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News Employment law – Sole power of dismissal of the head of human resource even with a general joint power of attorney – Rejection of the dismissal for lack of proof of procuration

In larger companies, it is common practice that notices of termination are not signed by the legal representative of the company, i.e. by the management board or managing director. The head of human resources is regularly authorized to do so. His power of attorney to issue notices of termination on behalf of the company arises solely from his position. It is only important that the position of the HR director is generally known in the company. If a HR director is also an authorized signatory (Prokurist), but is only authorized to represent the company jointly, this does not restrict his sole power of attorney in the case of terminations.

The Federal Labor Court (BAG) recently had cause to reconfirm these principles in its ruling of May 20, 2021 (2 AZR 596/20). In this case, the BAG even considered it irrelevant that the HR manager regularly signs notices of termination with another colleague. A corresponding practice does not preclude the HR manager from continuing to issue notices of termination alone. Such practice can be due to a corresponding restriction of the procuration in the internal relationship, for example to maintain a dual control principle.

It is still the case that terminations in the absence of procuration – for example if the position of the head of human resource was not properly announced – can only be rejected immediately, regularly within 1 week after receipt of the termination.