BAG: No blanket right to suspend employees

A German federal labor court ruled that employers cannot unilaterally suspend employees after termination without valid reasons. This affects benefits like company cars, which may still be owed during the notice period. Case: 5 AZR 108/25 (2026).

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Ruling blocks automatic suspension

The Federal Labor Court (BAG) ruled on March 25, 2026 (case 5 AZR 108/25) that employers cannot automatically suspend employees after termination. This means benefits tied to active work—like a company car—may still be owed during the notice period. The decision protects employees from losing pay or perks without justification.

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Why the court intervened

Standard contract clauses often let employers suspend workers after termination. The court found this unfair because it ignores the employee’s right to work and receive full pay until the contract ends. The ruling forces employers to justify suspensions case-by-case.

What happened in this case

An employee quit his sales job and returned his company car after the employer suspended him. He sued for compensation, arguing the suspension clause was invalid. The court agreed the clause was unfair but sent the case back for further review of the employer’s specific reasons for suspension.