Higher Severance Pay in the Event of Termination of Employment?
Following a notice of termination employees are trying to negotiate, at least, a high severance pay and are bringing the right to information under the GDPR into play. Gerd Kaindl and Dominik Sorber explain when employees are crossing the borderline into abuse of law.
After having been given notice of termination an employee files a complaint against unfair dismissal. The parties usually negotiate an amicable settlement. In so doing, the critical issue is always the amount of the severance pay. If the employer does not accept the (in most cases excessively high) claim, the employees are often drawing the data protection "card", i.e. the right to information pursuant to Art. 15 General Data Protection Regulation (GDPR). Accordingly, the employee - also the former employee - has a right to information of the data stored with regard to him/her. This right to information is far-reaching - even if the extent is not yet clear. What is clear, though, is that it means much work for the employer.
The question that arises, therefore, from the perspective of both the employers as well as - increasingly - the labour courts , is which limits have to be drawn under the aspect of labour law if a right to information is asserted pursuant to Art. 15 GDPR. The current situation is as follows: It is not (yet) possible to make reference to the rulings of the Federal Labour Court (Bundesarbeitsgericht, BAG)
regarding the extent of the right to information under data protection law. Before the Federal Labour Court appeal proceedings (previous instance Higher Labour Court of Baden-Wurttemberg, Judgment of December 20, 2018, Case No. 17 Sa 11/18) are pending which could contribute to a clarification of the matter (Case No. 5 AZR 66/19).
Most recently, inter alia, the Labour Court of Dusseldorf (Judgment of 5 March 2020, Case No. 9 Ca 6557/18) adopted a position regarding the right to information. The court, inter alia, correctly referred to the fact that, under certain conditions, the effort regarding the compliance with the right to information may be manifestly disproportionate to the interest of the employee (data subject) in the performance. The Labour Court dismissed the claim for information of an employee and justified this, in particular, with the principle of good faith also applicable under European law. Thus, no unreasonable efforts are demanded from the responsible party - the employer - to meet the claim for information at all costs.
1. Abuse of the Right as further Borderline?
It will not be possible to confine the right to information to the principle of good faith alone. Another case group is the abuse of a right. Art. 12 (5) s. 2 GDPR provides for such an abuse limit. So far its structure and implementation has been clarified neither by case-law nor by legal literature.
The abuse of a right requires a very narrow time-wise and content-wise connection to the action against unfair dismissal. Moreover, there must be further apparent accompanying circumstances indicating that the assertion of a right to information by the employee is an abuse of law. As a rule, this might only be the case if there is a connection between the exercise of the right to information and the demand for an excessive severance pay.
It would be conceivable that an employee states in a court hearing that he/she waives the assertion of a right to information only if an apparently too high severance pay is made. Should the employee in such a case assert a right to information, the assertion of the right to information does not correspond with the actual purpose, but would be - as a rebuttable presumption - an abuse of rights. This objection should also be taken into account in a possible examination procedure under data protection law and protect the employers against the risk that administrative fine proceedings will be initiated with very high and severe sanctions. Each examination procedure should be preceded by the abuse control.
2. More "Severance Pay" by way of Damages?
Employees can also increase their "severance pay" by way of the assertion of damages. For instance, the Labour Court Dusseldorf had rejected the right to information in part, however, the former employee has received compensation for damages. This was due to the fact that the employer did comply with the request for information incompletely pursuant to the GDPR and not within the period of one month as provided for.
The information obligation regularly has ready bureaucratic hurdles and particular pitfalls for employers. If the employer makes avoidable mistakes here, such as the observance of the - extendable - one-month time-limit a claim for damages can be made against the employer.
It is therefore recommended to regulate the right to information under data protection law in an amicable settlement or in a termination agreement. The payment of a severance pay should be conditional on the "settlement" of the right to information from the employer's point of view. A comparison of facts may be used as methodological resource. In this comparison of facts, it is agreed that the right to information is deemed to be fulfilled. Apart from that, the employee can also declare a withdrawal of the request for information. The comparison of facts and the withdrawal, however, are only effective for the past, but not for the future.
3. Waiver of Right to Information
However, it has to be taken into account that the right to information can also be asserted after termination of the employment relationship without specifying any reason. For this situation, a waiver with effect for the future may be recommendable. The question whether such a waiver would be permissible has neither been discussed in case-law nor in legal literature so far and has also not been decided by a supervisory authority.
A waiver, however, might be generally permissible. Since the persons concerned may also dispose of their rights within the scope of consent. This is also supported by the fact that employees may waive their right of objection within the scope of a transfer of business under certain conditions pursuant to the case-law of the Federal Labour Court.
In conclusion, it is recommended to include a financial compensation clause in an amicable settlement or termination agreement which, in particular, explicitly excludes claims for damages based on a violation of the information obligation.
For then, the employee may play the data protection "card", but the company has a "joker" ready. The judicature will still have to decide whether this joker is necessary from the employers' point of view.
The authors Gerd Kaindl (licensed labour law specialist) and Dr Dominik Sorber work as lawyers at the Munich office of BEITEN BURKHARDT in the Labour Law Practice Group.