GRP Rainer LLP

Contractual Provisions of Voluntary Special Payments Must Be Set Forth Clearly

According to the transparency requirement set forth in § 305c p. 1 of the Federal Legislation of Germany (BGB), it is illegal to express ambiguously provisions of labour contracts regarding voluntary extra payments by the employer.


North Rhine-Westphalia, Germany -- (SBWIRE) -- 12/31/2012 -- GRP Rainer lawyers and tax advisors in Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: The reference in the labor contract to the voluntary nature of special payments to the employee, as well as to the right to deprive the employee of them, must be expressed unambiguously in the general working conditions. Otherwise, the employer’s possible right for changes of these payments will not be available. It is necessary to define precisely which parts of the additional payments are voluntary and which of them are revocable.

Thus decided the state labor court (LAG) of Rhineland-Palatinate in its judgment dated 27.08.2012 (5 Sa 54/12). In the case that the decision refers to, the Christmas bonus of the employee was reduced by the employee for 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the general labor conditions a clause declaring unambiguously which payments are voluntary and which of them may be withdrawn by the employer. Only by such a clearly worded clause could employers change their voluntary additional payments at any time, or reduce them. Therefore in the present case the court ruled in favor of the employee.

According to the Court, a clause that generally combines the provisions of revocation and voluntary nature of benefits does not satisfy the transparency requirement set forth in § 305c paragraph 1 of the Federal Legislation (BGB). The voluntary services of the employer are not legally binding in principle, but in order to become revocable, such services must be obligatory from the very beginning. Therefore, a combination of such provisions makes impossible to determine which social payments the voluntary reservation refers to.

You should consult a lawyer specializing in the labor law regarding changes to an employment contract, the general working conditions, mandatory and voluntary social benefits, as well as collective bargaining. You can also obtain information regarding regulations of holidays, salary, dismissal, reprimands and other employment law issues, as well as 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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