Bonus Payments

Employer obligation to provide individual target agreements to safety authority

Employers may be required to provide safety authorities with information on individual target agreements with their employees. In a judgment dated 28 February 2018, the Dusseldorf administrative court confirmed a corresponding order by the local safety authority (docket number 29 K 4191/16). In the case at hand, the employer offers consulting services. It is bound by a local collective bargaining agreement which provides for a regular weekly working time of 38 hours. Under the CBA, …

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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 …

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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 different types of bonuses payments? The term “bonus” is not limited to a special kind of a bonus payment. In …

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Christmas (bonus) is for everyone

The Federal Labour Court (Bundesarbeitsgericht, BAG) ruled on November 13, 2013 (docket number – 10 AZR 848/12) that employers cannot validly exclude grants of special payments such as Christmas bonuses in their regulations with respect to employees whose employment ended during the calendar year, if such bonus shall not only reward company loyalty but also remunerate performed work. The court argued, that such exclusions are void, because they unreasonably deprive employees of their earned salary. …

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