Category Archive: Standard contractual terms and conditions of employment

Federal Labor Court rulings to watch in 2017 (edition Jan – March)

Already in the first quarter of the New Year Germany’s Federal Labor Court will deliver a number of judgments important for advisors and practitioners alike: Time Credits for works council members? (- docket no 7 AZR 224/15 – expected for 18 January 2017- ) Although members of a works council act in an honorary role …

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Exclusion Clauses: “Textual Form” to be Sufficient

Many employees are not adequately informed as to what a requirement for notification in “written form” encompasses. With regard to exclusion clauses, this lack of information can lead to an inability to exercise certain rights. Generally, exclusion clauses in employment contracts include provisions under which claims arising from the employment contract become void if they are …

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Repayment of costs of continuing training

The Higher Labour Court (Landesarbeitsgericht, LAG) Rheinland-Pfalz decided on 3 March 2015 (docket no. 8 Sa 561/14) that a repayment clause for costs of continuing training in an employment contract is void if it only provides for an annual reduction of the repayment obligation. In this case,  the employee was obliged to participate in a …

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Financial compensation entitlement for post-contractual non-compete based on standard saving clause

In German law, a post-contractual non-competition agreement with an employee is only effective if it provides the employee with appropriate financial compensation. The financial compensation must amount to at least 50% of the previous income. If no such compensation is provided, the post-contractual non-competition clause is, by force of law, invalid.   Nevertheless, the Hamm …

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No dismissal with the option of altered conditions to offset minimum wage

A dismissal with the option of altered terms and conditions will be invalid if additional payments are taken away to offset the higher hourly base pay required under the Minimum Wage Act (judgment of the Higher Regional Labour Court of Berlin-Brandenburg, Landesarbeitsgericht, LAG, dated 25 September 2015, docket number 8 Sa 677/15). In the case …

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Internships do not count towards the probationary period for vocational training

A previous internship will not count towards the mandatory probationary period for vocational training in order to effectively shorten the agreed probationary period (judgment of the Federal Labour Court, Bundesarbeitsgericht, BAG, dated 19 November 2015, docket number 6 AZR 844/14). Traditionally, many professions in Germany require a formal vocational training program which commonly takes three …

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Dynamic reference provisions – does European law strike again?

Depending on the industrial sector, German employment contracts sometimes refer to collective bargaining agreements (Tarifverträge). In this case the provisions of the collective bargaining agreements apply to the employees even if the employer and/or the employee are not members of the respective body. Therefore, the employees can claim eg additional benefits such as a longer …

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Too short a notice period will not render a termination null and void

Even if an employment contract invalidly provides for a notice period of two days and the employer subsequently issues a termination with a two-day notice period, this will not render a termination null and void. The Hamm Higher Regional Labour Court (Landesarbeitsgericht, LAG) was called to rule on the validity of a termination in the …

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Ins and Outs of Bonus and Commission Payments – Part II

In the second part of our two-part overview, we will address further aspects of bonus and commission payments with regard to the possibility to revoke a bonus and the impact of a termination of employment on the bonus entitlement. Can an employer revoke a bonus? Under certain, very narrow conditions, German law allows the employer to …

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Ins and Outs of Bonus and Commission Payments – Part I

Employers may grant their employees bonuses in addition to fixed basic salary for a variety of reasons, for example, to reward performance, loyalty to the company or just as a Christmas gratuity. In this context different questions arise. This two-part post addresses the most common questions regarding bonus and commission payments.    What are the …

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