Occupational pensions: Deviation from employer’s (contractual) obligation to adjust pension benefits requires detailed statement of reasons

By judgment of 21.06.2019 (docket number: 7 Sa 92/18) the State Labour Court Hamburg has ruled that a deviation from the employer’s obligation to adjust pension benefits in accordance with an increase in state pension benefits – as provided for in the employer’s pension plan in the event that the employer considers an adjustment “not justifiable” – requires a detailed statement of reasons. The employer must describe all relevant factors for his decision, the company’s …

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Entitlements on company pension are subject to particular protection in the event of a transfer of business according to Section 613 a German Civil Code

By judgment of 22 October 2019 (docket number: 3 AZR 429/18) the Federal Labour Court has extended its settled case law regarding the replacement of pension plans in the event of mergers and acquisitions. A replacement of a pension plan by a pension plan existing at the acquirer a must be in accordance with the principle of protection of legitimate expectation and the principle of proportionality. For occupational pensions, the Federal Labour Court has developed …

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Employee Leasing: Deviation from Equal Pay

According to a judgement of the Federal Labour Court employers (agency) who lease employees (agency workers) to a third party (client) can deviate from the principle of equal treatment (“Equal Pay”) by virtue of a reference clause in the contract of employment only if, for the period of the lease, the relevant collective bargaining agreement for employee leasing fully, and not just partially, applies (judgement dated 16 October 2019, docket number 4 AZR 66/18). The …

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Time Recording Systems Jumpstarted by the Works Council?

In an earlier ruling this year, the European Court of Justice held that European member states must require employers to introduce systems for recording the working time of their employees. However, since there is no German law stipulating time recording( with the exception of overtime recording duties) yet, typically it is up to the employer whether or not to introduce consistent time recording mechanisms. In the underlying case, the works council wanted to force the …

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A cycling accident with fatal consequnces – Regional Labour Court rules over injury and dismissal

1.                  The problem Around 20% of all dismissals of employees are subject to legal action. Therefore it is reasonable that employers want to make sure that dismissals are legally sound. One of the most important points in such lawsuits is whether the letter of notice has reached the employee, since the employer must not only prove that he sent the letter of notice, but also that this letter reached the employee, i.e. that he or …

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BAD HANDWRITING – DISMISSAL INVALID?

1.                  The problem Bad handwriting – a problem that is of little importance in times of computers, smartphones, etc. However letters of dismissal may not be sent via mail but have to be signed by hand; therefore even in our modern times, bad handwriting can affect the invalidity of a such a notice and thus lead to a defeat in court. The plaintiff, an employee of the Berlin-Schönefeld airport , filed a lawsuit against her …

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(NOT) NICE SEEING YOU AGAIN? FEDERAL LABOUR COURT DECIDES ON FIXED-TERM EMPLOYMENT

1.                  The problem In the year 2018 8,3 % of all German employees worked on the basis of a fixed term employment contract. Various rules apply to this kind of employment and breaching one of them often leads to the employment contract being indefinite. One of the most important rules is the time limit on fixed-term employment contracts. If the time limitation is not justified by factual reasons (e.g. needing a substitute for an employee …

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PARENTAL LEAVE AND VACATION ENTITLEMENT – A COMPLEX MATTER FOR EMPLOYERS

1. The problem Vacation entitlements – a matter that has undergone so many changes lately that the author can no longer even think of a suitable introduction. However this article focuses on a recent decision of the Federal Labour Court (19 March 2019, docket number: 9 AZR 495/17) in which the court explained the connections between holiday and parental leave. The applicant was a former employee who was on parental leave for six years before …

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NEW GERMAN LAW SHALL PREVENT CRISIS IN LABOUR MARKET

For years, the German labour market prospered, mass unemployment was not at all a problem, in fact it was difficult to find qualified employees. However, the times of sustained growth may soon be over. The ifo business climate index has been decreasing for the last couple of months and the German economy shrank slightly in the second quarter of 2019 compared with the previous quarter. The German government wants to be prepared for an potential …

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Federal Labour Court specifies requirements for termination of employment due to insufficient fitness

1. The Problem There are many jobs that require excellent mental or physical fitness. If this fitness is no longer maintained, the question often arises as to whether the employment relationship can still be maintained. This was also the problem in a case decided by the Federal Labour Court (docket number: 7 AZR 292/17) on 17 April 2019. The plaintiff had been employed as a stewardess for more than 20 years until an aeromedical institute …

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The hazards when working from home

As more and more employees enjoy home office options, litigation with regard to work accidents suffered when working from home has also become more relevant. While statutory accident insurance coverage is triggered when working from home, this does not extend to non-work-related activities. In a recent judgment, the Munich social court held that an employee who works from home and injures himself on the way to the bathroom which is located on the ground floor …

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Works Council’s right to know about work accidents also extends to external staff

According to a judgment by the Federal Labour Court, the works council may request information about work accidents suffered by individuals who are employed by an external party, if these works accidents were suffered in connection with the operational infrastructure (judgment dated 12 March 2019, docket number 1 ABR 48/17). The company, a delivery service provider, used both its own staff as well as contractors to provide these services. When two contractors slipped and thus …

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Change in Work Constitution Act to Increase Employee Representation

Following a legislative reform earlier this year, flight crews’ rights to obtain employee representation through a works council have been improved. While employees from (almost) all fields of work can choose to elect a works council, sec. 117 of the Works Constitution Act formerly provided for an exemption for flight crews. Flight crews were only able to establish an employee representative body if their collective bargaining agreement provided for such representation. Consequently, only flight crews …

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OVERTIME COMPENSATION – ARE 9 DAYS VACATION ENOUGH?

1. The problem Over time, a complex matter often leads to disputes, sometimes even trials between employers and employees. The question whether employers may arrange overtime, but also how to reimburse it is one such highly controversial issue. On June, 26 2019 (docket number: 5 AZR 452/18) the Federal Labour Court (BAG) had to decide whether the plant-level agreement of “ver.di” (a large German service trade union) with its works council on overtime compensation meets …

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THE END OF SPECIAL RIGHTS FOR THE CHURCH?

1. The problem Equal treatment is not only becoming more and more important since #metoo a few years ago, but has influenced the European Union for nearly 20 years. On June 2000 the Council Directive 2000/43/ implemented the principle of equal treatment between persons irrespective of racial or ethnic origin into European Law. Since then more and more European and German Laws were brought into force to promote equal treatment between the sexes, ethnicities, religions, …

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