By judgment of 13 July 2021 (docket number: 3 AZR 445/20) the Federal Labour Court (Bundesarbeitsgericht – BAG) has ruled that a claim to an (occupational) disability pension exists even if the pension plan presupposes a “permanent disability in the sense of social security law”, but the statutory invalidity pension pursuant to social security law is granted only for a limited period of time.
Facts / Background:
The employee (plaintiff) had received a pension commitment from the employer (defendant), which, inter alia, provided for a claim to (occupational) disability benefits in the event of “a permanent disability in the sense of social security law”. The employee became disabled during the employment relationship and, as a result, has been receiving a (statutory) disability pension from the statutory pension insurance since June 2017; this pension was initially only granted for a limited period of three years, i.e. until the end of May 2020.
As a consequence, the employee also claimed from the employer the granting of the (occupational) disability pension for this period (3 years). The employer rejected the claim; he was of the opinion that the requirements of the occupational pension commitment were not fulfilled, as the employee was not – pursuant to the pension plan – “permanently disabled in the sense of social security law”, but only for an (expected) period of 3 years.
The Federal Labour Court affirmed the employee’s claim to an occupational disability pension. The court argued that the reference in the pension plan to social security law (“a permanent disability in the sense of social security law”) only included the material provisions/requirements on disability pension (as defined in the German Social Insurance Code – Sozialgesetzbuch), but not procedural provisions such as provisions on the duration or limitation of such a pension. The limitation of the statutory disability pension therefore did not exclude – contrary to the employer’s view – the claim to occupational disability pension (provided for in the pension plan).
The Federal Labour Court’s interpretation of the relevant reference provision has surprised many, as – as a result – the term “permanent” within the reference remains unconsidered. The written reasons for the ruling are not yet available. However, the decision confirms a development with courts that has increasingly taken place in recent years: Even apparently clear provisions in pension plans can, in cases of doubt, be interpreted to the detriment of the employer if the employer does not ensure it has clearly included the exclusion variants in the relevant pension plan. It remains to be seen whether the Federal Labour Court will rule similarly outside of the area of disability pensions in the future. However, employers should check provisions of this type in their pension plans and – as far as legally possible – include clarifying amendments in order to avoid unfavorable interpretations to their disadvantage by courts.