The provision of Section 613a Para. 1 BGB requires the legal transfer of a business or part of a business to another owner. It is necessary to preserve the identity of the economic entity in question. The term economic unit refers to an organizational group of people and/or things for the long-term exercise of an economic activity with its own objective.
In industries in which human labor is essential, a group of employees who are permanently linked through a common activity can also constitute an economic unit. The identity of the economic unit can be assumed to be preserved if the new business owner not only continues the activity in question, but also takes over a significant proportion of the staff, in terms of number and expertise, that his predecessor specifically used for this activity.
On the other hand, the mere continuation of the activity by another contractor (functional succession) does not constitute a transfer of business. If a municipal company that operates hospitals establishes a service GmbH and takes over all of the hospital’s cleaning staff, according to a decision of the Eighth Senate of May 21, 2008 ( 8 AZR 481/07 ), there is a transfer of part of the business to the service company if the GmbH By way of temporary employment, all of the cleaning staff taken over are “lent back” to the municipal company and they carry out the same work there as before.
This applies in any case if the exclusive purpose of Service GmbH is to provide personnel to the municipal company or its subsidiaries. In its judgment of September 25, 2008 ( 8 AZR 607/07 ), the Eighth Senate decided that there is no transfer of operations if the Bundeswehr awards the contract to guard a military training area to a different security company than the previous one, provided that this is purely a security company succession of orders.
This does not apply if the new contractor takes over a significant part of the previous staff or identity-defining resources in terms of numbers and expertise. As part of a lawsuit for the control of time limits, the Eighth Senate ruled in its judgment of October 30, 2008 ( 8 AZR 855/07 ) that the transfer of military repair work previously carried out by the Bundeswehr to a newly founded GmbH does not constitute a transfer of operations if the previous repair unit is the Bundeswehr is disbanded. The civil plaintiff’s employment contract could therefore be effectively limited “until the regional repair center is dissolved”.