As a general rule, employees have the right to be given work under their employment contract with their employer. If the employer refuses to provide work, regardless of whether the employee would like to work, the employer remains obligated to pay the employee remuneration in the case of default in acceptance. It is often the case in practice that employers place employees who have given their notice on garden leave but continue to pay them. When placing employees on garden leave it is frequently stipulated that any existing annual leave entitlement is offset. Employers also reserve the right to offset the remuneration against any remuneration that could be potentially earned elsewhere during the period of garden leave. The Federal Labour Court (Bundesarbeitsgericht, BAG) has repeatedly commented on the extent to which an employee is obligated to endeavour to obtain new employment during potentially lengthy unfair dismissal proceedings, see also the Legal Updates dated 02/03/2021 and 09/01/2023. In a recent judgment the BAG(cf. Press release for the judgment dated 12/02/2025 – 5 AZR 127/24) has now ruled that the employee is, however, not obligated to actively apply for a new job during the ongoing notice period.
Facts of the matter
The claimant had been employed by the respondent since 2019. The respondent ordinarily terminated the employment contract in a letter dated 29/03/2023 adhering to the applicable notice period of three months to the end of June. At the same time, the respondent irrevocably placed the claimant on garden leave, freeing him from his obligation to carry out work and offsetting any remaining annual leave. In addition, the employer reserved the right to offset any other income earned by the employee during garden leave against the ongoing remuneration to be paid to the employee section 615 sentence 2 German Civil Code (BGB). The claimant filed a claim for unfair dismissal against the termination with the Labour Court (Arbeitsgericht, ArbG).
After receipt of the notice of termination, the claimant registered himself with the Federal Employment Agency as looking for work at the beginning of April 2023 and first received suggested vacancies from them at the beginning of July 2023. The respondent forwarded a total of 43 vacancies to the claimant in May and June 2023. The claimant applied for seven of these vacancies, although not until 28/06/2023, one day before the hearing at the Labour Court. After the respondent had no longer paid the claimant any remuneration for June 2023, the claimant filed a claim for this. The respondent argued that the claimant was already obligated to promptly submit applications for vacancies he had been made aware of during garden leave. As he had not done so, the amount of remuneration payable by the employer for June 2023 must be offset by a fictitious other employment as per section 615 sentence 2 BGB.
The decision of the BAG
The Labour Court rejected the claim. The Regional Labour Court (Landesarbeitsgericht, LAG) ruled in favour of the claimant on appeal. The appeal on a point of law brought by the respondent was unsuccessful, as the BAG upheld the ruling of the LAG (cf judgment dated 03/05/2024 – 9 Sa 4/24).
The BAG ruled that because the respondent had unilaterally placed the employee on garden leave during his notice period they were in default of acceptance and the respondent was obligated to pay the agreed remuneration for the entire duration of the notice period as per section 615 sentence 1 BGB in conjunction with section 611a (2 BGB. It held that remuneration acquired elsewhere does not have to be offset by the claimant as per section 615 sentence 2 BGB. This would only be justified if the claimant had not acted in good faith (section 242 BGB) and had remained idle in bad faith. As section 615 sentence 2 BGB contains an equity rule, the extent of the employee's obligation to acquire employment elsewhere may not be assessed separately from the employer's obligation to provide work for the employee. If follows that the claimant is not obligated to ease the financial burden of the respondent before the end of the notice period by starting another job and earning remuneration.
Practical significance
It remains to be seen whether this decision can be applied to all cases. The written opinions are not yet available. Although the BAG has previously ruled that employees may be obligated to actively endeavour to obtain income and apply for reasonable vacancies, this depends on the circumstances of the respective individual case, however. The LAG emphasised that a different position could be taken for roles that can be learnt quickly. In this case it had to be taken into account that the hearing date was imminent and was still inside the notice period. In addition, as there was no first instance judgment it was still possible that the employee could obtain continued employment with the employer. The employee could still assume that the termination was invalid up until this point. When ruling whether a behaviour was wilful it is required to always take the individual overall circumstances into account. In this case the BAG ruled against the employer who upon placing the employee on garden leave had ultimately deliberately decided to not provide the employee with work.
