The run-up to Christmas is the best part of the year. For many, this is the time to reflect on the year gone by. The time for reflection and acknowledgements has come, not only at home but also among colleagues in the workplace. There are many reasons to be joyful – be it the office Christmas party, the receipt of a gift or the payment of a Christmas bonus. There are, however, some legal pitfalls in terms of employment law in this context that might dampen the festive spirit.
Voluntary Christmas bonus
Disputes regarding the payment of a Christmas bonus are easily one of the classic issues in employment case-law. Employers often use the payment of a Christmas bonus as a way to say thank you without, however, wanting to set a precedent for any future payments. In order to remain as flexible as possible, many employment contracts contain reservations as to the voluntary nature of such payment, which are aimed at ruling out what is known as “company practice” (betriebliche Übung). This is because a payment claim not only arises under a corresponding provision in the employment contract, but might arise simply by the employer – through repeated, similar conduct – causing the employee to legitimately rely on the fact that he or she will continue to receive such payment. If a claim has arisen by way of “company practice”, the employer may not simply discontinue the payment but is committed to continue making it in the future.
The legal obstacles for the valid implementation of a reservation as to the voluntary nature of such bonus are now so high, however, that only very few provisions will pass legal scrutiny in practice. The establishment of a “company practice” may not be prevented by including such provisions.
In addition, the Federal Labour Court (Bundesarbeitsgericht) has considerably relaxed the requirements which must be met for a “company practice” to exist. Until now, it was required for the employee to have received at least three voluntary payments of the same amount. Now it suffices if the employer makes several payments – including payments of varying amounts. If, for instance, the employer pays a Christmas bonus of 100 euros in 2012 and 150 euros and 200 euros in the following years, such conduct now amounts to a “company practice”. In this case the employee is entitled to claim payment of a Christmas bonus for 2015; the amount, however, is at the employer’s discretion and may be set at a different level each year.
The missed Christmas gift
The office Christmas party – one man’s joy is another man’s sorrow. There is generally no obligation to attend. Sometimes employers reward attendance of the Christmas party by making small gifts. In such cases the employee might end up regretting not having gone. Cologne Labour Court had to rule on whether an employee who had not attended the office Christmas party still had a right to receive an iPad mini which was handed out as a gift during the office party (value: approx. 400 euros). The court denied such right. Attending the Christmas party is not mandatory but constitutes a voluntary commitment outside normal working time. If the employer decides to make office celebrations more attractive by distributing gifts, the court argued that this justifies treating employees differently. According to the court, only employees who had attended the Christmas party had the right to claim the gift. A further reason to consider carefully whether or not to reject an invitation to the Christmas party.
The boozy Christmas party
Even if the Christmas party is not held in the office, one must not forget that it constitues a business event. The relaxed atmosphere makes some colleagues temporarily forget how to behave appropriately towards colleagues and superiors. This might have consequences under employment law because, as a general rule, the same rules of behaviour as in the office apply in relation to the Christmas party, i.e. there must be no offensive or violent behaviour. Neither the festive spirit nor the consumption of alcohol constitute carte blanche for inappropriate offensive behaviour and harassment of any kind and, as such, regularly does not justify such misconduct. That is why it is important to adapt one’s own behaviour at the Christmas party accordingly to avoid the New Year starting with a warning or even a dismissal.
We hope that you will successfully avoid the aforementioned stumbling blocks and that you and your employees enjoy a lovely run-up to Christmas. We wish you a good start to the New Year and look forward to continue bringing you news of recent interesting developments in the field of employment law.