A supervisory board unanimously decides to remove and terminate the managing director - but the letter of termination is only signed by two of its three members. The managing director rejects the termination due to lack of authority. The Federal Labor Court (2 AZR 130/25) agreed with him in its decision of May 7, 2026: The termination is ineffective in analogous application of Section 174 Sentence 1 BGB. The decision concerns a constellation that is regularly underestimated in design practice. In the event of a dispute, the substantive division of competences was clean: the supervisory board was responsible according to the articles of association and had decided properly and unanimously. The termination failed solely because of how the decision was communicated to the outside world - and because nothing was presented to the recipient that would indicate the authority of the two signatories.
The most important thing in brief
- Section 174 of the German Civil Code (BGB) is to be applied analogously if an overall power of representation is extended to a sole power of representation for individual members by authorizing the other members of the body.
- The reason lies in the uncertainty of the declaration recipient: This authorization is not apparent from any public register, but is based on a verifiable one Decision of will.
- Proof can be provided by a declaration from all or the remaining board members - it must be enclosed with the termination. A copy of the decision that is only presented during the trial comes too late.
- The rejection must take place immediately; The principles of § 121 BGB apply, approximately one week as a guideline.
- General knowledge of the "management relationships" does not exclude the right of rejection under § 174 sentence 2 BGB or § 242 BGB.
- For What is crucial in practice is the statute: it can entrust individual members - typically the chairman - with the execution of resolutions.
The situation
The defendant was a GmbH with a Turkish sole shareholder. Their articles of association provided for a supervisory board consisting of three to five members and assigned this responsibility for appointing and dismissing the managing directors as well as representing the company in legal transactions with them. Furthermore, the provisions of stock corporation law regarding the supervisory board should expressly not apply. In August 2023, the three-member supervisory board unanimously decided to remove the plaintiff as managing director and to properly terminate his employment contract. The supervisory board chairwoman and another member signed the letter of termination - the third member did not. Neither the resolution nor a declaration of authorization was attached to the letter. Four days after receipt, the plaintiff rejected the termination due to the lack of a power of attorney. He only received the supervisory board's resolution during the trial when the company filed it. In the factual instances, the company had recently no longer denied that it was an employment relationship - a point that had significant procedural consequences: The concept of an employment relationship is a simple legal term, so that non-dispute binds the court, including the appeal court.
The decision of the Federal Labor Court
The labor court and the state labor court upheld the lawsuit, but the appeal was unsuccessful. The BAG bases the ineffectiveness of the termination on Section 174 Sentence 1 BGB in analogous application. Analogous application to corporate actions According to its wording, Section 174 of the German Civil Code (BGB) only covers actions based on legal power of attorney. However, the provision applies analogously where the recipient of the declaration has a comparable uncertainty about the power of representation exercised and this power of representation is based on a decision of the person being represented, which can be proven to him. This is exactly the case when board members with overall power of representation authorize one of them to act solely for the board. This expanded authority cannot be found in any public register; so the recipient cannot check it. This can be proven by a declaration from all or the remaining board members. The statutes were silent - and that was crucial. If the supervisory board has the power of representation, it basically does so as a body in its entirety. However, the partnership agreement can stipulate that individual members - in particular the chairman - carry out the resolutions. The defendant's statutes did not contain such regulations. She made a distinction in several places between the committee, individual members and the chairman; However, when it comes to representation towards managing directors, she clearly only spoke of the supervisory board as a body. In this respect, the BAG refers to the legal regulation in Section 26 Paragraph 2 Sentence 1 BetrVG as a model. An authorization of the two acting members, which was at best implicit in the decision, did not help: it was not presented to the plaintiff. Immediacy, knowledge and abuse of law The principles of Section 121 of the German Civil Code (BGB) apply to the immediacy of rejection: Immediate action is not required; the recipient has time to think things over and to obtain legal advice; Without special circumstances, a rejection after more than a week is no longer immediate. The period begins with actual knowledge of the termination and the lack of a power of attorney. Four days were easily enough here. Section 174 sentence 2 BGB also did not apply. Although the notification is free of form, it must be an equivalent replacement for the missing document and must specifically relate to the specific authorization. The claim that the chairperson's power of representation had been made public remained unsubstantiated; The fact that the plaintiff knew the powers of the supervisory board says nothing about an authorization for sole representation. For the same reason, the objection of abuse of rights under Section 242 of the German Civil Code (BGB) failed: knowledge of unspecified management relationships says nothing about external authorizations to act within a committee. The postponed termination also failed. The immediate termination declared as a precautionary measure in an electronically transmitted lawyer's letter in December 2023 did not comply with the written form of Section 623 of the German Civil Code (BGB); The electronic form is excluded there and the termination is therefore void according to Section 125 Sentence 1 BGB. The BAG clarifies that the transmission of an electronic document did not meet the written form requirement, at least until Section 46h ArbGG came into force on July 17, 2024.
Classification: an old dogmatic dispute
The decision addresses a question that has long been unresolved in stock corporation and limited liability company law: In what capacity does the supervisory board member who communicates a decision of the committee to the outside world actually act? The prevailing commentary literature describes the chairman as a “declaration representative” - as something in between a representative and a messenger, because he does not make his own declaration of intent, but was involved in the formation of the will. The analogous application of § 174 BGB lies on this line, because anyone who is not just a messenger claims a power of representation about which the recipient may be unclear. Hoffmann-Becking (in NZG 2026, 1203 ff.) recently fundamentally contradicted this figure. His argument: The BGB recognizes no third party between representation and messenger; The Supervisory Board's declaration of intent is already completed with the resolution and submitted in accordance with Section 130 of the German Civil Code (BGB) as soon as a member is entrusted with the transmission. Whoever delivers it only provides access - regardless of whether it is a member of the board of directors or a member of the decision-making body. If you follow this, the supervisory board member is acting as a messenger, § 174 BGB is neither directly nor analogously applicable, and the chairman does not require any special authorization to make the announcement because this authority is part of his office. There is also a second, separate thesis: the supervisory board cannot delegate additions to the content of a resolution; Anyone who gives the chairman blanket authorization to negotiate details of an employment contract, for example, breaks the ban on delegation. The permissible route is a range specified in the resolution, within which the authorized representative only chooses. The BAG did not agree with this criticism, but continued the line of previous labor court case law. For consulting practice, the dogmatic question has been decided for the time being - at least where there is a dispute about the effectiveness of a dismissal before the labor courts. In practice, the following solution is recommended, which is mentioned in the judgment itself: the statutory entrustment of individual members with the implementation of the resolutions. If this is missing, the remaining members can provide informal information, which can also be done electronically. Why this also counts beyond labor law The dismissal of a managing director is just as much a unilateral legal transaction as termination. If it is declared by individual members of the supervisory board, there is a risk of the same rejection - with direct relevance to the register, because the notification of the change of managing director requires an effective dismissal. Anyone who shifts the division of authority in the statutes to an optional supervisory body should therefore always help regulate the execution level.
Consequences for design practice
- Include an execution clause in the articles of association. The articles of association should expressly regulate that declarations of intent by the supervisory board within the framework of resolutions made are made by the chairman - or alternatively his deputy - on behalf of the board. In the case of a GmbH, the articles of association are in the register folder and can therefore be viewed by everyone; The uncertainty that prompted the BAG to make the analogy should no longer apply in this constellation.
- Longually separate competence and representation. Many statutes speak in general terms of “the supervisory board”. The judgment shows how strictly this formulation is read. A distinction must be made between the responsibility for the decision, the representation of the company and the execution of the resolution.
- Attach physical proof. As long as there is no statute regulation, the letter of termination or dismissal includes a declaration of authorization signed by all other members - in the original, not as a copy and not only during the process.
- Or simply have everyone sign it. The safest way is for all members of the committee to sign. For small supervisory boards, this is usually organizationally affordable and avoids any discussion about authorizations.
- Document prior notification. Notification according to Section 174 Sentence 2 BGB is free of form and can also be done by email. However, it must specifically refer to the authorization for sole representation and reach the recipient - general organizational charts or announcements are not sufficient.
- Keep the termination in writing. § 623 BGB excludes the electronic form. Terminations should be on paper with a handwritten signature; the statement in the lawyer's brief is no substitute.
- Keep the resolution documentation cleanly. The resolution should clearly and conclusively state the dismissal and termination and name the people involved. Formulations in the sense of a mere ought invite disputes about the explanatory content.
Conclusion
The material decision of the supervisory board was not objectionable in the dispute - the termination of the managing director failed due to a formality that could have been avoided with two sentences in the articles of association. When designing the social contractual regulations for supervisory boards, this is a clear request not to leave the execution of resolutions to chance. Where this clause is missing, it should be clarified before any unilateral declaration to a managing director who will sign and what will be attached to the letter.
