Forfeiture clause was valid to prevent employee’s claim despite not excluding minimum wage entitlement

In a judgement of 9 May 2017 (docket number 7 Sa 560/16 ) the regional labour court of Nurnberg held that a forfeiture clause which did not exclude entitlement to minimum remuneration was not invalid. The forfeiture clause simply did not apply to claims for minimum remuneration.

The parties had entered into an employment contract which contained the following forfeiture clause:

All claims of the parties arising under the employment contract shall be deemed forfeited unless they are asserted in writing against the other party within three (3) months after they arise and, in case of a rejection of the claim or no response for two weeks, they are taken to court within a further period of three (3) months after the rejection of the claim or two weeks after making the first written claim.

The employee raised a claim against the employer. Approximately 1.5 months later, the employer rejected the claim. Almost four months after this, the employee took the claim to court. The employee argued that his claim was not forfeited on the basis that the forfeiture clause was invalid because it also covered entitlement to minimum remuneration. The employee asserted that the clause could not be preserved in part because this would violate the statutory transparency requirements.

The court rejected the employee’s reasoning. It held that the clause was only invalid to the extent that it covered entitlement to the minimum wage (which was not claimed by the employee). Further, the court did not consider that the statutory transparency requirements were violated. The court held that obligations to exclude minimum remuneration entitlements stem from statutory law. It said that it was (or should be) common knowledge that there is no obligation to exclude minimum wage entitlement from a forfeiture clause.

The regional labour court has allowed an appeal to the Federal Labour Court. We will update you about any further developments. In any case, we recommend that minimum remuneration should be excluded from the scope of forfeiture clauses and we are happy to assist in amending your employment contracts.