Companies must notify authorities of mass redundancies before they take effect

Insolvency proceedings were initiated against a German company, and the company decided to terminate all its employees.

Under both German and EU rules, companies must inform the competent authority if they intend to carry out mass redundancies.

The company had not done so. The parties disagreed on whether the company should terminate the employees again or whether it could validate the terminations by informing the authority afterwards.

The Advocate General rejected the company's attempt to provide information retrospectively. Therefore, the company had to start over, first notifying the authorities and then terminating the employees again.

IUNO's opinion

If the European Court of Justice follows the Advocate General's decision, companies that do not inform the Regional Employment Council of mass redundancies have, in principle, not terminated their employees. The Danish rules on mass redundancies allow for the same result, but the issue has not yet been tested before the Danish courts.

IUNO recommends that companies follow the mass redundancy procedure before carrying out mass redundancies. If not, there is a risk that employees will, in principle, remain employed with a right to salary until the company gives proper notice.

We will follow the case and update you when the European Court of Justice delivers their final ruling.

[Opinion of the Advocate General in case C-134/24 of 27 February 2025]