Severance payment (German labor law)

from Wikipedia, the free encyclopedia

As severance in is German employment law a one-time cash payment of the employer to the employee called the occasion of the termination of employment is made.

General

Must be distinguished from compensation payments , such as the waiting allowance according to § 74 HGB (due observance of a post-contractual restraint on competition ) and the claim for damages pursuant to a justified extraordinary dismissal of the employee. Section 628 (2) of the German Civil Code ( BGB) , which, according to the case law of the Federal Labor Court, consists of “premature damage” (due to termination of the employment relationship without notice) and possibly a compensation claim in accordance with Section 9 and Section 10 KSchG .

Employment Law

According to German labor law , there is no entitlement to severance pay , even in the event of a termination , with the following exceptions.

In Germany, severance payments are made due to

  1. out of court settlement on the effectiveness of a termination or because of a termination agreement
  2. the legal regulation of § 1a KSchG
  3. Dissolution judgment of the labor court due to the unreasonableness of the continuation of the employment relationship according to § 9 and § 10 KSchG
  4. Collective agreement or a social plan (regularly in the case of mass layoffs )
  5. judicial judgment due to claims of an employee to compensation for disadvantages according to § 113 Works Constitution Act .

Only the severance pay claims according to No. 3 to 5 can be enforced against the will of the employer under certain circumstances.

Compensation settlement

Because the Dismissal Protection Act aims to safeguard the existence of the employment relationship, it does not normally provide for severance payments. The Dismissal Protection Act is an inventory protection act and not a severance payment act. However, this is only the case in theory or according to the law. In practice, most dismissal protection processes - and corresponding grandfathering disputes - are compared in the second instance at the latest.

Reasons for a severance payment comparison

There are reasons for the employer and for the employee. With the dismissal protection process, the employer is associated with the risk of having to pay the remuneration after the notice period has expired, so-called default wages . Therefore, after the dismissal has been pronounced, severance settlements are very often concluded out of court or in court, in which the effectiveness of the termination is accepted and the employer promises a severance payment in return. The severance payment is then the result of the typical negotiation rationality of give and take between the parties involved.

Amount of severance payment

The amount of the severance payment is a matter of negotiation. An employee is typically mentally, economically or intellectually inferior. If so, a lawyer can help. This has the disadvantage that, according to § 12a ArbGG , you have to bear the costs yourself. It may be possible to apply for legal aid . The employee-friendly regulation of allocation according to § 11a ArbGG has been abolished. You can now only be represented free of charge by close family members. It must be taken into account that as a legal layperson, one is generally not in a position to properly conduct a legal dispute. At the latest when a quality negotiation before the labor court fails, a lawyer is regularly required, whose fee then reduces the severance payment that was eventually paid.

There is no fixed statutory regulation for the amount of the severance payment. If human or social aspects do not play a role, but only business considerations are decisive, the litigation risk is decisive. With a severance payment, the employer buys himself free from his litigation risk, so to speak, and he limits his default risk of acceptance of wages . The litigation risk is a question of the individual case. Often the litigation risk cannot be objectively assessed with certainty. It is even more common that even an objectively assessable risk cannot be correctly assessed subjectively by the parties. Even the assessment of lawyers specializing in labor law does not provide any certainty. Neither do those of labor judges, since they too can be wrong and / or generally avoid clear statements in order to increase the willingness of the parties to make comparisons.

As a rule, regionally different rules of thumb have worked out, but they are not binding, but form an initial starting point. For example, in the district of the LAG Berlin-Brandenburg, half a gross monthly income per year of employment is normally assumed. However, this does not necessarily pay off for short employment contracts. Section 1a KSchG also provides for the amount of the severance payment as an indication of half a gross monthly wage per year of employment, with a period of more than 6 months being assessed as a full year. However, the regional customs of the courts are more decisive.

Design options

An important aspect when comparing severance pay is that the comparison does not result in any disadvantages with regard to entitlement to unemployment benefit or unemployment benefit II (see below ). The aim is also to optimize tax law (see also tax law ).

Due date

A severance payment claim is usually due at the end of the employment relationship. "If the settlement is concluded before the agreed end of the employment relationship and the severance payment is to be paid ... in accordance with §§ 9, 10 KSchG, then there are usually circumstances within the meaning of § 271 Paragraph 1 BGB, which result in the due date being the termination of the employment relationship. ”Nevertheless, an express provision is recommended, which avoids unnecessary legal disputes.

The parties are free to agree on the due date. From time to time, tax law considerations can lead to deviating from the usual due date.

Inheritance

If the employee dies before the end of the employment relationship, the claim is lost according to the prevailing opinion, i. H. the heirs do not receive the settlement. In any case, the Federal Labor Court decided this in its judgment of May 10, 2007 - 2 AZR 45/06 - NJW 2007, 3086 for the compensation claim according to § 1a KSchG. So if you think about your wife, children or other persons, you usually agree that the claim "arose immediately and / or is inheritable, but is only due when the employment relationship is terminated".

Loss in the event of premature termination elsewhere

There is also no entitlement to severance pay if the agreed termination date of the employment relationship is not reached because the employment relationship is terminated earlier by a subsequent extraordinary termination. For example, because an employee who has been released from work / already engaged in competition that was contrary to the contract during the current employment relationship or because it was only afterwards that it became known that the employee was embezzling. Advised employers make it clear that the above regulation only applies in the event of termination due to the death of the employee. In practice, however, this is unusual.

"Gross" severance payment

It should be agreed whether the severance payment is to be paid “gross” or “net”. If a net payment is agreed, the employer bears the tax liability. It is customary for the severance pay to be agreed as "gross". If the parties only agree on an amount and do not act as to whether this is to be paid “gross” or “net”, the agreement must be interpreted. When in doubt, d. H. the employee has to prove the opposite, a severance payment is (only) "gross" owed.

Crediting of redundancy payments

In social plans, individually agreed severance payments can more often be taken into account. Individual contracts may not fall short of social plans if there is no (more theoretical) opening clause. However, social plans may be exceeded. The contracting parties should clearly agree on the relationship between the agreed contractual severance pay and the redundancy plan severance pay.

Turbo bonus

Agreeing on a turbo premium is widespread (with longer regular notice periods) . One speaks of this colloquially if, in the event of early termination by the employee, the remuneration saved to the employer is paid in full or in part as an additional severance payment. If the employer does not place an increased value on the work performance of the employee, he can save himself the social security contributions for an otherwise payable remuneration.

Court costs

  • In the case of an overall comparison, the court fees do not apply if a default judgment has not already occurred. Court expenses remain, but are often so low that they are put down (e.g. only one-off costs for a document of service).
  • In the first instance, everyone bears their own legal costs themselves, § 12a ArbGG.
  • In the case of legal aid, the severance payment must be set as an asset, with the exception of only a small allowance.

Agreed severance payment

The employment contract parties can also agree to terminate the employment relationship outside of a legal dispute against payment of a severance payment, i. H. conclude a termination agreement with a severance payment agreement.

Principle of equal treatment

The validity of the principle of equal treatment is viewed differently. The sentence "Agreed severance payments must be based on the principle of equal treatment" is likely to be incorrect or imprecise. The case law of the Federal Labor Court (BAG) is decisive. According to this, a distinction must be made between (really) individual and group-related severance agreements. Only the latter are subject to the principle of equal treatment.

If the principle of equal treatment is applicable, objective reasons are required for differences. The employer is also not allowed to discriminate. Examples:

  • the amount of the severance payment may not be made dependent on the age upon reaching partial retirement;
  • whether or not a severance payment may be made dependent on the employee not bringing an action for protection against dismissal;
  • the amount of the severance payment for part-time employees may also be determined taking into account Section 4 (1) sentence 2 TzBfG in the ratio of their working time to full-time (“pro rata temporis”).
"gross"

The same problem applies to the settlement agreed out of court as to the settlement settlement in court. If “gross” is agreed, the employee bears the tax burden (i.e. taxes are deducted) and the risk of a credit. Unless otherwise expressly agreed, a gross payment is agreed in case of doubt. According to the BAG, even the agreement of x euros “gross = net” is not to be understood as meaning that the employer should bear the tax liability. In this respect, it is advisable to expressly agree on what should apply.

Death of the worker
see above for the settlement comparison

Compensation against waiver of legal action

Since 1 January 2004 sees the German labor law , the Employment Protection Act in § 1a KSchG a compensation claim of the employee shall be if the employer an ordinary compulsory redundancy has spoken. However, this entitlement to severance pay requires that the employer indicates in the necessary written notice of termination ( Section 623 BGB ) that the termination is due to operational reasons and that the employee can claim the severance payment if the three-week period for legal action has passed. In fact, it is not a legal claim, but rather a voluntary service by the employer.

In fact, hardly any use is made of the option of a severance payment under Section 1a KSchG.

According to § 23 KSchG (scope), the regulation of the severance payment in § 1a KSchG does not apply to companies with 10 or fewer employees (until December 31, 2003 five or fewer employees). The aim is to protect small businesses from the unpredictable financial consequences of dismissing a long-term employee, which in the worst case could endanger the employer's own existence. Employees in part-time or marginal employment are counted with 0.5 for up to 20 hours of weekly working time and 0.75 for up to 30 hours of weekly working time when the “10 employee limit” is determined.

The employee has the choice of whether he or she refrains from filing a dismissal protection suit and thus wants to claim the severance payment or whether he or she opts for continued employment by filing a suit (or filing the suit for tactical reasons, because he hopes - but at the risk of doing so that in the end he will not be able to enforce severance payments or continued employment - thereby being able to move the employer to a settlement that includes an even higher severance payment).

The practical advantage of a severance payment according to § 1a KSchG is that the 12-week blocking period at the employment office for unemployment benefits does not occur. In the past, this could also be avoided by a winding-up agreement concluded outside the scope of this statutory provision (see termination agreement ); According to the current case law of the Federal Social Court , however, a settlement agreement agreed within the three-week period for legal action (consideration by the employee: waiver of dismissal protection action) can lead to a blocking period.

In a decision dated July 12, 2006, the Federal Social Court announced that it would no longer adhere to this case law. A winding-up or termination agreement therefore does not lead to the imposition of a blocking period if the termination agreement avoids a lawful termination by the employer. The legality of the threatened termination is to be presumed if the agreed severance payment does not exceed the amount stipulated in Section 1a KSchG (0.5 gross monthly salary per year of service).

Dissolution judgment due to the unreasonableness of the continuation

Main article: Termination of employment (Germany)

If the employee wins the dismissal protection process , he can, if he can no longer be expected to continue the employment relationship, submit a so-called application for dissolution to the labor court ( Section 9 KSchG). If the condition of unreasonableness is met, which is interpreted restrictively by the case law, the labor court has to dissolve the employment relationship (usually at the time of the expiry of the notice period) and order the employer to pay a severance payment (amount of the severance payment § 10 KSchG staggered according to age and length of service: a maximum of 12 to 18 salaries). As a rule, the labor courts use the “rule of thumb” for the (rare) dissolution judgments and make a surcharge or discount depending on whether one side or the other is at fault. The employer can also submit an application for dissolution if there are reasons that do not allow us to expect further fruitful cooperation. High requirements must also be placed on the existence of this prerequisite, so that the protection of existing statuses intended by the Dismissal Protection Act is not undermined.

Compensation claim in collective agreements or social plans

Some collective agreements provide (mostly in the event of operational changes as a result of rationalization ) for severance pay claims for the employees concerned, which must be paid to the employees bound by the collective agreement when the employment relationship is terminated. Compensation claims can also result from a social plan, which can be enforced in companies with a works council and with more than 20 employees in the event of layoffs as a result of a change in the company ( Sections 111 ff. BetrVG , for details see: change of company , social plan ).

For the most part, such severance payments are calculated using the so-called “divisor formula”. To calculate the severance payment, the individual age is multiplied by the length of service and the gross monthly salary and divided by a divisor to be negotiated. The divisor is usually around 100, but varies according to the specific circumstances of the change in business. Since the employer and the works council negotiate the calculation of the severance payment, other calculation methods can also be used, for example the factor formula often used as a rule of thumb in individual law or a point value method.

In the public service , the level of severance pay is regulated by the rationalization protection collective agreement of January 9, 1987, which differentiates according to age and length of employment.

Compensation claim in the event of termination by the employee

If an employee resigns himself, there is initially no entitlement to severance pay. However, if he is entitled to terminate without notice in accordance with Section 628 of the German Civil Code (BGB), he has a statutory right to compensation. This can be justified by the fact that the employee has to be compensated for the loss of his job through demonstrably breach of duty on the part of the employer.

Severance payment as compensation for disadvantages

If an employer deviates from a reconciliation of interests agreed with the works council ( Section 111 BetrVG) without compelling reason, or if he does not try at all or does not try seriously enough to reach an agreement with the works council on a reconciliation of interests, employees who are subject to a change of company subject to co-determination can dismiss will sue the employer at the labor court according to § 113 BetrVG for payment of a severance payment, the so-called disadvantage compensation . The amount of such severance pay is based on the rules that must be observed in the case of a dissolution judgment under Section 10 of the KSchG. When determining the amount of the severance payment, the labor courts generally take into account that the employee may already be entitled to a severance payment from a social plan by offsetting the social plan severance payment towards the compensation for disadvantages.

Social security law

General

Severance payments are free of social insurance. No social security contributions are payable on a (real, see) severance payment. If, however, a payment in a (temporary) employment relationship is only declared as a severance payment, which in truth represents a certain form of contractually owed performance, such payment is subject to social security obligations.

disadvantage

The agreement of a severance comparison can for non-compliance of the ordinary notice or at ordinary tenure according to § 158 SGB III cause the entitlement to unemployment compensation suspended until the expiry of the notice. The credit is reduced depending on the age and length of service of the employee.

More often, a dismissal protection process ends with a termination / severance payment comparison after a behavior-related dismissal. In order to avoid the occurrence of a blocking period for unemployment benefit according to § 157 SGB ​​III or a reduction in unemployment benefit II according to § 31 Paragraph 2 No. 3.4 SGB ​​II , one as an employee should try to use formulas such as “From today's perspective does the employer not uphold the allegations "or the like and the reason for the termination is" operational reasons ".

If you are not sure whether the comparison will avoid the disadvantages mentioned, you can try to get information from the authority on this question by submitting a draft. However, it is uncertain whether you will (soon) get an answer and whether it will adhere to it and possibly be liable for incorrect information.

If the severance payment is made while receiving unemployment benefit II - the so-called inflow principle applies - the severance payment will be offset against Alg II, with the exception of a small monthly allowance (2012: € 30.-). With this in mind, you can set the due date or possibly agree on payment in installments. Here too, however, the risk of bankruptcy increases. Regarding the old law, without any apparent change in the matter, the Federal Social Court ruled in its judgment of March 3, 2009 - B 4 AS 47/08 R - NJW 2009, 3323 (guiding principle): “The settlement agreed in a labor court settlement because of job loss, if the severance payment is made while the basic security benefits are being paid, unemployment benefit II must be taken into account as income-reducing income. "

According to Section 157 (2) and (3) SGB III (new version from April 1, 2014 (previously there were corresponding regulations)), the entitlement to unemployment benefit is suspended for the time for which holiday compensation is actually paid: “Has the unemployed person due to termination receive or claim compensation for vacation due to the employment relationship, the entitlement to unemployment benefit is suspended for the period of the vacation paid for. The rest period begins with the end of the employment relationship on which the vacation compensation is based. ”From an economic point of view, the employee does not benefit from vacation compensation. This leads to attempts to circumvent them, which the labor administration / social justice system can only with difficulty catch.

With wages usually, rarely with severance payments, due to the uncertainty as to whether there is a transfer of claims in favor of the Federal Agency, it is also agreed that payment will only be made "taking account of transfers of claims to third parties".

See also: Blocking period (social law)

Tax law

The income tax on severance payments can be reduced by the so-called fifth rule. This is particularly important in the case of high severance payments. In this respect, the employer is probably not obliged to provide advice. The employee must therefore take care of the optimal tax law structure of the severance payment.

Severance payments, which are agreed on the occasion of a dismissal from the employment relationship (dismissal compensation), are tax-privileged compensation according to § 24 No. 1 i. V. m. Section 34 (1) and (2 ) EStG , if the severance payment is paid in an assessment period and the accumulation of income results in increased tax burdens (“accumulation principle”). In this case, the above-mentioned one-fifth rule is used to achieve a more moderate progression . The entire severance payment must accrue in one calendar year; if it is paid in partial amounts in several calendar years, it is subject to the full tax rate. The prerequisite for the privilege is that either the severance payment is higher than the income that would have accrued if the employment relationship had continued until the end of the year, or the taxpayer generates additional income that he would not have received had the employment relationship continued (e.g. from a new employment relationship, unemployment benefit) and he thus receives more than he would have received if things had gone normally.

In the case of a settlement settlement, the due date is a matter of free agreement. Sometimes it can be cheaper to only agree the due date for the next year if you hope to be better off because of the tax progression. However, it is important to keep an eye on the risk of bankruptcy .

Under certain circumstances, the costs associated with a severance payment arrangement can be deducted as income-related expenses. According to BFH, judgment of February 9, 2012 - VI R 23/10 -, BFHE 237, 43, BStBl II 2012, 829 applies (guiding principle): “There is regularly a presumption that expenses for civil and labor court disputes have a sufficiently concrete causal relationship to the wage income that justifies the deduction of income from expenses. In principle, this also applies if the employer and employee agree on such disputed claims in the context of a labor court settlement. "

See also

References and comments

  1. ^ Federal Labor Court, judgment of July 26, 2001 - 8 AZR 739/00
  2. ↑ a b c Ulf Kortstock: Nipperdey Lexicon labor law. Beck, Munich 2012: Severance payment
  3. ↑ BAG, judgment of July 15, 2004 - 2 AZR 630/03 - NZA 2005, 292
  4. ↑ Clear, NZA 2003, 543 (546)
  5. ↑ BAG, judgment of November 21, 1985 - 2 AZR 6/85 - juris Rn. 32 = RzK I 9j No. 2
  6. ↑ Example: BAG, judgment of 06.08.1997 - 10 AZR 66/97 - NZA 1998, 155
  7. ↑ So Küttner / Eisemann: Personalbuch 2015. 22nd edition. 2015, Severance Pay Rn.1
  8. ↑ Cf. on the one hand: "According to the principle of equal treatment under labor law, an employee generally has no entitlement to the conclusion of a termination agreement with payment of severance pay if the employer individually agrees to terminate the employment relationship with other employees and pays them a severance payment, the amount of which is one has established the regulatory plan drawn up by him "(BAG of February 25, 2010 - 6 AZR 911/08 - NZA 2010, 561 Os.) and on the other hand:" If the employer pays a severance payment to a group of employees on an individual contractual basis without legal obligation, he is there bound by the principle of equal treatment ”(BAG of 25.11.1993 - 2 AZR 324/93 = AP § 242 BGB Equal Treatment No. 114 [to B II 1 of the reasons]).
  9. ↑ According to Küttner / Eisemann: Personalbuch 2015. 22nd edition. 2015, Severance Pay Rn. 1
  10. ↑ BAG of September 18, 2007 - 9 AZR 788/06
  11. ↑ BAG of February 15, 2005 - 9 AZR 116/04
  12. ↑ BAG of February 13, 2007 - 9 AZR 729/05
  13. ↑ BAG, judgment of November 21, 1985 - 2 AZR 6/85 -, juris orientation sentence: “With an interpretation based on the principles of §§ 133, 157 BGB, the objective explanation content of the clause 'gross = net' cannot be used in the sense of a Net agreement to be interpreted. This wording only objectively expresses the fact that the agreed severance payment should initially be paid to the employee in full by the employer. Furthermore, this formulation does not clearly indicate who of the parties ultimately has to bear the tax due on the severance payment or that the tax liability should be regulated differently from tax law. "
  14. ↑ BSG, judgment of July 12, 2006 , Az.B 11a AL 47/05 R, full text.
  15. ↑ Entitlement to severance pay in the event of termination by the employee. Retrieved February 28, 2018 .
  16. ↑ Bundesfinanzhof, judgment of July 28, 1993 XI R 74/92

literature

  • Hans Eisemann, in: Küttner: Personalbuch 2015. 22nd edition. 2015. Beck, Munich: Severance payment. A. Labor law
  • Thomas Voelzke , in: Küttner: Personalbuch 2015. 22nd edition. 2015. Beck, Munich: Severance payment. C. Social Security Law
  • Schmidbauer, Stefan: Severance payments to executives from a legal point of view and their relevance in SMEs . Publishing house for science and culture, Duisburg 2006. ISBN 3-86553-159-8 .
  • Wölfel, Julian: The social plan compensation - differentiation criteria and arrangements . Peter Lang Verlag 2012. ISBN 978-3-631-63169-0 .

Web links