BAG: Changes to employment contract

If an employer wishes to make changes to assurances made in relation to occupational pension schemes and employees add their signatures to a relevant amendment in the employment contract, then they are subsequently bound by this.

GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: A legal dispute regarding occupational pensions ended up coming before the Bundesarbeitsgericht, Germany“s Federal Labour Court. The employer had promised several employees comprehensive pension schemes based on civil service pensions. The former also granted the latter a so-called „Versorgungsrecht“ (entitlements to retirement provision) if they met certain criteria.

When the employer“s financial situation took a turn for the worse, the decision was made to withdraw the assurances. Instead, the employer offered the workers in question a contribution-based occupational pension scheme. With their signatures, the employees declared that they accepted this change. Employees who have not signed this declaration continue to be entitled to fulfilment of the original agreements pursuant to a ruling of the Bundesarbeitsgericht from May 2012.

However, one of the employees who signed the amendment later sued for fulfilment of his Versorgungsrecht. The BAG dismissed this legal action in its judgment of November 15, 2016 (Az.: 3 AZR 539/15). The 3rd Senate of the BAG ruled that the plaintiff had accepted the employer“s offer and the declaration in question was binding. This was said to also encompass forfeiting the Versorgungsrecht. The Court went on to say that a valid agreement had been made concerning the contractual amendment, and its content was neither ambiguous nor surprising.

Furthermore, the BAG held that the content of the change to the contract was subject to review in accordance with the law governing general terms and conditions. It stated that because the changes were not unreasonable and it could not be established that the employee had been discriminated against in an unacceptable manner, the review was concluded in favour of the employer. Thus, the employee is bound by his declaration. It is irrelevant here whether colleagues who did not make this declaration enjoy better conditions pertaining to their occupational pension.

To avoid legal disputes, employers can have the effectiveness of planned amendments to employment contracts reviewed. Lawyers who are experienced in the field of employment law can advise on all matters relating to the workplace.

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GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

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