No recovery of a voluntarily paid Corona bonus after termination
Update Employment Law August 2021
Labour Court Oldenburg 25.05.2021 - 6 Ca 141/21
Numerous companies have granted their employees "Corona special payments" in recent months. Corresponding payments can be provided tax-free in an amount of up to EUR 1,500 in the form of allowances and benefits in kind in addition to the regular remuneration. Under the current legal situation, this tax allowance pursuant to Section 3 No. 11a of the German Income Tax Act (EStG) will continue to apply until March 31, 2022.
With regard to employment law, the granting of "corona special payments" can lead to disputes between employers and employees in particular if an employee leaves the employment relationship after receiving a corresponding benefit and the employer then demands the return of the special payment with reference to a repayment obligation agreed in the employment contract. According to the case law of the Federal Labor Court, such repayment clauses in employment contracts are only permissible under strict conditions and essentially only if they relate to gratuities - i.e. special payments without remuneration character. The Oldenburg Labor Court has now had to decide how a "Corona special payment" is to be classified in the light of this case law and whether these payments can be reclaimed by the employer if the employee leaves the employment relationship.
Facts of the case
Since the Oldenburg Labor Court has refrained from presenting the facts of the case pursuant to Sections 313a (1) sentence 1, 495 of the German Code of Civil Procedure (ZPO) in conjunction with Section 46 (2) sentence 1 of the German Labor Court Act (ArbGG), the facts of the case presented cannot be fully portrayed. However, the essential circumstances of the legal dispute can be gathered from the reasons for the decision. According to this, the plaintiff employee was employed by the defendant employer at least some of the time in 2020 and 2021. With the remuneration for November 2020, the employer granted the employee a tax-free special payment in the net amount of EUR 550. This payment was accompanied by a letter from the employer dated November 24, 2020, in which the employer pointed out that the special payment was made "one-time tax-free in relation to the Corona pandemic".
Section 5 (7) of the parties' employment contract stipulated that the employer may demand the return of voluntary benefits if an employee leaves the company within twelve months, calculated from the date of issue of the notice of termination, after receiving voluntary benefits at his or her own request without culpable conduct on the part of the employer or for a reason that led to or would have justified immediate dismissal. Only those benefits that do not exceed an amount of EUR 50 were excluded from this.
In the course of 2021 - the exact date cannot be gathered from the reasons for the decision - the plaintiff then left the defendant employer. In this context, the employer offset the net amount of EUR 550 paid to the plaintiff in November 2020 and deducted this from the remuneration for the months of March and April 2021. The employee's action was directed against this.
The Oldenburg Labor Court upheld the employee's action and ordered the defendant employer to pay the outstanding net amount of EUR 550 to the employee. According to the reasons for the decision, the claim for payment of the plaintiff employee results from the employment contract and the provision of Section 611a (2) BGB. The employer was not entitled to offset the special payment granted in November 2020 against the remuneration for March and April 2021, because it had no claim to repayment of the "Corona special payment". In particular, a repayment claim against the employee does not arise from the provision under § 5 no. 7 of the employment contract, as this clause is invalid under § 307 (1) sentence 1 BGB. It puts the employee at an unreasonable disadvantage.
The Oldenburg Labor Court essentially cited two considerations in support of its decision:
Firstly, the special payment granted by the employer exceeded an amount of EUR 100. According to the case law of the Federal Labor Court, a repayment obligation is invalid if it provides for a commitment over the following quarter with regard to special payments between EUR 100 and one month's remuneration. This was the case here, as the clause in § 5 number 7 provided for a commitment period of twelve months ("if an employee [...] within twelve months"), but at the same time was intended to cover a special payment of EUR 550 net in the present facts.
Secondly, the twelve-month commitment of the employee with regard to the "Corona special payment" was also invalid because the employer had apparently also rewarded work performance with its payment. This is evident from the employer's letter of November 24, 2020, which is to be understood as meaning that the employer wanted to financially compensate and recognize the special burdens of the employee during the Corona pandemic with the payment of the bonus. This also included the work performed in the past. A repayment obligation cannot be justified because special payments, which at least also represent remuneration for work performed, cannot be made dependent on the continued existence of the employment relationship without notice at a time outside the reference period.
The decision of the Oldenburg Labor Court is in line with previous labor court case law on the reclaiming of special payments. As the decision of the Oldenburg Labor Court now illustrats, this case law also applies to special payments made by companies to their employees in connection with the Corona pandemic. If there is a connection between special payments and the Corona pandemic and the associated burdens, it must be assumed in cases of doubt that such payments at least also represent remuneration for the work performed during this period and are therefore of a compensatory or at least "mixed" nature. Accordingly, a claim for repayment is excluded in any case if the point of reference for the obligation to repay is a departure of the employee outside the reference period.
The strict requirements for repayment clauses in employment contracts must also be observed. In the context of the examination pursuant to Sections 307 et seq. BGB, the main question is whether the cases in which the repayment obligation shall apply are clearly regulated and differentiated in terms of content, and whether the selected commitment period is appropriate. The permissible commitment period depends on the amount of the special benefit granted, whereby case law has developed a corresponding "gradation" which the user of the clause must take into account. Against this background, repayment clauses must be formulated with particular care.