"Monthly Dose" Employment Law 01/2025

On 1 August 2024, the German Federal Labour Court (Bundesarbeitsgericht, BAG) ruled (6 AZR 38/24) that employees are entitled to a public holiday allowance (Feiertagszuschlag) in accordance with the collective bargaining agreement (CBA) applicable to the employment relationship (here: CBA for public services in German federal states (Tarifvertrag des öffentlichen Dienstes der Länder, TV-L)) if they perform their work on a calendar day that is a public holiday at their regular place of employment; regardless of whether they work at a location where the day is not recognized as a public holiday.

Facts 

• A technical specialist (claimant) of a university hospital (defendant) in North Rhine-Westphalia attended a five-day training course in Hesse starting on 1 November 2021, as instructed by his employer.
• The claimant's regular place of employment is in North Rhine-Westphalia.
• The employment relationship falls under the scope of TV-L.
• The 1 November 2021 (All Saints' Day) is a public holiday in North Rhine-Westphalia and not in Hesse.
• The plaintiff requested the public holiday allowance via email on 22 November 2021, stating that he was claiming ‘overtime with the associated time allowances.
• The defendant rejected the public holiday allowance, arguing that neither public holiday nor overtime allowances apply to further training. Furthermore, the location where the claimant worked that day was not observing a public holiday.
• The plaintiff then filed a lawsuit on 18 November 2022 for a 35% public holiday allowance.
• Additionally, the defendant argued that the claim was forfeited due to the expiration of the six-month limitation period stipulated in the CBA at the time of filing. The plaintiff had not met the preclusion period requirement in his email of 22 November 2021, as he had not clearly stated the reason for claiming the public holiday allowance.

Reasons for the decision

• The entitlement to public holiday allowances (pursuant to Section 8 (1) no. 2 lit. d) TV-L) is determined by the employee's regular place of employment and not by the place of actual deployment. Any provisions that deviate from this must be clearly stated.The purpose of the CBA on public holiday allowance is linked in particular to the social significance of working on public holidays at the regular place of employment, since this is where the employee's social environment typically observes the public holiday. This rule ensures that employees receive an additional compensation for losing the opportunity to spend public holidays with family and friends, even when working in locations that do not observe the holiday.
• Temporary work at a different location as part of a training course does not change the regular place of employment.Violating working time regulations on public holidays does not affect entitlement to public holiday allowance.
• The plaintiff complied with the 6 month CBA limitation period with his email of 22 November 2021. The observance of a CBA preclusion period (also) requires the statement of the reason for the claim and in the present case the plaintiff did not explicitly refer to the CBA’s public holiday allowance in the email. However, the defendant could reasonably infer from the email that the plaintiff was asserting a claim for a public holiday allowance.

Consequences for the practice

The judgment emphasises the importance of the regular place of employment for determining public holiday allowance and obliges employers to take into account the public holiday regulations of this place when planning the deployment of their employees (including in the case of business trips, training or similar assignments). Employers should also review their contractual and internal guidelines for consistency to avoid conflicts. The BAG also reaffirms its relatively generous approach in interpreting employees' declarations concerning claims and their compliance with the applicable limitation period.

In its decision of 6 August 2024 (21 TaBV 7/24), the Higher Labour Court (Landesarbeitsgericht, LAG) of Baden-Württemberg examined to what extent the works council has a say in the introduction of desk sharing and a clean desk policy and confirmed that it has a right of co-determination in certain areas.

Facts

• The employer wanted to introduce a workplace concept to implement desk sharing and a clean desk policy. These provisions covered (1) the ‘overlapping use’ of areas for both work and break purposes, (2) the bringing and storage of personal belongings in so-called lockers, (3) desk sharing, and (4) tidying up the workplace at the end of each working day (clean desk policy).
• In this context, existing workstations in open-plan offices were to be converted from fixed to flexible, non-personalized workstations, and some of the existing partitions were to be removed.
• The works council requested the appointment of a conciliation committee (Einigungsstelle), invoking co-determination rights under Section 87 (1) Nos. 1, 6 and 7 of the German Works Constitution Act (Betriebsverfassungsgesetz, BetrVG). The employer rejected the co-determination requirement for the concept as a whole.
• A risk assessment for the new workplaces had not yet been conducted; however, negotiations with the central works council were ongoing.
• The labour court dismissed the works council's application, whereupon the works council filed an appeal.

Reasons for the decision

• The LAG Baden-Württemberg partially upheld the complaint and set up a conciliation committee to deal with the following matters: ‘Rules regarding personal items brought in by employees in connection with the introduction and implementation of the planning concept...spaces’ and ‘Rules regarding conduct in areas with so-called overlapping uses in connection with the introduction and implementation of the planning concept...spaces’. To justify the appointment of a conciliation board, the mere possibility of a co-determination right is sufficient. Whether such a right actually exists is to be examined in more detail by the conciliation board.
• The LAG found that the introduction of desk sharing and a clean desk policy did not require the co-determination of the works council, as this pertains solely to employees' work behavior, which is not subject to co-determination. However, the employer's instructions regarding the storage of personal belongings—particularly before and after working hours—do not necessarily aim to establish order beyond work behavior control within the meaning of Section 87 (1) no. 1 BetrVG or to eliminate disorder caused by objects left at the workplace.
• The introduction of ‘overlapping use’ of company areas (e.g., using a break room for work purposes) may impact company operations and thus fall under organizational behavior. This overlapping use would therefore also be subject to the co-determination of the works council in accordance with Section 87 (1) no. 1 BetrVG.
• The LAG rejected a co-determination right under Section 87 (1) no. 6 BetrVG because no technical booking tool was introduced. In addition, there was no co-determination right under Sec. 87 (1) No. 7 BetrVG because no specific hazards to employees were identified.

Consequences for the practice

A ‘New Work’ concept regarding the use of workplaces or work areas with shared/clean desk rules can impact employees' organizational behavior and may therefore be subject to co-determination under Section 87 (1) no. 1 BetrVG. Employers must structure their concept and implementation strategy based on their stance on company participation, ensuring that it either primarily concerns work behavior or appropriately involves the works council within the co-determination framework of Section 87 (1) no. 1 BetrVG.

In its judgment of 14 August 2024 (14 Sla 303/24), the LAG Düsseldorf ruled that employees on (full) parental leave are not entitled to a collectively agreed inflation special payment if it serves both as compensation for work performance and as a measure to offset inflation-related price increases.

Facts

• The plaintiff, employed by the defendant since 2019, took parental leave from 14 June 2022 to 13 April 2024, with a part-time employment arrangement from 1 December 2023 to 13 April 2024.
• The applicable CBA to the employment relationship provided for the granting of an inflation special payment for all employees with an employment relationship existing on 1 May 2023, if there was an entitlement to remuneration for at least one day between 1 January 2023 and 31 May 2023. In addition, employees who had received only sick pay or child sick pay during the reference period were also eligible for the inflation adjustment premium.
• The plaintiff argued that the exclusion of employees on parental leave from the inflation adjustment violated the principle of equal treatment under labour law. She also claimed compensation of EUR 8,000 gross for gender discrimination under Section 1 of the German General Equal Treatment Act (Allgemeines Gleichbehandlungsgesetz, AGG).

Reasons for the decision

• The LAG Düsseldorf dismissed the claim, ruling that the requirement of a salary during the reference period did not violate the general principle of equality under Article 3 (1) of the German Constitution (Grundgesetz, GG).
• The LAG ruled that compensating for inflation could also have a remuneration purpose and could therefore be designed to be job activity-related.
• The CBA’s differentiation, allowing employees receiving sick pay or child sick pay to still receive the inflation adjustment, serves to mitigate hardship on social grounds. Parental leave is generally foreseeable, whereas personal or child-related illnesses often arise unexpectedly.
• The court awarded the claimant a pro-rata inflation special payment of EUR 220 gross for December 2023, as she was entitled to remuneration for at least one day that month. The inflation adjustment was based on the hours worked on the first day of the reference month, which, in this case, reflected a full-time position.
• The court dismissed the plaintiff’s EUR 8,000 gender discrimination claim, finding no evidence of discrimination.

Consequences for the practice

The judgement highlights the importance of carefully formulating the legal basis for one-time special payments with clearly defined eligibility criteria. Many employers have made the granting of inflation compensation bonuses, which are tax-privileged under Section 3 no. 11c of the German Income Tax Act (Einkommenssteuergesetz, EStG), as well as the granting of coronavirus special bonuses, dependent not only on the compensation of inflation/coronavirus-related additional burdens but also on the performance of work in the reference period and have stated this purpose transparently (e.g. by stating it in a transparent manner for groups of persons who are not eligible for the bonus) in the legal basis. From a practical point of view, the LAG's clarification that these special payments can permissibly be made dependent on the provision of work performance is helpful. The claimant has appealed the judgment to the BAG (10 AZR 261/24), where it is still pending.

On 11 September 2024 (4 Sa 10/24), the LAG Baden-Württemberg clarified recent labour court rulings on wage claims during default of acceptance. It ruled that an employee is not required to accept a hypothetical offsetting of earnings during this period, even if they maliciously refrained from seeking employment, provided the employer had not presented specific job opportunities.

Facts

• The plaintiff, an employee in the metal and electrical industry, filed an unfair dismissal claim after receiving notice of termination from the defendant. The Stuttgart Labour Court had declared the termination to be invalid in its judgment of 15 September 2021 (15 Ca 1009/21).
• The plaintiff sought compensation for default of acceptance from July 2021 to August 2022, a period in which he received unemployment benefits but did not seek other employment.
• The plaintiff informed the employment agency that he wished to continue working solely for the defendant and, consequently, did not receive any job offers.
• The defendant denied compensation for default of acceptance, arguing that the plaintiff had maliciously refused reasonable job offers and should have actively sought employment. It cited labour market reports showing vacancies in the region and argued that the plaintiff could have found employment.
• After Stuttgart Labour Court upheld the claim, partly because the defendant had not presented specific job offers, the defendant later introduced ‘post-investigated’ job offers in the appellate court.

Reasons for the decision

• The LAG Baden-Württemberg ruled that the plaintiff was entitled to wages for default of acceptance under Sections 611a (2), 615 (1) BGB, as the defendant had not reinstated him following the lower court’s ruling in the termination dispute.
• The plaintiff should only have a hypothetical earnings amount offset against his compensation claim under Section 11 no. 2 KSchG if he had maliciously refused a reasonable job offer.
• The defendant bears the burden of proof that the plaintiff would have had a specific reasonable job opportunity. The defendant's submission, based on general labour market reports and subsequently identified jobs, does not meet this burden of proof.
• Although the plaintiff's malicious inactivity was established, no evidence showed that he would have secured a salary even if he had made an effort.The ‘subsequently determined’ job offers presented by the employer were not made known to the plaintiff during the period of default, which is why they could not be taken into account.An estimate of the hypothetical earnings can only be considered if specific earning opportunities have been established – this was not the case here.

Consequences for the practice

The judgment of the Higher Labour Court of Baden-Württemberg (and probably also its confirmation by the as yet unpublished judgment of the Federal Labour Court of 15 January 2025) vividly demonstrates the approach that is advisable for employers in dismissal disputes to avoid claims for compensation for delay in acceptance arising from the continued employment relationship resulting from the proceedings, in the case of continued employment that is regularly not intended by the employer for procedural reasons. procedure of sending the employee relevant job advertisements during the period of default in acceptance, to which the employee must respond in order to maintain the claim for compensation for the period of default in acceptance.

With its decision, the LAG deviates from recent case law of the BAG (most recently 7 February 2024 (5 AZR 177/23)) on malicious failure to earn elsewhere, in which the Federal Labour Court had not (yet) required the employer to present specific employment opportunities, justifying this by stating that if an employee's behaviour prevents the employment agency from making placement suggestions , the employer would only become aware of this at a later point in time and would no longer be able to (re)act. In this case, the employee bears the burden of proof that an application would have been unsuccessful. The BAG has already rejected the defendant's appeal against the judgment of the LAG Baden-Württemberg on 15 January 2025 (5 AZR 273/24). The reasons for the judgment or a press release are still pending.

The ECJ has ruled that national regulations which provide for overtime allowances for part-time employees only if the regular working hours of full-time employees are exceeded may constitute an unjustified disadvantage for part-time employees. Meanwhile, the Federal Labour Court (Bundesarbeitsgericht; BAG) has also issued judgments in both pending proceedings in line with the ECJ decision.

Facts

• The framework collective bargaining agreement (F-CBA) concluded between Vereinte Dienstleistungsgewerkschaft e.V. (ver.di) and the defendant stipulated for overtime allowancees for hours worked in excess of the regular working hours of full-time employees (38.5 hours per week) in accordance with Sections 10, 13.
• Two part-time employees (40% and 80% of the regular weekly working hours of a full-time employee) brought an action against their employers, demanding overtime allowancees for hours worked in excess of their contractually agreed working hours but below the regular working hours of full-time employees, as well as compensation under Section 15 (2) of the German General Equal Treatment Act (Allgemeines Gleichbehandlungsgesetz, AGG)).
• The LAG Hesse granted the employees the overtime allowancees they had sought. The BAG referred the above-mentioned legal question to the ECJ for a preliminary ruling in the appeal instance.

Reasons for the decision

• According to the ECJ, unequal treatment exists if part-time employees have to work a disproportionate number of hours to receive overtime allowancees.
• This practice violated the Framework Agreement on part-time work annexed to Directive 97/81/EC and of the prohibition of indirect discrimination on grounds of sex pursuant to Article 157 TFEU and Directive 2006/54/EC, according to which Member States shall ensure that men and women receive equal pay for equal work or work of equal value.
• The ECJ made it clear in its decision that Article 157 (1) TFEU, Clause 4 (1) and (2) of the framework agreement annexed to Directive 97/81/EC and Directive 2006/54/EC prohibit discrimination that is not justified in an objective and transparent manner. The ECJ emphasised that the collective agreement provisions submitted to it cannot be justified by legitimate objectives, as they are not suitable for achieving the desired objectives.
• In the wake of this, the BAG ruled in the appeal instance with judgments of 5 December 2020 (8 AZR 370/20 and 8 AZR 372/20) that the corresponding collective agreement provision violates the prohibition of discrimination against part-time employees. It ruled that part-time employees are entitled to overtime pay as soon as they exceed their individually agreed working hours, and not only when they exceed the working hours of full-time employees.In addition, the court awarded the plaintiffs compensation because they had suffered indirect discrimination on the grounds of gender as a result of the application of the collective agreement.

Consequences for practice

Employers who grant their employees overtime allowancees for working overtime must review their bonus rules to ensure that they comply with the legal principles established by the ECJ and the Federal Labour Court and must ensure that such an overtime allowance also exists for part-time employees for any overtime that exceeds the regular individual working hours. At the same time, this requires from a personnel policy point of view that part-time employees then achieve a higher remuneration than full-time employees with the same volume of work, taking into account the overtime worked in the respective total volume of working hours. Employers should develop practical solutions, such as regulating overtime based on operational needs.