Lawblog<\/h1><\/div><\/div><\/div><\/div><\/div><\/div>\n![](\"https:\/\/www.adkl-msi.de\/wp-content\/uploads\/2020\/01\/leistung_icon_recht.png\" "\\"leistung_icon_recht\\"")
<\/span><\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/div>Information and updates from legal advice<\/h2><\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/i><\/i><\/span>Managing director liability in times of crisis: When do obligations shift from shareholders to creditors?<\/span><\/a><\/h4><\/div>\nManaging directors of a limited liability company (GmbH) naturally act in the interests of \u2018their\u2019 company on a day-to-day basis and thus, ultimately, in the interests of the shareholders. The aim is to manage the company successfully, generate profits and increase its value. In difficult economic times, however, a key question arises: does this remain the case, or must managing directors at some point give priority to protecting the interests of creditors, such as banks, suppliers or landlords?<\/p>\n
In legal terms, this is referred to as a possible \u2018reversal of duties\u2019. This refers to the question of whether and at what point the benchmark for managing director decisions shifts from the shareholders to the creditors.<\/p>\n
Principle: As long as the company is healthy, the interests of the shareholders count<\/strong><\/b><\/p>\nNormally, the situation is clear. Managing directors are obliged to manage the company in the interests of the shareholders. They may and should take entrepreneurial risks, open up new business areas and invest, as long as these decisions are economically justifiable. Creditors’ interests may be taken into account, for example to secure the financing of the company or to ensure long-term stability. However, they are not the decisive legal benchmark.<\/p>\n
Even when initial economic difficulties arise, this does not change.<\/p>\n
Impending insolvency: no change in obligations yet<\/strong><\/b><\/p>\nImpending insolvency refers to a situation where it is foreseeable that the company may not be able to meet its future liabilities, but is currently still solvent. Under German law, there is no change in the managing directors’ obligations during this phase. Managing directors remain primarily accountable to the shareholders.<\/p>\n
This does not mean that they are allowed to remain inactive. On the contrary, they must continuously monitor the economic situation, identify risks, draw up plans and examine restructuring options. Legally, however, they continue to act in the interests of the shareholders. Creditors do not yet have priority at this stage.<\/p>\n
Restructuring proceedings: Creditors’ interests come to the fore<\/strong><\/b><\/p>\nThe situation is different once formal restructuring proceedings have been initiated. From this point on, the law expressly obliges the management to protect the interests of all creditors.<\/p>\n
This does not mean that shareholder interests become completely irrelevant. However, it sets a clear boundary: measures that jeopardise the success of the restructuring or unreasonably disadvantage creditors are not permitted. Within the restructuring proceedings, creditor interests take precedence in procedural decisions.<\/p>\n
In practical terms, this means in particular that high-risk \u2018all-or-nothing\u2019 decisions, which give shareholders a last chance but would further harm creditors in the event of failure, are no longer legally justifiable without further ado.<\/p>\n
Insolvency maturity: the change of obligation is complete<\/strong><\/b><\/p>\nAs soon as the company is over-indebted or insolvent, the legal situation changes fundamentally. From this point on, it is no longer the shareholders who bear the economic risk, but the creditors. The shareholders have effectively lost their remaining economic interest in the company.<\/p>\n
The managing director must then consistently align his actions with the interests of the creditors. The goal is no longer to increase value, but to limit damage, preserve assets and treat creditors equally. In this phase, particularly strict legal obligations apply, in particular the obligation to file for insolvency in good time and the prohibition on making payments after insolvency has occurred. Violations regularly lead to personal liability.<\/p>\n
Self-administration: the benchmark remains the interests of creditors<\/strong><\/b><\/p>\nEven if insolvency proceedings are conducted under self-administration and the management remains in office, the same applies. Managing directors no longer act in the interests of the shareholders, but in the interests of the creditors. The responsibility here is particularly high because special liabilities under insolvency law apply and decisions are closely scrutinised.<\/p>\n
Conclusion for managing directors<\/strong><\/b><\/p>\nA change in obligations does not occur automatically just because a crisis is looming. As long as there is only a threat of economic difficulties, the interests of the shareholders remain decisive. With the start of formal restructuring proceedings, the creditors come to the fore. At the latest when insolvency occurs, the change in obligations is complete.<\/p>\n
For managing directors, this means that the legal standard changes significantly depending on the stage of the crisis. Decisions that are permissible or even necessary in normal business operations can trigger considerable personal liability risks in restructuring or near insolvency.<\/p>\n
When a crisis looms, the legal classification of the stage is crucial because it determines obligations, scope for action and personal liability risks. We advise managing directors and shareholders of limited liability companies on early crisis detection, restructuring and insolvency-related decisions and provide support in the legally compliant design and documentation of the necessary measures.<\/p>\n<\/div><\/div><\/div><\/div><\/div>
26 January 2026 by Philipp Dietz <\/a>and Justus Abeln<\/a><\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/i><\/i><\/span>BSG on status determination: Contract drafting as the key to contractor compliance<\/span><\/a><\/h4><\/div>\nThe distinction between dependent employment and self-employment is one of the perennial issues in social security law and entails considerable compliance risks. The ruling of the Federal Social Court (BSG) of 22 July 2025 (Ref.: B 12 BA 7\/23 R) makes it clear that the careful drafting of contracts is crucial for legal classification.<\/p>\n
Key points of the BSG ruling:<\/strong><\/b><\/p>\n\n- Contract as starting point and end point:<\/b> The status check must be based primarily on the contract that has been concluded. The decisive factor is whether its content corresponds to the practical implementation. If the contract and reality differ, the actual arrangement takes precedence.<\/li>\n
- Party intent in cases of doubt:<\/b> If there is a balance between indications of dependent employment and self-employment, the documented intent of the parties to agree on self-employment is given particular weight.<\/li>\n
- Limits of party autonomy:<\/b> Contractual clauses that exclude employee rights (e.g. continued payment of remuneration, holiday entitlement, social security obligations) merely demonstrate the intention to avoid employment, but do not in themselves constitute evidence.<\/li>\n
- Relativisation of the parties’ intentions:<\/b> The less clear the wording of the contract or the greater the imbalance in the negotiating positions, the less evidence the parties’ intentions provide.<\/li>\n<\/ul>\n
Practical implications for contract design:<\/strong><\/b><\/p>\n\n- Clear characteristics of self-employment should be expressly regulated in the contract (e.g. freedom to choose location and working hours, possibility of working for several clients, precise description of services).<\/li>\n
- Terms and structures that indicate an employment relationship should be consistently avoided.<\/li>\n
- When concluding a contract, it is important to check whether the agreed form of cooperation can actually be implemented in practice.<\/li>\n<\/ul>\n
Conclusion:<\/b><\/p>\n
The BSG emphasises that the documented contract design plays a central role in determining status \u2013 especially in cases of doubt. A clear, consistent and practically implementable contract design is therefore an essential component of effective contractor compliance<\/b>.<\/p>\n
Practical tip:<\/strong><\/b><\/p>\nWhen drafting contracts with freelancers or contractors, it is not only important to ensure that the wording of the contract is clear. It is crucial that the agreements are actually implemented. Even the best-formulated contract loses its effect if the contractor is integrated into the company organisation in practice like an employee (e.g. fixed working hours, holiday requests, use of IT infrastructure as for employees). Companies should therefore regularly check whether the contract and actual practice are consistent and adjust their internal processes accordingly. This significantly reduces the risk of status determination proceedings and additional social security contributions.<\/p>\n<\/div><\/div><\/div><\/div><\/div>
09.09.2025 by Heike Fiss<\/a> and Martin Giepen<\/a><\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/i><\/i><\/span>BAG confirms: No preventive measures required during waiting period<\/span><\/a><\/h4><\/div>\nThe question of whether employers must initiate a prevention procedure in accordance with Section 167(1) of SGB IX when terminating the employment of severely disabled employees within the first six months (\u2018waiting period\u2019) has recently caused considerable uncertainty in practice. In particular, decisions by the Cologne labour courts (ArbG Cologne, judgment of 20 December 2023, ref.: 18 Ca 3954\/23 and LAG Cologne judgment of 12 September 2024, ref.: 6 SLa 76\/24) affirmed such an obligation, thereby paving the way for de facto special protection against dismissal during the probationary period.<\/p>\n
The BAG’s decision:<\/b><\/p>\n
In its ruling of 3 April 2025 (2 AZR 178\/24), the BAG has now provided clarity:<\/p>\n
There is no obligation to carry out a prevention procedure during the waiting period.<\/p>\n
Such a procedure only comes into consideration when the Unfair Dismissal Protection Act (KSchG) applies.<\/p>\n
In the underlying case, a severely disabled employee had been dismissed after only three months. He argued that the dismissal was invalid because the employer had not carried out a prevention procedure. However, the BAG dismissed the claim and clarified that Section 167 (1) SGB IX is systematically tailored to the grounds for dismissal under Section 1 (2) KSchG \u2013 and these do not apply during the waiting period.<\/p>\n
What is a prevention procedure?<\/strong><\/b><\/p>\nThe prevention procedure is an early warning system provided for by law: in the event of difficulties in the employment relationship, employers should seek solutions at an early stage together with the representative body for severely disabled persons, the works council and the integration office in order to maintain the employment relationship \u2013 for example, through adjustments to the workplace or special support measures. Only when this dialogue fails is dismissal considered as a last resort.<\/p>\n
Significance for practice<\/strong><\/b><\/p>\nWith its decision, the BAG clearly rejects the decisions of the Cologne labour courts and provides clear legal certainty. Employers can be confident that dismissal during the waiting period is not invalid solely because of a lack of a prevention procedure.<\/p>\n
At the same time, it should be noted that<\/p>\n
\n- The involvement of the representative body for severely disabled persons and the works council is also mandatory during the waiting period.<\/li>\n
- In addition, the termination of the employment relationship must be reported to the integration office within four days (Section 173 SGB IX).<\/li>\n<\/ul>\n
The BAG thus confirms its previous line \u2013 and relieves employers of the concern that the probationary period for severely disabled employees could become a hidden special protection against dismissal due to a prevention procedure.<\/p>\n<\/div><\/div><\/div><\/div><\/div>
01.09.2025 by Heike Fiss<\/a> and Martin Giepen<\/a><\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/i><\/i><\/span>Terminations by registered mail? Registered mail \u2013 No prima facie evidence of actual receipt BAG ruling of 30 January 2025 \u2013 2 AZR 68\/24<\/span><\/a><\/h4><\/div>\nThe Federal Labour Court (BAG) has once again tightened the rules on proof of delivery: without a delivery receipt, there is no reliable proof of delivery!<\/p>\n
In the proceedings, an employee disputed the delivery of the notice of termination. The employer was only able to present the shipment tracking information \u2013 and failed.<\/p>\n
In its ruling of 30 January 2025 \u2013 2 AZR 68\/24, the BAG clarifies:<\/p>\n
The mere presentation of the proof of posting for a registered letter and the presentation of its delivery history do not in themselves constitute prima facie evidence of receipt of the delivered mail by the recipient without the presentation of a reproduction of the delivery receipt. Online tracking (\u2018delivered\u2019) is not sufficient to prove receipt in a legally secure manner. More concrete evidence is required, such as a delivery receipt or witness statements\u203c\ufe0f<\/p>\n
Conclusion:<\/b><\/p>\n
If the employer cannot prove that the employee has received the notice of termination, the employment relationship is not terminated. This entails considerable financial and organisational risks.<\/p>\n
Companies should therefore urgently review and adapt their internal delivery processes.<\/p>\n
Receipt must be reliably proven by means of a delivery receipt and\/or witnesses.<\/p>\n
Where possible, companies should deliver notices of termination by (courier) messenger or in person.<\/p>\n
If you have any questions about termination, please do not hesitate to contact us.<\/p>\n<\/div><\/div><\/div><\/div><\/div>
08 May 2025 by Heike Fiss<\/a> and Philipp Dietz<\/a><\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/i><\/i><\/span>Termination without notice due to working time fraud and reimbursement of detective costs<\/span><\/a><\/h4><\/div>\nIn its ruling of 11 February 2025, ref. no. 7 Sa 635\/23, the Cologne Regional Labour Court upheld the dismissal of an employee for deliberately falsifying his working hours \u2013 and also ordered him to reimburse the costs of hiring a detective, amounting to \u20ac21,608.90.<\/p>\n
The current ruling shows that anyone who falsely documents their own working hours not only risks their job, but also possibly the costs of hiring a detective agency.<\/p>\n
The facts of the case:<\/strong><\/b><\/p>\nA ticket inspector in public transport is alleged to have made several private trips during his working hours \u2013 to the hairdresser, the gym, the baker’s, a photo shoot or the mosque \u2013 without documenting this as a break in the time recording system.<\/p>\n
Following external reports, the employer commissioned a detective to initially carry out random checks on the employee during his working hours and in public spaces. The detective discovered corresponding violations on several days.<\/p>\n
The same pattern was observed during the subsequent two weeks of surveillance during working hours.<\/p>\n
The employer then terminated the employment relationship without notice. The employee filed an action for unfair dismissal, and the employer demanded the costs of the surveillance.<\/p>\n
The decision:<\/strong><\/b><\/p>\nWorking time fraud is a serious breach of trust that can justify termination without notice as good cause.<\/p>\n
In this case, the termination without notice was effective.<\/p>\n
The surveillance by the detective agency was permissible under data protection law, especially since it only took place after initial suspicion, only during working hours and only in public spaces.<\/p>\n
The detective costs are to be borne by the employee as compensation.<\/p>\n
The court once again makes it clear:<\/u> Anyone who deliberately misrepresents their working hours is in serious breach of their employment contract obligations \u2013 and thus causes a significant breach of trust. This justifies termination without notice and, under certain circumstances, personal liability for the investigation costs may also be incurred.<\/p>\n
Conclusion<\/strong><\/b><\/p>\nThe ruling is yet another warning signal for anyone who is not entirely accurate with their time recording.<\/p>\n
Employers are permitted to engage a detective agency if they have concrete suspicions.<\/p>\n
Substitute members of the works council are also not safe from dismissal if there has been a serious breach of duty.<\/p>\n
The ruling shows once again that employees who falsify their time records not only risk their jobs, but also significant financial losses.<\/p>\n
If you have any questions about dismissal due to serious breaches of trust, among other things, we will be happy to assist you.<\/p>\n<\/div><\/div><\/div><\/div><\/div>
08 May 2025 by Heike Fiss<\/a> and Philipp Dietz<\/a><\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/i><\/i><\/span>New transitional provision \u00a7 127 SGB IV mitigates liability risks of the Herrenberg ruling<\/span><\/a><\/h4><\/div>\nIn its Herrenberg ruling of 28 June 2022 (B 12 R 3\/20 R), the Federal Social Court ruled in an individual case on the insurance obligation of a music teacher at a municipal music school on the basis of dependent employment.<\/p>\n
The Bundestag responded by passing a transitional regulation for teaching activities in Section 127 of the Social Security Code IV (SGB IV) on 30 January 2025. The Bundesrat approved it on 14 February 2025.<\/p>\n
The new Section 127 SGB IV stipulates that, for a limited transitional period\u202f\u2013 initially limited until 31 December 2026 \u2013 the work of teachers is to be structured as self-employed work that is not subject to social security contributions or income tax, and thus the mandatory payment of social security contributions is to be waived. The application of the transitional provision requires that<\/p>\n
\n- the contracting parties agree or have agreed at the time of conclusion of the contract that the activity is self-employed and<\/li>\n
- the teacher concerned agrees to this.<\/li>\n<\/ul>\n
However, this regulation only applies to \u2018genuine teachers\u2019 who are self-employed and therefore subject to pension insurance contributions. In practice, this means that persons who did not previously fall within the scope of \u2018self-employed teachers\u2019 within the meaning of Section 2 No. 1 SGB VI will continue to be fully subject to social security contributions in future. Universities and educational institutions must therefore check very carefully whether the teachers they employ actually meet the requirements of the planned standard, as it is to be expected that the German Pension Insurance Fund will examine potential cases of application particularly critically in future.<\/p>\n
Definition of teaching activity:<\/b><\/p>\n
Teaching activity is defined in Section 2 of SGB VI. According to this, teaching activities include the transfer of knowledge and the instruction of practical activities. In addition to teachers, lecturers, speakers and teaching staff at schools and universities, this also includes sports instructors of all kinds (e.g. skiing, tennis, golf), driving instructors, music teachers, language teachers and dance instructors.<\/p>\n
Our recommendation:<\/strong><\/b><\/p>\nWe strongly recommend that educational institutions and companies obtain the written consent of their freelance teachers as a precautionary measure, confirming that they are not subject to compulsory insurance on the basis of their activities until 31 December 2026. This consent is a key prerequisite for taking advantage of the transitional provisions of Section 127 SGB IV and avoiding potential legal disputes or additional claims.<\/p>\n
We would be happy to advise you on the implementation of the new Section 127 SGB IV and support you in making the necessary changes to your organisational models.<\/p>\n<\/div><\/div><\/div><\/div><\/div>
08 May 2025 by Heike Fiss<\/a> and Martin Giepen<\/a><\/p>\n<\/div>
<\/span><\/div>Information and updates from legal advice<\/h2><\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/i><\/i><\/span>Managing director liability in times of crisis: When do obligations shift from shareholders to creditors?<\/span><\/a><\/h4><\/div>\nManaging directors of a limited liability company (GmbH) naturally act in the interests of \u2018their\u2019 company on a day-to-day basis and thus, ultimately, in the interests of the shareholders. The aim is to manage the company successfully, generate profits and increase its value. In difficult economic times, however, a key question arises: does this remain the case, or must managing directors at some point give priority to protecting the interests of creditors, such as banks, suppliers or landlords?<\/p>\n
In legal terms, this is referred to as a possible \u2018reversal of duties\u2019. This refers to the question of whether and at what point the benchmark for managing director decisions shifts from the shareholders to the creditors.<\/p>\n
Principle: As long as the company is healthy, the interests of the shareholders count<\/strong><\/b><\/p>\nNormally, the situation is clear. Managing directors are obliged to manage the company in the interests of the shareholders. They may and should take entrepreneurial risks, open up new business areas and invest, as long as these decisions are economically justifiable. Creditors’ interests may be taken into account, for example to secure the financing of the company or to ensure long-term stability. However, they are not the decisive legal benchmark.<\/p>\n
Even when initial economic difficulties arise, this does not change.<\/p>\n
Impending insolvency: no change in obligations yet<\/strong><\/b><\/p>\nImpending insolvency refers to a situation where it is foreseeable that the company may not be able to meet its future liabilities, but is currently still solvent. Under German law, there is no change in the managing directors’ obligations during this phase. Managing directors remain primarily accountable to the shareholders.<\/p>\n
This does not mean that they are allowed to remain inactive. On the contrary, they must continuously monitor the economic situation, identify risks, draw up plans and examine restructuring options. Legally, however, they continue to act in the interests of the shareholders. Creditors do not yet have priority at this stage.<\/p>\n
Restructuring proceedings: Creditors’ interests come to the fore<\/strong><\/b><\/p>\nThe situation is different once formal restructuring proceedings have been initiated. From this point on, the law expressly obliges the management to protect the interests of all creditors.<\/p>\n
This does not mean that shareholder interests become completely irrelevant. However, it sets a clear boundary: measures that jeopardise the success of the restructuring or unreasonably disadvantage creditors are not permitted. Within the restructuring proceedings, creditor interests take precedence in procedural decisions.<\/p>\n
In practical terms, this means in particular that high-risk \u2018all-or-nothing\u2019 decisions, which give shareholders a last chance but would further harm creditors in the event of failure, are no longer legally justifiable without further ado.<\/p>\n
Insolvency maturity: the change of obligation is complete<\/strong><\/b><\/p>\nAs soon as the company is over-indebted or insolvent, the legal situation changes fundamentally. From this point on, it is no longer the shareholders who bear the economic risk, but the creditors. The shareholders have effectively lost their remaining economic interest in the company.<\/p>\n
The managing director must then consistently align his actions with the interests of the creditors. The goal is no longer to increase value, but to limit damage, preserve assets and treat creditors equally. In this phase, particularly strict legal obligations apply, in particular the obligation to file for insolvency in good time and the prohibition on making payments after insolvency has occurred. Violations regularly lead to personal liability.<\/p>\n
Self-administration: the benchmark remains the interests of creditors<\/strong><\/b><\/p>\nEven if insolvency proceedings are conducted under self-administration and the management remains in office, the same applies. Managing directors no longer act in the interests of the shareholders, but in the interests of the creditors. The responsibility here is particularly high because special liabilities under insolvency law apply and decisions are closely scrutinised.<\/p>\n
Conclusion for managing directors<\/strong><\/b><\/p>\nA change in obligations does not occur automatically just because a crisis is looming. As long as there is only a threat of economic difficulties, the interests of the shareholders remain decisive. With the start of formal restructuring proceedings, the creditors come to the fore. At the latest when insolvency occurs, the change in obligations is complete.<\/p>\n
For managing directors, this means that the legal standard changes significantly depending on the stage of the crisis. Decisions that are permissible or even necessary in normal business operations can trigger considerable personal liability risks in restructuring or near insolvency.<\/p>\n
When a crisis looms, the legal classification of the stage is crucial because it determines obligations, scope for action and personal liability risks. We advise managing directors and shareholders of limited liability companies on early crisis detection, restructuring and insolvency-related decisions and provide support in the legally compliant design and documentation of the necessary measures.<\/p>\n<\/div><\/div><\/div><\/div><\/div>
26 January 2026 by Philipp Dietz <\/a>and Justus Abeln<\/a><\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/i><\/i><\/span>BSG on status determination: Contract drafting as the key to contractor compliance<\/span><\/a><\/h4><\/div>\nThe distinction between dependent employment and self-employment is one of the perennial issues in social security law and entails considerable compliance risks. The ruling of the Federal Social Court (BSG) of 22 July 2025 (Ref.: B 12 BA 7\/23 R) makes it clear that the careful drafting of contracts is crucial for legal classification.<\/p>\n
Key points of the BSG ruling:<\/strong><\/b><\/p>\n\n- Contract as starting point and end point:<\/b> The status check must be based primarily on the contract that has been concluded. The decisive factor is whether its content corresponds to the practical implementation. If the contract and reality differ, the actual arrangement takes precedence.<\/li>\n
- Party intent in cases of doubt:<\/b> If there is a balance between indications of dependent employment and self-employment, the documented intent of the parties to agree on self-employment is given particular weight.<\/li>\n
- Limits of party autonomy:<\/b> Contractual clauses that exclude employee rights (e.g. continued payment of remuneration, holiday entitlement, social security obligations) merely demonstrate the intention to avoid employment, but do not in themselves constitute evidence.<\/li>\n
- Relativisation of the parties’ intentions:<\/b> The less clear the wording of the contract or the greater the imbalance in the negotiating positions, the less evidence the parties’ intentions provide.<\/li>\n<\/ul>\n
Practical implications for contract design:<\/strong><\/b><\/p>\n\n- Clear characteristics of self-employment should be expressly regulated in the contract (e.g. freedom to choose location and working hours, possibility of working for several clients, precise description of services).<\/li>\n
- Terms and structures that indicate an employment relationship should be consistently avoided.<\/li>\n
- When concluding a contract, it is important to check whether the agreed form of cooperation can actually be implemented in practice.<\/li>\n<\/ul>\n
Conclusion:<\/b><\/p>\n
The BSG emphasises that the documented contract design plays a central role in determining status \u2013 especially in cases of doubt. A clear, consistent and practically implementable contract design is therefore an essential component of effective contractor compliance<\/b>.<\/p>\n
Practical tip:<\/strong><\/b><\/p>\nWhen drafting contracts with freelancers or contractors, it is not only important to ensure that the wording of the contract is clear. It is crucial that the agreements are actually implemented. Even the best-formulated contract loses its effect if the contractor is integrated into the company organisation in practice like an employee (e.g. fixed working hours, holiday requests, use of IT infrastructure as for employees). Companies should therefore regularly check whether the contract and actual practice are consistent and adjust their internal processes accordingly. This significantly reduces the risk of status determination proceedings and additional social security contributions.<\/p>\n<\/div><\/div><\/div><\/div><\/div>
09.09.2025 by Heike Fiss<\/a> and Martin Giepen<\/a><\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/i><\/i><\/span>BAG confirms: No preventive measures required during waiting period<\/span><\/a><\/h4><\/div>\nThe question of whether employers must initiate a prevention procedure in accordance with Section 167(1) of SGB IX when terminating the employment of severely disabled employees within the first six months (\u2018waiting period\u2019) has recently caused considerable uncertainty in practice. In particular, decisions by the Cologne labour courts (ArbG Cologne, judgment of 20 December 2023, ref.: 18 Ca 3954\/23 and LAG Cologne judgment of 12 September 2024, ref.: 6 SLa 76\/24) affirmed such an obligation, thereby paving the way for de facto special protection against dismissal during the probationary period.<\/p>\n
The BAG’s decision:<\/b><\/p>\n
In its ruling of 3 April 2025 (2 AZR 178\/24), the BAG has now provided clarity:<\/p>\n
There is no obligation to carry out a prevention procedure during the waiting period.<\/p>\n
Such a procedure only comes into consideration when the Unfair Dismissal Protection Act (KSchG) applies.<\/p>\n
In the underlying case, a severely disabled employee had been dismissed after only three months. He argued that the dismissal was invalid because the employer had not carried out a prevention procedure. However, the BAG dismissed the claim and clarified that Section 167 (1) SGB IX is systematically tailored to the grounds for dismissal under Section 1 (2) KSchG \u2013 and these do not apply during the waiting period.<\/p>\n
What is a prevention procedure?<\/strong><\/b><\/p>\nThe prevention procedure is an early warning system provided for by law: in the event of difficulties in the employment relationship, employers should seek solutions at an early stage together with the representative body for severely disabled persons, the works council and the integration office in order to maintain the employment relationship \u2013 for example, through adjustments to the workplace or special support measures. Only when this dialogue fails is dismissal considered as a last resort.<\/p>\n
Significance for practice<\/strong><\/b><\/p>\nWith its decision, the BAG clearly rejects the decisions of the Cologne labour courts and provides clear legal certainty. Employers can be confident that dismissal during the waiting period is not invalid solely because of a lack of a prevention procedure.<\/p>\n
At the same time, it should be noted that<\/p>\n
\n- The involvement of the representative body for severely disabled persons and the works council is also mandatory during the waiting period.<\/li>\n
- In addition, the termination of the employment relationship must be reported to the integration office within four days (Section 173 SGB IX).<\/li>\n<\/ul>\n
The BAG thus confirms its previous line \u2013 and relieves employers of the concern that the probationary period for severely disabled employees could become a hidden special protection against dismissal due to a prevention procedure.<\/p>\n<\/div><\/div><\/div><\/div><\/div>
01.09.2025 by Heike Fiss<\/a> and Martin Giepen<\/a><\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/i><\/i><\/span>Terminations by registered mail? Registered mail \u2013 No prima facie evidence of actual receipt BAG ruling of 30 January 2025 \u2013 2 AZR 68\/24<\/span><\/a><\/h4><\/div>\nThe Federal Labour Court (BAG) has once again tightened the rules on proof of delivery: without a delivery receipt, there is no reliable proof of delivery!<\/p>\n
In the proceedings, an employee disputed the delivery of the notice of termination. The employer was only able to present the shipment tracking information \u2013 and failed.<\/p>\n
In its ruling of 30 January 2025 \u2013 2 AZR 68\/24, the BAG clarifies:<\/p>\n
The mere presentation of the proof of posting for a registered letter and the presentation of its delivery history do not in themselves constitute prima facie evidence of receipt of the delivered mail by the recipient without the presentation of a reproduction of the delivery receipt. Online tracking (\u2018delivered\u2019) is not sufficient to prove receipt in a legally secure manner. More concrete evidence is required, such as a delivery receipt or witness statements\u203c\ufe0f<\/p>\n
Conclusion:<\/b><\/p>\n
If the employer cannot prove that the employee has received the notice of termination, the employment relationship is not terminated. This entails considerable financial and organisational risks.<\/p>\n
Companies should therefore urgently review and adapt their internal delivery processes.<\/p>\n
Receipt must be reliably proven by means of a delivery receipt and\/or witnesses.<\/p>\n
Where possible, companies should deliver notices of termination by (courier) messenger or in person.<\/p>\n
If you have any questions about termination, please do not hesitate to contact us.<\/p>\n<\/div><\/div><\/div><\/div><\/div>
08 May 2025 by Heike Fiss<\/a> and Philipp Dietz<\/a><\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/i><\/i><\/span>Termination without notice due to working time fraud and reimbursement of detective costs<\/span><\/a><\/h4><\/div>\nIn its ruling of 11 February 2025, ref. no. 7 Sa 635\/23, the Cologne Regional Labour Court upheld the dismissal of an employee for deliberately falsifying his working hours \u2013 and also ordered him to reimburse the costs of hiring a detective, amounting to \u20ac21,608.90.<\/p>\n
The current ruling shows that anyone who falsely documents their own working hours not only risks their job, but also possibly the costs of hiring a detective agency.<\/p>\n
The facts of the case:<\/strong><\/b><\/p>\nA ticket inspector in public transport is alleged to have made several private trips during his working hours \u2013 to the hairdresser, the gym, the baker’s, a photo shoot or the mosque \u2013 without documenting this as a break in the time recording system.<\/p>\n
Following external reports, the employer commissioned a detective to initially carry out random checks on the employee during his working hours and in public spaces. The detective discovered corresponding violations on several days.<\/p>\n
The same pattern was observed during the subsequent two weeks of surveillance during working hours.<\/p>\n
The employer then terminated the employment relationship without notice. The employee filed an action for unfair dismissal, and the employer demanded the costs of the surveillance.<\/p>\n
The decision:<\/strong><\/b><\/p>\nWorking time fraud is a serious breach of trust that can justify termination without notice as good cause.<\/p>\n
In this case, the termination without notice was effective.<\/p>\n
The surveillance by the detective agency was permissible under data protection law, especially since it only took place after initial suspicion, only during working hours and only in public spaces.<\/p>\n
The detective costs are to be borne by the employee as compensation.<\/p>\n
The court once again makes it clear:<\/u> Anyone who deliberately misrepresents their working hours is in serious breach of their employment contract obligations \u2013 and thus causes a significant breach of trust. This justifies termination without notice and, under certain circumstances, personal liability for the investigation costs may also be incurred.<\/p>\n
Conclusion<\/strong><\/b><\/p>\nThe ruling is yet another warning signal for anyone who is not entirely accurate with their time recording.<\/p>\n
Employers are permitted to engage a detective agency if they have concrete suspicions.<\/p>\n
Substitute members of the works council are also not safe from dismissal if there has been a serious breach of duty.<\/p>\n
The ruling shows once again that employees who falsify their time records not only risk their jobs, but also significant financial losses.<\/p>\n
If you have any questions about dismissal due to serious breaches of trust, among other things, we will be happy to assist you.<\/p>\n<\/div><\/div><\/div><\/div><\/div>
08 May 2025 by Heike Fiss<\/a> and Philipp Dietz<\/a><\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/i><\/i><\/span>New transitional provision \u00a7 127 SGB IV mitigates liability risks of the Herrenberg ruling<\/span><\/a><\/h4><\/div>\nIn its Herrenberg ruling of 28 June 2022 (B 12 R 3\/20 R), the Federal Social Court ruled in an individual case on the insurance obligation of a music teacher at a municipal music school on the basis of dependent employment.<\/p>\n
The Bundestag responded by passing a transitional regulation for teaching activities in Section 127 of the Social Security Code IV (SGB IV) on 30 January 2025. The Bundesrat approved it on 14 February 2025.<\/p>\n
The new Section 127 SGB IV stipulates that, for a limited transitional period\u202f\u2013 initially limited until 31 December 2026 \u2013 the work of teachers is to be structured as self-employed work that is not subject to social security contributions or income tax, and thus the mandatory payment of social security contributions is to be waived. The application of the transitional provision requires that<\/p>\n
\n- the contracting parties agree or have agreed at the time of conclusion of the contract that the activity is self-employed and<\/li>\n
- the teacher concerned agrees to this.<\/li>\n<\/ul>\n
However, this regulation only applies to \u2018genuine teachers\u2019 who are self-employed and therefore subject to pension insurance contributions. In practice, this means that persons who did not previously fall within the scope of \u2018self-employed teachers\u2019 within the meaning of Section 2 No. 1 SGB VI will continue to be fully subject to social security contributions in future. Universities and educational institutions must therefore check very carefully whether the teachers they employ actually meet the requirements of the planned standard, as it is to be expected that the German Pension Insurance Fund will examine potential cases of application particularly critically in future.<\/p>\n
Definition of teaching activity:<\/b><\/p>\n
Teaching activity is defined in Section 2 of SGB VI. According to this, teaching activities include the transfer of knowledge and the instruction of practical activities. In addition to teachers, lecturers, speakers and teaching staff at schools and universities, this also includes sports instructors of all kinds (e.g. skiing, tennis, golf), driving instructors, music teachers, language teachers and dance instructors.<\/p>\n
Our recommendation:<\/strong><\/b><\/p>\nWe strongly recommend that educational institutions and companies obtain the written consent of their freelance teachers as a precautionary measure, confirming that they are not subject to compulsory insurance on the basis of their activities until 31 December 2026. This consent is a key prerequisite for taking advantage of the transitional provisions of Section 127 SGB IV and avoiding potential legal disputes or additional claims.<\/p>\n
We would be happy to advise you on the implementation of the new Section 127 SGB IV and support you in making the necessary changes to your organisational models.<\/p>\n<\/div><\/div><\/div><\/div><\/div>
08 May 2025 by Heike Fiss<\/a> and Martin Giepen<\/a><\/p>\n<\/div>
<\/i><\/i><\/span>Managing director liability in times of crisis: When do obligations shift from shareholders to creditors?<\/span><\/a><\/h4><\/div>\nManaging directors of a limited liability company (GmbH) naturally act in the interests of \u2018their\u2019 company on a day-to-day basis and thus, ultimately, in the interests of the shareholders. The aim is to manage the company successfully, generate profits and increase its value. In difficult economic times, however, a key question arises: does this remain the case, or must managing directors at some point give priority to protecting the interests of creditors, such as banks, suppliers or landlords?<\/p>\n
In legal terms, this is referred to as a possible \u2018reversal of duties\u2019. This refers to the question of whether and at what point the benchmark for managing director decisions shifts from the shareholders to the creditors.<\/p>\n
Principle: As long as the company is healthy, the interests of the shareholders count<\/strong><\/b><\/p>\nNormally, the situation is clear. Managing directors are obliged to manage the company in the interests of the shareholders. They may and should take entrepreneurial risks, open up new business areas and invest, as long as these decisions are economically justifiable. Creditors’ interests may be taken into account, for example to secure the financing of the company or to ensure long-term stability. However, they are not the decisive legal benchmark.<\/p>\n
Even when initial economic difficulties arise, this does not change.<\/p>\n
Impending insolvency: no change in obligations yet<\/strong><\/b><\/p>\nImpending insolvency refers to a situation where it is foreseeable that the company may not be able to meet its future liabilities, but is currently still solvent. Under German law, there is no change in the managing directors’ obligations during this phase. Managing directors remain primarily accountable to the shareholders.<\/p>\n
This does not mean that they are allowed to remain inactive. On the contrary, they must continuously monitor the economic situation, identify risks, draw up plans and examine restructuring options. Legally, however, they continue to act in the interests of the shareholders. Creditors do not yet have priority at this stage.<\/p>\n
Restructuring proceedings: Creditors’ interests come to the fore<\/strong><\/b><\/p>\nThe situation is different once formal restructuring proceedings have been initiated. From this point on, the law expressly obliges the management to protect the interests of all creditors.<\/p>\n
This does not mean that shareholder interests become completely irrelevant. However, it sets a clear boundary: measures that jeopardise the success of the restructuring or unreasonably disadvantage creditors are not permitted. Within the restructuring proceedings, creditor interests take precedence in procedural decisions.<\/p>\n
In practical terms, this means in particular that high-risk \u2018all-or-nothing\u2019 decisions, which give shareholders a last chance but would further harm creditors in the event of failure, are no longer legally justifiable without further ado.<\/p>\n
Insolvency maturity: the change of obligation is complete<\/strong><\/b><\/p>\nAs soon as the company is over-indebted or insolvent, the legal situation changes fundamentally. From this point on, it is no longer the shareholders who bear the economic risk, but the creditors. The shareholders have effectively lost their remaining economic interest in the company.<\/p>\n
The managing director must then consistently align his actions with the interests of the creditors. The goal is no longer to increase value, but to limit damage, preserve assets and treat creditors equally. In this phase, particularly strict legal obligations apply, in particular the obligation to file for insolvency in good time and the prohibition on making payments after insolvency has occurred. Violations regularly lead to personal liability.<\/p>\n
Self-administration: the benchmark remains the interests of creditors<\/strong><\/b><\/p>\nEven if insolvency proceedings are conducted under self-administration and the management remains in office, the same applies. Managing directors no longer act in the interests of the shareholders, but in the interests of the creditors. The responsibility here is particularly high because special liabilities under insolvency law apply and decisions are closely scrutinised.<\/p>\n
Conclusion for managing directors<\/strong><\/b><\/p>\nA change in obligations does not occur automatically just because a crisis is looming. As long as there is only a threat of economic difficulties, the interests of the shareholders remain decisive. With the start of formal restructuring proceedings, the creditors come to the fore. At the latest when insolvency occurs, the change in obligations is complete.<\/p>\n
For managing directors, this means that the legal standard changes significantly depending on the stage of the crisis. Decisions that are permissible or even necessary in normal business operations can trigger considerable personal liability risks in restructuring or near insolvency.<\/p>\n
When a crisis looms, the legal classification of the stage is crucial because it determines obligations, scope for action and personal liability risks. We advise managing directors and shareholders of limited liability companies on early crisis detection, restructuring and insolvency-related decisions and provide support in the legally compliant design and documentation of the necessary measures.<\/p>\n<\/div><\/div><\/div><\/div><\/div>
26 January 2026 by Philipp Dietz <\/a>and Justus Abeln<\/a><\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/i><\/i><\/span>BSG on status determination: Contract drafting as the key to contractor compliance<\/span><\/a><\/h4><\/div>\nThe distinction between dependent employment and self-employment is one of the perennial issues in social security law and entails considerable compliance risks. The ruling of the Federal Social Court (BSG) of 22 July 2025 (Ref.: B 12 BA 7\/23 R) makes it clear that the careful drafting of contracts is crucial for legal classification.<\/p>\n
Key points of the BSG ruling:<\/strong><\/b><\/p>\n\n- Contract as starting point and end point:<\/b> The status check must be based primarily on the contract that has been concluded. The decisive factor is whether its content corresponds to the practical implementation. If the contract and reality differ, the actual arrangement takes precedence.<\/li>\n
- Party intent in cases of doubt:<\/b> If there is a balance between indications of dependent employment and self-employment, the documented intent of the parties to agree on self-employment is given particular weight.<\/li>\n
- Limits of party autonomy:<\/b> Contractual clauses that exclude employee rights (e.g. continued payment of remuneration, holiday entitlement, social security obligations) merely demonstrate the intention to avoid employment, but do not in themselves constitute evidence.<\/li>\n
- Relativisation of the parties’ intentions:<\/b> The less clear the wording of the contract or the greater the imbalance in the negotiating positions, the less evidence the parties’ intentions provide.<\/li>\n<\/ul>\n
Practical implications for contract design:<\/strong><\/b><\/p>\n\n- Clear characteristics of self-employment should be expressly regulated in the contract (e.g. freedom to choose location and working hours, possibility of working for several clients, precise description of services).<\/li>\n
- Terms and structures that indicate an employment relationship should be consistently avoided.<\/li>\n
- When concluding a contract, it is important to check whether the agreed form of cooperation can actually be implemented in practice.<\/li>\n<\/ul>\n
Conclusion:<\/b><\/p>\n
The BSG emphasises that the documented contract design plays a central role in determining status \u2013 especially in cases of doubt. A clear, consistent and practically implementable contract design is therefore an essential component of effective contractor compliance<\/b>.<\/p>\n
Practical tip:<\/strong><\/b><\/p>\nWhen drafting contracts with freelancers or contractors, it is not only important to ensure that the wording of the contract is clear. It is crucial that the agreements are actually implemented. Even the best-formulated contract loses its effect if the contractor is integrated into the company organisation in practice like an employee (e.g. fixed working hours, holiday requests, use of IT infrastructure as for employees). Companies should therefore regularly check whether the contract and actual practice are consistent and adjust their internal processes accordingly. This significantly reduces the risk of status determination proceedings and additional social security contributions.<\/p>\n<\/div><\/div><\/div><\/div><\/div>
09.09.2025 by Heike Fiss<\/a> and Martin Giepen<\/a><\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/i><\/i><\/span>BAG confirms: No preventive measures required during waiting period<\/span><\/a><\/h4><\/div>\nThe question of whether employers must initiate a prevention procedure in accordance with Section 167(1) of SGB IX when terminating the employment of severely disabled employees within the first six months (\u2018waiting period\u2019) has recently caused considerable uncertainty in practice. In particular, decisions by the Cologne labour courts (ArbG Cologne, judgment of 20 December 2023, ref.: 18 Ca 3954\/23 and LAG Cologne judgment of 12 September 2024, ref.: 6 SLa 76\/24) affirmed such an obligation, thereby paving the way for de facto special protection against dismissal during the probationary period.<\/p>\n
The BAG’s decision:<\/b><\/p>\n
In its ruling of 3 April 2025 (2 AZR 178\/24), the BAG has now provided clarity:<\/p>\n
There is no obligation to carry out a prevention procedure during the waiting period.<\/p>\n
Such a procedure only comes into consideration when the Unfair Dismissal Protection Act (KSchG) applies.<\/p>\n
In the underlying case, a severely disabled employee had been dismissed after only three months. He argued that the dismissal was invalid because the employer had not carried out a prevention procedure. However, the BAG dismissed the claim and clarified that Section 167 (1) SGB IX is systematically tailored to the grounds for dismissal under Section 1 (2) KSchG \u2013 and these do not apply during the waiting period.<\/p>\n
What is a prevention procedure?<\/strong><\/b><\/p>\nThe prevention procedure is an early warning system provided for by law: in the event of difficulties in the employment relationship, employers should seek solutions at an early stage together with the representative body for severely disabled persons, the works council and the integration office in order to maintain the employment relationship \u2013 for example, through adjustments to the workplace or special support measures. Only when this dialogue fails is dismissal considered as a last resort.<\/p>\n
Significance for practice<\/strong><\/b><\/p>\nWith its decision, the BAG clearly rejects the decisions of the Cologne labour courts and provides clear legal certainty. Employers can be confident that dismissal during the waiting period is not invalid solely because of a lack of a prevention procedure.<\/p>\n
At the same time, it should be noted that<\/p>\n
\n- The involvement of the representative body for severely disabled persons and the works council is also mandatory during the waiting period.<\/li>\n
- In addition, the termination of the employment relationship must be reported to the integration office within four days (Section 173 SGB IX).<\/li>\n<\/ul>\n
The BAG thus confirms its previous line \u2013 and relieves employers of the concern that the probationary period for severely disabled employees could become a hidden special protection against dismissal due to a prevention procedure.<\/p>\n<\/div><\/div><\/div><\/div><\/div>
01.09.2025 by Heike Fiss<\/a> and Martin Giepen<\/a><\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/i><\/i><\/span>Terminations by registered mail? Registered mail \u2013 No prima facie evidence of actual receipt BAG ruling of 30 January 2025 \u2013 2 AZR 68\/24<\/span><\/a><\/h4><\/div>\nThe Federal Labour Court (BAG) has once again tightened the rules on proof of delivery: without a delivery receipt, there is no reliable proof of delivery!<\/p>\n
In the proceedings, an employee disputed the delivery of the notice of termination. The employer was only able to present the shipment tracking information \u2013 and failed.<\/p>\n
In its ruling of 30 January 2025 \u2013 2 AZR 68\/24, the BAG clarifies:<\/p>\n
The mere presentation of the proof of posting for a registered letter and the presentation of its delivery history do not in themselves constitute prima facie evidence of receipt of the delivered mail by the recipient without the presentation of a reproduction of the delivery receipt. Online tracking (\u2018delivered\u2019) is not sufficient to prove receipt in a legally secure manner. More concrete evidence is required, such as a delivery receipt or witness statements\u203c\ufe0f<\/p>\n
Conclusion:<\/b><\/p>\n
If the employer cannot prove that the employee has received the notice of termination, the employment relationship is not terminated. This entails considerable financial and organisational risks.<\/p>\n
Companies should therefore urgently review and adapt their internal delivery processes.<\/p>\n
Receipt must be reliably proven by means of a delivery receipt and\/or witnesses.<\/p>\n
Where possible, companies should deliver notices of termination by (courier) messenger or in person.<\/p>\n
If you have any questions about termination, please do not hesitate to contact us.<\/p>\n<\/div><\/div><\/div><\/div><\/div>
08 May 2025 by Heike Fiss<\/a> and Philipp Dietz<\/a><\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/i><\/i><\/span>Termination without notice due to working time fraud and reimbursement of detective costs<\/span><\/a><\/h4><\/div>\nIn its ruling of 11 February 2025, ref. no. 7 Sa 635\/23, the Cologne Regional Labour Court upheld the dismissal of an employee for deliberately falsifying his working hours \u2013 and also ordered him to reimburse the costs of hiring a detective, amounting to \u20ac21,608.90.<\/p>\n
The current ruling shows that anyone who falsely documents their own working hours not only risks their job, but also possibly the costs of hiring a detective agency.<\/p>\n
The facts of the case:<\/strong><\/b><\/p>\nA ticket inspector in public transport is alleged to have made several private trips during his working hours \u2013 to the hairdresser, the gym, the baker’s, a photo shoot or the mosque \u2013 without documenting this as a break in the time recording system.<\/p>\n
Following external reports, the employer commissioned a detective to initially carry out random checks on the employee during his working hours and in public spaces. The detective discovered corresponding violations on several days.<\/p>\n
The same pattern was observed during the subsequent two weeks of surveillance during working hours.<\/p>\n
The employer then terminated the employment relationship without notice. The employee filed an action for unfair dismissal, and the employer demanded the costs of the surveillance.<\/p>\n
The decision:<\/strong><\/b><\/p>\nWorking time fraud is a serious breach of trust that can justify termination without notice as good cause.<\/p>\n
In this case, the termination without notice was effective.<\/p>\n
The surveillance by the detective agency was permissible under data protection law, especially since it only took place after initial suspicion, only during working hours and only in public spaces.<\/p>\n
The detective costs are to be borne by the employee as compensation.<\/p>\n
The court once again makes it clear:<\/u> Anyone who deliberately misrepresents their working hours is in serious breach of their employment contract obligations \u2013 and thus causes a significant breach of trust. This justifies termination without notice and, under certain circumstances, personal liability for the investigation costs may also be incurred.<\/p>\n
Conclusion<\/strong><\/b><\/p>\nThe ruling is yet another warning signal for anyone who is not entirely accurate with their time recording.<\/p>\n
Employers are permitted to engage a detective agency if they have concrete suspicions.<\/p>\n
Substitute members of the works council are also not safe from dismissal if there has been a serious breach of duty.<\/p>\n
The ruling shows once again that employees who falsify their time records not only risk their jobs, but also significant financial losses.<\/p>\n
If you have any questions about dismissal due to serious breaches of trust, among other things, we will be happy to assist you.<\/p>\n<\/div><\/div><\/div><\/div><\/div>
08 May 2025 by Heike Fiss<\/a> and Philipp Dietz<\/a><\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/i><\/i><\/span>New transitional provision \u00a7 127 SGB IV mitigates liability risks of the Herrenberg ruling<\/span><\/a><\/h4><\/div>\nIn its Herrenberg ruling of 28 June 2022 (B 12 R 3\/20 R), the Federal Social Court ruled in an individual case on the insurance obligation of a music teacher at a municipal music school on the basis of dependent employment.<\/p>\n
The Bundestag responded by passing a transitional regulation for teaching activities in Section 127 of the Social Security Code IV (SGB IV) on 30 January 2025. The Bundesrat approved it on 14 February 2025.<\/p>\n
The new Section 127 SGB IV stipulates that, for a limited transitional period\u202f\u2013 initially limited until 31 December 2026 \u2013 the work of teachers is to be structured as self-employed work that is not subject to social security contributions or income tax, and thus the mandatory payment of social security contributions is to be waived. The application of the transitional provision requires that<\/p>\n
\n- the contracting parties agree or have agreed at the time of conclusion of the contract that the activity is self-employed and<\/li>\n
- the teacher concerned agrees to this.<\/li>\n<\/ul>\n
However, this regulation only applies to \u2018genuine teachers\u2019 who are self-employed and therefore subject to pension insurance contributions. In practice, this means that persons who did not previously fall within the scope of \u2018self-employed teachers\u2019 within the meaning of Section 2 No. 1 SGB VI will continue to be fully subject to social security contributions in future. Universities and educational institutions must therefore check very carefully whether the teachers they employ actually meet the requirements of the planned standard, as it is to be expected that the German Pension Insurance Fund will examine potential cases of application particularly critically in future.<\/p>\n
Definition of teaching activity:<\/b><\/p>\n
Teaching activity is defined in Section 2 of SGB VI. According to this, teaching activities include the transfer of knowledge and the instruction of practical activities. In addition to teachers, lecturers, speakers and teaching staff at schools and universities, this also includes sports instructors of all kinds (e.g. skiing, tennis, golf), driving instructors, music teachers, language teachers and dance instructors.<\/p>\n
Our recommendation:<\/strong><\/b><\/p>\nWe strongly recommend that educational institutions and companies obtain the written consent of their freelance teachers as a precautionary measure, confirming that they are not subject to compulsory insurance on the basis of their activities until 31 December 2026. This consent is a key prerequisite for taking advantage of the transitional provisions of Section 127 SGB IV and avoiding potential legal disputes or additional claims.<\/p>\n
We would be happy to advise you on the implementation of the new Section 127 SGB IV and support you in making the necessary changes to your organisational models.<\/p>\n<\/div><\/div><\/div><\/div><\/div>
08 May 2025 by Heike Fiss<\/a> and Martin Giepen<\/a><\/p>\n<\/div>
Managing directors of a limited liability company (GmbH) naturally act in the interests of \u2018their\u2019 company on a day-to-day basis and thus, ultimately, in the interests of the shareholders. The aim is to manage the company successfully, generate profits and increase its value. In difficult economic times, however, a key question arises: does this remain the case, or must managing directors at some point give priority to protecting the interests of creditors, such as banks, suppliers or landlords?<\/p>\n
In legal terms, this is referred to as a possible \u2018reversal of duties\u2019. This refers to the question of whether and at what point the benchmark for managing director decisions shifts from the shareholders to the creditors.<\/p>\n
Principle: As long as the company is healthy, the interests of the shareholders count<\/strong><\/b><\/p>\n Normally, the situation is clear. Managing directors are obliged to manage the company in the interests of the shareholders. They may and should take entrepreneurial risks, open up new business areas and invest, as long as these decisions are economically justifiable. Creditors’ interests may be taken into account, for example to secure the financing of the company or to ensure long-term stability. However, they are not the decisive legal benchmark.<\/p>\n Even when initial economic difficulties arise, this does not change.<\/p>\n Impending insolvency: no change in obligations yet<\/strong><\/b><\/p>\n Impending insolvency refers to a situation where it is foreseeable that the company may not be able to meet its future liabilities, but is currently still solvent. Under German law, there is no change in the managing directors’ obligations during this phase. Managing directors remain primarily accountable to the shareholders.<\/p>\n This does not mean that they are allowed to remain inactive. On the contrary, they must continuously monitor the economic situation, identify risks, draw up plans and examine restructuring options. Legally, however, they continue to act in the interests of the shareholders. Creditors do not yet have priority at this stage.<\/p>\n Restructuring proceedings: Creditors’ interests come to the fore<\/strong><\/b><\/p>\n The situation is different once formal restructuring proceedings have been initiated. From this point on, the law expressly obliges the management to protect the interests of all creditors.<\/p>\n This does not mean that shareholder interests become completely irrelevant. However, it sets a clear boundary: measures that jeopardise the success of the restructuring or unreasonably disadvantage creditors are not permitted. Within the restructuring proceedings, creditor interests take precedence in procedural decisions.<\/p>\n In practical terms, this means in particular that high-risk \u2018all-or-nothing\u2019 decisions, which give shareholders a last chance but would further harm creditors in the event of failure, are no longer legally justifiable without further ado.<\/p>\n Insolvency maturity: the change of obligation is complete<\/strong><\/b><\/p>\n As soon as the company is over-indebted or insolvent, the legal situation changes fundamentally. From this point on, it is no longer the shareholders who bear the economic risk, but the creditors. The shareholders have effectively lost their remaining economic interest in the company.<\/p>\n The managing director must then consistently align his actions with the interests of the creditors. The goal is no longer to increase value, but to limit damage, preserve assets and treat creditors equally. In this phase, particularly strict legal obligations apply, in particular the obligation to file for insolvency in good time and the prohibition on making payments after insolvency has occurred. Violations regularly lead to personal liability.<\/p>\n Self-administration: the benchmark remains the interests of creditors<\/strong><\/b><\/p>\n Even if insolvency proceedings are conducted under self-administration and the management remains in office, the same applies. Managing directors no longer act in the interests of the shareholders, but in the interests of the creditors. The responsibility here is particularly high because special liabilities under insolvency law apply and decisions are closely scrutinised.<\/p>\n Conclusion for managing directors<\/strong><\/b><\/p>\n A change in obligations does not occur automatically just because a crisis is looming. As long as there is only a threat of economic difficulties, the interests of the shareholders remain decisive. With the start of formal restructuring proceedings, the creditors come to the fore. At the latest when insolvency occurs, the change in obligations is complete.<\/p>\n For managing directors, this means that the legal standard changes significantly depending on the stage of the crisis. Decisions that are permissible or even necessary in normal business operations can trigger considerable personal liability risks in restructuring or near insolvency.<\/p>\n When a crisis looms, the legal classification of the stage is crucial because it determines obligations, scope for action and personal liability risks. We advise managing directors and shareholders of limited liability companies on early crisis detection, restructuring and insolvency-related decisions and provide support in the legally compliant design and documentation of the necessary measures.<\/p>\n<\/div><\/div><\/div><\/div><\/div> 26 January 2026 by Philipp Dietz <\/a>and Justus Abeln<\/a><\/p>\n<\/div> The distinction between dependent employment and self-employment is one of the perennial issues in social security law and entails considerable compliance risks. The ruling of the Federal Social Court (BSG) of 22 July 2025 (Ref.: B 12 BA 7\/23 R) makes it clear that the careful drafting of contracts is crucial for legal classification.<\/p>\n Key points of the BSG ruling:<\/strong><\/b><\/p>\n Practical implications for contract design:<\/strong><\/b><\/p>\n Conclusion:<\/b><\/p>\n The BSG emphasises that the documented contract design plays a central role in determining status \u2013 especially in cases of doubt. A clear, consistent and practically implementable contract design is therefore an essential component of effective contractor compliance<\/b>.<\/p>\n Practical tip:<\/strong><\/b><\/p>\n When drafting contracts with freelancers or contractors, it is not only important to ensure that the wording of the contract is clear. It is crucial that the agreements are actually implemented. Even the best-formulated contract loses its effect if the contractor is integrated into the company organisation in practice like an employee (e.g. fixed working hours, holiday requests, use of IT infrastructure as for employees). Companies should therefore regularly check whether the contract and actual practice are consistent and adjust their internal processes accordingly. This significantly reduces the risk of status determination proceedings and additional social security contributions.<\/p>\n<\/div><\/div><\/div><\/div><\/div> 09.09.2025 by Heike Fiss<\/a> and Martin Giepen<\/a><\/p>\n<\/div> The question of whether employers must initiate a prevention procedure in accordance with Section 167(1) of SGB IX when terminating the employment of severely disabled employees within the first six months (\u2018waiting period\u2019) has recently caused considerable uncertainty in practice. In particular, decisions by the Cologne labour courts (ArbG Cologne, judgment of 20 December 2023, ref.: 18 Ca 3954\/23 and LAG Cologne judgment of 12 September 2024, ref.: 6 SLa 76\/24) affirmed such an obligation, thereby paving the way for de facto special protection against dismissal during the probationary period.<\/p>\n The BAG’s decision:<\/b><\/p>\n In its ruling of 3 April 2025 (2 AZR 178\/24), the BAG has now provided clarity:<\/p>\n There is no obligation to carry out a prevention procedure during the waiting period.<\/p>\n Such a procedure only comes into consideration when the Unfair Dismissal Protection Act (KSchG) applies.<\/p>\n In the underlying case, a severely disabled employee had been dismissed after only three months. He argued that the dismissal was invalid because the employer had not carried out a prevention procedure. However, the BAG dismissed the claim and clarified that Section 167 (1) SGB IX is systematically tailored to the grounds for dismissal under Section 1 (2) KSchG \u2013 and these do not apply during the waiting period.<\/p>\n What is a prevention procedure?<\/strong><\/b><\/p>\n The prevention procedure is an early warning system provided for by law: in the event of difficulties in the employment relationship, employers should seek solutions at an early stage together with the representative body for severely disabled persons, the works council and the integration office in order to maintain the employment relationship \u2013 for example, through adjustments to the workplace or special support measures. Only when this dialogue fails is dismissal considered as a last resort.<\/p>\n Significance for practice<\/strong><\/b><\/p>\n With its decision, the BAG clearly rejects the decisions of the Cologne labour courts and provides clear legal certainty. Employers can be confident that dismissal during the waiting period is not invalid solely because of a lack of a prevention procedure.<\/p>\n At the same time, it should be noted that<\/p>\n The BAG thus confirms its previous line \u2013 and relieves employers of the concern that the probationary period for severely disabled employees could become a hidden special protection against dismissal due to a prevention procedure.<\/p>\n<\/div><\/div><\/div><\/div><\/div> 01.09.2025 by Heike Fiss<\/a> and Martin Giepen<\/a><\/p>\n<\/div> The Federal Labour Court (BAG) has once again tightened the rules on proof of delivery: without a delivery receipt, there is no reliable proof of delivery!<\/p>\n In the proceedings, an employee disputed the delivery of the notice of termination. The employer was only able to present the shipment tracking information \u2013 and failed.<\/p>\n In its ruling of 30 January 2025 \u2013 2 AZR 68\/24, the BAG clarifies:<\/p>\n The mere presentation of the proof of posting for a registered letter and the presentation of its delivery history do not in themselves constitute prima facie evidence of receipt of the delivered mail by the recipient without the presentation of a reproduction of the delivery receipt. Online tracking (\u2018delivered\u2019) is not sufficient to prove receipt in a legally secure manner. More concrete evidence is required, such as a delivery receipt or witness statements\u203c\ufe0f<\/p>\n Conclusion:<\/b><\/p>\n If the employer cannot prove that the employee has received the notice of termination, the employment relationship is not terminated. This entails considerable financial and organisational risks.<\/p>\n Companies should therefore urgently review and adapt their internal delivery processes.<\/p>\n Receipt must be reliably proven by means of a delivery receipt and\/or witnesses.<\/p>\n Where possible, companies should deliver notices of termination by (courier) messenger or in person.<\/p>\n If you have any questions about termination, please do not hesitate to contact us.<\/p>\n<\/div><\/div><\/div><\/div><\/div> 08 May 2025 by Heike Fiss<\/a> and Philipp Dietz<\/a><\/p>\n<\/div> In its ruling of 11 February 2025, ref. no. 7 Sa 635\/23, the Cologne Regional Labour Court upheld the dismissal of an employee for deliberately falsifying his working hours \u2013 and also ordered him to reimburse the costs of hiring a detective, amounting to \u20ac21,608.90.<\/p>\n The current ruling shows that anyone who falsely documents their own working hours not only risks their job, but also possibly the costs of hiring a detective agency.<\/p>\n The facts of the case:<\/strong><\/b><\/p>\n A ticket inspector in public transport is alleged to have made several private trips during his working hours \u2013 to the hairdresser, the gym, the baker’s, a photo shoot or the mosque \u2013 without documenting this as a break in the time recording system.<\/p>\n Following external reports, the employer commissioned a detective to initially carry out random checks on the employee during his working hours and in public spaces. The detective discovered corresponding violations on several days.<\/p>\n The same pattern was observed during the subsequent two weeks of surveillance during working hours.<\/p>\n The employer then terminated the employment relationship without notice. The employee filed an action for unfair dismissal, and the employer demanded the costs of the surveillance.<\/p>\n The decision:<\/strong><\/b><\/p>\n Working time fraud is a serious breach of trust that can justify termination without notice as good cause.<\/p>\n In this case, the termination without notice was effective.<\/p>\n The surveillance by the detective agency was permissible under data protection law, especially since it only took place after initial suspicion, only during working hours and only in public spaces.<\/p>\n The detective costs are to be borne by the employee as compensation.<\/p>\n The court once again makes it clear:<\/u> Anyone who deliberately misrepresents their working hours is in serious breach of their employment contract obligations \u2013 and thus causes a significant breach of trust. This justifies termination without notice and, under certain circumstances, personal liability for the investigation costs may also be incurred.<\/p>\n Conclusion<\/strong><\/b><\/p>\n The ruling is yet another warning signal for anyone who is not entirely accurate with their time recording.<\/p>\n Employers are permitted to engage a detective agency if they have concrete suspicions.<\/p>\n Substitute members of the works council are also not safe from dismissal if there has been a serious breach of duty.<\/p>\n The ruling shows once again that employees who falsify their time records not only risk their jobs, but also significant financial losses.<\/p>\n If you have any questions about dismissal due to serious breaches of trust, among other things, we will be happy to assist you.<\/p>\n<\/div><\/div><\/div><\/div><\/div> 08 May 2025 by Heike Fiss<\/a> and Philipp Dietz<\/a><\/p>\n<\/div> In its Herrenberg ruling of 28 June 2022 (B 12 R 3\/20 R), the Federal Social Court ruled in an individual case on the insurance obligation of a music teacher at a municipal music school on the basis of dependent employment.<\/p>\n The Bundestag responded by passing a transitional regulation for teaching activities in Section 127 of the Social Security Code IV (SGB IV) on 30 January 2025. The Bundesrat approved it on 14 February 2025.<\/p>\n The new Section 127 SGB IV stipulates that, for a limited transitional period\u202f\u2013 initially limited until 31 December 2026 \u2013 the work of teachers is to be structured as self-employed work that is not subject to social security contributions or income tax, and thus the mandatory payment of social security contributions is to be waived. The application of the transitional provision requires that<\/p>\n However, this regulation only applies to \u2018genuine teachers\u2019 who are self-employed and therefore subject to pension insurance contributions. In practice, this means that persons who did not previously fall within the scope of \u2018self-employed teachers\u2019 within the meaning of Section 2 No. 1 SGB VI will continue to be fully subject to social security contributions in future. Universities and educational institutions must therefore check very carefully whether the teachers they employ actually meet the requirements of the planned standard, as it is to be expected that the German Pension Insurance Fund will examine potential cases of application particularly critically in future.<\/p>\n Definition of teaching activity:<\/b><\/p>\n Teaching activity is defined in Section 2 of SGB VI. According to this, teaching activities include the transfer of knowledge and the instruction of practical activities. In addition to teachers, lecturers, speakers and teaching staff at schools and universities, this also includes sports instructors of all kinds (e.g. skiing, tennis, golf), driving instructors, music teachers, language teachers and dance instructors.<\/p>\n Our recommendation:<\/strong><\/b><\/p>\n We strongly recommend that educational institutions and companies obtain the written consent of their freelance teachers as a precautionary measure, confirming that they are not subject to compulsory insurance on the basis of their activities until 31 December 2026. This consent is a key prerequisite for taking advantage of the transitional provisions of Section 127 SGB IV and avoiding potential legal disputes or additional claims.<\/p>\n We would be happy to advise you on the implementation of the new Section 127 SGB IV and support you in making the necessary changes to your organisational models.<\/p>\n<\/div><\/div><\/div><\/div><\/div> 08 May 2025 by Heike Fiss<\/a> and Martin Giepen<\/a><\/p>\n<\/div><\/i><\/i><\/span>BSG on status determination: Contract drafting as the key to contractor compliance<\/span><\/a><\/h4><\/div>
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<\/i><\/i><\/span>BAG confirms: No preventive measures required during waiting period<\/span><\/a><\/h4><\/div>
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<\/i><\/i><\/span>Terminations by registered mail? Registered mail \u2013 No prima facie evidence of actual receipt BAG ruling of 30 January 2025 \u2013 2 AZR 68\/24<\/span><\/a><\/h4><\/div>
<\/i><\/i><\/span>Termination without notice due to working time fraud and reimbursement of detective costs<\/span><\/a><\/h4><\/div>
<\/i><\/i><\/span>New transitional provision \u00a7 127 SGB IV mitigates liability risks of the Herrenberg ruling<\/span><\/a><\/h4><\/div>
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