(German Federal Labour Court (Bundesarbeitsgericht), Decision of 28 Jan 2026 – 5 AS 4/25):
Many companies try to limit the financial risk arising from unfair-dismissal proceedings through contractual arrangements. A common approach is to use clauses intended to exclude pay in lieu of work as broadly as possible—sometimes combined with a choice-of-law clause in favor of foreign law. The German Federal Labour Court (Bundesarbeitsgericht, BAG) decision of 28 Jan 2026 – 5 AS 4/25 draws a clear line here: A complete, advance waiver/exclusion of acceptance-default claims (Annahmeverzug) in the dismissal context is impermissible.
What is “Annahmeverzug” and why is it economically relevant?
“Annahmeverzug” (default of acceptance) occurs when the employee is willing to work, but the employer does not accept the performance—typically because the employer believes the employment relationship has ended due to dismissal. If an unfair-dismissal claim later establishes that the dismissal was invalid or only becomes effective at a later date (e.g., due to an incorrect notice period), the employee may claim remuneration for the interim period under Section 615 sentence 1 of the German Civil Code (BGB). In practice, this can quickly lead to substantial back-pay exposure (several months’ salary).
Core holding of the BAG: Section 615 BGB is partly mandatory in dismissal cases
The BAG clarifies:
- As a rule, Section 615 sentence 1 BGB is dispositive: the parties may modify it contractually.
- However, a complete advance exclusion of acceptance-default claims is not permitted for cases in which an employer’s dismissal is invalid or becomes effective only later because it violates the applicable notice period.
- Legal consequence: in this area, Section 615 sentence 1 BGB operates as mandatory law. A clause that reduces the claim to zero in the dismissal context is void under Section 134 BGB as an impermissible circumvention of mandatory dismissal-protection rules.
Important for international settings: even a choice-of-law clause (Article 8(1) Rome I Regulation) cannot override this mandatory protection.
In doing so, the Fifth Senate confirms the line taken by the Second Senate and at the same time corrects its own earlier case law, which had at times treated Section 615 BGB as fully waivable.
Reasoning in brief: Protecting employees’ economic security
The Senate draws the line where contractual drafting would effectively deprive dismissal protection of its economic substance. Dismissal protection law is not merely “formal law”; it is intended to secure the employee’s economic livelihood. The structure of the Dismissal Protection Act (KSchG), including Sections 9–12, presupposes that, where a dismissal is invalid, remuneration is generally owed as acceptance-default pay. Notice periods (Section 622 BGB) and the rules on extraordinary dismissal (Section 626 BGB) also serve to protect the economic basis at least for a transitional period. A pre-formulated total exclusion would circumvent this protective logic—and is therefore void.
Practical implications for employers
- Review employment contracts, collective agreements, and works agreements: clauses that completely exclude or reduce acceptance-default pay to zero in the event of dismissal are invalid.
- Cross-border employment relationships: relying on “foreign law” as a lifeline does not work here.
- Calculate dismissal risk realistically: the more vulnerable a dismissal is (notice periods, hearings, justification), the higher the acceptance-default risk.
- Adjust litigation strategy: in dismissal protection proceedings, the acceptance-default issue (including interim earnings, malicious failure to mitigate, etc.) should be considered early—but not through “zero clauses.”
Conclusion
The decision increases pressure to manage dismissals carefully and to use legally robust contract templates. Total exclusions of acceptance-default pay in connection with invalid or notice-defective employer dismissals will no longer be a reliable instrument.
Jan-Peter Braun, Specialist attorney in labour law
Contact:
Jan-Peter Braun