Release From Duty After Notice: Why the Standard Clause No Longer Holds
- Jul 30
- 3 min read
Almost every standard form employment contract contains a sentence allowing the employer to send an employee home once notice has been given, until the notice period runs out. Germany's Federal Labour Court (Bundesarbeitsgericht) has now struck that sentence down (judgment of 25 March 2026, case no. 5 AZR 108/25).
1. The Case: 510 Euros a Month
A regional sales manager working in the field had a company car that he was also allowed to use privately. The contract permitted that use to be withdrawn if he was released from duty. He resigned himself with effect from 30 November 2024, whereupon the employer released him from work until the end of the notice period and asked for the car back. He handed it over.
He then sued for compensation for loss of use covering four months, 510 euros gross per month. His argument: the release had no basis, because the clause in the contract was invalid. The labour court dismissed the claim, and the Regional Labour Court of Lower Saxony (Landesarbeitsgericht Niedersachsen) awarded him the money.
2. The Clause: Unreasonable Disadvantage
The Fifth Senate of the Federal Labour Court agrees with the claimant on this point. A standard form clause that entitles the employer across the board to release an employee from duty once notice has been given does not survive the fairness review and is invalid under Section 307(1) sentence 1 of the German Civil Code (BGB).
What is required instead is a balancing of interests between the employer (in the release) and the employee (in actually being employed). The employee's interest in working right up to the last day is grounded in constitutional rights and therefore, as a rule, weighs more heavily than the employer's general interest in taking him out of the business earlier. The decisive factor is the blanket nature of the clause: an employer who settles the question conclusively in the contract takes away the employee's chance to raise a heightened interest in employment in the individual case at all.
3. The Balancing Exercise Stays Case by Case
The employer's appeal on points of law nevertheless succeeded. Because the invalidity of the clause does not yet mean that the release itself was unlawful. The appeal court would have had to examine whether, in the specific case, overriding legitimate interests of the employer stood in the way of continued employment. Findings on that point were missing, which is why the Senate referred the case back to Lower Saxony.
That shifts the discussion from contract drafting into the pleadings. An employer who wants to release someone will probably have to set out why this particular employee, in this particular situation, should no longer be on the premises. With sales staff who have customer contact, access to price lists, or a move to a competitor lined up, such reasons are often close at hand. Where they are missing, a release can become expensive, and it does so through benefits in kind such as the company car, whose withdrawal regularly hangs on the release.
Have You Been Released From Duty After Notice?
If you have been released from duty and your company car or another benefit in kind was taken back, or if you are an employer who wants their contract templates reviewed, I offer you a short, free initial assessment. In that conversation we clarify what holds up in your case and which next steps make sense.
