Leave of absence: When is failure to look for a job considered “malicious”

The release from work of employees following their dismissal is common practice in the world of work. If an employee is released from work during the applicable notice period despite their entitlement to employment, the employee does not generally refrain from earning money elsewhere in bad faith within the meaning of Section 615 sentence 2 German Civil Code (BGB) if they do not enter another employment relationship before the end of the notice period. This has the consequence that employees remain entitled to their full compensation during garden leave. This was clarified by the Federal Labour Court (BAG) in a ruling dated 12 February 2025 (case no. 5 AZR 127/24).

Initial situation: Failure to pay salary during leave of absence

The decision is based on an employee's action for protection against dismissal. The case was preceded by an ordinary termination of the employment relationship, which the employee had held since November 2019. The termination took effect on 30 June 2023 and the employee was released from the obligation to perform his work owed until the end of the three-month notice period, taking into account the remaining leave.

The conflict: job offers and application obligations

After the employee received notice of termination, he registered as a job seeker at the beginning of April 2023. By the end of the notice period, the employee had received a total of 43 job offers from his employer in May and June 2023 from job portals or companies that he believed would have been suitable for the employee.

Despite these offers, the employee only applied for seven jobs and only towards the end of June 2023, i.e. shortly before the end of the notice period.

Salary payment and complaint by the employee

The employer stopped paying wages in June 2023 as he was of the opinion that the employee was obliged to apply for the job vacancies during the leave of absence. Due to the failure to apply, the employer argued that the employee had maliciously failed to look for other employment in a situation of default of acceptance. According to Section 615 sentence 2 of the German Civil Code (BGB), he therefore had to take into account fictitious earnings in the amount of the previous salary.

The BAG judgement: No crediting without demonstration of unreasonableness

The BAG ruled in favour of the employee and rejected the employer's argument. The court clarified that the employer was in default of acceptance pursuant to Section 615 sentence 1 BGB in conjunction with Section 611a para. 2 BGB due to the employee's unilaterally declared leave of absence during the notice period. Consequently, the employer had to pay the employee the agreed remuneration for the entire notice period.

The BAG ruled that the fictitious crediting of omitted earnings in accordance with Section 615 sentence 2 BGB is only justified if the employee would have remained inactive in an unlawful manner. The court emphasised that the extent of the employee's obligation to work elsewhere should not be considered in isolation. In the case of a leave of absence, the employer must prove that it would have been unreasonable to expect the employee to work during the notice period. As the employer did not demonstrate this, the employee was not obliged to take up new employment before the end of the notice period in order to relieve the employer financially.

Practical relevance

The judgement of the BAG has considerable practical significance, in particular for the structuring of leaves of absence and the legal handling of salary payments during the notice period. In similar cases, employers must now clearly explain why it is unreasonable to expect the released employee to work elsewhere if they wish to make a notional deduction of earnings. At the same time, employees are granted a certain degree of flexibility with regard to finding new employment as long as it is not unreasonable.

So far, only a press release on the judgement is available; the full reasons for the decision have not yet been published by the BAG.