If an employer intends to lay off a considerable number of employees, it must be checked whether the employer is obligated to observe the co-determination rights of the works council pursuant to sections 111 et seq. Works Council Constitution Act (Betriebsverfassungsgesetz), in particular to negotiate on a reconciliation of interests and to agree on a social plan (please see Changes in Operations). This is the case, if a substantial part of the staff is affected by the reduction of personnel. The special thresholds pursuant to section 112 a para. 1 Works Council Constitution Act (Betriebsverfassungsgesetz) must be observed with respect to the obligation to set up a social plan.
Furthermore, the employer must check whether the competent employment office must be notified of the dismissals pursuant to section 17 Protection against Dismissal Act (Kuendigungsschutzgesetz). The obligation of notification only exists if – depending on the size of the operations – specific thresholds are exceeded within a period of 30 days. The time of notification must be determined exactly since, on the one hand, the dismissals may not occur until a certain point in time (dismissal ban, Entlassungssperre) but, on the other hand, they must be executed within a specific subsequent period (free period, Freifrist).
If notification of the dismissal does not occur on time or in proper form, the employer runs the risk that a laid-off employee will refer to this in the course of legal proceedings and that the dismissal may be invalid for this reason.