If the employer dismisses for operational reasons, they cannot always freely decide whom to let go. As a rule, they must carry out a so-called social selection based on certain criteria. In this article, you will learn why social selection can help you secure a substantial severance payment or even save your job.
- When does a social selection have to be carried out?
- General requirements for redundancy dismissal
- The three steps of social selection
- How to use social selection correctly to your advantage
- Conclusion
1. When does a social selection have to be carried out?
Social selection is relevant in connection with job cuts. The employer must use social criteria to determine who is least in need of protection. Only those positions may be eliminated.
A social selection is not necessary for all dismissals. The employer is only obliged to carry out a social selection in the context of redundancy dismissals. In the case of dismissals due to misconduct, illness or other reasons, a social selection would not make sense either.
It is also decisive whether the Protection Against Dismissal Act (KSchG) applies. This is always the case if you have worked for the company for longer than six months and the establishment regularly employs more than ten employees. If the KSchG does not apply, the employer is relatively free in its decision as to whether and whom to dismiss. Only in extreme cases—where, without any plausible reason, it could just as well have eliminated the position of someone who is significantly less in need of social protection—can this selection be challenged.
2. General requirements for redundancy dismissal
Now back to the standard case in which the employer must carry out a full social selection. First, I will explain to you which further requirements a redundancy dismissal depends on. Only once these hurdles have been cleared does the question arise of the correct social selection among those affected.
Redundancy dismissal means that employees are dismissed for economic reasons. There can be various causes for this. Examples include a weak economic situation, disruptions in a particular industry, or a restructuring or strategic realignment by your employer. An employer’s insolvency and the resulting job cuts also fall under this.
If you bring an action against your dismissal, the court will examine whether the termination meets all requirements:
- The employer must set out the economic reasons for the position being eliminated.
- In addition, they must prove that they cannot continue to employ you in any other comparable position within the company. If necessary, they are required to offer you further training/retraining.
- The court also carries out a balancing of interests between the two parties, in which the employer’s interest in termination must outweigh your interest in keeping your position.
- The employer must also comply with numerous formal requirements, in particular prior consultation of the works council and, where applicable, a collective redundancy notification to the employment agency.
3. The three steps of social selection
Social selection is carried out in three steps.
Forming a comparison group
First, a comparison group must be formed. This is because social selection is only necessary if those potentially affected by dismissals are comparable. Comparability depends on the tasks performed, hierarchical levels and many other aspects of the employment contracts. Much revolves around the question: Can the employer assign these people the same tasks—i.e., are they functionally interchangeable?
Example: A company downsizes its research department to reduce costs. You are one of four senior engineers. Some of them are to be dismissed. However, two of the four can continue to be employed as Technical Managers at the company’s Berlin headquarters.
All senior engineers can be regarded as comparable in their positions, so they form a comparison group. However, they would not be comparable with the commercial managers or IT engineers who are also being dismissed. They therefore could not form a comparison group with them.
Exceptions to social selection
Even if you belong to such a comparison group as in the example above, you may be excluded from social selection for special reasons. These exceptions apply to people who are of particular importance to the company and whom the legislator does not want to force the company to dismiss. However, for such exceptions the establishment must demonstrate a legitimate interest in continued employment. This is provided for in Section 1 (3) sentence 2 KSchG.
These exceptions are particularly interesting for you if you work as a manager with special qualifications.
Example: You work in sales at a medium-sized company. In future, you are to take on more responsibility as the company’s Head of Sales. Since your promotion to a management position is planned, you can be excluded from social selection.
Special performance, knowledge or qualifications may also mean that you are spared from social selection and remain in your position. This allows companies to retain key specialists.
On the other hand, of course, the employer may possibly apply such an exception to a colleague comparable to you as well. This increases your risk of being dismissed. It is worth taking a close look at whether the colleague was actually allowed to be left out of the social selection.
Applying the criteria
In the third step, the social selection criteria are applied. All employees in the comparison group are ranked according to these legally prescribed criteria. The employer may then only dismiss those who are least in need of social protection. The employer usually creates a points system. How they weight the individual criteria is, at least in part, at their discretion.
The criteria are as follows:
Length of service
One of the key criteria is the length of time you have already been with the company. What matters here is uninterrupted service; only this is taken into account. This is intended to reward your loyalty and commitment to the company and to reflect this accordingly in the social selection.
Severe disability
A severe disability is also taken into account in your favour. The reason is that job searches are often difficult for severely disabled people on the labour market. They are therefore particularly in need of protection in the event of redundancy dismissals. The severe disability must be determined under Section 152 SGB IX and be verifiable.
Existing maintenance obligations
If you are obliged to provide maintenance for your family, this also increases your need for protection in the event of redundancy dismissals. After all, other people (such as a spouse or children) depend on your income.
Age
Young people often have better opportunities on the labour market. Older people are therefore generally more in need of protection. Put simply, the employer must therefore prioritise dismissing younger employees. The details, however, are far more complicated.
4. How to use social selection correctly to your advantage
The good thing about social selection is that it is highly prone to errors. In almost all employment-law restructurings, doubts can be raised as to whether the social selection was carried out properly. So if you are affected by job cuts, you have a good chance of using errors in the social selection to your advantage.
In many cases, it makes sense to bring an action against the dismissal. If the court decides that the employer did not carry out the social selection properly, you can return to your position.
However, this scenario is rather theoretical. As a rule, people seeking advice prefer to receive an attractive severance payment, leave the company and take up a new position. As a rule, you have to negotiate the severance payment. There is only rarely an entitlement. The more flawed the social selection, the higher the amounts that are realistic. I will help you with the negotiation!
Very important: From the date you receive the notice of dismissal, you only have three weeks to file a claim. After this deadline, both severance payments and returning to your job are equally unrealistic.
By the way, you can demand that the employer tells you the reasons for its social selection. On that basis, it is often possible to assess quite well what your chances are in court.
5. Conclusion
- In the case of redundancy dismissals, your employer generally has to select, based on certain criteria, whom to dismiss. This is called social selection.
- Social selection is not necessary if the company employs ten or fewer people and/or you have been employed for six months or less.
- In social selection, comparable employees must be ranked according to the criteria length of service, severe disability, maintenance obligations and age. The employer may only dismiss those who are less in need of protection.
- Social selection is often flawed. If so, after a dismissal you have a good chance of securing an attractive severance payment.