In the 3rd quarter of 2012 the labour courts of first and second instance passed a multitude of decisions regulating issues that were still unresolved at the practical level. One of these decisions is that of the Regional Court [Landesarbeitsgericht, LAG] of Hamm described below on the use of chat protocols during unfair dismissal proceedings. The Federal Labour Court [Bundesarbeitsgericht, BAG], in contrast, has had to decide on "evergreens" such as the settlement of holiday claims in the event of an employee's long-term illness or the agreement of fixed remuneration.
1. Current case law
1.1. Works council activities during holiday - no claim
to new holiday entitlement
Amongst a number of recent judgements on the rights and
obligations of works council members, a decision has been
pronounced by the Labour Court [Arbeitsgericht, ArbG] of Cottbus
dated 15 August 2012 (2 Ca 147/12) clarifying that works council
activities during holiday do not give rise to the need to grant the
works council member new holiday.
The situation underlying the decision was that, having given
notice to the group works council chairman, the works council
member attended a works council meeting during his holiday. In the
legal action brought by him he demanded that the Defendant grant
him a new day of holiday. He argued that works council members have
to interrupt their holiday or - as in the case here - are unable to
even go on holiday, if they exercise works council activities and
notify this in good time to the (group) works council chairman. The
complaint was justly dismissed.
The Labour Court decided that works council members are suspended
from all official duties during their holiday and are temporarily
hindered within the meaning of Sec. 25 German Shop Constitution Act
[Betriebsverfassungsgesetz, BetrVG]. They can cancel such temporary
hindrance by giving timely notice to the works council chairman;
the legal consequence hereof, however, is not the interruption of
the granted holiday.
Rather, in such a case the works council member voluntarily
sacrifices a day of holiday for the works council activities. He
does so on personal grounds and not for operational reasons which
interrupt the granted holiday.
The decision can also be transferred to cases in which works
council members exercise a works council activity despite having
previously applied for and been granted time-off in compensation
for overtime. If the works council member conducts works council
activities during this time, then this is purely a leisure activity
and cannot lead to the new accrual of the claim to time-off.
1.2. Use of chat protocols in court - admissibility of evidence not prohibited
Many enterprises use instant-messaging programmes to make it
easier for their employees to keep communication channels and times
to a minimum. In business practice, for a variety of reasons
employers are frequently keen to inspect and use chat protocols in
court in unfair dismissal proceedings based on an employee's
conduct. Because of the criminal legal relevance of accessing chat
protocols, this will hardly be possible.
The Regional Labour Court of Hamm has now ruled by judgement dated
10 July 2012 (14 Sa 1711/10), however, that chat protocols are not
prohibited from being admitted as evidence in unfair dismissal
proceedings even if the chat protocols stored on a works computer
have been unlawfully obtained. In the underlying case, employees
had sold company property on the internet. This act could
exclusively be proven through the chat protocols. The decisive
factor for the Regional Court of Hamm in its decision whether or
not to admit the evidence was the manner in which the enterprise
had permitted its employees to use the instant-messaging service.
In this connection, the enterprise had inter alia always pointed
out that employees could not expect the confidential treatment of
their personal affairs.
If evidence supporting contract-breaching conduct can be elicited
via chat protocols, then guidelines for the use of
instant-messaging services need to be reviewed on the basis of the
decision of the Regional Labour Court of Hamm. However, one should
not forget in this connection that the collection of data is still
generally prohibited.
1.3. Cut in social plan benefits for employees
approaching pension age
In a judgement dated 6 July 2012 the Regional Labour Court of
Düsseldorf(10 Sa 866/11) permitted social plan provisions
which envisage lower social plan benefits for employees approaching
pension age.
The claimant contested a clause in a social plan pursuant to which
the individual points value would be reduced by 1/48 per month for
employees who entitled to a statutory retirement pension within 48
months as of the date of the legal end of their employment
relationship. In the claimant's case, this meant a reduction of
his redundancy pay by about €9,600 to about
€28,800. His claim to payment of the balance was
unsuccessful before the Labour Court. The Regional Labour Court of
Düsseldorfalso rejected the claim, albeit that it permitted
the appeal on points of law before the Federal Labour Court
[Bundesarbeitsgericht, BAG].
The Regional Labour Court of Düsseldorfdid not deem this
provision on the cut in redundancy pay to violate any higher
ranking right. It was of the opinion that a distinction in the
social plan between employees close to pension age and employees
not close to pension age - also pursuant to the case law of the
Federal Labour Court - is covered by Sec. 10 sentence 3 no. 6
German Labour Courts Act [Arbeitsgerichtsgesetz, ArbGG] and does
not violate the EU directives on protection against age
discrimination. In the opinion of the Regional Labour Court of
Düsseldorf, the business partners have duly accounted for the
essentially age-based chances on the employment market by putting a
proportionately strong emphasis on age. The manner in which this
was accounted for was, in the opinion of the Regional Court of
Düsseldorf, not objectionable either because the reference
basis was the regular age limit within the meaning of Sec. 235
German Social Code Book IV [Sozialgesetzbuch IV, SGB IV], hardship
cases were avoided through the gradation as opposed to a strict
qualifying date clause, and the cut in redundancy pay is minimal in
relation to the overall sum.
The judgement confirms the structuring possibilities open to the
business partners when regulating social plan provisions which are
oriented on employees' chances on the employment market. Even
though the Regional Court of Düsseldorfhas admitted the appeal
on points of law before the Federal Labour Court, the Federal
Labour Court is expected to deem such clause admissible in
conformity with its previous case law on the distinction between
employees approaching pension age and employees not approaching
pension age in social plans.
1.4. Loss of holiday claim in case of long-term illness
Following several cases before the ECJ which have given German
holiday entitlement law an impulse in a new direction, the Federal
Labour Court has ruled in a further decision (dated 7 August 2012;
9 AZR 353/10), which accounted for the requirements of European
law, that the loss of the holiday claim in case of an
employee's long-term illness is lawful upon the expiry of 15
months after the end of the year in which the holiday
accrued.
The Federal Labour Court's decision was based on the appeal on
points of law by the sued employer, whose employee - after having
left the employment relationship in 2009 following a long-term
illness - sued for €18,841.05 in remuneration for 149 days
of holiday from the years 2005 to 2009. The previous instances had
always ruled in the claimant's favour, albeit that the courts
had limited the remuneration of the statutory holiday entitlement
by reducing the amount of the claim to about
€13,500.
The Federal Labour Court exclusively acknowledged the remuneration
of the holiday for the years 2008 and 2009 and explicitly stated
that in cases of employees incapacitated from work on grounds of a
long-term illness, Sec. 7 para. 3 sentence 3 German Federal Holiday
Entitlement Act [Bundesurlaubsgesetz, BUrlG] - pursuant to which a
transferred holiday entitlement must be granted and taken during
the first three months of the following calendar year - must be
interpreted in conformity with Union law to the effect that the
holiday claim expires 15 months after the expiry of the year in
which the holiday accrued. With this, the financial risk -
particularly with a view to reserves - has finally become
terminable.
1.5. Orally agreed fixed remuneration of overtime is valid; effects upon contract structuring of the latest Federal Labour Court case law on overtime clauses
By judgement dated 16 May 2012 (5 AZR 331/11) the Federal Labour
Court affirmed the validity of an oral agreement between an
employer and employee, pursuant to which the first 20 hours of
overtime per month are already remunerated with the monthly fixed
salary. In particular, it did not consider such an agreement to be
either non-transparent or surprising. Nor is it subject to any
requirement to have its contents further examined pursuant to Sec.
307 para. 1 sentence 1 German Civil Code
[Bürgerliches Gesetzbuch, BGB], as a clause in
general terms and conditions which exclusively regulates the
remuneration of overtime as opposed to the employer's power to
order overtime work constitutes an agreement on a principal service
which solely concerns the employer's consideration for services
rendered and is therewith not subject to the examination of its
contents.
In the case to be decided by the Federal Labour Court the claimant
worked at the defendant, an automobile supplier not bound by a
collective bargaining agreement, in the stock management department
and, with a regular working week of 40 hours, earned a fixed gross
salary of €2,184.84. The employment contract had only been
concluded orally. The defendant's personnel manager had also
orally informed the claimant that the first 20 hours of overtime
per months were "included in this". Accordingly, in the
past the defendant had only remunerated overtime as of the 21st
hour of overtime worked in the month, and then with a 25% bonus.
The claimant retroactively demanded inter alia remuneration of the
first 20 hours of overtime, which was in turn rejected by the
defendant on grounds of the orally agreed fixed overtime
agreement.
The complaint was unsuccessful in all three instances. In the
opinion of the Federal Labour Court the said oral agreement
constituted a general term and condition as it was used by the
defendant in a multitude of employment contracts. In particular,
the lack of written employment agreement did not exclude the
acceptance of general terms and conditions. However, being an
agreement concerning a principal service, it was not subject to any
further-reaching examination of its content (Sec. 307 para. 3
sentence 1 BGB). Moreover, the Federal Labour Court did not
consider the clause to be surprising either, for fixed overtime
remuneration clauses are broadly used in the employment sector and,
additionally, the oral notification of this clause to the employee
and therewith its agreement as an integral part of the employment
contract also did not suffice to constitute a
"blindsiding" of the employee. Otherwise, oral general
terms and conditions would always be surprising and could never
become integral parts of a contract. Finally, the clause was also
not invalid on grounds of a lack of clarity, as it clearly and
comprehensibly regulates in which temporal scope the employment
services of the claimant are to be covered by the agreed
salary.
The decision does not comment on whether or not a comparable clause
would be subject to an examination of its contents if the
employment contract simultaneously contained the employer's
power to order overtime work. For purposes of future contract
structuring, however, the most recently pronounced decisions of the
Federal Labour Court concerning overtime clauses are of
considerable relevance. Accordingly, in summary, the following can
be established:
- A clause on the fixed remuneration of all overtime worked is non-transparent and therefore invalid (BAG, NZA 2011, 575).
- Even in the event of the invalidity of such a clause, however, the employee only has a claim to remuneration if, pursuant to objective criteria, such remuneration could be expected; this is regularly not the case with a salary above the social security contribution ceiling in the statutory pension insurance scheme or in case of senior
In contrast, a clause on the remuneration of a specific number of overtime hours is fundamentally valid up to the limit of unconscionability. Not clarified to date, however, is when the said limit is deemed specifically exceeded in this connection. In the aforesaid configuration of the Federal Labour Court decision dated 16 May 2012 (without examination of contents), the Federal Labour Court certainly accepted fixed remuneration for about 12.5%. In a decision dated 1 September 2010 (5 AZR 517/09) the Federal Labour Court did not comment on a desired fixed remuneration for about 18.5% (although the remuneration clause in this case was already deemed invalid on grounds of its non-transparency). Moreover, if one compares this with the previous case law of the Federal Labour Court on reservations of revocation, there are several indications to the effect that in case of a fixed remuneration agreement, as much as 25% of the regular working hours certainly can be validly "flexibilised".
However, until supreme court clarification of this matter, caution should still be applied when structuring contracts and employers should consider whether they ought to dispense with a clause regarding the ordering of overtime in order to avoid a further-reaching examination of its contents and therewith be able to have as many overtime hours as possible remunerated with the monthly salary.
2. 4th Employment Law Day 15 November 2012
On 15 November 2012 Oppenhoff & Partner is to hold its 4th
Employment Law Day with a focus on European law, occupational
health management and matrix structures within corporate groups. We
are pleased to be able to once again welcome Prof. Dr. Gregor
Thüsing (University of Bonn) as a renowned speaker from the
research and academic sectors.
Prof. Dr. Thüsing will explain the most important decisions of
the ECJ over the past year and the most significant projects of the
EU Commission, as well as their effects upon business
practice.
The legal framework of occupational health management as well as
the employer's pertinent obligations and structuring
possibilities will subsequently be introduced by Kathrin Vossen and
JörnKuhn.
Dr. Gilbert Wurth and Dr. Alexander Willemsen will answer topical
questions on matrix structures within corporate groups, in
particular concerning the problem areas of business-wide and
company-wide collaborations within the group.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.