Same title, less responsibility: Beware of unlawful transfers

A transfer to a position with the same formal title is unlawful if it involves a significant reduction in the scope of duties and responsibilities and thus effectively constitutes a change to the employment contract.

Facts of the Case

The employee had been employed as a department head since 2002 and most recently managed a department comprising four teams and a total of 77 staff members. In addition to comprehensive personnel responsibility, his remit also included the commercial administration and supervision of the teams. As part of a restructuring, the employer assigned the employee to manage a different department. The new focus of his work was to be on developing new client relationships and business development, as well as planning and conducting client meetings. This new department consisted of only two teams. One team comprised just one or two employees and was on short-time working. The other team initially consisted of 19 employees and was predominantly deployed externally. It had its own team leader. At the same time, there was a company-wide hiring freeze, meaning that any foreseeable expansion of the teams was not possible.

The head of department considered the transfer to be unlawful, as he had not been assigned work of equivalent value and the new role was limited to sales organisation and customer contact. The employer, on the other hand, took the view that the size of a department was irrelevant to equivalence; the sole determining factor was the formal position as head of department.

The decision

The Regional Labour Court ruled that the transfer was not covered by the employer’s right to issue instructions and was therefore invalid. The decisive factor was whether the new role was equivalent in substance to the previous one. What mattered was not the formal title of the position or the unchanged remuneration, but the actual scope of duties, responsibilities and standing within the company.

In the court’s view, there was a significant reduction in the scope of duties and responsibilities in this case. Instead of four teams with 77 employees, the employee now managed only two teams comprising a total of approximately 20. The duties envisaged by the employer for a head of department – primarily the sustainable management of sales and service delivery within the department, as well as the leadership of staff and managers – could no longer be performed in this role.

The employer’s right to issue instructions serves only to further specify the agreed contractual duties. However, it did not entitle the employer to alter the content of the contract. Such an alteration could only be effected by way of a notice of amendment. It was irrelevant that the employee continued to receive the same remuneration. The consequence of the invalid transfer was that the employee was entitled to continued employment in his previous role.

Consequences for practice

The decision makes it clear that employers must examine transfers, particularly at management level, with particular care. The employment relationship enjoys protection against substantive changes to the agreed role. An unchanged job title or unchanged remuneration is not sufficient to establish the equivalence of a role. What is decisive is the actual content of the role.

Particularly in situations of restructuring and crisis, there is a significant risk that transfers may effectively amount to a demotion and thus exceed the limits of the employer’s right to issue instructions.

The Lower Saxony Regional Labour Court thus confirms the case law of the highest courts by applying established principles to a management context.

Practical tip

Transfers must always be assessed on their merits. Employers should carefully check and document in advance whether the tasks, responsibilities, hierarchical position and economic significance of the new role are in fact equivalent. If this is not the case, the only legally secure option is usually a notice of change or a mutually agreed amendment to the contract:

In principle, a transfer can be implemented with the consent of the employees concerned, not least because there is a chance that employees will accept it if their title and remuneration remain unchanged. However, if the person concerned refuses the transfer, the legal challenges are significantly greater. In such situations, it is therefore advisable to first seek a mutually agreed solution with the employees concerned. If this fails, legal advice is strongly recommended to avoid costly court proceedings.