An Executive employee ist an employees. There is, however, no uniform legal regulation that can determine when an employee has a management function. The Works Constitution Act does contain certain criteria in § 5 BetrVG. An important indication for such a position is if an employee has been granted a general power of attorney or a power of attorney with not insignificant powers.
However, even when applying this standard, determining whether someone is in a managerial position or not can be very difficult in practice. The common practice of designating employees in employment contracts as executives and treating them as such for this reason alone does not correspond to the legal situation.
The legislator treats executive Employees differently from normal employees
Since typical employer tasks are part of the scope of duties, they are treated differently from “normal” employees by the legislator.
- Under § 14 (2) of the German Protection Against Dismissal Act (Kündigungsschutzgesetz), certain senior executives do not enjoy protection for their existing staff, but only protection against severance pay.
- The Works Constitution Act does not apply in principle, § 5 (3) BetrVG. Rather, they are represented by the spokesperson committee in accordance with the Spokesperson Committee Act.
- The Working Hours Act is also not applicable pursuant to § 18 (1) 1 Arbeitszeitgesetz.
Executive employees have special duties
The executive often represents the company to the outside world in a special way. Because of their prominent position, actions in their free time also have an impact on the company. It is more likely to result in customer complaints or the like, such as racist statements on Facebook. Due to the proximity to the employer and this special position, such employees have special duties of conduct and loyalty.
Termination of the executive employee
There are no special reasons for the termination of a executive employee. However, because an act of a manager in breach of his or her duties is more likely to cause damage to the enterprise than to a normal employee, the employer may give notice of termination for conduct that would not be sufficient grounds for termination for a normal employee.
If there is a committee of spokespersons, this committee must be heard and informed of the reasons for the termination. The Spokespersons’ Committee may raise objections to ordinary notices of termination within one week and to extraordinary notices of termination without delay.
In the event of a termination, an action for protection against dismissal must also be filed. The employer has the opportunity to file a dissolution petition during the proceedings. This means that the court can dissolve the employment relationship upon request if the employer pays a severance. This possibility also exists for normal employees. The difference to executive employees is that the employer does not have to justify the request here.
Employers should carefully check whether an employee is actually a manager before giving notice. If this is not the case, the works council should be involved. Managers must also file a complaint within three weeks of termination.