Is it possible to agree on an effective revocation proviso?

Facts of the Case

The claimant is employed by the defendant as an educational assistant. In order to relive the workload of another employee, the defendant has assigned the claimant higher-ranking regional management assistant activities. At the same time the defendant informed the claimant in a letter as follows: 

„Dear Mr. B.,

as of 1 October 2019 and until revocation you will receive a monthly functional allowance of EUR 294.00 for taking over regional manager assistance tasks. (…)”

When the position of the underperforming employee was filled by a suitable successor (who was also able to take over the regional manager assistance activities again), these additional activities of the claimant ceased. Negotiations on the continuation of additional activities by the claimant and thus the continued payment of the related functional allowance were unsuccessful, so that the defendant revoked the payment of the functional allowance. Thereupon, the claimant has filed a claim with the Labour Court and demanded the continuation of the payment of the functional allowance. The claim was dismissed by the Labour Court and the Reginal Labour Court has also dismissed the claimant’s appeal.

The Reasoning of the Court

The Reginal Labour Court has ruled, that the defendant has effectively revoked the allowance. The defendant was able to legally instruct the claimant to temporarily take on higher-ranking activities. There are also no fundamental objections to the admissibility of a temporary assignment of higher-ranked activities by way of instruction. The assignment of higher-ranked activities until revocation also withstands an examination of the general terms and conditions (“GTC control”), so that the revocation is effective. However, as a consequence of the effective revocation the claimant was also no longer entitled to the continued payment of the functional allowance. According to the Regional Labour Court, the overall context of the case shows that both the assignment of the higher-ranked activities and the associated functional allowance were subject to revocation. It must have been clear to the claimant that the functional allowance would only be paid for as long as the higher-ranking activities were assigned to him. The payment of a higher remuneration was linked to the performance of another activity. This in itself is not fundamentally intransparent. Also, it is not necessary to include specific reasons for the revocation in the agreement. The temporary assignment of higher-ranking activities corresponds to a short-term need of personnel planning and therefore was also not unreasonable. Finally, the Reginal Labour Court stated that an entitlement to the payment of the payment of the allowance did not arise from the employment contract either (Sec. 611 a (2) German Civil Code (BGB), since no amendment agreement had been concluded between the claimant and the defendant employer regarding the assignment of the reginal manager assistance activities.

Conclusion and Practical Advice

It is in the employer’s interest to be able to react quickly when temporary replacements are necessary. In this respect, the employer has various options to choose from. Depending on the individual case, the (purpose) limited employment of a substitute, a change of work duties by exercising the right of direction, an amicable change of work activities (change of contract) or a notice of termination of employment are to be considered.

The ruling of the Regional Labour Court Hessen shows that employers can also react quickly to a temporary need for replacement with an “effective” revocation provisio and can ensure that a “higher-quality employment relationship”, which is then protected as a going concern, is not permanently established. However, it remains to be seen whether this recommendation can be upheld in the long term.

The claimant in the case at hand has filed an appeal under the reference no. 10 AZR 192/22 at the Federal Labour Court. We will keep you informed on the outcome.