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Employment contract: What managers should consider when giving notice of changes

2022-06-22T06:54:20.190Z

Companies like to resign if they want to get rid of a manager quickly and cheaply. Managers are often relegated back to the operative business. A labor lawyer explains how employees can defend themselves against it.



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Change notices often lead to a nerve-wracking court case

Photo: Rainer Berg / Getty Images

When companies want to get rid of a manager who has become a nuisance, they can often think of many ways.

A particularly popular method is the so-called change notice: This replaces the previous employment contract with a new one.

So the employee does not have to leave, but is transferred to a new position in the company.

In recent years, notice of change has developed into a tool to get rid of executives.

"Employers are increasingly using notices of change as a means of exerting pressure on managers who have become unwelcome," says Christoph Abeln, a specialist lawyer for labor law.

In the meantime, 50 percent of his clients are affected by the "promotion to the bottom".

The case of the former Infineon top manager Ulrich Schumacher is still one of the most well-known, because hardly any separation has generated so much publicity and followed such dramaturgy.

Schumacher once brought the semiconductor manufacturer and the Siemens subsidiary Infineon public.

He was considered the superstar of the German economy.

Then he had to go, the public took part in his severance dispute with Infineon in court for years.

He spoke publicly about time for the first time with manager magazin.

The relentlessness with which the company parted ways with its CEO now often extends to lower echelons as well.

Dilemma for managers: accept less salary or leave

The number of notices of change that end up in court every year is not statistically recorded.

According to the Federal Statistical Office, the labor courts passed judgment in 198,766 termination proceedings in 2020, around 12 percent more than in 2011. There are also proceedings before regional courts, which are responsible for higher office holders such as managing directors and board members, but are not collected nationwide will.

However, most of those affected shy away from going to court or give in at some point. 

Employees find themselves in a dilemma as a result of the notice of changes: They must decide whether they either accept the new contract with worse conditions or leave.

The employer benefits twice from this: he does not have to pay the employee severance pay and can at the same time fill a vacancy in the company.

"All you need to do is look at the company's job exchange, where you can almost always find a position that may not be in the same hierarchy or in the same salary bracket, but which in any case could have been transferred to the employee based on the employee's knowledge and skills." , says Abel.

In this case, the employer is even obliged to issue a notice of change before a proper notice of termination.

According to Abeln, accepting this and continuing to work under the new conditions not only leads to a break in the CV and the end of a career in the company, but also often means a significantly lower salary.

"In practice, it then regularly happens that the manager at the lower end of the hierarchy level is to take on new tasks and receive a reduced salary in line with the usual conditions," says Abeln.

Often up to 70 percent less salary

A salary reduction of up to 70 percent is not uncommon.

Special entitlements such as company cars, pensions or bonuses for managers are also regularly eliminated.

However, if the manager rejects the change of notice, the right notice will be given and a dispute will arise before the labor court.

But there is also a third option: "The manager can accept the notice of change with reservations and then have the labor court examine whether the employment relationship is continued under the old or the new conditions," says Abeln.

The catch: Although this option may be the supposedly safest way for the person concerned, after the period of notice for the current job has expired, he or she is obliged to continue the new employment relationship under the changed conditions until a final decision has been made.

If the employer increases the pressure – first subtly, then openly

"At this point at the latest, the first executives are frustrated and, conversely, more willing to compromise, to find a quick solution on significantly worse terms," ​​says Abeln.

The work in the new position is often exhausting.

"New bosses, new colleagues and employers aren't very kind to you.

In addition, there are regular checks, reporting obligations, assignments of tasks with exaggerated deadlines or a change of location to an open-plan office away from your former colleagues," says Abeln was allowed to visit," says the labor law expert.

New position also leads to mental stress

This is exactly what Abeln's client, Maximilian D. (name changed by the editors), is currently experiencing.

He is currently in litigation with his employer after they presented him with a notice of change.

While D. worked for years at a management level below the board, he now has to deal with operational business tasks again.

Because the company decided to eliminate one management level without replacement due to structural changes.

"I knew about the restructuring, but was completely surprised when it affected me myself," says the manager concerned.

The company management had offered him a severance payment, but D. was not satisfied with that.

Now he is in court with his employer.

His life has changed radically since then.

As long as no decision is made, D. has to make significant cuts financially.

In addition, the situation weighs on him mentally.

"You wake up thinking about it in the morning and go to bed with it at night," he says.

Above all, he could not come to terms with his new daily tasks at work.

"I've always been used to making decisions," said the former manager.

While he previously distributed powers of attorney for certain areas of work himself, he now has to apply for them himself.

And he often feels powerless in the court process.

"I'm suddenly reactive," he says.

D. always felt comfortable in the company until he was given notice of changes.

Even today, he sees the best solution for being able to continue working in the company

Family support and sport as an outlet

The problem, which also affects other clients: the interest of the court in a quick agreement between the parties is often greater than in a legally sound discussion of the situation, says employment lawyer Abeln.

"In the process, the employer often presents himself as the caring employer who would like to continue working with the manager by exhausting all possibilities, but unfortunately no other position is available," says Abeln.

The employer also often asks for understanding that the ex-manager cannot earn more in their new role than everyone else.

Abeln nevertheless pleads for action to be taken against the notice of change.

"Regardless of the employer's approach, a change of notice involves considerable risks for the employer in many places," he says.

Even if dismissals in Germany are often unpleasant, a process is worth the effort.

With the support of friends and family and the right representation, this is easier to get through and lead to a successful conclusion that both parties can live with.

Maximilian D. also has this hope in order to be able to take on management tasks again in the future.

Sport and time with the family help him as an outlet during the nerve-wracking process.

Managers should be aware, however, that winning a process does not necessarily mean continued employment and a continuation of the career path in the company, says Abeln.

"Unfortunately, the employer lacks insight into this."

Source: spiegel

All business articles on 2022-06-22

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