Quick Hits
- Dismissals following an employee’s refusal to accept a unilateral, far-reaching relocation of the workplace may count toward the thresholds for mass dismissals, the European Court of Justice held in a June 2026 decision.
- Whether a workplace relocation is equivalent to a dismissal depends on the circumstances of the individual case, in particular the distance involved, the permanence of the change, and any compensatory measures offered.
- In the event of a site relocation, employers may want to assess early on whether a mass dismissal notification to the German Federal Employment Agency (Agentur für Arbeit) and the involvement of the works council (Betriebsrat) are required.
Site Relocation of More Than 600 Kilometers
The employer is an Italy-based company specializing in the manufacture of power generators. It ceased production at a site in Campania and relocated operations entirely to a new site in Sardinia. The two sites were more than 600 kilometers apart, separated by the Mediterranean Sea. Several employees failed to report to the new workplace, whereupon the employer initiated disciplinary proceedings and terminated their employment contracts. The Italian appellate court submitted a request for a preliminary ruling to the ECJ pursuant to Article 267 of the Treaty on the Functioning of the European Union, asking whether such dismissals must be treated as notifiable mass dismissals for the purposes of the Collective Redundancies Directive.
The Significance of the Change Is Decisive
The Collective Redundancies Directive defines mass dismissals as dismissals effected by an employer for one or more reasons not related to the individual workers concerned, provided that certain quantitative and temporal thresholds are met. The ECJ interprets the concept of a notifiable dismissal under the Collective Redundancies Directive broadly: it encompasses any termination of the employment contract that is not sought by the employee, i.e., that occurs without the employee’s consent.
In the ECJ’s view, a significant change to the essential terms of the employment contract that is imposed unilaterally by the employer to the detriment of the employee for reasons not related to the employee personally also falls within the concept of a notifiable dismissal under the Collective Redundancies Directive.
The workplace regularly constitutes an essential term of the contract, as any change to the workplace can have significant economic and organizational consequences for the employee concerned. The ECJ identified three criteria for determining whether a change is significant: the permanence of the relocation, the distance between the original and the new workplace, and any accompanying measures to compensate for the proposed reassignment.
In the case of a permanent relocation of more than 600 kilometers, the ECJ considered that there was much to suggest a significant change. The final assessment, however, remains with the referring Italian court.
Implications for Employers in Germany
In Germany, Sections 17 and 18 of the German Dismissal Protection Act (Kündigungsschutzgesetz (KSchG)) govern, in particular, the mass dismissal notification to the Federal Employment Agency (Agentur für Arbeit), the associated involvement of the works council (Betriebsrat), and the dismissal moratorium that may apply.
Dismissals issued without the required prior notification are void—a point the Federal Labor Court (Bundesarbeitsgericht (BAG)) reaffirmed in its judgment of April 1, 2026 (Ref. No. 6 AZR 157/22).
In two 2025 rulings, the ECJ held that failure to provide proper notification prior to a mass dismissal will result in invalid layoffs
The latest ECJ ruling broadens the perspective: going forward, employers must also include dismissals following a refused long-distance transfer in the threshold calculation. However, not every refusal to accept a transfer automatically triggers a mass dismissal. The decisive factors are the specific circumstances, in particular the distance involved, the duration, and the absence of compensatory measures.
Takeaways: EU-Law Concept of Dismissal Reaches Far
The ruling confirms that the EU-law concept of “dismissal” is broad in scope. Where the new workplace is far away and the change is permanent, employees’ refusal to transfer can result in the need to initiate mass dismissal proceedings.
Employers may therefore want to assess during the planning phase whether transfers, terminations with an offer of changed conditions (Änderungskündigungen), or subsequent terminations of employment must be aggregated and whether proceedings under Section 17 KSchG should be initiated as a precautionary measure. This is particularly important in the context of major restructurings, as procedural errors can significantly delay implementation and, in individual cases, jeopardize the validity of dismissals already issued.
Andre Appel is a partner in Ogletree Deakins’ Berlin office.
Lela Salman, a law clerk in Ogletree Deakins’ Berlin office, contributed to this article.
Ogletree Deakins’ Berlin office and Global Reorganizations Practice Group will continue to monitor developments and will post updates on the Cross-Border, Germany, Global Reorganizations, and Reductions in Force blogs as additional information becomes available.
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