German Location Shut Down: All Employees’ Contracts Canceled by Company If you need any further adjustments or specific details, feel free to let me know!

Sauldorf,Germany – A significant blow to the Baden-Württemberg economy as Tegometall Lagertechnik GmbH announced the impending closure of its Sauldorf facility next month. The decision, revealed to the entire workforce on Thursday, will result in the loss of approximately 90 positions.

Economic Headwinds Force Tegometall’s Decision

The closure forms part of a broader trend of industrial restructuring impacting Germany. Just recently, a long-standing manufacturing company revealed plans to relocate production overseas by mid-2027. Now, Tegometall joins this pattern, citing a dramatic decline in sales – nearly 60 percent – and escalating costs as primary drivers.

the Tegometall Group facility in Sauldorf, set to close at the end of September. (Image for illustrative purposes only)

Tegometall, a Swiss-German group specializing in shopfitting and warehouse technology, has decided to significantly scale back its warehouse technology operations. This strategic shift directly lead to the decision to shutter the Sauldorf plant.

Impact on Workforce and Local Economy

The news has understandably caused distress among employees, many of whom have dedicated decades of service to the company. Arndt Lüdtke, Managing Director of the Tegometall group, expressed the difficulty of the decision, stating the company explored all available alternatives before reaching this point.

According to reports, the decline in orders is linked to the loss of a major customer, specifically Lidl. The loss of this key contract proved unsustainable for the Sauldorf location.

Company Facts – Tegometall International Sales GmbH
Founded	1968
Headquarters	Lengwil, Switzerland (and Konstanz, Germany)
Industry	Warehouse Technology, Shopfitting
Approximate Employees	Around 900 (Group-wide)

While a limited number of employees may be offered positions at Tegometall’s Crawl sore location, the vast majority will be required to seek assistance from the employment office. This situation underscores the challenges facing manufacturing and logistics sectors in Germany.

did You Know? Germany’s manufacturing sector, a cornerstone of its economy, has faced increasing pressure from global competition and rising energy costs in recent years.

The situation at Tegometall mirrors a broader trend of businesses responding to economic pressures by streamlining operations and reducing thier footprint.This restructuring often has significant consequences for local communities and the workforce.

Understanding the Broader Economic Context

The challenges facing Tegometall reflect a complex interplay of economic factors. Global supply chain disruptions,increased competition from lower-cost manufacturing hubs,and the rising price of raw materials all contribute to the pressure on German businesses.

Furthermore, the shift towards digitalization and automation is reshaping the landscape of the warehouse technology sector, requiring companies to adapt and invest in new technologies to remain competitive. Companies that fail to innovate and streamline operations risk falling behind.

Frequently Asked Questions About the Tegometall Closure

• What is the primary reason for the Tegometall Sauldorf closure? The closure is attributed to a significant decline in sales, estimated at nearly 60 percent, and increasing costs.
• How many employees will be affected by the closure? Approximately 90 employees will lose their jobs as a result of the facility’s closure.
• What options are available for impacted employees? A small number of employees might potentially be offered positions at the crawl sore location, while the majority will need to seek assistance from the employment office.
• What is Tegometall’s core business? Tegometall specializes in shopfitting and warehouse technology solutions.
• Is this closure part of a larger trend? Yes, it reflects a broader pattern of industrial restructuring and cost-cutting measures within the German manufacturing sector.

What are your thoughts on the challenges facing German manufacturers? How can companies navigate these turbulent times? Share your opinions in the comments below!

What are teh specific legal requirements for employer consultation with the Works Council (Betriebsrat) during a mass dismissal (Massenentlassung) in Germany?

German Location shut Down: All Employees’ Contracts Canceled by Company

understanding Mass contract Cancellations in Germany

A sudden German location shut down resulting in the cancellation of all employee contracts is a severe event with significant legal and financial implications. German labor law is exceptionally protective of employees, making such actions complex and frequently enough subject to rigorous scrutiny. This article details the process, employee rights, and potential recourse when facing this challenging situation.Key terms to understand include mass dismissal (Massenentlassung), termination notice (Kündigung), and severance pay (Abfindung).

Legal Framework: Mass Dismissal (Massenentlassung) in Germany

German law distinguishes between individual and collective dismissals.A mass dismissal is triggered when a company with more than 20 employees intends to dismiss 30 or more employees within a 30-day period.This triggers specific obligations for the employer:

Consultation with the Works council: If a Works Council (Betriebsrat) exists, the employer must consult with them before initiating any dismissals. This consultation aims to explore alternatives to avoid or mitigate the impact of the dismissals.

Notification to the Employment Agency: The employer is legally required to notify the local Employment Agency (Agentur für Arbeit) of the planned mass dismissal.This notification must include detailed information about the reasons for the dismissal, the number of affected employees, and the selection criteria used.

Social Plan (Sozialplan): In many cases, a social plan is required. This is a legally binding agreement negotiated between the employer and the Works Council, outlining measures to compensate employees for the loss of their jobs, such as severance payments, retraining opportunities, and assistance with finding new employment.

Failure to adhere to these procedures can render the dismissals legally invalid.

Employee Rights When Facing Contract cancellation

Even with a legally compliant mass dismissal,employees retain significant rights:

Right to a Writen Termination Notice: A termination notice (Kündigung) must be provided in writing and must state the reasons for the dismissal. Verbal notices are invalid.

Notice period: Employees are entitled to a statutory notice period, which increases with their length of service. this period ranges from four weeks to seven months.The employment contract or collective bargaining agreement may stipulate longer notice periods.

Right to Unemployment Benefits: Employees who are dismissed are generally eligible for unemployment benefits (Arbeitslosengeld I).

Right to Challenge the Dismissal: Employees have the right to challenge the dismissal in labor court (Arbeitsgericht) if they believe it is unlawful. This must be done within three weeks of receiving the termination notice.

Potential for Severance Pay (Abfindung): While not automatically guaranteed, severance pay is frequently enough negotiated, particularly through the Works Council in the context of a social plan. Even without a Works Council, employees might potentially be able to negotiate a severance package.

Grounds for Challenging a Dismissal

Employees can challenge a dismissal based on several grounds:

Social Justification: Dismissals must be socially justified. This means the employer must demonstrate a valid reason for the dismissal, such as economic difficulties, restructuring, or operational requirements.

Selection Criteria: If the dismissal is based on operational reasons, the employer must use fair and objective selection criteria to determine which employees will be dismissed. criteria such as age, performance, and skills are frequently enough considered.

Formal Errors: Any errors in the termination notice, such as missing information or incorrect notice periods, can invalidate the dismissal.

Discrimination: Dismissals based on discriminatory grounds (e.g., age, gender, religion, disability) are illegal.

Navigating the process: Practical Steps for Employees

If you are affected by a German location shut down and contract cancellation, take these steps:

1. Review Your Contract: Carefully review your employment contract and any applicable collective bargaining agreements.
2. Contact the Works Council: If a Works Council exists, contact them immediately for advice and support.
3. Seek Legal Advice: Consult with a labor law attorney (Fachanwalt für Arbeitsrecht) to understand your rights and options. Don’t delay – the three-week deadline to challenge a dismissal is critical.
4. Register with the Employment Agency: Register with the Employment Agency as soon as possible to begin the process of claiming unemployment benefits.
5. Document Everything: Keep copies of all relevant documents, including your employment contract, termination notice, and any correspondence with the employer.
6. Negotiate Severance: Explore the possibility of negotiating a severance pay package with your employer.

Case Study: Automotive Supplier Restructuring (2023)

In late 2023, a major automotive supplier announced the closure of its German manufacturing plant, impacting over 500 employees. The company initiated a mass dismissal process, but failed to adequately consult with the Works Council.The Works Council successfully challenged the dismissals in labor court, forcing the company to renegotiate a more favorable