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Extraordinary termination of a managing director due to the accusation of paying consulting fees is invalid

The In its judgment of September 24, 2024, the Lower Saxony State Labor Court has file number 10 SLa 76/24 decided on the appeal in a procedure about the effectiveness of a termination without notice or, alternatively, a termination on notice and damages in the amount of over 200,000 euros.

From the press releases from the LAG Lower Saxony from September 17th, 2024 and October 7th, 2024:

The plaintiff has been working as managing director of the defendant association since 2009, whose aim is to promote the breeding of Oldenburg horses in accordance with traditional breeding regulations. On May 2, 2023, the defendant terminated the employment relationship with the plaintiff without notice, or alternatively within the prescribed period. In support of this, he asserted in the first instance that the plaintiff had culpably breached his employment contractual obligations by obliging the defendant to pay consulting fees totaling 217,017.71 euros without his involvement. In view of his secret actions and the financial volume of the transactions, the trust in the plaintiff was irretrievably destroyed. The latter must reimburse the costs caused by his actions.

The plaintiff stated that it is the original task of the managing director of an association to manage day-to-day business, which also includes the conclusion of contractual obligations. The association’s board of directors was also aware of some of these obligations. The association did not suffer any damage and therefore could not be compensated.

The labor court upheld the claim and dismissed the counterclaim. The defendant’s board of directors at the time approved and initiated the project to be developed, including the associated financial commitment. For years, coordination between the board and management that deviated from the employment contract had been practiced. Therefore, the plaintiff cannot be blamed for his behavior. If he is accused of having concluded unfavorable contracts, this does not entitle him to terminate the contract without prior warning. The plaintiff could also request continued employment. The claim for damages pursued in the counterclaim is unfounded because there is no breach of duty for which the plaintiff is responsible. The defendant also did not adequately demonstrate the occurrence of damage.

With his appeal, the defendant is pursuing his request for dismissal of the lawsuit and payment of damages.

The 10th Chamber of the Lower Saxony State Labor Court partially rejected the defendant’s appeal as inadmissible and rejected the rest. Like the labor court, she found the dismissals to be ineffective. She did not consider the appeal against the dismissal of the claim for damages to be sufficiently justified. The chamber did not allow the appeal to the Federal Labor Court.

‹ Compensation for pain and suffering in the event of adjustment disorder, reinstatement to the previous position according to § 233 ZPO – application of the BGH unconstitutional ›

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