At the same time, Commerzbank plans to create new jobs in its Polish subsidiary mBank and at Asian locations. The global workforce is expected to remain at around 36,700 full-time employees, which is almost the same as at the end of 2004 (36,842 positions). Commerzbank CEO Bettina Orlopp emphasized that these measures are aimed at positioning the company as a permanent player in the European banking sector.

Job cuts in Germany: The headquarters and the Rhine-Main area are particularly affected

The job cuts in Germany primarily affect the headquarters in Frankfurt and other locations in the Rhine-Main area. Administrative areas such as communications, building management, the staff of the divisional boards and back office tasks, in particular the processing and administration of transactions, are particularly affected. At the end of the year, Commerzbank AG recorded a total of 19,370 full-time positions in its home market.

"In order to make this transformation process socially acceptable, Commerzbank is focusing primarily on demographic change and natural fluctuation," the bank explained. In cooperation with employee representatives, the essential foundations for a partial retirement program have already been agreed, which is to be implemented this year.

Unicredit remains stubborn with Commerzbank

Commerzbank has been under increasing pressure since Unicredit took advantage of the federal government's partial exit in the fall to invest heavily in Commerzbank. Today, the Milan-based major bank holds around 28 percent of the DAX group's shares, of which around 9.5 percent are directly in shares and almost 18.6 percent through financial instruments. Should its share rise to 30 percent, Unicredit would be obliged to make a takeover offer to the remaining Commerzbank shareholders.

Unicredit CEO Andrea Orcel has been pursuing a takeover for months. Two days before Commerzbank presented its strategy, Unicredit used its balance sheet presentation to send Commerzbank a list of questions. Among them was the provocative question: "Are the new targets realistic - especially given that the previous targets were not achieved? Or are they based on overly optimistic assumptions and the pressure to fend off a potential takeover offer?" Commerzbank CEO Bettina Orlopp replied during the strategy presentation: "I assure you that we have clear answers to all the questions our Italian competitor and investor has asked about our strategy."

There is currently no takeover offer from Unicredit. Orcel itself stated this week that such an offer could be made in the fourth quarter of 2025 or the first quarter of 2026 at the earliest.

In view of the resistance in Germany, Orcel plans to use the time to promote his takeover plans to the new federal government. The federal government, which rescued Commerzbank with billions in tax money during the 2008/2009 financial crisis, still holds around 12 percent of the institute's shares.

Commerzbank sets ambitious growth targets

The management board, supervisory board and works council of Commerzbank are also fighting against what they see as "hostile" actions by the Italian Unicredit. Bettina Orlopp, CEO since October 1, is committed to securing the bank's independence through increasing profits and ambitious return targets.

In the coming years, Commerzbank aims to significantly increase its profits and become more profitable. After a record profit of almost 2.7 billion euros last year, the bank plans to increase its surplus to 4.2 billion euros by 2028. In addition, the return on equity is expected to rise from 9.2 percent in 2024 to 15 percent in 2028. However, profits are expected to fall to 2.4 billion euros this year as the job cuts will initially entail high costs. The bank expects one-off expenses of around 700 million euros. At the same time, annual costs are expected to fall by around 500 million euros as a result of the savings.

The branch network will remain reduced to around 400 locations, and the two-brand strategy with Commerzbank and the online bank Comdirect will remain unchanged.

Shareholders should benefit from high profit distributions

The Board of Management of Commerzbank plans to reward shareholders with high profit distributions. A dividend increase from 35 cents to 65 cents per share is planned for the 2024 financial year. For 2025, Commerzbank intends to distribute more than 100 percent of its surplus to shareholders, after deducting the interest on equity-like bonds. For the years 2026 to 2028, CEO Bettina Orlopp is aiming for a payout ratio of 100 percent, although this depends on the successful implementation of the new "Momentum" strategy and the economic environment.

Commerzbank shares initially rose by up to 2.6 percent on Thursday morning before the price gains shrank again. Ultimately, the stock was one of the losers in the German stock index, with a decline of half a percent. Industry expert Anke Reingen from the Canadian bank RBC assessed management's assumptions for the coming years as optimistic, especially with regard to the development of earnings.

New partnership with credit card provider Visa

In order to achieve its profit targets, Orlopp is relying on continuously growing income, particularly from commissions, in addition to job cuts and cost reductions. While 59 percent of income was used to cover banking costs last year, this figure is expected to fall to around 50 percent by 2028. This means that in future, Commerzbank only wants to spend around 50 cents on costs for every euro of income.

The bank is planning targeted acquisitions and partnerships to increase profitability. A significant new cooperation has already been concluded with the credit card provider Visa: Commerzbank customers will in future be given priority to receiving debit and credit cards from Visa.

Der Beitrag Commerzbank baut trotz Rekordgewinns fast 4.000 Arbeitsplätze ab erschien zuerst auf R&U.

In this article, managing directors, shareholders and supervisory bodies learn what important information they should know about the content of a managing director's contract.

1. Checklist: Typical areas of regulation of a managing director's contract

The contracts of managing directors in GmbHs contain a large number of provisions regarding the rights and obligations of the managing director and the company. Each managing director contract is individually designed and can vary depending on the industry, company size, business area and shareholder structure. Nevertheless, some basic regulatory areas can be identified that should be taken into account along with other aspects.

Checklist for the managing director contract:

1. Relationship between managing director contract, partnership agreement, rules of procedure and shareholder resolutions as well as the possibilities for subsequent amendment
2. regulations on existing employment relationships
3. Scope of the power of representation and management authority (including departmental responsibilities) and the possibility of changing them
4. Transactions requiring approval and their subsequent adjustments
5. Remuneration (fixed and variable) and other benefits (e.g. health insurance, retirement provision, company cars, company cell phones, laptops, 1st or 2nd class travel expenses)
6. Limitations of liability: limitation to intent and gross negligence, limitation of liability in terms of the amount, regular right to relief, D&O insurance
7. Contract duration, termination options, notice periods and severance payments of the managing director
8. (Post-contractual) non-competition clauses, including competition and customer protection clauses, non-solicitation clauses and confidentiality agreements
9. Possible special regulations for shareholder-managers
10. Invalidity of managing director contracts and responsibilities within the company
11. General Terms and Conditions Control of Managing Director Contracts: Consumer Protection for Managing Directors
12. Tax-optimized design of managing director contracts

Even this short but incomplete checklist illustrates the complexity of managing director contracts. The provisions not only affect the relationship between the managing director and the GmbH, but also have far-reaching effects beyond that.

A well-structured contract can, for example, avoid frequently occurring uncertainties in the event of later personal claims by the GmbH or third parties, as well as uncertainties in the enforcement of salary claims and restrictions in the event of a professional reorientation.A notice: In addition, numerous special features apply to shareholder-managers (e.g. hidden profit distributions, tax aspects and the (non-)exemption from social security contributions), which are explained in more detail at the end of this article.

2. Regulations on existing employment relationships

It is common for people to be appointed as managing directors who were previously employed by the company. The managing director's contract should therefore clearly state how these previous employment contracts are to be dealt with:

• Should the previous employment contract come into force again in the event of termination of the managing director?

• Do the previous contracts (in addition to the new managing director contract) still exist?

• Will the previous employment relationship be terminated or should it be transferred to the new relationship?

3. Scope of representation and management authority

It may be useful for the managing director to set out a regulation in the managing director's contract regarding the scope of his authority to represent the company. Important aspects include:

• Individual or collective representation: Does the managing director have the right to act alone, or must he coordinate with the other managing directors and sign contracts together?
• Exemption from the prohibition of self-contracting (§ 181 BGB): Is the managing director permitted to conclude contracts with himself?

From the perspective of the GmbH, however, it is advisable to make the power of representation and management in the contract as flexible as possible in order to allow for later adjustments.

It is crucial that the provisions in the managing director's contract are consistent with the company's articles of association and any rules of procedure. In practice, there are often contradictions between the various provisions, as different templates are often used.

4. Transactions requiring approval

As a rule, the managing director's contract also contains provisions on transactions requiring approval that serve to control the managing director.

The shareholders often reserve the right to co-decision on important matters, such as:

• real estate purchase contracts
• license agreements
• loan agreements
• contracts whose value exceeds a certain amount

In cases where the consent of the shareholders is required, the managing director is obliged to obtain this approval. There are often established catalogues of transactions that require approval. These consent requirements are regulated not only in the managing director's contract, but also in the articles of association or the rules of procedure.

If the managing director violates the consent requirement, he risks extraordinary termination and may even be liable to pay damages to the GmbH.

5. Remuneration of the Managing Director and other benefits

In modern managing director contracts, remuneration often consists of a fixed salary and variable remuneration components (such as bonuses or royalties).

Fixed salary
First, the gross salary is determined either on a monthly or annual basis. In addition, lump-sum bonus payments or special payments, such as Christmas or holiday bonuses, can be agreed as part of the fixed salary.

Variable compensation
In the case of variable remuneration, a profit-related bonus is often agreed in order to create incentives for successful company management. In practice, remuneration arrangements based on sales and events (milestones) also occur. From the company's perspective, discretionary bonus arrangements that are at the company's discretion offer the greatest flexibility. However, these arrangements may not be very attractive for the managing director.

Other services: pension and insurance
The main additional benefits for the managing director include:

• subsidies for health and nursing care insurance
• subsidies for retirement provision
• taking out life insurance
• provision of D&O insurance
• company car, laptop, travel expenses, etc.

In addition, it is advisable to clearly define any additional services. These include, for example:

• Type of company car and its private use
• Private use of IT devices (laptop, mobile phone, tablet, etc.)
• Amount of reimbursement of travel expenses (1st/2nd class by train and plane)

What is the total compensation?
The amount of the individual remuneration components depends not only on the type and extent of the managing director's activities, but also on the size of the company and the earnings prospects, especially in the case of shareholder-managing directors. In addition, the amount of the managing director's remuneration has a direct impact on corporate and trade tax. The remuneration is considered a business expense for tax purposes and thus reduces the tax assessment basis.

The higher the total remuneration, the lower the corporate taxes. Pension systems that enable effective tax reduction therefore make sense for GmbH managing directors.

Attention to the shareholder-managing director
However, in the case of a managing director who is also a shareholder, care must be taken to ensure that both the fixed and variable remuneration as well as additional remuneration components are appropriate.

Inappropriate remuneration that does not stand up to arm's length comparison can lead to tax problems (such as hidden profit distribution). Particular attention should therefore be paid to tax optimization in the managing partner's employment contract.

In addition, the tax authorities have defined further conditions under which the remuneration of a shareholder-managing director is recognized as a business expense (e.g. ratio of fixed and variable remuneration, permissible reference values for royalties). The details of the remuneration arrangement in the employment contract should therefore be carefully designed.

Can the managing director also work for free?
It is not absolutely necessary to pay the managing director a salary. This is particularly often the case for shareholder-managing directors of startups. As long as the company is in the start-up phase and there are no financial resources yet, it can make sense not to burden the company unnecessarily.

Alternatively, a salary can be agreed and set in conjunction with a subordinated salary or a subordinated deferral, which will be paid later when the company's financial situation allows it.

6. Managing Director Liability, Liability Avoidance and Responsibilities

Managing directors are exposed to various liability risks that may arise from the company, the shareholders, the tax authorities, the social insurance providers, insolvency administrators and other third parties.

Background: Liability risks for managing directors
The areas in which liability risks can arise are very diverse. These include, among others:

• Business mistakes
• product responsibility
• taxes and social security contributions
• M&A transactions
• grants and subsidies
• environmental, competition and antitrust aspects
• Data protection and obligations to file for insolvency

In recent years, such liability cases have been pursued more and more consistently, often in court. This trend is due to a change in awareness among companies and the emergence of manager liability insurance.

Liability reduction in the managing director's contract
In order to reduce the risks of liability and claims – sometimes even to prevent them completely – the managing director can take preventive and strategic measures.

The classic measures for reducing and limiting liability include the contractual design of the managing director's contract, shareholder resolutions, the managing director's regulation and/or compliance systems.

In the managing director's employment contract, for example, the managing director's liability towards the company for negligent breaches of duty can be excluded, as long as the primary concern is not creditor protection.

Allocation of responsibilities in the managing director's contract
The clear definition of areas of responsibility is particularly important in a management team with several members in order to minimize liability risks.

It is sensible to clearly define the responsibilities of the managing director in the managing director's contract. Dividing the management into different areas enables a clear allocation of duties.

A list of particularly important transactions, which require the approval of at least two managing directors or the shareholders' meeting, limits the scope of action of an individual managing director. These are some of the instruments that enable the shareholders to control the managing director.

right to regular relief
The shareholders give their consent to the actions of the managing director in a specific financial year through the so-called discharge. This declaration of consent takes the form of a shareholders' resolution. However, the managing director has no legal right to such a resolution.

It is therefore common practice to agree in the managing director's contract that the managing director is entitled to regular discharge. This reduces his liability risk, as the shareholders should have recognized any breaches of duty.

taking out D&O insurance
The D&O insurance that is taken out for managers often covers the managing director's costs in the event of liability. If the company is willing to take out such insurance for the benefit of the managing director, this is usually recorded in the managing director's contract.

A (maximum) liability sum is often also specified, for which the insurance should be taken out. D&O insurance ensures that the managing director is not held liable with his private assets in the event of liability. D&O insurance is therefore one of the basic instruments for limiting liability for managing directors.

7. Fixed-term contract, notice period, extraordinary termination without notice & dismissal as well as severance pay

Another important point in the managing director's contract is the contract term. All parties involved should be aware that the contract term and the notice periods are generally freely negotiable.

Managing director employment contracts can be either fixed-term or permanent. In particular, contracts for external managing directors are often limited to two to five years.

It should be noted that even in fixed-term contracts, (ordinary) grounds for termination for early termination of the managing director's contract can be specified.

Ordinary termination
For permanent contracts, it is advisable to explicitly regulate the notice period. The point in time at which termination is possible (e.g. end of the month or end of a quarter) and the notice period to be observed (e.g. four weeks to the end of a month or six weeks to the end of a quarter) should be clearly defined.

If the notice period is not expressly regulated in the contract, a statutory notice period of four weeks initially applies to external managing directors. The question of whether and how this period will be increased has been unclear since a ruling by the Federal Labor Court in 2020. Since then, there has been disagreement in some parts of the case law. Therefore, a contractual regulation of the notice period in the managing director's contract is now essential in order to create legal certainty for all parties involved. A longer notice period offers more planning security, but makes it more difficult to terminate the contract early.

Extraordinary termination
Extraordinary termination for good cause cannot be excluded by the contracting parties; it is mandatory statutory law. Nevertheless, important reasons can be mutually agreed upon in the managing director's contract that entitle one of the parties to extraordinary termination.

Typical examples of such agreed extraordinary grounds for termination are change-of-control cases (i.e. significant changes in the shareholder structure) and violations of contractual non-competition clauses.

coupling clauses
In addition, many managing director employment contracts contain so-called linking clauses, which stipulate the automatic expiration of the contract if the managing director is removed from office or his office ends in another way.

Whether such clauses are effective must be assessed on a case-by-case basis. Case law has developed important guidelines for practice in this area.

Special attention should also be paid to regulations that stipulate that a shareholder-manager automatically loses his shareholder status when he leaves the management. Such agreements are not so easy to enforce legally, as case law has set strict limits.

For further information on the removal and termination of managing directors, see here: Removal, termination and resignation of the managing director of a GmbH.severance pay
When a managing director's contract is terminated, the managing director is not legally entitled to severance pay. If severance pay is to be paid, this must be expressly regulated in the managing director's contract.

8. Non-competition clause for managing directors

The members of the management of a GmbH have a special duty of loyalty to the company. This duty includes that they may not compete with the company. For the management of AGs, OHGs, KGs or KGaAs, this ban on competition arises directly from the law.

In addition, a managing director is generally prohibited from exploiting the company's business opportunities ("corporate opportunities") for his own benefit. Although this commitment to business opportunities is not explicitly stated in the law, it arises directly from the duty of loyalty under corporate law.

The specific scope of the non-competition clause and the business opportunity restriction is often difficult to determine in practice. This is particularly true for the post-contractual non-competition clause, which is also not enshrined in law. If a company intends to bind its managing director with a post-contractual non-competition or customer protection clause, it must meet certain legal requirements. Otherwise, there is a risk that the post-contractual protection will become ineffective and thus no longer effective.

9. Special features: Shareholder-Managing Director

It is particularly important for shareholder-managers to make the regulations regarding the performance and remuneration of the manager clear and unambiguous:

• An objectively “high” remuneration can justify the accusation of hidden profit distribution (vGA).
• This also applies to payments that are not expressly specified in the managing director's contract, such as reimbursement of travel expenses or the private use of a company car.
• Both the fixed and variable remuneration of the managing director must be clearly defined in advance. It is not permissible, for example, to quickly set a Christmas bonus shortly before the end of the year.

In addition, there are special tax considerations for shareholder-managers. It is often necessary to assess on a case-by-case basis whether a shareholder-manager is subject to social insurance contributions or not. Careful preparation and wording of the manager contract can help to save or minimize taxes.

10. Invalid managing director contracts and jurisdiction

The conclusion of a managing director's contract is generally the responsibility of the general meeting of shareholders, unless the articles of association of the GmbH provide for different provisions.

If the contract is not signed by the responsible body, it may be invalid. The Federal Court of Justice (BGH) has ruled that an invalid employment contract concluded by a GmbH managing director must be treated in accordance with the principles of faulty employment relationships. This means that the contract is considered valid for the duration of the managing director's activity, but can in principle be terminated at any time in the future and without any important reason.

However, the judges made it clear that an invalidly concluded employment contract can, in exceptional cases, be considered valid for the future if both parties have recognised this contract as the basis of their legal relationship for years and the company has strengthened the managing director's trust in the legal validity of the contract through further actions.

11. General Terms and Conditions Control: Consumer Protection for the Managing Director

According to the case law of the Federal Labor Court (BAG) and the prevailing opinion in the literature, the managing director of a GmbH can be considered a consumer within the meaning of Section 13 of the German Civil Code (BGB) when concluding his employment contract. This means that the managing director's employment contract is subject to general terms and conditions control.

The law on general terms and conditions includes a catalogue of requirements that must be observed for reasons of consumer protection. This includes the prohibition of unreasonable discrimination and the rule that ambiguous clauses, if they are effective at all, must be interpreted in the most favourable way for the consumer.

12. Legal expertise in the area of managing director contracts

Our highly qualified and specialized team of lawyers specializing in corporate law, labor law and tax law is available to answer all questions about the managing director's contract. We work closely with our tax advisors. The range of advice provided by our specialists includes in particular:

• Drafting and adapting managing director contracts
• Review and optimization of managing director contracts under corporate, tax, social security and labor law aspects
• Accompaniment, advice and support in contract negotiations on new and amended managing director contracts
• Termination of existing managing director contracts, in particular by termination
• Drafting and adapting rules of procedure for the management and coordinating these with managing director contracts and shareholders' agreements
• Dispute settlement, mediation or judicial enforcement of claims in connection with managing director employment contracts, including effective interim legal protection measures (e.g. interim injunctions)

For a non-binding inquiry, you can contact one of our contact persons directly by phone or email or use our contact form.

Our recommendations

The regulatory aspects presented in this document refer to general aspects of the managing director's contract that are relevant for almost every managing director. In addition, there are various regulatory mechanisms that vary depending on the industry, company size, business area and shareholder structure and must be adapted individually.

Managing directors, whether they are external directors or shareholder-directors, as well as shareholders and companies, should be aware that managing director contracts can be designed in a wide range of ways. At the same time, it is important to note that such contracts are often complex legal documents, the handling and application of which should be carefully considered.

This applies not only to the situation in which a new managing director contract is concluded, but also when appointing another managing director, adjusting an existing contract due to changed circumstances, changes in departmental responsibilities, restructuring or conversions, and terminating a managing director contract.

FAQs – Frequently Asked Questions

Der Beitrag Wesentliche Klauseln und Muster für Geschäftsführer einer GmbH erschien zuerst auf R&U.

Unlike in the Netherlands, employers in Germany are not required to provide a reason why employees cannot work from home. There is currently no legal regulation for this. Learn more about the current labor law framework for establishing home office arrangements here.

Right to work from home: Legal regulations and case law

• No general legal right to work from home.
• In certain cases, case law has recognized a right to work from home.
  • According to Section 164 Paragraph 1 of the Social Code Book IX, severely disabled people have the right to suitable employment.
  • The Lower Saxony State Labor Court has concluded that groups in particular need of protection may have the right to work from home.
    • Example: Paraplegic employee (LAG Lower Saxony, judgment of December 6, 2010, case number 12 Sa 860/10).

Home office by work instruction: Legal basis and limits

• Employers cannot unilaterally instruct employees to work from home.
• According to Section 106 of the German Trade Regulation Act (GewO), the employer may determine the place of work at his or her reasonable discretion, however:
  • This right to give instructions ends when the employee’s fundamental rights are affected.
  • The private sphere is particularly affected, as the home is part of this area.
• Transferring employees to work from home by order is not permitted.
• If an employee disobeys such an instruction, this cannot serve as a basis for effective dismissal.
  • Example: The Berlin-Brandenburg Regional Labor Court ruled on October 10, 2018 (case no. 17 Sa 562/18) that termination is invalid if the employee refuses to work from home after the company closes.
  • The court found that there was no persistent refusal to work.

Working from home: mutual agreements and regulations

• Working Hours Act (ArbZG):
  • The Working Hours Act also applies to home offices.
  • Employees must comply with the following regulations:
    • Maximum working hours
    • Rest breaks and rest periods
    • Prohibition of work on Sundays and public holidays
  • Employers should draw attention to these regulations and implement a time recording model.

• Occupational safety:
  • The employer must ensure that occupational health and safety measures are also guaranteed in the home office.
  • Required steps:
    • Determination of necessary occupational safety measures
    • Carrying out a risk assessment
  • Although there is no obligation to monitor the home office workplace, detailed interviews and appropriate training are required.
  • Occupational health care (ArbMedVV) must also be observed.

• Data protection:
  • High requirements for data security and IT infrastructure must be met in the home office.
  • Employers must take appropriate data protection measures and ensure that employees comply with data protection regulations.
  • Important measures:
    • Use of VPN connections
    • Secure storage of data via company servers

• Co-determination in mobile work (Section 87 (1) No. 14 BetrVG):
  • The Works Council Modernization Act regulates the co-determination of works councils in mobile work.
  • Aspects of co-determination:
    • Regulations regarding the time scope of work
    • Start and end of daily working hours
    • Place of work, attendance requirements and accessibility
    • Security aspects
  • However, the decision as to whether mobile work is permitted remains with the employer.

• Accident insurance cover in the home office (Section 8 SGB VII):
  • Statutory accident insurance coverage for home office workers has been expanded.
  • Accidents that are directly related to work are insured.
  • This also includes travel to childcare outside the home.
  • Insurance coverage was extended in the same way as for work in the company.

Do you need employment law assistance in establishing a home office agreement?
Our employment law attorneys are happy to help you!

Termination of the home office agreement through transfer: Important regulations and considerations

It is advisable to include a clause regarding the relocation of the workplace in a home office agreement. This provision gives the employer the option of permanently transferring the employee back to the office within the scope of their right to issue instructions. This may be necessary, especially if working from home does not produce the desired results or if certain circumstances require on-site attendance.

However, the order to return must be made within the scope of reasonable discretion. This requires a careful balancing of the interests of both employer and employee. The principles of proportionality, appropriateness, custom, and reasonableness must be taken into account (Federal Labor Court, decision of June 14, 2017, Ref. No. 10 AZR 330/16).

Termination of the home office agreement by revocation

It is possible to include a revocation clause in the home office agreement. However, whether the reasons for the revocation must be stated in the agreement has not yet been conclusively clarified. The Düsseldorf Regional Labor Court (LAG) has ruled that an unlimited and unconditional revocation option in pre-formulated contractual terms and conditions unreasonably disadvantages the employee and is therefore invalid (LAG Düsseldorf, judgment of September 10, 2014, case number 12 Sa 505/14). The court emphasized that in a unilateral order to change the place of work, the employee's interests must be appropriately considered.

Involvement of the works council in home office

The decision to introduce home office within the company rests with the employer. However, a change of workplace may be considered a transfer within the meaning of Section 95 (3) of the Works Constitution Act (BetrVG). In such a case, the consent of the works council is required in accordance with Section 99 (1) of the Works Constitution Act.

Der Beitrag Vereinbarung Homeoffice erschien zuerst auf R&U.

On January 23, 2024, the Hamm Regional Labor Court issued a groundbreaking ruling (case no. 6 Sa 1030/23) regarding the continued provision of a company car for private use. This case decided whether an employee is still entitled to use their company car for private purposes. This decision could have far-reaching implications for similar cases in labor law.

Facts: Dispute over the provision of a company car for private use

The present proceedings concerned the provision of a company car, which was also intended for private use. The plaintiff, who has been employed by the defendant since February 1, 2009, most recently earned a gross annual salary of approximately €130,000, including a non-cash benefit of €1,119 gross per month. In 2015, the parties signed an employment contract that appointed the plaintiff as a sales manager in the marketing and sales department. The contract did not contain any specific provisions regarding the provision of the company car, but a supplementary agreement provided the plaintiff with a function-specific company car.

In 2021, the contract was amended when the plaintiff assumed the position of Area Sales Manager in July. This agreement stipulated that he could be granted a function-related company car, provided company policies permitted it. Upon termination of employment, this entitlement would cease, and the defendant reserved the right to reclaim the company car for objective reasons.

Since February 2023, the plaintiff has worked as a sales partner manager for individual customers without any contract changes. The company car continued to be made available to him. During an inspection in March 2023, the defendant determined that the plaintiff did not meet the required business absence requirement of more than 50 days. The defendant then demanded that he return the company car by December 31, 2023, at the latest. The plaintiff filed a lawsuit to enforce the provision of the company car for private use beyond December 31, 2023.

Reasons for the decision in the legal dispute concerning the provision of a company car for private use

The Hamm Regional Labor Court (LAG Hamm) ruled in favor of the plaintiff, requiring the defendant to provide him with a company car for private use beyond December 31, 2023. While the Dortmund Labor Court dismissed the claim, the Hamm Regional Labor Court recognized the plaintiff's claim as not extinguished. The provision of a company car for private use is considered remuneration and is therefore owed as long as the employer is obligated to pay remuneration.

A claim to a company car could only be lost through a validly agreed condition subsequent or a valid right of revocation. The Higher Labor Court (LAG) in Hamm determined that the plaintiff's claim had not expired due to a condition subsequent pursuant to Section 158 (2) of the German Civil Code (BGB). The relevant clause regarding "permanently high mobility" was non-transparent and therefore ineffective. It remained unclear under which circumstances "permanently high mobility" is not present, how the 50% quota of working days is calculated, and which trips should be taken into account.

The court also deemed the cancellation clause invalid. This allowed the defendant to reclaim the company car for reasons that were unreasonable for the plaintiff. Although the employer has a legitimate interest in flexibility, the economic risk cannot be shifted onto the employees. The clause permitted cancellation for organizational reasons, such as changes to contractual duties. However, not every change in job duties justifies the withdrawal of use of the company car.

In addition, the defendant failed to comply with the contractually stipulated two-year review period. Therefore, the Hamm Labor Court ruled in favor of the plaintiff and confirmed his right to the company car for private use as well.

Practical tips: Company car provision for private use

Contractual arrangements regarding the provision of company cars, including for private use, are frequently the subject of labor court disputes. The Hamm Higher Labor Court ruling demonstrates that cancellation clauses must meet strict requirements for effectiveness. Employers should therefore exercise particular care when drafting such clauses.

It is advisable to agree on a right of revocation in connection with the provision of a company car for private use. In doing so, it should be ensured that the employer's legitimate interest in being able to revoke the provision of the company car during the ongoing employment relationship is clearly and legally soundly formulated. The contractual provisions must comply with the requirements of general terms and conditions law.

The trend in labor courts shows that the provisions of Sections 305 et seq. of the German Civil Code (BGB), in particular the transparency requirement (Section 307 (1) sentence 2 BGB), continue to be strictly applied. Employers should therefore ensure transparency and clarity in their contractual clauses to avoid legal conflicts.

Disputing with your employer over the use of a company car? Our employment law attorneys are happy to assist you!

Der Beitrag Rechtsstreit um den Entzug eines Dienstwagens auch zur Privatnutzung erschien zuerst auf R&U.

Expectant parents often have numerous questions about maternity protection and parental leave. There is often a lack of clarity about the differences between these two concepts. There is also often uncertainty about the legal provisions and their practical application. It is therefore particularly important to obtain comprehensive information and to always be aware of the current legal regulations.

Simply explained: The difference between maternity protection and parental leave

In order to better understand the differences between maternity protection and parental leave, it is useful to consider the two terms separately. Maternity protection only concerns the expectant mother. In the period before and after the birth, she is entitled to special rights that are laid down in the Maternity Protection Act. These regulations are aimed in particular at protecting the mother and her working conditions during this time.

Der Beitrag Wie Elternzeit und Mutterschaft zusammenhängen erschien zuerst auf R&U.

Claiming vacation entitlements after 3 years

In a recent ruling (Judgment of 22.09.2022 – C-518/20 C-727/20) The European Court of Justice (ECJ) has determined that holiday entitlements do not have a three-year limitation period. This means that old holiday entitlements that could not be taken for health reasons, for example, can still be claimed even after several years and must be paid out to the employee.

In this specific case, an employee who was already receiving a pension due to a severe disability filed a lawsuit against Fraport. During his employment, he had been unable to take 34 days of annual leave due to his health condition.

No expiration of holiday entitlements: still valid 3 years later

Fraport argued that the employee’s holiday entitlement expired after the expiry of the § 7 III Federal Vacation Act (BurlG) The Federal Labor Court (BAG), however, questioned whether this regulation complies with European directives.

The ECJ ruled that holiday entitlements must be settled once they have arisen, regardless of the three-year limitation period common in Germany.

If you were unable to work in the past due to health reasons or pregnancy and therefore could not take your holiday, you are entitled to compensation for these holiday entitlements. We recommend: Have your claims reviewed by our team of lawyers, Sinan Böcek and Burcu Gülcan, who specialize in employment law.

The labor law expert at R&U Sinan Böcek answers your questions:

Am I entitled to vacation, wif I was sick all year?

The clear answer is: YES! According to the case law of the Federal Labor Court (BAG), the right to vacation does not depend on the employee's state of health. This also applies if the employee is ill all year round. In this case, however, special aspects must be taken into account, which should be examined by a lawyer beforehand.

Can remaining vacation days be cancelled?

No! The remaining vacation days may not be cancelled unilaterally by the employer. The employer must give the employee the opportunity to use the remaining vacation days in the same year, but no later than March 31 of the following year. If the employer does not grant this remaining vacation days, this vacation entitlement does not expire even after three years.

When does unused vacation time expire?

According to a recent ruling by the European Court of Justice (ECJ), the remaining vacation days do not expire! Therefore, it is possible to compensate for vacation days even if employment relationships have already ended, i.e. to get them paid out.

Can I get paid out for vacation days I didn't take?

It depends on whether the employment relationship has not been terminated. If the employment relationship continues, the employer must grant the holiday entitlement through paid leave. If the holiday entitlement no longer exists, the employee is entitled to a replacement holiday. The replacement holiday entitlement is intended to ensure that the holiday entitlement that no longer exists continues. This should take place under the conditions of the Federal Holiday Act (BUrlG) - i.e. paid leave instead of compensation in cash. If the employment relationship has ended, however, the only option is to compensate for these entitlements in cash.

Can remaining vacation last beyond 31.03. transferred beyond?

In Germany, there is no legal regulation that states that remaining vacation must be taken by March 31 of the following year. According to § 7 Federal Vacation Act (BUrlG) an employee is entitled to paid holiday and it is the employer's responsibility to ensure that the employee has the opportunity to take the holiday. It is therefore possible that remaining holiday can be carried over beyond 31 March, as long as it is agreed between the employer and the employee.

Does the employer have to inform about remaining vacation days and if so, when?

The employer has a duty to inform and cooperate in this regard. If the employer fails to comply with this duty, the remaining holiday entitlement can be carried over into the following year. The employer should therefore regularly inform employees that they still have holiday entitlement left and that they should take it before it expires. A good time to do this could be shortly before the end of the calendar year, for example.

Can the employer refuse to grant the remaining vacation days after termination?

After termination and termination of the employment relationship, it is possible to compensate for the vacation in cash. Those affected should therefore contact us and have us check their entitlement. It is therefore not permissible for an employer to refuse the remaining vacation just because termination has been announced. However, it is permissible for the employer to pay the remaining vacation in the form of time off in lieu or in cash when the notice period has expired, unless something else is agreed in your employment contract or collective agreement.

Do you have any questions about employment law? Then please contact our team of expert lawyers. We will provide you with legal advice that is sound and reliable – by phone or email.

Der Beitrag Bezahlter Jahresurlaub – kein Verfall von Urlaubsansprüchen erschien zuerst auf R&U.

On the other hand, many companies are currently facing cost-cutting measures. The main reason for this – in light of the looming recession in industrialized and emerging markets – is a decline in German exports, which will be reflected in Germany's overall economic output. In addition, the increasing automation of work processes is leading to a growing redundancy of work performed by employees.

Against this background, many employees are confronted with unjustified disputes or warnings that lead to negative entries in their personnel files without the employee being given the opportunity to explain their point of view.

Disputes with the employer – what should be done?

At a Termination There are often many unanswered questions for employees due to employers.

I'm still in my probationary period and was terminated by my employer without cause. Can I successfully appeal this termination, or is there no point?

Contrary to popular belief – even among lawyers, who only deal with labor law marginally – employees are not subject to the mere arbitrary decisions of their superiors. Special protection against dismissal for pregnant women or severely disabled people also begins upon signing the employment contract. However, this requires that the human resources department or employer is aware of the severe disability or pregnancy. If a works council or staff council exists, these bodies must be consulted before a dismissal is announced. When dismissing a severely disabled person, prior approval from the Integration Office must be obtained. Legal representation is recommended in such proceedings, because once the Integration Office's approval has been granted, it can only be challenged in court.

I fear serious consequences if I sue my employer. What can I do in this case? 

You don't always have to sue your employer! There are several labor law tools available that can achieve significant success in out-of-court disputes between superiors and employees. The situation is different for all types of dismissals, such as dismissals with a change of terms or dismissals based on suspicion on the part of the employer. In cases of this kind, legal action is necessary for reasons of effective legal protection.

Rogert & Ulbrich recommends that employees take immediate action

Do you feel unfairly treated? You don't have to let it go! We offer you a professional and free initial consultation. You send us all necessary documents (Employment contract, possible amendments, termination, payroll) and we will prepare for you within 24 hours a draft lawsuit and an out-of-court dismissal letter to your employer.

If you do not have employment law legal protection insurance There is the possibility of a mandate with self-payment. In labor law, the Cost issue The principle: Each party bears its own costs in first instance proceedings, even if it wins.  

Also the possibility legal aid Applying for legal aid is provided for in labor law. If you are unsure whether you are eligible to apply for legal aid, we would be happy to advise you on this matter.

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Der Beitrag Schutz von Arbeitnehmenden am Arbeitsplatz erschien zuerst auf R&U.