Germany’s Federal Labor Court has ruled that termination notices issued without proof of authority can be rejected by employees, rendering them legally invalid.
The decision, handed down on May 7, 2026, centres on a dispute between a managing director and the limited liability company that employed her under a formal employment agreement.
The company’s three-member supervisory board unanimously resolved to remove the managing director and terminate the employment relationship, but only two of the three members signed the termination letter.
The termination notice, dated August 11, 2023, was signed by two supervisory board members including the chair, but contained no attached proof of authority for those two signatories.
The managing director received the notice on August 14, 2023, and just four days later, on August 18, rejected it on the grounds that no proof of authority had been submitted.
Germany’s Federal Labor Court, known as the Bundesarbeitsgericht, affirmed lower court decisions and held both termination notices invalid, siding with the managing director’s challenge.
The court applied Section 174 of the German Civil Code by analogy, finding that without proof of authorisation, the managing director was entitled to reject the notice promptly.
The BAG confirmed that the four-day rejection window was considered prompt, and that only after more than one week has elapsed is a rejection generally no longer considered timely.
The company subsequently attempted a second termination without notice on December 7, 2023, this time transmitted electronically as part of court proceedings, but that too was struck down.
The court ruled that an electronically transmitted pleading does not satisfy the written-form requirement for termination notices, as the relevant legislative provision did not enter into force until July 17, 2024.
The ruling carries significant practical implications for German employers, particularly where authority to act is distributed across individual members of a corporate body rather than held by the representative body as a whole.
Employers should ensure that any termination notice issued by individual members of a supervisory board is accompanied by clear, documented proof of their authorisation to act alone.
Ogletree, Deakins, Nash, Smoak and Stewart, P.C., whose Berlin office authored analysis of the ruling, noted the firm would continue to monitor developments and post updates on its Cross-Border and Germany blogs.