GRP Rainer LLP

Contractual Notices of Voluntary Special Payments Must Be Clear

According to the transparency requirement it is illegal to formulate incomprehensibly clauses of labour contracts regarding voluntary additional payments by the employer.


North Rhine-Westphalia, Germany -- (SBWIRE) -- 01/08/2013 -- GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart, Bremen, Hanover, Nuremberg, Essen and London conclude: The reference in the contract to the voluntary character and the withdrawal of special payments to the employee must be expressed unambiguously in the general working conditions. Otherwise, the employer’s rights for changes of these payments will not be available. These will require a precise definition of the shares of the additional payments that are bound by the voluntary condition, as well as the shares under the revocation.

Thus proclaimed the state labor court (LAG) of Rhineland-Palatinate in its judgment dated 27.08.2012 (5 Sa 54/12). In the case related to the above decision, the Christmas bonus of the employee was reduced by the employer due to a few days in which he was unable to work. The court ruled that the employer had to integrate into the general labor conditions a clause that would state unambiguously which payments were voluntary and which might be withdrawn by the employer. Only by such a clearly worded clause could employers change or reduce their voluntary additional payments at any time. In the present case, the court ruled in favor of the employee. The employer owed the employee the entire Christmas bonus, since the regulation regarding the voluntary reservation was not clearly formulated and hence the whole clause was legally invalid.

According to the court’s ruling, a clause that generally combines revocation and the voluntary condition of benefits does not satisfy the requirements of the transparency regulation. The voluntary contributions of the employer are not legally binding in principle, but such contributions that may be revoked should by default be considered obligatory.

In cases regarding changes to an employment contract, general working conditions, mandatory and voluntary benefits, and collective bargaining, you should consult a lawyer experienced in the labor law. You can also obtain information regarding rules on holiday payment, notice and warning, and other employment law issues and represent yourself if necessary by a competent lawyer.

About GRP Rainer LLP
GRP Rainer LLP is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, and Stuttgart, Germany and London UK.

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