In the labor court, each party incurs costs in the first instance, because there everyone bears his own legal fees. It does not matter who wins or loses the argument. The employee must therefore pay even if the dismissal was invalid. If no own financial means can be used for a lawsuit, legal aid can be granted. In this article you will learn what legal aid actually is and when it can be applied for.
1. What is legal aid?
Through legal aid (PKH), the state covers the costs incurred by the court and your own lawyer. Only your own costs are covered. This is to enable (relatively) destitute people to take legal action and enforce their rights despite their financial difficulties.
Fees and expenses will not be settled with the employee, but directly with the state treasury. For the person concerned, the costs either disappear completely or are paid back (proportionally) in installments.
If you would like an estimate of the basic costs incurred in the first instance, you can get an overview by reading our article on legal action against dismissal. Nevertheless, the fees are generally somewhat lower on a PKH basis.
Note: Adversary costs are not included in the legal aid. This is bzgl. of attorney's fees in the first instance before the labor court, but no problem, since the respective parties always pay only for their own attorney's fees anyway.
However, in the second instance before the regional labor court, the party who loses the case must pay for the opponent's costs. So opposing counsel's fees must be paid and are not recoverable through PKH. Benefits and cost risks must therefore be carefully weighed in any case.
2. Can I pick my own lawyer or is the lawyer provided by the court?
Legal aid does not mean that you cannot choose your own lawyer. It is simply a matter of funding. The court will then provide, upon request, the lawyer chosen by the employee.
So even with legal aid you have to bzgl. The lawyer's free choice.
3. Legal aid despite legal expenses insurance?
If one has legal expenses insurance, funding for the lawsuit can go through the insurance company. If the legal expenses insurance takes effect, there is no entitlement to legal aid because the legal expenses insurance must be claimed as a priority. In any case, however, it should be carefully checked whether any legal protection insurance includes labor law and actually covers the labor court process. Not every legal expenses insurance policy covers labor disputes (in full).
Legal aid can be granted in individual cases despite legal expenses insurance if
- no cover note has been issued by the insurance company,
- the coverage sum of the legal protection insurance is not sufficient to finance the process or
- Part of the cost is not covered by insurance due to a deductible or for other reasons.
4. Who can apply for legal aid and what are the requirements?
Legal aid is granted according to. § 114 ZPO granted, if
- because of your personal and economic circumstances you are unable to raise the necessary funds for the process either at all, only partially or only in installments (financial indigence),
- The claim has a "reasonable chance of success" (the claim must not be completely futile),
- there is no wantonness (exists if a reasonable person who is not financially dependent on legal aid would not have sued because of the weighing of cost risk and litigation prospects) and
- the costs are not covered by the legal protection insurance.
Both employees and employers can apply for legal aid.
5. Definition of financial neediness
In principle, it is required that the own assets are used. So, in order to determine financial need, the amount of sog. Income to be used can be determined in four steps. The assets to be used do not correspond to the net income.
Calculating the assets to be used:
Step 1: Determine monthly income (earnings)
Add to the monthly net income:
- Regular income from renting, leasing, etc.
- Income from self-employment
- Child support, to the extent it comes directly to the PKH applicant
- Housing Allowance
- Social Services
- Pensions and annuities
- alimony payments
In the case of irregular income that does not accrue in the same amount every month, the sum of all income from the last calendar year is to be formed and this sum is to be divided by 12 in order to obtain an average value for a month (OLG Cologne, decision dated 15.02.1993 – 2 W 15/93).
In the case of income, earmarked benefits should not be taken into account from the outset (e.g.B. Care money).
Step 2: Deduction of current expenses (costs)
From the income are the monthly running expenses, d.h. deduct expenses incurred. Deductible are for example:
- Rent and incidental expenses
- Costs for the journey to work
- ordinary insurances (e.B. life insurance, household contents and liability insurance).
Not deductible are regular costs for sog. Luxury goods (z.B. Maintenance of a yacht or a vacation home).
Step 3: Offset of allowances
In addition to the deduction of current expenses, allowances can also be claimed. These are intended to ensure that the entire income does not have to be spent on the process.
According to the legal aid announcement of the respective year, corresponding allowances can be additionally deducted from the income. The allowances regularly change minimally with increasing tendency. In 2019, the allowances were as follows:
- For himself, the PKH applicant can offset 491 euros
- Those who are employed can count an additional 223 euros of
- For spouse or registered partner 491 Euro are chargeable
- For adult persons in the household for whom maintenance is paid (z.B. Children aged 18 and over) are eligible for 392 euros each
- For young people between 14 and 17 years each 372 euros
- For children between 6 and 13 years 345 euros each
- For children up to 5 years 282 Euro each
Step 4: Realizable assets
Existing assets must first be used up for an action against unfair dismissal before PKH can be claimed. But also from this there are exceptions.
The following assets do not have to be used:
- Financial assets up to 2.000 euros
- Self-occupied real estate (here, however, it is occasionally required that the real estate is encumbered)
- Assets for retirement provision
- Assets necessary for the exercise of the profession.
Rented real estate or a life insurance are not protected against it. Here, the courts require that these assets be liquidated or mortgaged before legal aid can be claimed.
6. Calculation example
Employee A is dismissed by her employer. She suspects that the dismissal is invalid and would like to file an action against dismissal.
A has income of 1.500 Euro net per month and also receives child benefit for the 15-year-old son in the amount of 194 Euro. She has ongoing monthly expenses (u.a. rent) of 700 euros. Ms. A has no other assets.
- Step/income: Net income (1.500 euros) + child benefit (194 euros) = 1.694 euros
- Step/ongoing expenses: 700 euros rental costs
- Step/allowable assets: 491 euros + 223 euros + 372 euros = 1.086 Euro
Income to be used = 1.694 Euro – 700 Euro – 1.086 Euro = -92 Euro
Since the value of the income to be used (-92 Euro) is negative and thus below an income to be used of 20 Euro per month, employee A can apply for legal aid free of installments (see s.u.) claim.
7. Legal aid with and without installments
Legal aid is not always granted free of charge. If the income to be used is less than 20 euros per month, the legal aid is free, d.h. (for the time being) free of installments.
In the above calculation example under 5. A would therefore be granted free legal aid because of her income of – 92 Euro.
In the case of a higher income to be used (more than 20 euros per month), legal aid will be paid initially, but the following costs will be deducted. However, the costs must be paid back in full or in part by the PKH recipient (depending on financial possibilities). The amount of the monthly installment is then half of the income to be used, whereby the installments are to be rounded down to full euro amounts.
Example: According to the above calculation, A has an income of 195 Euros to be used. In addition, she has financial assets i.H.v. 1.000 euros.
If the income to be used is more than 600 euros per month, the monthly installment is 300 euros plus the part of the income to be used that exceeds 600 euros.
The repayment period is a maximum of 48 months. If costs are still outstanding after the 48 monthly installments, because the installments could not be set higher due to the financial situation, these are taken over by the state.
Note: If the income situation has improved significantly within four years of the end of the proceedings, the PKH-entitled party can still be called upon to make a retrospective or supplementary payment. Be obliged to pay in installments.
Example: PKH is granted as a result of unemployment and the person in question is gainfully employed again.
There is a duty of notification here. A substantial improvement in income is z.B. if the difference in monthly income is not only once at least 100€. However, the substantial improvement can also result from other circumstances than the monthly salary (z.B. increased rental income).
In addition, if necessary. also the difference fees between PKH-attorney fees and elective attorney fees accrue. PKH attorney's fees are lower than standard attorney's fees. If it now turns out within the framework of the review within 4 years that the client earns better again, this difference can accrue retroactively.
8. How do I get legal aid?
Legal aid is not granted ex officio, but must be applied for yourself – for each instance and/or extension of the action.
The application can be made either by the employee himself or by the authorized attorney.
The application for legal aid is to be submitted to the labor court, which also decides on the validity of the dismissal.
If not only the court costs, but also the lawyer's fees are to be covered, the application form must also request that the named lawyer be assigned to the case.
9. Deadlines to be observed when suing for protection against dismissal
The action for protection against dismissal must be filed with the labor court within three weeks of receipt of the notice of dismissal. Otherwise the dismissal becomes effective. It is mandatory to comply with this deadline. Since the granting of legal aid is usually not to be expected within these three weeks, action must be taken beforehand.
The mere filing of the application for legal aid is not sufficient to meet this deadline.
Even if the action is brought subject to the condition (i.e. restricted) that the application for legal aid is granted, this is generally not sufficient to meet the deadline. An unconditional filing of the action for protection against dismissal is required.
Whoever applies for PKH and waits for the approval will regularly miss the deadline for the dismissal protection action and thus his chance for a reinstatement or a severance payment.
The submission of the complaint without PKH grant is in principle also no problem for (relatively) indigent persons, because with procedures before the labor court first still no court fees become due, so that the procedure starts at all. Unlike in most civil courts, no advance payment of fees is required in proceedings before the labor court.
An alternative to hiring a lawyer when filing a lawsuit is always free assistance at the legal application office of the labor court.
In any case, it is therefore necessary to act quickly to ensure that the action is filed in good time and that the deadline for the action for protection against unfair dismissal does not expire.