Imprisonment During Employment: When May Employers Terminate?

The plaintiff had been employed by an automobile manufacturer for several years. In 2024, he was finally convicted and sentenced to three years and three months’ imprisonment. He began serving his sentence in January 2025. Shortly thereafter, the defendant employer issued an ordinary termination of the employment relationship. The plaintiff challenged the termination in dismissal protection proceedings. In particular, he argued that a return to work within less than two years was realistic, for example due to early release or employment as a day-release inmate. He also asserted that the employer had not shown any specific operational disruptions.

The Stuttgart Labor Court was not persuaded by this reasoning and dismissed the claim.

According to the settled case law of the Federal Labor Court (Bundesarbeitsgericht, “BAG”), imprisonment may generally constitute a person-related ground for termination. Unlike a conduct-related dismissal, the decisive factor is not the reason for the imprisonment, but the imprisonment itself and the resulting inability of the employee to perform the contractual work duties. An employer is not required to keep a position open indefinitely.

If, at the time notice of termination is issued, the employee still has more than two years of imprisonment to serve and an earlier return cannot be expected with sufficient certainty, this will generally support the validity of a person-related termination. That was precisely the case here.

The imprisonment imposed was three years and three months. Accordingly, even if the plaintiff had been released early after serving two thirds of the imprisonment, he would still have had more than two years to serve at the time of termination, namely two years and two months. In cases involving imprisonment, the employer is also not required to demonstrate specific operational disruptions where, as here, release before the expiry of two years cannot be expected with sufficient certainty.

Nor could it be expected with sufficient certainty that the plaintiff would be granted work-release status and thus be able to resume performing his work duties within two years. The plaintiff argued in the proceedings that he might be able to work in open detention significantly earlier and thereby return to his position. The Labor Court found no sufficiently reliable basis for this assumption either.

It is true that, after the termination had been issued, the plaintiff was certified as having had an unremarkable prison record, a positive work evaluation and progress to date in addressing the offense. He had also shown himself in prison to be “reliable and capable of honoring agreements” and the risk of abuse in connection with measures easing the conditions of imprisonment was deemed to have been “ruled out with sufficient certainty.” The Labor Court nevertheless did not infer from this that work-release status could be expected with sufficient certainty.

Of particular relevance for employers is that they may, in principle, have a duty to cooperate in enabling an employee to obtain day-release status.

According to the Federal Labor Court’s case law, an employer may generally be required to support the employment of an employee on work-release status. This applies, however, only if employing such an employee does not pose a risk to the employer. To enable the employer to assess that risk, the convicted employee must provide access to the criminal judgment. Otherwise, any potential duty of cooperation on the employer’s part ceases to apply.

In the case before the Stuttgart Labor Court, the plaintiff refused to disclose the more detailed circumstances of the offense and did not give the employer access to the criminal judgment. The Labor Court therefore held that the employer had no duty to cooperate in the plaintiff’s efforts to obtain work-release status.

In the final balancing of interests, the Labor Court considered in the plaintiff’s favor, in particular, his long and unblemished service record, the principle of rehabilitation and the possibility of later release from prison or employment on work-release status. Ultimately weighing against the employee, however, was the fact that he himself had caused the inability to work and that, given the relatively severe sentence for a first-time prisoner, he had presumably committed a particularly serious offense involving a high degree of culpability. In addition, neither early release nor the granting of work-release status was sufficiently foreseeable at the time of termination.

Employers are not required to keep positions open indefinitely for incarcerated employees. Before issuing a termination, however, they should carefully assess whether there are realistic indications of a timely return to work. Particular attention should be paid to the possibility of work-release status. Employers should clarify at an early stage whether continued employment at a later point in time appears realistic and whether they have the information necessary to assess the associated risks. If the employee refuses to provide the relevant information, this may significantly strengthen the employer’s position in dismissal protection litigation.