Forfeiture clauses ineffective if minimum wage claims not excluded

Forfeiture clauses in standard employment contracts are invalid if they do not sufficiently differentiate which claims are covered.

Employment contracts very often contain so-called forfeiture or exclusion clauses. They specify a deadline within which employees must assert their claims against the employer after termination of the employment relationship. If this deadline is missed, claims lapse. However, this only applies if the corresponding agreement is effective.
The Federal Labour Court has now decided that such clauses are invalid as a whole if they do not differentiate sufficiently between which claims are to be covered by them and which are not. In particular, it must be taken into account that § 3 (1) of the Minimum Wage Act prohibits any agreements which fall short of the claim to the minimum wage or which restrict or exclude its assertion. Expiry clauses must therefore explicitly exclude claims to payment of the minimum wage from their own scope of application. Otherwise, the forfeiture clause is invalid in its entirety.
In the specific case, the affected employee could still assert his claims for holiday compensation due to the invalidity of the clause, although he had actually missed the contractually agreed deadline for doing so.

Source: Federal Labour Court, decision of 18.09.2018, Ref. 9 AZR 162/18


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