Fulfilment of the statutory minimum wage.

 Minimum wage is always the lower limit for holiday pay and night work premium Federal Labour Court, judgment of 20.09.2017 – 10 AZR 171/16.

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Erfüllung des gesetzlichen Mindestlohns

The plaintiff has been working as an assembler for the defendant employer for over 20 years. The employment relationship is governed by the MTV (Manteltarifvertrag für die gewerblichen Arbeitnehmer der Sächsischen Metall- und Elektroindustrie i.d.F vom 24.02.2002; Collective wage agreement for industrial employees of the Saxon metal and electrical industry in the version dated 24.02.2002). The MTV provides for, inter alia, a night work premium in the amount of 25% of the actual hourly earnings (§ 6 MTV) and “holiday pay” in the amount of 1.5 times the average earnings per employee (§ 25 MTV).

For the month of January 2015, the defendant paid a “MiLoG bonus” (Mindestlohngesetz; Minimum wage legislation) in addition to the contractual hourly earnings of 7.00 euros, respectively 7.15 euros. She calculated the remuneration for one public holiday and one day off, as well as the night work premium for five hours, not based on minimum wage but rather in accordance with the lower contractually-agreed hourly remuneration. Moreover, she debited a paid “holiday bonus” from the plaintiff’s minimum wage entitlements.

The plaintiff filed an action for payment in order to compensate all hours of work, days off and public holidays billed in January 2015 on the basis of the minimum gross wage of (at the time) 8.50 euros per hour (since 2017, 8.84 euros per hour). She also claimed that the night work premium should be calculated based on minimum wage.

Since both the Labour Court and the Regional Labour Court (Saxony, Germany, judgment of 27.01.2016 – 2 Sa 375/15) allowed the claim, the defendant’s appeal – with the exception of a small arithmetical difference – was unsuccessful.

As a justification, the Federal Labour Court – in the only press release currently available – stated that although the MiLoG only grants entitlements for hours actually worked, according to § 2 para. 1 EFZG (Entgeltfortzahlungsgesetz; Act on continued payment of remuneration), the employer must pay the employee for working hours that are cancelled due to a public holiday. The remuneration must cover what the employee would have earned without the loss of working hours (Entgeltausfallprinzip; loss of earnings principle). This also applies if the amount of the remuneration is determined in accordance with the MiLoG; there are no derogations. Recourse to a contractually lower remuneration is not possible. According to the provisions of the MTV, the agreed night work premium and holiday pay must also be calculated (at least) on the basis of the statutory minimum wage of (at that time) 8.50 euros. This is in fact part of the “actual hourly earnings” within the meaning of the MTV. A crediting of the paid “holiday bonus” to entitlements under the MiLoG is inadmissible, since the MTV has an independent entitlement to this and it is not remuneration for hours worked.

Recommendation for practice:

The Federal Labour Court’s ruling is to be welcomed in the interest of clarity and legal certainty; it effectively strengthens the rights of shift workers. This ruling constitutes a leading case on legal minimum wage. It has already been decided that, in principle, all of the employer’s cash benefits in the synallagmatic contract are to be charged against the statutory minimum wage – with the exception of payments made by the employer irrespective of actual work performance or that are based on a special statutory purpose (Federal Labour Court, judgment of 25.05.2016 – 6 AZR 135/16 on the imputation of special payments such as holiday and Christmas bonuses; Federal Labour Court, judgment of 29.06.2016 – 5 AZR 716/15 on the compensation of on-call time with the statutory minimum wage). It is therefore in the employer’s own interest to take this case law into account.