A large number of employment contracts contain the promise of a bonus. However, this is usually subject to a repayment clause in the event that the employee leaves within a certain period of time after payment. In principle, such repayment provisos are permissible. They must be unambiguously formulated and made known to the employee at the latest when the bonus is paid. The frequently encountered formulation that there is no legal claim to the bonus does not in itself contain an obligation to repay it. Similarly, a notice on the bulletin board stating that the Christmas bonus is to be repaid if the employee leaves the company before March 31 of the following year is not effective.
The Federal Labor Court has developed legal principles for individual contractual repayment provisos for a Christmas bonus, which always apply unless special circumstances in an individual case require a different assessment. The amount of the bonus granted is always decisive for the period during which the employee is bound.
Bonuses of up to 200.00 DM (now 102.26 EUR) cannot be reclaimed. Repayment provisos with a corresponding content are invalid.
Bonuses that exceed the aforementioned amount but are less than one month's salary make it possible to retain the employee until March 31 of the following year. If the employment relationship ends before March 31, the employee must repay the bonus.
If the repayment clause in this case also stipulates the repayment of the bonus if the employee leaves on 31 March or later, it is invalid to that extent. Only a previous departure can justify a repayment obligation.
If the gratuity is paid in the amount of a full monthly salary, the employee may be bound beyond March 31. If the employee only has a termination option by that date, it is reasonable to expect them to leave the company after March 31. However, an extension beyond June 30 is not permitted.
If a bonus is paid that is less than two monthly salaries, a repayment clause cannot be used to tie the employee to the company beyond June 30 of the following year if the employee had several opportunities to resign.
If the employee only started work during the course of the year and does not receive a full monthly salary as a Christmas bonus, the amount actually paid out should be used as the basis for calculating the retention period.
The employer, on the other hand, is not always entitled to reclaim the bonus paid when the employee leaves. The repayment obligation only comes into effect if the employee gives notice within the permissible notice period, gives notice without good cause, or the employer gives notice with good cause or with notice for an important reason.
The employee is also not obliged to make a repayment if he justifiably terminates the contract with immediate effect. However, if the termination is due to operational reasons, the repayment clause in the individual contract is effective. The employee is then obliged to make a repayment.
If repayment clauses are agreed in individual contracts that do not comply with the principles developed by case law, they are null and void. However, the bonus promise is not affected by this. Only the excessively long commitment is void. If the employee does not comply with the commitment period, he must repay the (gross) bonus without being left with a basic amount of DM 200.00 (EUR 102.26).
Collective agreements can also contain repayment clauses for bonuses. Since the legal principles developed by case law regarding repayment clauses are subject to the collective agreement, the agreement may also be deviated from to the detriment of the employees.
The additional vacation pay often paid in the form of a gratuity (also vacation bonus) can also be granted subject to a repayment proviso. The repayment clauses agreed there are subject to the same restrictions as for a Christmas bonus. If, for example, an employee receives a vacation bonus exceeding DM 200.00 but less than one month's salary at the end of May or in June, the employee may be bound until September 30.
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.