Germany Update: Crediting of other earnings in the event of irrevocable exemption

The question of crediting other earnings in the event of irrevocable leave of absence of the employee often occurs in practice. Such a case was also the basis of the judgment of the BAG of 23 February 2021 (Az.: 5 AZR 314/20).

Circumstance

The plaintiff was last employed by the defendant as a personnel manager. The parties concluded a termination agreement in September 2018, according to which the employment relationship was to end on 30 April 2019. In addition, the plaintiff was irrevocably released from work until the end of the contract, with continued payment of his previous monthly remuneration. In addition, the parties agreed that the plaintiff can leave the employment relationship with a notice period of three working days before 30 April 2019 and in this case part of the remaining salary is to be paid to him as severance pay (so-called “sprinter clause”). In January, the plaintiff then – without making use of the sprinter clause – took up an activity with another employer. As a result, the defendant ceased to pay the monthly remuneration. With his lawsuit, the plaintiff asserts compensation claims for the months of January to April 2019. The lower courts essentially upheld the action.

The decision of the BAG

On the other hand, following the defendant’s appeal on a point of law, the BAG annulled the second-instance judgment and referred the case back to the LAG Hamm for hearing. In the present case, the plaintiff must have the other earnings credited to the continued payment of his monthly remuneration.

First of all, the BAG found that the defendant was not in default of acceptance during the period of exemption and thus no crediting of the other earnings according to § 615 S.2 BGB took place. That follows from the fact that the plaintiff is no longer obliged to perform his work as a result of his irrevocable leave of absence. Nor did the termination agreement concluded between the parties contain an express agreement on a reservation of imputation. In this case, however, the employer’s power of credit may also result from a supplementary interpretation of the contract. In the opinion of the BAG, this should in principle be interpreted in accordance with the interests of the contracting parties in such a way that there is a power of credit in favour of the defendant. As justification, the court refers to the agreement of the so-called sprinter clause. This amounts to a special right of dismissal on the part of the plaintiff, which only makes sense if the plaintiff wishes to take up a new activity during the existing employment relationship. It follows that the other earnings must be taken into account, because without the defendant’s power of credit, the plaintiff would have remuneration claims against both the defendant and the new employer. However, such an interpretation would not be in line with the interests. In the opinion of the BAG, the sprinter clause therefore shows that the commencement of another activity during the exemption period should not lead to the plaintiff being remunerated twice as a result.

Importance for practice

A crediting of other earnings can also result implicitly through supplementary interpretation of the contract. This applies in particular in the event that the termination agreement contains a “sprinter clause”. In order to avoid uncertainty, however, it is advisable not to let it get that far and to provide for a clear provision in the termination agreement for the crediting of other earnings.

By Dominik Gallini, MELCHERS, Germany, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact germany@transatlanticlaw.com

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