OGH: Social plan and waiver of avoidance

Jun 30, 2021 Benn-Ibler Rechtsanwälte

According to a decision of the Supreme Court, the payment of a voluntary settlement by a social plan may be made dependent on the employee’s or the works council’s refraining from challenging the termination in court.

In the present case, a works agreement on a social plan was concluded between the employer and the employee works council. This granted employees a voluntary settlement payment in case of termination of employment by mutual consent or by the employer, if certain conditions were fulfilled. Part of the agreement was an exclusion clause: if the termination is contested by the works council or employee in accordance with the provisions of the Labor Constitution Act, the works agreement will not apply. The Supreme Court did not consider this works agreement to be in violation of the provisions of section 105 of the Labor Constitution Act (ArbVG).

A social compensation plan may differentiate between cases in which a mutually agreed termination of the employment relationship took place "at the initiative" of the employee or of the employer. Such an agreement prevents the employer from having to pay social plan benefits on the one hand, while being exposed to the risk of termination challenges on the other. The Supreme Court follows the view that such an agreement is intended to create legal certainty for all parties involved and to maintain legal peace when the termination of employment relationships is necessary.

In the case at hand, the employee could choose whether or not to agree to a mutual termination of the employment relationship which was offered to him by the employer; if he were terminated by the employer and did not want to accept the termination, he could challenge the termination in court, just as any employee who was not subject to this works agreement. The social plan did not take away the subsidiary right of the employee to challenge the termination should he reject the mutually agreed termination. Also, the social plan did not foresee that the works council waive in advance its constitutional rights of participation in connection with the termination of an employee.

OGH 9 ObA 9/21w (Apr. 29, 2021)