Employee appraisal – legal situation and rules for HR

Conducting employee appraisals is the order of the day in companies. HR managers and employees ask themselves questions about the legal framework of such interviews, especially if the subject of the appraisal interview is "difficult" topics: What are the legal bases for the appraisal interview, what are the obligations in this context and can employees make use of "assistance"? The following article provides answers.

Subject of an appraisal interview

Examples include performance evaluations, target agreements, end-of-trial appraisals, contract changes, misconduct and even termination of employment. In principle, the employer can make any topic related to the employment relationship the subject of an appraisal interview if it has an objectively justified reason. It must not be vexatious, restrictive in nature and must not disproportionately impair the employee's personal rights. In this respect, employers are free to talk to their employees about their performance, their behaviour in the company, the organisation of work or their development potential in the context of an appraisal interview.

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Can the employer request an appraisal interview?

The employee's obligation to participate in an appraisal interview is derived from the employer's right to issue instructions or direct as regulated in Section 106 of the Industrial Code (GewO). On the basis of this right to issue instructions, the employer can specify the content, place and time of work performance in more detail vis-à-vis its employees. It entails the employer's right to oblige the employee to participate in discussions in which the employer intends to prepare or give instructions in one of the above-mentioned areas or to object to their non-fulfilment (e.g. specific performance deficits). There is also an obligation to participate when it comes to compliance with company regulations or the employee's conduct in the company.

The employer cannot unilaterally order participation in employee appraisals that deal exclusively with the content of the employment contract and, in particular, its amendment. This is because the right to issue instructions does not extend to the components of the exchange relationship, i.e. the amount of remuneration and the extent of the work owed, as the Federal Labour Court ruled in its judgment of 23 June 2009 (2 AZR 606/08). There is therefore no obligatory reason for an employee appraisal if the employment contract is to be worsened, changed or even terminated. The Federal Labour Court therefore declared a warning due to non-participation in a meeting with the sole aim of a contract amendment that had already been rejected by the employee to be invalid.

Rejecting an appraisal interview

If employees refuse to participate in a scheduled employee appraisal without authorisation, they may be warned. In the event of a repeat offense, the refusal may also entitle the employee to dismissal for conduct.

Appraisal interview and illness

During or because of the duration of an inability to work due to illness, the employer has no right to issue instructions regarding the performance of work. Due to the latent risk of an impairment of the recovery process and a consequent prolongation of the absence from work due to illness, the employer's duty of consideration (§ 241 (2) BGB) therefore requires that the issuing of instructions be limited to extremely urgent operational occasions. Only in an emergency-like situation with a not insignificant potential for damage can the sick person be obliged to have a short conversation – preferably by telephone.

Conducting an appraisal interview

There are no legal requirements for conducting the interview itself. However, the employer is bound by the requirements of equitable discretion: an appraisal interview without notice can lead to the employee feeling taken by surprise. Employees should be given the opportunity to mentally prepare for the interview. Therefore, the reason must be communicated at least in the form of keywords. If the person concerned is not informed of the reason for the appraisal interview in advance, he or she can ask for it. Otherwise, the employee does not know whether he or she may call in a member of the works council to accompany and support him (see below). It also depends on the content of the conversation whether there is an obligation to appear at all.

Time frame and the appropriate location

When scheduling the appraisal interview, the employer must proceed at its reasonable discretion. In principle, the employer can only schedule personnel interviews within the contractual working hours. As a matter of principle, the appraisal interview must be conducted where employees have to perform their work – i.e. at the place of work. If the employee has to travel to a place other than the place of work, the employer is obliged to cover the travel expenses. The travel time to the appraisal interview at a place other than the place of work is to be remunerated as working time.

Record employee appraisals?

For data protection reasons, both parties are not permitted to record employee interviews, as this would violate personal rights. The secret recording of an employee interview with a mobile phone or via a video camera therefore also entitles the holder to extraordinary dismissal (LAG Rheinland-Pfalz, judgment of 30.4.2012, 5 Sa 687/11).

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When can employees involve third parties in the appraisal interview? Who can be there?

Participation in employee appraisals, the subject matter of which is covered by the right of direction, is a highly personal obligation that cannot be transferred to others (cf. § 613 BGB).

As a matter of principle, an employee may not be accompanied by a lawyer or by persons outside the company against the will of the employer. If, however, the employer itself involves third parties in the discussion, the participation of a lawyer of the employee is permissible in the opinion of the LAG Hamm in order to maintain equality of arms (judgment of 23.1.2001, 14 Sa 497/01). In addition, in order for an intended dismissal on grounds of suspicion to be effective, it is required that the employee concerned has the opportunity to consult a lawyer for the hearing interview (LAG Berlin-Brandenburg, judgment of 6.11.2009 – 6 Sa 1121/09).

There is no general entitlement on the part of the employee to involve a works council member in an appraisal interview. However, the Works Constitution Act (BetrVG) provides that the employee has a legal right to an employee appraisal in the following legally regulated cases, to which he or she may then involve a works council member:

• Modification of work processes that require further training of the employee (Section 81 (4) of the Works Constitution Act),
• composition of remuneration, performance appraisal and professional development (§ 82 para. 2 sentence 2 Works Constitution Act),
• inspection of the personnel file (§ 83 para. 1 sentence 2 BetrVG);
• Handling of complaints (§ 84 para. 1 sentence 2 BetrVG).

In addition, the participation of a works council member in prevention discussions within the framework of company integration management in accordance with § 167 SGB IX may be considered.

For personnel discussions on the conclusion of a termination agreement, the Works Constitution Act does not establish a general entitlement of the employee to the involvement of a works council member. Often, however, questions of "performance appraisal" as well as the employee's development opportunities will also be discussed in such discussions. From this, a right of participation of the works council can be derived. However, the employer is free to separate the discussions from each other in terms of content and time. In this way, he can first address performance deficits in the presence of the works council member. If, on the other hand, the termination of the employment relationship has already been decided for the employer and only the modalities and conditions are to be discussed, there is no right to participate.

It is also conceivable for a translator to participate if this is the only way to ensure that the employee can follow the conversation. In this way, any accusations of discrimination on the basis of ethnic origin can also be prevented. In the case of underage trainees, the legal representative has the right to accompany them.

About the Author:

Hendrik Bourguignon specialises in individual and collective labour law. For many years, executives and companies have trusted his expertise:

• Lawyer and Partner at ebl factum rechtsanwälte I notare
• Certified Specialist Lawyer for Employment Law since 2004
• Business Mediator (IHK) since 2013
• Member of the Working Group on Employment Law of the German Bar Association (DAV)
• Member of the Association of Hessian Specialist Lawyers for Employment Law
• Co-founder of the Frankfurt Mediation Centre (frankfurter-mediationszentrale.de)