Forfeiture clauses in employment contracts on trial

1. Text form versus written form

With the “law on the improvement of the enforcement by civil law of consumer-protecting data protection provisions” dated 17 February 2016, the regulation set out in Section 309 no. 13 German Civil Code (BGB) changed with effect from 1 October 2016. This amendment is gaining in significance for standard employment contracts that, according to the decisions made by the Federal Labour Court (BAG), are subject to content control according to Sections 305 et seq. BGB as General Terms and Conditions (GTC). When concluding an employment contract, employees act as consumers. Therefore, the prohibited clauses of Section 309 BGB apply, unless otherwise governed by the special labour law regulations.

According to the old version of Section 309 no. 13 BGB, clauses that stipulated a stricter form than the written form for a notification or statement of the employee were prohibited. According to the new version of Section 309 no. 13 BGB that took effect on 1 October 2010, no stricter form than the text form may be agreed. Amongst others, an e-mail or a (computer) fax meets the text form requirement.

This new legal regulation particularly affects the agreement of forfeiture clauses with cut-off periods, which nearly every standard employment contract includes. Forfeiture clauses aim to quickly clarify any claims arising from and in connection with the employment. For this purpose, they regularly required the contractual parties to assert their (alleged) claims in writing to the other party within a certain period of time (at least three months). If the deadline was exceeded, the claims would forfeit.

Due to the new legal regulation, the cut-off clause for the assertion of an (alleged) claim arising from employment within a certain period of time must not demand a stricter form than the text form. Stricter requirements such as the “written form” are invalid.

The new regulation does not have any impact on old employment contracts concluded prior to 1 October 2016. For the time being, already agreed forfeiture clauses remain effective. However, any change to an old contract is problematic, as the BAG already held in a different connection that an – even minor – change to the employment contract would usually turn an “old contract” into a “new contract”. This means that after each agreed change, the new law would also apply with regard to any unchanged forfeiture clause.

It is not yet certain whether the BAG will apply the principles of the jurisprudence stated above to the new version of Section 309 no. 13 BGB as well. However, as long as this issue is not clarified in the case law, the forfeiture clause should be adjusted at the same time as a precautionary measure if an employment contract is changed after 1 October 2016.

Standard employment contracts must now be adjusted to the new legal situation. In addition to the adjustment of the standard contracts, it must be ensured that the forfeiture clause is adjusted with each change of an “old contract” as well.

Apart from that, it already applies to the written form agreed in old standard employment contracts that the submission of the declaration by e-mail or fax is sufficient for the compliance with the contractually agreed written form, unless a different intention of the parties is apparent. The legislator therefore only established a clarifying new version for the general case with the reformulation of Section BGB. To justify the law, it explains that many consumers and/or employees did not know that the text form already complies with the contractually agreed written form now, which is why the GTC user and/or the employer should be forced in the future to present this correctly to the other contractual party in the contract.

2. Forfeiture clause and minimum wage

On 24 August 2016, the BAG issued a judgement that could require another adjustment of forfeiture clauses in standard employment contracts.

The BAG had to decide a case where a nursing assistant asserted salary claims against her employer. The employment was subject to the regulation on mandatory working conditions for the nursing care industry (PflegeArbbV) that took effect on 1 August 2010. Amongst others, it governed a minimum wage that had to be complied with. The employment contract concluded between the parties in 2013 contained a two-step forfeiture clause according to which all mutual claims arising from the employment and such claims in connection with the employment forfeit if they are not asserted in writing to the other contractual party within three months after maturity. If the counterparty rejects or fails to respond to the claim within two weeks after its assertion, the claim forfeits, unless it is asserted in court within three months after the rejection or the expiry of the deadline.

Although the plaintiff asserted her salary claim to the defendant employer out of court in due time, she missed the deadline for assertion in court. The employer then argued, amongst others, that the claim was now forfeited. However, the employer was unsuccessful with this argument in all courts.

The BAG is of the opinion that a cut-off or forfeiture clause agreed as GTC that does not expressly exclude the minimum wage constitutes an unreasonable disadvantage, as it is not sufficiently clear and understandable to the employee that the minimum wage is not included by the forfeiture. There is therefore the risk that an employee would no longer claim the minimum wage after the expiry of the deadline due to the forfeiture clause which is non-transparent in the BAG’s point of view. This leads to the consequence that the non-transparent cut-off clause is ineffective as a whole, as it violates the requirement of transparency set out in Section 307 (1) clause 2 BGB. At any rate, this was now decided by the BAG with regard to the minimum wage in the nursing care industry.

The Minimum Wage Act (MiLoG) applies since early 2015, which also prohibits the restriction or exclusion of the statutory minimum wage claim in Section 3 MiLoG. However, this is what forfeiture clauses do that do not expressly exclude the statutory minimum wage. It is now the question whether all forfeiture clauses are invalid that do not expressly exclude the statutory minimum wage. This question still neds to be clarified by the BAG. Nonetheless, employers would be well advised to revise the forfeiture clause in their standard employment contracts in this regard from now on.