Employer not obligated to pay remuneration in the event of pandemic-related business closure

The Lower Saxony Regional Labor Court (like the lower court, the Verden Labor Court) had determined that the closure of a sales outlet by official order as a result of the COVID 19 pandemic was part of the employer's operational risk and that the employer was therefore still required to pay his employees’ remuneration. The Federal Labor Court has now – correctly – recognized that the official order to close the store as a measure to combat the pandemic relates to the general risk of life and must be borne equally by everyone, and that the employee therefore has no claim to payment of remuneration.

In the decision’s underlying case, an employee working as a sales assistant in a marginal employment ("mini-job") had demanded payment of remuneration from her employer, which trades in sewing machines and accessories, for one month (April 2020) during which the employer had had to close its business due to the general decree issued by the Free Hanseatic City of Bremen in order to contain the coronavirus and was therefore unable to accept the plaintiff's work performance.

The Federal Labor Court has now decided – in contrast to the previous instances – that the employer does not bear the risk of loss of working hours if, in order to protect the population from severe and fatal courses of disease as a result of SARS-COV-2 infections, social contacts are reduced to a minimum by administrative order and almost all facilities not necessary for the supply and care of the population are closed. According to the Federal Labor Court, the present case does not constitute an operational risk inherent in a particular business (which must always be borne by the employer). Rather, the impossibility of work performance resulted from a governmental intervention to avert a dangerous situation affecting society as a whole. As the situation did not constitute an operational risk, there was also no obligation on the part of the employer to pay remuneration.

The Federal Labor Court points out that, in such cases, the state was responsible to provide adequate compensation for the financial disadvantages suffered by employees as a result of the governmental intervention, which has been implemented to some extent by facilitating access to short-time allowance. To the extent such access is not guaranteed – as in the case of the plaintiff as a mini-jobber – this was due to gaps in the social security system. However, from the absence of such a downstream statutory entitlement, one could not deduce any employer's payment obligation under labor law.

So far, the decision is only available as press release.

Decision:

German Federal Labor Court
Decision of October 13, 2021 – 5 AZR 211/21 

Lower court: Lower-Saxony Regional Labor Court
Decision of March 23, 2021 – 11 SA 1062/20