavily infested with wet rot because sections of the walls were damp. One wall that was particularly affected was covered with cork board at the time of the inspection. The purchasers privately obtained an expert opinion, with the surveyor estimating the total renovations costs at around 60,000 euros.
The purchasers subsequently asserted damages claims against the seller, arguing that the latter had fraudulently concealed defects. They claimed that the masked areas of the attic stairs and roof truss had been explained during the inspection as protection from wood splinters. Moreover, the seller was accused of having known about the damage caused by dampness and moisture, and allegedly mentioned it to a neighbor. She was also said to have repeatedly tried and failed to repair the damage as well as failed to point out the serous defects, despite having personally lived in the house for a long time. Accordingly, the seller ought to have been aware of the defects.
The OLG Frankfurt has therefore given serious consideration to awarding damages for fraudulently failing to disclose defects. The Court held that the purchasers had sufficiently demonstrated that the defects in question must have been known to the seller and that these were fraudulently concealed during the sale. It went on to rule that the exclusion of liability agreed to by the parties was null and void due to the fraudulent failure to disclose the defects.
There are a number of potential pitfalls when purchasing real estate. Lawyers with experience in the field of real estate and property law can offer advice.
https://www.mtrlegal.com/en/legal-advice/real-estate-and-property-law.html
Sep 10, 2019 | Uncategorized
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Sep 10, 2019 | Uncategorized
Repayment of a shareholder loan can potentially be contested by the insolvency administrator even if the amount circuitously ends up in the company”s account again.
Payments made in the face of looming insolvency may be contested by the insolvency administrator on the basis that the payment places other creditors at a disadvantage. We at the commercial law firm MTR Rechtsanwälte https://www.mtrlegal.com/en note that even if the money ends up with the company again via third parties, this does not automatically resolve the issue of creditor fraud, as is clear from a recent ruling of the Bundesgerichtshof (BGH), Germany”s Federal Supreme Court.
In a ruling from May 2, 2019, the BGH held that creditor fraud resulting from the repayment of a shareholder loan is not resolved just because the amount ultimately returns to the company (Az.: IX ZR 67/18).
In the case in question, the defendant was the managing director of a GmbH that had since become insolvent. He was also the sole limited partner of the GmbH”s parent company. He loaned the GmbH 100,000 euros, which the company repaid shortly thereafter. The managing director used the money to pay his limited partner capital contribution in the amount of 100,000 euros to the parent company. The latter then promptly effected a loss compensation payment for the benefit of the GmbH.
Although the 100,000 euros had ended up in the GmbH”s account again, the insolvency administrator nevertheless demanded that the amount be repaid by the managing director. While the claim was dismissed by the courts of lower instance, it was ultimately successful before the BGH.
The BGH ruled that the prerequisites for contesting the debtor”s actions in insolvency proceedings were present, since the repayment of the shareholder loan placed other creditors of the GmbH at a disadvantage. The Court noted that while this can, in theory, be subsequently resolved, that did not happen here, even though the amount ended up back in the hands of the GmbH.
According to the BGH, resolving this form of creditor fraud requires the company to return the appropriated asset and that the creditors may have access to it. In the instant case, however, the sum was used by the managing director to discharge his obligation to the parent company and by the latter, in turn, to discharge its obligation in the form of liability for covering losses vis-à-vis the subsidiary GmbH. The Court therefore concluded that repayment of the original shareholder loan had not been effected.
When faced with looming insolvency, it is necessary to make prudent financial plans in order to navigate the company back to safe waters. Lawyers experienced in the field of company law can serve as expert advisors.
https://www.mtrlegal.com/en/legal-advice/company-law.html
Sep 9, 2019 | Uncategorized
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