Insidious dismissal of managers: four warning signs and how to defend yourself

From the Handelsblatt archive: When employers want to get rid of unpleasant managers without high severance payments, they often resort to tricks. What can be done legally?

Insidious layoffs of executives: There are four warning signs. Photo: midjourney/MeiOl [M]

Dusseldorf. Suddenly, important decisions go over the head of the responsible manager and he is officially deprived of staff and budget. At this point at the latest it should be clear to him: his job is in danger.

Degrade and demotivate – “such attacks by the employer are intended to persuade a manager to accept a termination agreement and leave the company as quickly as possible,” says Christoph Abeln. The Berlin specialist lawyer for labor law mainly represents managers in legal disputes.

Companies want to avoid high severance payments and are therefore increasingly relying on unsightly methods to get rid of management personnel. And “the most dangerous form of this is invisible,” said the lawyer.

Instead of public degradation and humiliation, there is a hidden disempowerment, which at first glance may even seem like a promotion or reward. In his book “From Career Break to Comeback,” Abeln has compiled the most common separation tricks used by employers – and tips on how to defend yourself.

Nils Schmidt, lawyer and board member of the Association for Specialists and Managers (DFK), confirms the topicality of the topic. “Almost every day we deal with long-serving first and second level managers in all industries who are being subtly pushed out of the company.”

The two specialist lawyers describe how a gradual dismissal can be recognized and which countermeasures are recommended in each case.

Warning sign 1: Promoted to managing director

A division manager who had worked for a company for almost 30 years was enthusiastic: he should become managing director. He had finally achieved the crowning achievement of his career. A new title, more prestige – and a contract that he signed without hesitation.

Danger: The manager had overlooked the fact that protection against dismissal also ended with the promotion. The new contract replaced all previous rights. “Managing directors are not traditional employees,” says lawyer Abeln, who supervised the case. “You can be terminated at any time and are not entitled to any bonuses or severance pay.” Three months after Meier's appointment, he was terminated - without notice.

Countermeasure: Before the new managing director contract is accepted, pay attention not only to remuneration regulations, but also to security.

DFK lawyer Schmidt recommends: “It’s best not to give up the old employment contract, but rather agree to put it on hold.” If the appointment is revoked or the managing director contract is terminated, this original contract will be reinstated.

DFK board member Schmidt: “Do not accept the installation of dual leadership without reacting.” Photo: private

Alternatively, special protection against dismissal, a return clause and severance pay in the event of dismissal should be agreed in the new managing director contract.

Either way, the lawyers agree: “If the employer resists, this is an indication that it is not about a promotion, but about the dismantling of protection against dismissal.”

Warning signal 2: New dual leadership

An experienced head of investment banking at a large German bank is suddenly given a co-manager in his mid-40s. The manager of the same rank is similar to the previous Managing Director in terms of professional career and age.

Danger: shared responsibility? How modern! Relief – great! Anyone who reacts like this underestimates the new situation. “Such dual leadership is not always a caring gesture on the part of the employer, but rather serves to gradually disempower,” says lawyer Schmidt.

Caution should be exercised if the new co-boss reports directly to their shared superior. “This is a popular way to initiate dismantling.” In this way, the employer can observe who is performing better, adds lawyer Abeln.

Labor lawyer Abeln: When alleged promotions become a trap. Photo: abeln

In practice, dual leadership that is not requested by oneself means a gradual loss of power, overlapping competences and strong internal competition. This is not without consequences: whoever loses the secret competition usually has to leave. This was also the case in Abeln's case at the bank: at some point, the original head of the department was considered redundant and should accept that his contract be terminated.

Countermeasure: “Don’t accept the installation of dual leadership without reacting,” advises Abeln. He recommends requesting employment in accordance with the contract in writing and also establishing a clear demarcation of the responsibilities of both co-boss. “It should also be confirmed that your reporting line – for example to the board – remains unchanged.”

Nevertheless, to be on the safe side, the manager concerned should document all further processes. According to Abeln, a chronological record is important if a legal dispute arises. These included, for example:

who took away which tasks from him and when

which meetings he was excluded from

what instructions were given to him

“Complete documentation of your disempowerment strengthens your position,” says the lawyer. Judges took this so-called “fact of life” into account when making their decision.

Warning signal 3: Transfer abroad

The 60-year-old division manager from the technology industry was informed by the production director that he would be transferred to Mumbai. The engineer was supposed to ensure German quality standards during production in India. This came as a surprise to the manager. But after 25 years at the German company headquarters, it also had its charm.

Danger: “In fact, moving abroad after the mid-50s all too often hides an elegantly packaged disempowerment,” says Schmidt, who often advises on such cases. Anyone who agrees will most likely find that their previous position will be filled during their absence without them having heard of it beforehand. “Anyone who then relies on the employer still having use for them after their return risks unemployment.”

Countermeasure: “To ensure that the posting abroad does not become a professional dead end, you should only agree to the posting if a specific end date and a guarantee of return to an operational management function are recorded in writing,” advises specialist lawyer Christoph Abeln. “It may seem petty, but it could save your career.”

Under no circumstances should those affected let their employer brush them off with sentences like: “We don’t know what will happen in three years.”

Warning signal 4: Take over project management

A high-ranking manager of a large insurance company is urgently asked by management to take on an important project activity: "We have been working with you for ten years, we know your expertise. Nobody but you is suitable for this challenge." The 52-year-old head of underwriting and risk analysis agrees, flattered.

Danger: “The risk of actually ending up in the so-called death room is great,” says lawyer Abeln. He refers to a current case in his Berlin law firm. The manager in question was isolated from the decision-makers and had to take on tasks that were far below their qualifications.

Countermeasure: Specialist lawyer Abeln advises only accepting a temporary project “if the return to a specific operational function with responsibility for results and personnel has been guaranteed in writing beforehand”.

A contractual amendment is mandatory for this purpose. “It describes the project deployment precisely and sets the target position after the end of the project.” He also ensures the unchanged reporting line and makes it clear that the previous contract is suspended but will automatically come into force again.

Before signing, you should check how serious the employer is about retaining an experienced manager. “Suggest a time limit of initially one, maximum two months,” recommends Abeln.