By judgment dated 7 June 2011 (docket no.: 1 AZR 34/10) the BAG
decided that it is possible to validly agree in a social plan that
employees shall not receive a settlement if they are not employed
because they draw on a temporary full pension on grounds of reduced
earning capacity and where one can expect their inability to work
to continue in the unforeseeable future.
In the case up for decision by the BAG the defendant had agreed
in a social plan with its work council on the exclusion of benefits
to employees who are not employed because they draw on a temporary
full pension on grounds of reduced earning capacity and where it
could be expected that the inability to work accompanying the
reduced earning capacity would continue on a permanent basis or
would at least not be remedied in the foreseeable future. According
to the social plan, this can be assumed in case of an inability to
work accompanying the drawing of the pension which has lasted more
than three years or where a pension on grounds of reduced earning
capacity has been granted for more than three years. The claimant
had uninterruptedly been unable to work since December 2001 because
of a commuting accident. Since April 2003 he had drawn a reduced
earning capacity pension which had initially been limited until the
end of June 2007. This was extended without interruption until 30
June 2009. Since then the claimant has been drawing an indefinite
pension. The claimant's employment was terminated for
operational reasons as per 31 July 2008. His claim for payment of a
social plan settlement of about €220,000.00 was
unsuccessful before the First Senate of the BAG.
In the opinion of the BAG, employees with reduced earning
capacity are not directly detrimentally affected on grounds of
their disability through the exclusion of their claim in the social
plan. The regulation in the social plan actually treats them no
less favourably than other persons in a comparable situation. The
purpose of social plan benefits is to compensate economic
disadvantages incurred by those employees who, as a result of the
business change, lose their job and thus their claim to their
employment remuneration. Employees who have already had a reduced
earning capacity for some time and who will not regain their
ability to work in the foreseeable future do not suffer any
comparable disadvantages through the loss of their employment
With this judgement, the BAG is consistently continuing its
previous case law on the meaning of the discrimination prohibition
in the configuration of social plans. Accordingly, the BAG already
decided by judgement dated 26 May 2009 that social plans may
provide for a settlement regulation that is staggered according to
years of ago or service with the company, and may even exclude from
social plan benefits those employees who are entitled to a pension.
In the opinion of the BAG, the ensuing different treatment on
grounds of age is covered by Sec. 10 sentence 3 no. 6 German
General Non-Discrimination Act (Allgemeines
The development in the BAG's case law can be welcomed. At
the same time, however, this creates a conflict with ECJ case law.
The ECJ deems it irreconcilable with Council Directive 2000/78/EG
to exclude from a settlement employees who could claim an old-age
pension when they withdraw from the employment relationship insofar
as no consideration is given to whether or not the respective
employee "actually" draws an old-age pension at the time
or whether he is still available to the labour market. Although
this ECJ judgment related to a statutory settlement claim pursuant
to Danish law with a different underlying purpose, which means that
the decision cannot simply be transferred to German social plan
practice, we will therefore have to wait and see whether it will
also be possible in future to uphold the BAG case law on the
admissibility of an exclusion of employees entitled to a pension
from social plan payments.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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