If an employee is ill and unable to work for a period that exceeds six weeks, differences often arise regarding the payment of a 13th month's salary in such a way that it has to be reduced or paid in full.
First of all, a distinction must be made as to whether the 13th month's salary is a remuneration component or a bonus. The 13th month's salary is a remuneration component if it is integrated into the contractual exchange relationship between remuneration and work performance and no further purpose is pursued with it. A gratuity, on the other hand, is promised for a specific reason. While the gratuity is characterized by the fact that it is paid by the employer as recognitionfor services rendered and as an incentive for further services from the employer, and thus lacks the characteristic of a performance-related special payment, it is typical for the 13th month's salary to be a remuneration for work performed and for there to be no further purpose.
A prerequisite for a reduction is that the agreed 13th monthly salary is a remuneration component that is integrated into the contractual exchange relationship between remuneration and work performance and that no further purpose is pursued with it.
What the parties wanted to agree must be decided by interpreting the commitment. The designation of the special allowance alone is not decisive for this. If the sole intention is to reward proven loyalty to the company, this is usually expressed by the fact that the entitlement only arises if the employee has belonged to the company for a certain period of time within the reference period and is still an employee on a certain key date. If future loyalty to the company is also to be rewarded, this is usually ensured by the employee not having been dismissed at the end of the reference period or by them still being employed by the company at a certain date in the following year after the reference period. If payment is promised without further conditions of entitlement being specified, it is to be assumed in case of doubt that the sole purpose is to provide additional remuneration for work performed within the reference period.
If the interpretation of the employment contract shows that the 13th month's salary is a remuneration component that is part of the consideration for the employee's work, i.e. that it is integrated into the contractual exchange relationship between remuneration and work performance and that no further purpose is pursued with it, the entitlement to payment in the event of illness is limited. The employer may always reduce the 13th month's salary if the employee is unable to work due to illness and this illness exceeds a period of six weeks and therefore an entitlement to continued payment of remuneration to be fulfilled by the employer no longer exists. The Federal Labor Court (judgment of 03/21/01 – 10 AZR 28/00) justifies this by stating that work-related special payments without actual work performance are only to be paid if the continued payment of remuneration is to be paid due to legal, collective bargaining or other regulations. However, since the continued payment of remuneration after a period of six weeks no longer applies in the event of incapacity to work due to illness, and thus the obligation to work and to pay remuneration also no longer applies, the claim to work-related special payments in the form of a 13th monthly salary is to be denied.
The employer is therefore entitled to reduce the 13th month's salary for periods in which there is no longer an entitlement to continued payment of remuneration in the event of incapacity to work due to illness. An explicit agreement to reduce the salary in the employment contract is not required for this.
The reduction of the 13th month's salary occurs by operation of law. If the employee is unable to fulfill his or her work performance obligation due to illness-related incapacity for work, he or she loses the claim to the work performance-related special payment. In the event of partial impossibility, the consideration is reduced proportionately.
The statements represent initial information that was current for the law applicable in Germany at the time of initial publication. The legal situation may have changed since then. Furthermore, the information provided cannot replace individual advice on a specific matter. Please contact us for this purpose.