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Occupational Pensions: Clause of general terms and conditions according to which only a “present” wife of an employee is entitled to survivors’ benefits can constitute inadmissible disadvantage

By judgment of 21.02.2017 (3 AZR 297/15) the Federal Labor Court has ruled that a clause in general terms and conditions according to which only a “present” wife of an employee is entitled to a survivor’s pension constitutes an unreasonable disadvantage for the employee and therefore is invalid according to § 307 para (1) sentence 1 of German Civil Code (BGB). However, if the pension promise had been granted before 1 January 2002, this would lead to claims only if the marriage had already existed during the employment relationship.

The plaintiff was employed by his former employer from 1 February 1974 until 31 October 1986. The insolvency proceedings with the former employer were opened on 31 October 1986. On 1 July 1983, the plaintiff was granted a pension promise that included general terms and conditions according to which the “present” wife should receive a lifelong survivor’s pension under the condition that they did not divorce. When the pension promise was granted, the plaintiff was married to his first wife. This marriage ended in divorce as of 31 December 2004, after the plaintiff had left the employment relationship. On 8 April 2006 the plaintiff married again. The plaintiff claimed that his second wife, to whom he was married at the time of his death, would be entitled to a survivor’s pension.

The Federal Labor Court dismissed the plaintiff’s claim. The employer is not obliged to pay a survivor’s pension to the wife who is married to the plaintiff at the time of the insured event. This results from the interpretation of the pension promise, according to which the word “present” only applies to the wife who was married to the employee at the time the pension promise was granted (1 July 1983).

Since the provisions regarding general terms and conditions are applicable to the pension promise, and the pension promise is to be considered as an atypical pension promise because typically a certain category of persons who are in a close relationship to the employee are entitled to a survivor’s pension, the “present” restriction constitutes an unreasonable disadvantage and therefore is inadmissible according to § 307 para (1) sentence 1 of German Civil Code. However, this does not result in any claim by the plaintiff’s second wife. Instead, a supplementary interpretation of the pension promise is to be made, since removing the word “present” would be an unreasonable hardship for the employer because he would have to face all risks arising from future marriages regarding survivor’s pension claims. Since an examination of the laws with respect to general terms and conditions had not yet been required by law at the time when the pension promise was granted (1983), it has to be interpreted in such a way that only the wife to whom the plaintiff was married at the time when the pension promise was granted would be entitled to a survivor’s pension.

The Federal Labor Court’s decision shows that an infringement under § 307 para (1) sentence 1 German Civil Code does not necessarily lead to claims. Instead, a supplementary interpretation of the contract may show that the employer is not liable, since otherwise there would be an unreasonable hardship for the employer. Moreover, the decission shows how important it is to have clear and comprehensible provisions regarding survivor’s pension.