Been made redundant

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Hi all,

I was informed on Monday that our department is to close. We were all offered the choice between resigning and taking a job in a spin off (which I have no faith in) or being made redundant. I took redundancy.

 

My Kündigungsfrist means I officially remain an employee until the 31st of December. They have released me from duties with immediate effect to seek a new job, fair enough I can sit on my arse until the end of the year and get paid in full but that's not for me-I already have a new job more or less sorted and would like to get on with it.

 

My current employer states that should I find employment in this paid absence period, that I will cease being paid by them and that we would then have to negotiate an Abfindung, but surely they owe me an Abfindung (permanent employee since 1st April 2011) anyway?

 

I know the Abfindung wouldn't be huge money (have read roughly 0.5 months pay per year, so roughly 1.5 months pay if I go at the end of this month and start in my new place) but it's the principle of it: they are making us redundant, we're not resigning.

 

Any thoughts?

 

EDIT: Let's say I am prepared to go Lohnsteuerklasse VI on my new job until the end of my Kündigungsfrist, is there any way for my current employer to even know that I am actually working again? Is there any reason for the Finanzamt to inform them?

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They're not making you redundant, you resigned...or not?

 

Anyway, I wouldn't wait - accept your new job offer at a new company if it's where you want to work then worry about the rest, eg: being able to start there asap.

Meanwhile, you should consult your Betriebsrat (if there is one) or potentially an employment lawyer but be careful because their fees may be more than what you're owed (if that's anything at all).

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Hi,

No I didn't resign- I have received a "betriebsbedingte Kündigung" and remain an employee until year's end (Kündigungsfrist), but have been given a "Freistellung" meaning I don't have to actually attend the office during this time (I think this is standard practice to do with company data security more than giving me a paid holiday).

 

They are making me redundant. I did not seek nor really want a new job until they informed me I was going to lose this one. I should be entitled to some monetary compensation for this (Abfindung) I would have thought, regardless of if or when I start a new job. The company itself is not being wound up and is highly profitable, they just don't see the need for our department anymore (business decision, fair enough).

 

I have a new job more or less sorted but I also have to start over again with a new Probezeit there and I had accrued extra days holidays (we get 1 day per year of service extra up to 30 days) which I now have to start accruing from scratch again so it is not entirely convenient.

 

If I was to simply start a new job and instruct them that I want to go onto Lohnsteuerklasse VI (what an employer is obliged to put you on if you fail to provide a Lohnsteuerkarte anyway) until further notice, is there any way the original employer could find out? As far as I'm aware, separate employments have nothing to do with one another for tax purposes (until one files a Steuererklärung to reconcile and over/under payment in the previous tax year) and companies aren't even aware of the other employments unless explicitly told about them by the employee.

 

We don't have a Betriebsrat (very uncommon in our sector) but I do have legal insurance with cover for employment law, but I have to pay the first €250 myself. I think I'd be entitled to at least that, so it might well be worth it to get their opinion, but I was just throwing it out here for people's thoughts.

 

Cheers!

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The Finanzamt won't tell them, but what about social security?

Both public health and pension insurance only charge up to a limit and it sounds like with getting both salaries in parallel you would exceed that limit and social security would then contact the employer who pays last each month in order to reimburse them.

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I'm pretty sure that unless you have an agreement with them about an abfindung then you have no legal right to one after only being employed for 2 years.

 

 

My current employer states that should I find employment in this paid absence period, that I will cease being paid by them and that we would then have to negotiate an Abfindung, but surely they owe me an Abfindung (permanent employee since 1st April 2011) anyway?

 

I know the Abfindung wouldn't be huge money (have read roughly 0.5 months pay per year, so roughly 1.5 months pay if I go at the end of this month and start in my new place) but it's the principle of it: they are making us redundant, we're not resigning.

 

That's not even 2 years you have been employed there so how you come to 1.5 months pay at 0.5 months per year I have no clue.

 

Just take the new job and be done with it or sit on your arse till end of Dec being paid for it which would probably earn you more than any abfindung would be.

If you do decide to sit on your arse make sure you inform the Arbeitsamt now that you will be unemployed at the end of Dec.

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If your prospective employer is willing to wait until 1 January to hire you, i.e. the Start Date on the contract is 1 January 2013, then I'd take the garden leave. It might even be possible to do some freelancing during that garden leave, but that'd depend on your current contract, the terms stipulated in any documentation you signed related to your redundancy, and any other extant laws and/or regulations. So if you could/want to do that, get proper legal advice.

 

When I was handed my (voluntary) redundancy papers, it came with strict instructions to go visit an employment lawyer before signing it, and that the costs of said lawyer would be borne by the employer. This was in the UK, mind, and came with a voluntary separation package, but it sounds like something Germans might do too.

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Hi Keleth,

can you explain the Abfindung part a bit more. Is there a minimum 2 year period of employment before you're entitled to it?

 

It was they themselves that mentioned it, so I presumed there was an entitlement. The 1.5 months figure is wrong, don't know what the hell I was thinking, more like 0.75 months, if there's any entitlement at all, as I say, they brought it up so I presumed so.

 

I think I'll just offer them a deal and see if they bite. It's simply cheaper for them to pay a 1.5 or 2 month "Abfindung" rather than keep paying me for the entire 4 months and I'm not going to take a 4 month "holiday" as the other job is interesting. They'd be mad not to take a deal IMO but I guess we'll see.

 

Having spoken to some people I've decided to inform them regardless and not simply work the new job at Tax class VI as I don't want to get a reputation as some sort of fraudster, even though the firm has behaved quite shoddily and I certainly don't feel I owe them anything to be honest (even HR are embarrassed at the duties they're being asked to carry out at the moment, the HR rep to our department told me so)

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If your prospective employer is willing to wait until 1 January to hire you, i.e. the Start Date on the contract is 1 January 2013, then I'd take the garden leave. It might even be possible to do some freelancing during that garden leave, but that'd depend on your current contract, the terms stipulated in any documentation you signed related to your redundancy, and any other extant laws and/or regulations. So if you could/want to do that, get proper legal advice.

 

When I was handed my (voluntary) redundancy papers, it came with strict instructions to go visit an employment lawyer before signing it, and that the costs of said lawyer would be borne by the employer. This was in the UK, mind, and came with a voluntary separation package, but it sounds like something Germans might do too.

 

Hi Gwaptiva,

tbh I require their written consent to do any other work during this time (in my original contract) so even freelancing would require their consent technically. I can't sit around at home for 4 months, I'd go crazy I think, especially knowing that I could be actively working on a project and getting to know new systems/technologies that I haven't used before.

 

I have sent off an email to an online lawyer (a complimentary service offered by our legal insurance). I've never used it before so I'll be interested to see what they say back.

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Obviously, if the job's avaialble now, take it. Heck, you might even get them to compensate you (partly) for missing out on 4 months' paid vacation :)

 

Btw, I *loved* my year's unemployment. Not bored a single moment, and had the money not run out, I'd still be playing EVE Online all day :D

 

Note: EVE Online wasn't a time waster; it got me the job I have now :)

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Hi Keleth,

can you explain the Abfindung part a bit more. Is there a minimum 2 year period of employment before you're entitled to it?

I'm only going what we were told in 2008 when our jobs were under threat and we were told by our betriebsrat that legally it is something like 10 or 15 years you have to work before they are legally liable to give you an abfindung.

There is plenty of people on here who know about this sort of stuff and will give you the 100% correct info.

 

 

It was they themselves that mentioned it, so I presumed there was an entitlement. The 1.5 months figure is wrong, don't know what the hell I was thinking, more like 0.75 months, if there's any entitlement at all, as I say, they brought it up so I presumed so.

If they offered it then it sounds like it is probably an agreement with them that their employees receive an abfindung regardless of time worked.

Or they would rather you do what you say underneath as it is cheaper for them presumably...

 

 

I think I'll just offer them a deal and see if they bite. It's simply cheaper for them to pay a 1.5 or 2 month "Abfindung" rather than keep paying me for the entire 4 months and I'm not going to take a 4 month "holiday" as the other job is interesting. They'd be mad not to take a deal IMO but I guess we'll see.

Don't forget if you have accrued holidays to take them into account when coming to a settlement plus any flex time you may have.

Once again only speaking from personal experience in my job if we are made redundant or quit then we have the choice of taking the holidays as days off before end of notice period or being paid for them.Our flex time is to be used before the end of the notice period or we lose it.

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There's no general right to a compensation when being made redundant, with exceptions: compensation is part of a Sozialplan in big lay-offs (doesn't seem to apply here), part of a tariff contract or individual employment contract or the betriebsbedingte Kündigung includes an explicit offer for compensation on the grounds of § 1a Kündigungsschutzgesetz. In return, the employee renounces to the possibility to go to court, see Hensche, Arbeitsrecht

 

All other compensations and the amount that may be paid are negotiable; as a rule of thumb it's between 50% and 100% of the gross monthly salary per year of employment.

 

As to starting another job while still on the old job, many employment contracts stipulate that the employer has to give his okay to any side jobs. If your contract has this clause, it might not be correct not to tell the employer, because technically you are still employed, but this is disputed in the case of a suspension. The question of suspension and payment throughout the end of the contract even if the employee takes up a new job in the meantime seems to be controversial as well, see Freistellung:

 

 

Ein ähnlicher Streit kann entstehen, wenn der Arbeitgeber von dem Zwischenverdienst des Arbeitnehmers erfährt und diesen auf die für die Freistellungszeit zu zahlenden Vergütung anrechnet. Eine solche Anrechnung wird in der arbeitsgerichtlichen Rechtsprechung teilweise für rechtens und teilweise für unzulässig erklärt.

 

Es empfiehlt sich daher bei längeren Freistellungszeiträumen aus Sicht des Arbeitnehmers, die Vergütungspflicht des Arbeitgebers während der Freistellung in der Freistellungsvereinbarung als „unbedingte und von gesetzlichen Grundlagen der Entgeltfortzahlungspflicht unabhängige Zahlungspflicht“ zu bezeichnen.

I think especially with regard to the Freistellung and the start of the new job there are enough tricky questions to warrant consulting a lawyer for Arbeitsrecht now. Please note that the above is just my opinion and doesn't constitute legal advice.

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You say your next job is 'more or less sorted out' but if it is not 100% you should go to the Arbeitsamt immediately if you haven't already, to declare that you will be available for work in 3 months time. If you don't do this you will miss out on benefits, later. You are supposed to turn up within 3 days of getting your redundacy notice.

 

If you don't, you are putting a lot of trust into this new employer - a lot might change before next year. In any case it does no harm and your back is covered.

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I'm going to exchange original contracts this afternoon. I presume once I have a signed contract (already have a signed copy) it's not required that I go to the Arbeitsamt? (last place in the world I want to go tbh lol)

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I really don't want them tbh. We're saving for a house so being "on holiday" means I'd end up spending money that I wouldn't if I was in an office working. I also expect the work to be interesting and sitting at home alone would drive me bananas I think.

 

I understand people who are thinking "wtf you mad man, take the time off" but it just doesn't suit now and my new employer, while flexible, do need somebody sooner rather than later and I don't want to let them down.

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Is there a chance your new employer could do without you for the first few months - effectively "freezing" (ruht sich) the new contract, and only activating it out of being dormant when you are released from the current employer contract/redundancy? New (not replacement) positions never existing before often have a good potential for negotiating start dates.

 

Its hit and miss - sometimes employers expect a hiring requisition signed in say August might not get somebody physically sitting in an office chair until Dec/Jan taking recruitment lead times and candidate notice periods etc... into consideration. Other times though, especially project/service deadline critical vacancies must be filled on a certain date otherwise there is chain reaction on project deliverables.

 

I was available to start "immediately" with one of my employers, vacancy was advertized as immediate, and turns out they actually contacted me to ask if I didn't mind waiting a further 2-3 months before starting. Obviously, if you're out of work you do mind very much, but as was my case, if you're switching jobs/in redundancy phase, its a different story, and I was more than happy to wait.

 

Beware that if you come to a mutual arrangement to terminate early with your current employer, you may impact the starting date (and the waiting period before that) by which you will become entitled to collect unemployment benefits.

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Hi all,

quick update. I've signed a contract with my new employer, starting on the 1st of next month. I have also signed an Aufhebungsvertrag with my existing employer that terminates by mutual consent the employment on the 30th of this month. I will obviously receive my full pay up to that date and an Abfindung of 2 months pay (it still saves them a 3rd month, so they're happy enough, as am I).

 

My question now centres around tax: I believe that Abfindungen are nowadays taxable in Germany but there is possibly some way to reduce the tax burden and save a few bob? Anybody know anything about that, or should we split that off into another thread in finance?

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... is possibly some way to reduce the tax burden and save a few bob?

 

Not that I know of.

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You've barely been there a year and a half, so any severance pay you get will only be a blip in terms of your annual salary. The Fünftelregelung is applied to cases in which the severance pay is several times your annual pay.

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Cheers Jeff. That explains why the various online calculators seemed to show no/almost no advantage to simply letting the Abfindung be taxed as normal income at normal rates. I think there was a €80 advantage according to one of the calculators.

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