Employment law in Germany: the implication of the COVID-19 outbreak on employers

Written on 13 Mar 2020

With thousands of confirmed cases of Coronavirus and its borders now closed, Germany's businesses face major disruption which raises a range of questions for employers. We gather together a list of points around employer relationships that businesses might need to address during the pandemic.

General effects on the employment relationship without any concrete involvement

Do employers have to take precautions? This is recommended. The employer's duty of care also includes the obligation to organise the business in such a way that there is as little risk of infection as possible. Depending on the current risk situation, this duty of care must always be reassessed. Possible measures that might be taken are:

  • Informing employees about the risks of infection with the virus.
  • Providing disinfectants (for example, at entrances, in the coffee kitchen and in sanitary facilities).
  • Enabling employees to work from home.
  • Holding conferences by phone, Skype, or other remote working systems.

Is the employer obliged to provide information? Employers, because of their duty of care towards employees, should inform them about hygiene regulations (for instance, using notices on the intranet, notice boards or circulars by email). Employers can point out the following points, for example:

  • Wash your hands frequently and thoroughly.
  • Avoid handshakes for greeting.
  • Do not cough in your hands, but use the crook of your arm or a tissue instead.

Can employees refuse to work/stay away from work because they are afraid of becoming infected during work?

In principle, employees cannot unilaterally refuse to perform their work. Employees are also not entitled to refuse performance if they fear that they will be infected with an illness. Rather, employees lose their wage entitlement in the event of a unilateral refusal to perform. In addition, employers may consider taking consequences under employment law (such as issuing a warning notice, in individual cases even the termination of the employment relationship may be considered).

Can employees demand to work from home? Employees have no legal right to work from home ("home office"). Instead, working from home requires a legal basis, for example, an agreement between employer and employee. However, employers should consider giving this option to employees who can also perform their work from home. This can reduce the risk of infection and possible absences from work.

Specific requirements must be met for work in the home office, in particular requirements under occupational safety law (existence of a suitable workplace) or data protection law (for example, ensuring that third parties do not gain unauthorised access to protected data). In addition, the works council may have co-determination rights if the employer wishes to grant home office to employees collectively.

Can employers still send employees on business trips? Employers still have the right to send employees on business trips within the framework of their "right of direction". However, the employer's instruction must be in accordance with "reasonable discretion", for instance, the interests of the employer and the interests of the employee must be sufficiently taken into account in the decision.

Against this background, employers that order business trips to take place in regions for which there is a travel warning from the Federal Foreign Office or that have been classified as risk areas by the Robert Koch Institute will not be in line with fair judgement. A different assessment is conceivable in exceptional cases if it is part of the employee's field of activity to travel to such regions (such as journalists or doctors).

First suspicious cases

Can the employer order a company medical examination of employees to rule out infection of employees with the coronavirus? In this instance, employers may not in principle order medical examinations of employees. However, as a milder remedy, employers may unilaterally exempt employees for a certain period of time while continuing to pay their remuneration (see the answer to the next question).

Can the employer send an employee home in case of suspected coronavirus infection? Employers may unilaterally release employees from work where there is a reasonable suspicion, subject to revocation and continued payment of remuneration. A well-founded suspicion will certainly exist if an employee has recently been in a region that has been classified as a risk area by the Robert Koch Institute or in a region for which there is a travel warning from the German Foreign Office, and if the employee also shows specific symptoms of illness. In such cases, a unilateral revocable exemption for the duration of the currently assumed incubation period of two weeks should be possible for the protection of other persons.

Employees directly affected

Must an employee inform the employer if the competent authority has ordered the quarantine of the employee? In all cases, the employee must inform the employer of their absence from work. Whether the employee is obliged to inform the employer about an official quarantine has not been conclusively clarified. In practice, however, this is unlikely to be relevant, as employees will usually report when an official quarantine has been ordered. In addition, the employer will learn about the quarantine through the competent authorities.

Is an employee who is in officially ordered quarantine obliged to work? If a quarantine is ordered without the employee actually falling ill, it depends on the individual case whether the employee is obliged to perform the work. If the employee carries out an activity that is only possible in the employer's business (such as work on an assembly line), there is no obligation to perform the work.

If the employee performs an activity that can also be done from home (for example, an employee from the legal department) and there is a (valid) home office agreement with the employee, then the employee is obliged to perform work. The question is currently open as to whether an employee is exceptionally obliged to work from home due to a special "emergency situation".

If, on the other hand, the quarantined employee is ill and incapable to work, there is obviously no obligation to perform the work.

Is an employee entitled to remuneration if an official measure has been imposed on him/her (for example, an employment ban or quarantine)? Persons who suffer a loss of earnings because the authorities have imposed an employment ban or quarantine on them receive compensation in money, cf. sec. 56 para. 1 of the German Infection Protection Act (Infektionsschutzgesetz – IfSG).

For the payment of this compensation, the employer makes an advance payment and pays the compensation to the employee for a period of six weeks. The amount of the compensation is calculated in the first six weeks after the loss of earnings.

The employer may apply to the competent authority for reimbursement of the compensation paid. Employers may also apply to the competent authority for an advance payment of the anticipated amount of the reimbursement. From the beginning of the seventh week, compensation shall be granted by the competent authority at the request of the employee. The amount of the compensation is then based on the amount of sickness benefit, provided that the loss of earnings does not exceed the annual earnings limit applicable for compulsory statutory health insurance.

However, the compensation option described above only exists for persons who "suffer a loss of earnings":

  • Particularly in the case of an officially ordered ban on work, it may be that no such loss of earnings exists if the employee retains their claim to a wage from his or her employer despite being prevented from performing his or her work duties. Such a case exists, for example, if the provision of sec. 616 sentence 1 German Civil Code (Bürgerliches Gesetzbuch – BGB) applies.
  • According to this provision, the employee does not lose the right to remuneration for work by being prevented from performing the service for a relatively insignificant period of time by a reason inherent in their person without his fault.
  • In the case of an individual prohibition of activity which only affects a single employee, it is precisely such an obstacle which could be seen to lie in the person of the employee. The Federal Court of Justice (Bundesgerichtshof – BGH), for example, assumed this in its judgment of 30 November 1978 (File No. III ZR 43/77), and denied a claim for compensation in the context of an imposed ban on activity by the epidemic police with reference to sec. 616 BGB.
  • Insofar as the competent authorities consider the provision of sec. 616 sentence 1 BGB to be applicable in individual cases, employers would not be entitled to compensation.

If, however, the employer and employee have excluded the applicability of the provision of sec. 616 sentence 1 BGB in the employment contract, the authorities could not refuse a request to reimburse the compensation payments.

Is an employee entitled to remuneration if he or she has fallen ill with the coronavirus? In the event of illness, the employee is generally entitled to continued remuneration in accordance with the provisions of the German Continued Remuneration (during Sickness) Act (Entgeltfortzahlungsgesetz – EFZG). The claim to continued payment of remuneration is probably also not excluded in the case of an infection during a stay in a so-called risk area due to self-inflicted illness, as the mere stay in such an area should not yet have crossed the threshold to particularly careless or even deliberate behaviour.

If the employee is ill and there is an official prohibition of employment, the question arises as to whether the employee is entitled to continued remuneration in the event of illness or to compensation (see also question above) in accordance with sec. 56 para. 1 IfSG. The prevailing view is that the IfSG takes precedence as a more specific legal basis.

What should employers consider in the event of an official closure of a business?

In addition to banning employment or ordering quarantine, the authorities can also order the closure of entire businesses and shops. In this case, employers are advised to assert a claim for compensation according to sec. 56 IfSG. As described above, the employer continues to pay the remuneration for at least six weeks. However, the employer may claim reimbursement from the competent authority.

Can employers also take a purely precautionary approach by suspending business operations without having to continue paying wages? Employers may suspend business operations purely as a precaution, e.g. to reduce the risk of infection. In this case, however, they must continue to pay the wages.

Legal notice: The information contained in this list of questions has been compiled with due care. Nevertheless, no liability can be assumed for its accuracy, topicality and completeness, regardless of the legal basis. The reading does not replace individual advice, so that no responsibility can be assumed for decisions which the reader makes on the basis of this information. Reprinting or reproduction is only permitted with the written consent of the publishers.