Peak performances of professional soccer player up to retirement not to be expected

In February 2016 we reported on a ruling of the Higher Labour Court Rheinland-Pfalz (Landesarbeitsgericht, LAG) in regard to a case of a goalkeeper who sued his former Bundesliga soccer club for unlimited employment and payment of missed bonuses
( Almost two years later, the Federal Labour Court (Bundesarbeitsgericht, BAG) has now confirmed on 16 January 2018 (docket-number: 7 AZR 312/16), that the established practice of employing professional soccer players only on a fixed-term basis does not violate German employment laws, as those fixed-term contracts with soccer players of the Bundesliga are generally justified in accordance with sec. 14 para. 1 sentence 2 no. 4 Part Time and Fixed-Term Employment Act (Teilzeit- und Befristungsgesetz, TzBfG) due to the characteristics of the work.

The plaintiff had been with the defendant club since July 2009. His last employment contract dated 7 July 2012 stated fixed-term employment until 30 June 2014 as well as an option to prolong the contract until June 2015 if he played in at least 23 out of the 34 Bundesliga matches that season. In addition, the plaintiff was entitled to bonus payments for each game that he was starting goalkeeper or played at least 45 minutes. The plaintiff did nine out of the first ten games of the season, before he got injured and did not play another Bundesliga match for the whole season.

Similarly to the Higher Labour Court’s argument, the Federal Labour Court dismissed the claims for unlimited employment and payment of missed bonuses by reasoning that in commercialized professional soccer with its public attention every professional player is expected to deliver athletic peak performances. However, since it cannot be expected that players deliver such performance up to the age of retirement, the court held, that the characteristic of modern professional soccer gives cause for fixed-term employments.

At first, the ruling seem odd, given the fact that employees performing very heavy work may also not be able to do their work up to the age of retirement, but still fixed-term employments in such industries are not justified by the characteristics of the work performed. However, taking into account the enormous wages that professional soccer players are paid, they may be considered less worthy of protection, and other circumstances such as the public image of the sport are considered more important.

Occupational Pensions: Submission by Federal Labour Court to the European Court of Justice regarding compensation for benefit reductions by the Pension Insurance Association

By order of 20 February 2018 (3 AZR 142/16 (A)), the Federal Labour Court asked the European Court of Justice for a preliminary ruling on the interpretation and direct application of Article 8 of Directive 2008/94/EC. According to that provision, Member States are required to ensure that the necessary measures are made to safeguard the interests of employees regarding pension entitlements in case of insolvency of the employer.

The plaintiff receives benefits from a company pension insurance fund (Pensionskasse) which were reduced by the company pension insurance fund due to economic difficulties. In the past, the plaintiff’s former employer compensated for these benefit reductions on the basis of its statutory liability. After the employer became insolvent, the plaintiff demanded that the Pension Insurance Association (PSV), as a provider of statutory insolvency insurance, should pay for the company pension insurance fund’s benefit cuts. The Regional Labour Court dismissed the claim. The State Labor Court granted it.

The Federal Labour Court submitted the case to the European Court of Justice.

The Federal Labour Court assumes that national law does not require the Pension Insurance Association to compensate for benefit reductions, if the benefits are provided by a company pension insurance fund. According to the Court, liability of the Pension Insurance Association can therefore at most arise from Article 8 of the Directive. This presupposes that the provision also applies to cases in which – as in this case – an employer cannot compensate for the benefit reductions of a company pension insurance fund due to its own insolvency. In addition, according to the Court’s view it is relevant under which conditions pursuant to Article 8 of the Directive a state insolvency protection is guaranteed. It also depends on whether the Directive has direct effect and whether the employee can therefore refer to the provision as against the Pension Insurance Association. The European Court of Justice is responsible for answering all these questions.

Occupational Pensions: Legitimacy of so-called “age difference clauses” in pension arrangements

By judgment of 20.02.2018 (3 AZR 43/17) the Federal Labour Court has ruled that a so-called “age difference clause” (Altersabstandsklausel) providing that spouses receive a survivor’s benefit only if they are no more than 15 years younger than the deceased former employee is admissible.


The plaintiff was born in 1968. She married her husband, who was born in 1950 and died in 2011, in 1995. The plaintiff’s deceased husband was granted a survivor’s pension promise by his employer. The pension scheme provided that spouses receive a survivor’s benefit only if they are no more than 15 years younger than the beneficiary (former employee). The plaintiff considered that clause to be inadmissible discrimination on grounds of age.


The Federal Labour Court dismissed the case and stated that the direct discrimination on grounds of age (according to the General Law on equal treatment [Allgemeines Gleichbehandlungsgesetz])  caused by the age-difference clause is justified. The employer who grants a survivor’s pension has a legitimate interest in limiting the associated financial risk. According to the Court, the age difference clause is also necessary and appropriate. It does not unduly prejudice the legitimate interests of the employees entitled to benefits who are affected by the clause. At an age difference of more than 15 years, the common standard of living of the spouses is designed in such a way that the survivor spends part of his life without the beneficiary (deceased former employee). In addition, with an age difference of more than 15 years only those spouses are excluded from benefits whose age difference to the beneficiary (deceased former employee) considerably exceeds the “usual” age difference between spouses.


The ruling creates legal certainty, since until now it had not been clarified by the highest court, whether age difference clauses with regard to survivor’s benefits are in in accordance with the General Law on equal treatment.

Employment Law in the New Coalition Agreement – What plans does the new German Government have?

Finally, Germany gets a new government – that is sure since the membership decision of the Social Democrats (SPD) ended successfully. Already on 7th February, the SPD and the Christian Democrats (CDU) had agreed on a coalition agreement in which they plan important projects for the next four years. Of course, this 179-page contract also contains some pages on employment law.

For this reason, the projects planned in the next few years should be presented here in order to show which way employment law will pursue in the future. Of course, this does not mean that everything is really implemented that way, and often there are still changes and discussions. Nevertheless, both parties feel bound by the contract – which is one reason why the negotiations lasted so long.

Changed regulations on the limitation of employment contracts

The most important section is certainly that for the regulation of fixed-term contracts. In principle, a time limit is only possible if this is provided by law. Discussions are often about how far this should go. A time limit without material reason should now only be possible for a maximum of 18 months (instead of 24 months). In this period, the time limit can now be extended only once, instead of the previous three times. In addition, the number of non-permanent employees in companies with more than 75 employees is to be limited to 2.5%.

In addition, chain-fixed-term-contracts (sequence of fixed-term with reason) should be limited. Here a maximum duration of 5 years is to be inserted.

Right to limited part-time

In companies with 45 or more employees, the employee should have the option to arrange part-time work only for a certain period of time and then returning to his or her original job. Such a right did not exist so far. The possibility of extending the working time is only possible to a very limited extent.

Restriction of work on demand

In principle, work on demand is regulated very strictly under German law. Zero-hour contracts are, for example, inadmissible. Flexibility should only be in the range of 20% less work and 25% more work.

Modernization of working time law

The consequences of digitization on the Working Hours Act are a frequently discussed issue. Nevertheless, they have decided against a change in the legal regulations. However, the collective bargaining parties should be given the opportunity to create more flexible regulations here. This should in particular concern the maximum weekly working time.

Simplification of the works council election

The election of the works council should be formally facilitated. So far, this only applies to companies with up to 100 employees and is to be expanded to 200 employees.

Evaluation of the Temporary Employment Act (“Arbeitnehmerüberlassungsgesetz”)

Temporary employment is often discussed. Changes to the associated law were already made in 2017. These should be critically reviewed for their effectiveness by 2020.

Regulation employment data protection

The data protection specifically for employees also became more in the focus of the parties. It should be evaluated whether an independent law should be created in addition to the Data Protection Act (“Bundesdatenschutzgesetz – BDSG”).

Expansion of further education offers

In addition, further education is becoming more important. The employment relationship is understood as dynamic. Therefore, further education programs should be strengthened


It will be exciting to see which of these points will actually be implemented over the next four years. Due to the long duration of the negotiations, it is expected that many of these issues will be transposed. With regard to the individual details of the coming laws, as well as their interpretation, one should wait. Here, the problems often show up only when the law is actually implemented.

Time at home can be working hours

As we have already made clear in our article about time for changing clothes, the distinction between working time and rest periods is practically extremely important. The case law of the ECJ is decisive for the demarcation of these areas. Both working time and rest period are terms expressly listed in Article 2 of Directive 2003/88/EC.

In a recent ruling (ECJ 21 February 2018, docket number C-517/15), the ECJ has now commented on the more precise definition, continuing its case law from 2000 (ECJ from 3. October 2000, docket number C-303/98 – SIMAP) and 2003 (ECJ from 9. September 2003, docket number C-151/02 – Jaeger). The ECJ stated here:

“Article 2 of Directive 2003/88 must be interpreted as meaning that stand-by time which a worker spends at home with the duty to respond to calls from his employer within 8 minutes, very significantly restricting the opportunities for other activities, must be regarded as ‘working time’.”

For German law, too, this judgment is of great importance, strictly distinguishing between on-call service (“Bereitschaftsdienst”) and stand-by duty (“Rufbereitschaft”). On-call duty should be provided if the employee is not to be in the workplace but at a specified location designated by the employer. In contrast during stand-by duty the employee only has to be reachable (by telephone). However, it is possible to impose restrictions (eg. maximum distance, alcohol ban, etc.) for this time period. On-call service is basically regarded as working time, stand-by duty as rest period, since the employee has much more freedom here. The ECJ upholds this differentiation. Nevertheless, in the specific case decided in February 2018 stand-by duty is working time – where the employee must be reachable, but a fixed place is not specified. Due to the duty to arrive at the workplace within 8 minutes, the freedom of the employee is severely limited.

“In the light of those constraints, Mr Matzak’s situation differs from that of a worker who, during his stand-by duty, must simply be at his employer’s disposal inasmuch as it must be possible to contact him.” These specifications “are such as to objectively limit the opportunities which a worker […] has to devote himself to his personal and social interests.”

It is therefore not decisive whether the relevant period is referred to as on-call service or stand-by duty. The only thing that matters is the extent to which the employees’ freedom to shape his own time is limited. In this respect, it always requires a precise examination.

Finally, it is important to mention that this only has an effect on the working-time issues. In particular, the classification has no effect on remuneration:

“Article 2 of Directive 2003/88 must be interpreted as not requiring Member States to determine the remuneration of periods of stand-by time such as those at issue in the main proceedings according to the prior classification of those periods as ‘working time’ or ‘rest period’.”

The Federal Constitutional Court reviews strike ban for civil servants

The Federal Constitutional Court (Bundesverfassungsgericht) is currently dealing with four constitutional complaints by teachers who had been punished for participating in protests and warning strikes. A judgment is expected in several months (docket numbers: 2 BvR 1738/12, 2 BvR 1395/13, 2 BvR 1068/14, 2 BvR 646/15).

Under current German law, civil servants are not allowed to participate in strikes for more money and better working conditions. Civil servants fall within the scope of the so called civil service law, which is rooted in Article 33 para. 5 of the German Constitution (Grundgesetz). The “Principles of the Professional Civil Service” (Grundsätze des Berufsbeamtentums) also include the prohibition against resigning from work, i.e. to participate in strikes. This is due to the special relationship between a civil servant and the state, which is based on loyalty and which not only grants the civil servants special rights but also imposes duties.

Therefore, Interior Minister Thomas De Maizière regards the strike ban essential for a modern state. It “ensures the functioning of the administration for the citizens”. Particularly in crisis situations, the state must be able to rely on and even relocate its officials. They are committed to the common good and ensure that the state is functioning at all times. As argued by the Federal Government, a right to strike would put the entire system of the official service in question and would weaken the justification for civil servants’ state remuneration (alimentation principle).

The Unions, on the contrary, argue by reference to international law, including the European Convention on Human Rights (ECHR). They call for limiting the strike ban to officials with purely sovereign tasks, such as policemen, whereas other officials, who work in non-governmental positions, such as teachers or postmen, should be granted the right to strike. Even under Article 11 ECHR, the freedom of association and the right to strike is only limited for those officials with sovereign powers. The European Court of Human Rights confirmed this viewpoint in two judgements regarding cases from Turkey.

The Federal Administrative Court (Bundesverwaltungsgericht) was the last to deal with this problematic issue. It came to the conclusion that the German case law is not in line with European law. Therefore, the Federal Constitutional Court must now find a final answer. This decision will affect the approx. 1.8 million German civil servants.

The right to extend working hours – sec 9 Act on Part-Time Work and Fixed-Term Employment (TzBfG)

Many employees want flexibility at work; often, this means there is a desire to work part-time (less than 40 hours a week). However the reverse case is also not uncommon; an employee wants to increase his working hours, particularly to earn more money. Both cases are covered by German law. However, there is a claim (currently) only in respect of shortening the working time (sec. 8 TzfG). With an extension the conditions are different. Sec. 9 TzBfG stresses here that a request for extension should be taken into account when filling a vacant position. Thus, if a worker is employed part-time and now wants to work full-time, this is only relevant if a full-time vacant position is filled. This means that there is no general right to return from part-time employment to full-time employment. Although such a claim is often required, it is not provided for by law.

Therefore, an extension of working hours is only possible under certain conditions. It is important that a (comparable) position with extended working hours is actually free. What this means, the Federal Labor Court has ruled in a recent judgment (docket number 9 AZR 192/17). The court has made it clear that a free job exists only if this position is completely unoccupied. In this particular case, the employer had decided to increase a worker’s working time due to increased labor demand. According to the Federal Labor Court, at no time was there a vacant job, so that a claim under sec. 9 Act on Part-Time Work and Fixed-Term Employment to increase the working hours did not exist. The employer is not bound by sec. 9 Act on Part-Time Work and Fixed-Term Employment here. This rule therefore only applies if the employer establishes a new position or, after the departure of an employee, newly recruits. In a mere temporal restructuring, the scheme does not apply.

The employer can thus relatively freely distribute working time and is not restricted by the law. It is only necessary to ensure that there is no completely free position. However, the employee does not have a claim to the establishment of a vacant position. For this reason, sec 9 Act on Part-Time Work and Fixed-Term Employment is often heavily criticized by employee representatives. Maybe a change will be made to this position by a new federal government in Germany.

Does the employer have to pay for clothes change times?

Many professions require the wearing of special clothing, whether for hygiene or safety reasons (for example, in a hospital), or to show a particular corporate identity (for example, supermarket vendors). The worker does not wear the clothing because he wants to, but because the employer demands it. This leads to several problems: First, the question arises whether the period of time to change clothes belongs to the daily working hours (which is usually limited to a maximum of 8 hours); on the other hand, it must be clarified whether usual remuneration is to be granted for this time. This is not just a theoretical problem, as a simple example calculation shows: Calculating 10 minutes a day for dressing and undressing in working clothes, this results in about 1.5% of daily working hours. This demonstrates that this problem is associated with considerable costs or potential savings.

For this reason, German courts have already dealt with this problem several times. They found that working time is engaged when the time spent changing clothes serves the interests of the employer. In this case, the employee does not dress in particular clothes in his own interest, but because the employer demands it. This applies to all garments that are worn specifically for the profession (eg protective clothing and hygiene clothing). Here, the employee only changes because the job demands it, so this is in the interest of the employer and counts towards working time. However the case law goes even further. If the work clothes are particularly conspicuous, the changing time is also treated as working time. Although these clothes could also be worn privately, this cannot – according to the Federal Labor Court – be expected of the employee. The Federal Labor Court has already answered several times the question of when the clothing is particularly conspicuous. In any case, if the color and design of the clothes clearly identifies the employer (and the name may even appear on the garment), there is particular conspicuousness. This the Federal Labor Court affirmed, for example, in relation to the yellow-blue clothing of a furniture store (Federal Labor Court from 10. November 2009, docket number 1 ABR 54/08). In a recent ruling, the court goes even further. It is not necessary for the specific employer to be identifiable. The allocation of clothing to a specific industry is sufficient. The worker cannot be forced to reveal his profession to the outside world. For this reason, even neutral white service clothing (for example, in elderly care) has particular conspicuousness (Federal Labor Court from 6. September 2017, docket number 5 AZR 382/16). In all these cases, the time spent changing clothes is therefore working time.

Working hours can therefore only be excluded if private use of the clothing is permitted and the clothes are not particularly conspicuous.

However, it is less clear whether these clothes change times have to be paid accordingly. Employment contracts usually do not contain any regulation in this respect. It would be possible, however, to regulate or exclude such payments in the employment contract. The same applies to collective bargaining agreements. If such a rule is missing, the clothes change times are to be compensated with the usual hourly wage. If costs are to be saved here, such a regulation is recommended.

However, it becomes clear that the employment law treatment of periods in which the primary employment contract activity is not provided is extremely problematic. In these borderline cases, extreme care must always be taken to avoid errors and, if necessary, costs.

Reduction of a Special Payment Possible Despite Unrestricted Granting for Years

On 23 August 2017 the Federal Labour Court decided that despite the unrestricted granting of a special payment for multiple years, the employer may reduce the amount of a special payment in the future provided that the employment agreement contains a reservation in this respect (docket number 10 AZR 97/17).

The employee and later plaintiff was employed by the defendant from 1999 and received through the years, in addition to her regular salary, a Christmas payment. Until 2013 this Christmas payment amounted to the equivalent of one monthly gross salary. The payment method was that employees regularly received with the May payroll an advance payment of half a gross monthly salary and the other half with the November payroll.

The employment agreement contained a provision saying that the employer provides for a Christmas payment as voluntary compensation. The amount of such Christmas payment had to be determined annually by the employer and would currently not exceed a full monthly salary whereby an advance payment of half a monthly salary was to be made in June.

In May 2014, the defendant paid half a monthly salary in addition to the regular salary which appeared as “Part payment annual payment” on the employees’ pay slips. Due to a negative prognosis for the annual operating profit, the defendant decided and informed the employees accordingly that no further annual payment could be granted for this year.

The plaintiff found the contractual provision not transparent and claimed the full monthly salary as an annual payment. She further pointed out that the full monthly salary had been paid for years without restriction.

The Federal Labour Court considered the relevant contractual provision as General Terms and Conditions pursuant to sec. 305 et seqq. German Civil Code and stated that for its interpretation one had to consider how the contractual text had to be understood from the point of view of participants who typically participate in this kind of business. Accordingly, the employees had an entitlement to an annual Christmas payment whereby half of it should be paid at mid-year. However, the Federal Labour Court found that the amount of the annual payment and its advance could be determined by the defendant at its reasonable discretion in accordance with sec. 315 German Civil Code as the employment agreement only stated that the amount would “currently” not exceed one full monthly salary. Therefore, the contractual provision left open in a recognizable way whether the amount of the Christmas payment should remain the same, be increased or decreased in future years.

In addition, the Federal Labour Court found that the advance payment in May did not bind the defendant to the full monthly amount. An advance payment is a payment of a debt which has not yet been due. The payment of the advance with the May payroll in the amount of half a monthly salary had not been a declaration by the defendant that the Christmas payment for that year would remain a total amount of a full monthly salary. It was only an implied statement that the Christmas payment for that year would at least amount to half a monthly salary.

The conclusion is that even if a payment is granted for multiple years without reservation, this can only have binding consequences such as the development of an operational custom if there is no explicit agreement in place.


Compensation (severance pay) of director’s pension benefits

By judgment of 23.05.2017 (II ZR 6/16) the Federal Supreme Court (Bundesgerichtshof) has ruled that the prohibition against compensating for pension benefits according to Section 3 German Occupational Pension Act (Betriebsrentengesetz) may be derogated from by mutual consent and, as a result, ongoing pension benefits of a director can be paid out (severance pay).

In the present case, the admissibility of the compensation for an ongoing pension, which in principle according to Section 3 German Occupational Pension Act is inadmissible, was in dispute. However, the applicability of this provision (Section 3 German Occupational Pension Act) was excluded in the pension commitment granted to the director.

According to Section 17 para. 3 sentence 3 German Occupational Pension Act (as applicable until 31. December 2017; now regulated in Section 19 para 3), in principle there can be no derogation from the provisions of the German Occupational Pension Act to the detriment of employees. Section 17 para. 3 sentence 3 German Occupational Pension Act (as applicable until 31. December 2017; now regulated in Section 19 para 3) also applies to members of executive bodies such as directors in this context. However, according to Section 17 para. 3 sentence 1 German Occupational Pension Act (as applicable until 31. December 2017; now regulated in Section 19 para 1), deviations from certain provisions of the German Occupational Pension Act, such as Section 3 German Occupational Pension Act, are permissible, provided that this is regulated in a collective agreement.

The Federal Supreme Court has ruled that the exclusion of the applicability of Section 3 German Occupational Pension Act, according to which it is in principle inadmissible to pay out ongoing pension benefits, was allowed in the present case. Deviations from the German Occupational Pension Act may be agreed to the detriment of members of executive bodies, as far as deviations for employees can be agreed by collective agreements. Otherwise, members of executive bodies would be better protected by law than employees, although members of executive bodies are typically not inferior to the employer when negotiating their occupational pension.

By this decision the Federal Supreme Court follows the legal opinion of the Federal Labor Court in a previous ruling. Companies can therefore continue to agree to exclude the applicability of Section 3 German Occupational Pension Act with members of executive bodies.

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