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In an answer to a recent question, it was stated that

(...) unless you are in Germany or a country with similarly rigid firing order

Is there a legally binding mechanism which takes the seniority into account when a company must choose between several people to be fired?

Is it THE algorithm for the choice, or only ONE of the elements to take into account?

(I am of course not expecting an answer with all possible cases, just a general one on a peculiar law, also interested in other similar setups in the EU)

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In Germany, a layoff is called Betriebsbedingte Kündigung (Translation: "Termination due to reasons of corporate setup". Means the job is gone with no replacement, instead of the person was fired to hire someone else.)

Sind mehrere vergleichbare Arbeitnehmer betroffen, muss der Arbeitgeber die Arbeitnehmer, denen er kündigen möchte, zudem nach bestimmten sozialen Kriterien auswählen (Sozialauswahl). Er muss dabei die Dauer der Betriebszugehörigkeit, das Lebensalter, eventuelle Unterhaltspflichten und eine eventuelle Schwerbehinderung des Arbeitnehmers ausreichend berücksichtigen. Auf Verlangen des Arbeitnehmers hat der Arbeitgeber dem Arbeitnehmer die Gründe anzugeben, die zu der getroffenen sozialen Auswahl geführt haben.

Translation (emphasis mine for the context of this question):

If several comparable employees are affected, the employer must also select the employees whom he wishes to dismiss according to certain social criteria (social selection). In doing so, he must take sufficient account of the employee's length of service, age, possible support obligations and any severe disability. At the employee's request, the employer must inform the employee of the reasons that led to the social selection made.

So how do you weight 10 years and 2 ex-wife's against 5 years, a wife and 2 kids? There is no single formula, but the formula has to be made available to all who got laid off. It's called the "Sozialplan".

If you have no "Sozialplan" or your Sozialplan will not hold up in court, the termination is invalid and the company will need to pay the employee as if they had been employed all the time since the layoff. As a court ruling on those cases can take years, that is a pretty hefty risk in the books and many companies rather pay a good severance (which is not legally required in Germany at all) to make sure nobody sues, than having that risk in their books.

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  • Yours is way better than mine but I would add one note that this is very unlike many other eu countries where for redundancy it's usually down to management to make the choice who to let go, as long as it doesn't discriminate (and that's a high bar to prove even if they do discriminate against a singular person during layoffs. That is unless they are very stupid about it). – Tymoteusz Paul Jul 10 at 9:50
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    Would a sozialplan be valid if the formula weighted one factor far above others? Just wondering it could be used as an excuse to implement age based discrimination. – Myles Jul 10 at 13:50
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    Well, first you'd need to discriminate against younger people, you cannot turn the plan upside down. And then... they probably already are on the bottom of the list because the older people will likely have more dependents and more years of service. But yes, if you want to get rid of all the young, cheap, well-educated, overtime-happy single workers, you'd probably be able to tailor a sozialplan for that. I don't think anybody ever tried... – nvoigt Jul 10 at 16:03
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    @nvoigt about a social plan to keep young workers: one has to consider the cost of firing people. In France (the only case I know) the cost is usually a proportion of the total wages earned in the company, so firing the latest arrived can be way cheaper than the first. – m.raynal Jul 10 at 19:26
  • @nvoigt It appears to be the point of sozialplan that it is harder to fire older workers, so whether you tailor it or not, you might have to fire the younger ones. Down here in Latvia it is not that much regulated, but especially in state institutions it might be risky for management to fire somebody close to retirement, so firing is done reluctantly and sometimes leads to people who are unfortunately unable to contribute on level, remaining in positions which would otherwise be filled with better performing younger ones. – Gnudiff Jul 11 at 4:47
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When a company is large enough to have a Betriebsrat (workers council), then §112 BetrVG says that mass-layoffs need to be planned according to a Sozialplan (social plan) which is to be negotiated between the Betriebsrat and company management, with the Agentur für Arbeit (labor office) acting as a mediator if no consensus can be found.

The law says that the Sozialplan should protect those employees who:

  • Have the largest economical disadvantages through loss of income
  • Would lose retirement benefits
  • Would have to move or take a job at a much more distant place
  • Have a low chance to find a new job
  • Are relevant for the existence of the company

And prefer to fire those who:

  • Could be moved to an adequate different job at the company or one of its subsidiaries but reject that offer

So no, seniority alone is not directly relevant in this case. But it can be indirectly relevant, because people with high seniority are often in a situation where it is difficult for them to find a job at a different company, are often also very important for the existence of the company. They also tend to have a higher income, so there is the argument that they have the largest disadvantage through loss of income.

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