Monthly Dose of Germany

Effectiveness of Hypotax Agreements between Employer and Employee

An individual contract which states that a fictitiously calculated wage tax may be withheld by the employer if the employee is sent abroad may violate Section 4 (3) TVG and thus be invalid if the agreement deviates from the collective agreement to the disadvantage of the employee and if the collective agreement does not contain an opening clause permitting the deviation.

The German employer cannot refer to an agreement with the posted employee which allows him to withhold a fictitiously calculated wage tax in Germany because the employee is liable for tax in the host country and the employer bears the employee's lower tax liability there. This violates Sec. 4 (3) TVG and in particular cannot be justified by a comparison of favorability.

Adjustment (check) of pension benefits according to Section 16 BetrAVG 2022/2023

Renaissance of the net wage adjustment in the current inflation environment?!

The current economic framework conditions and above all the current inflation trend also have a material impact on the adjustment of pension benefits from commitments to company pension schemes (Zusagen der betrieblichen Altersvorsorgung, "bAV" commitments) in accordance with Section 16 BetrAVG. Employers who - when the economic situation permitted - have in the past adjusted pensions in line with the development of the consumer price index (CPI, Section 16 (2) no. 1 BetrAVG) are already facing considerable additional expense in the current financial year in view of an inflation rate of most recently 10.4% if the adjustment continues unchanged. Against this background, it may be worthwhile in individual cases to use the alternative structural design options under the BetrAVG to carry out the pension adjustment (check). This Client Alert discusses the specific structural design options.

Buy Now Pay Later – Contractual and regulatory legal framework

Buy Now Pay Later (BNPL), the fast and easy financing of online shopping for consumers, is making headlines. This form of consumer finance is now a completely common service offered by internet merchants. At the same time, concern is growing that these offers are resulting in excessive debt among - especially young - consumers. Therefore, it is worth taking a look at the legal framework for BNPL. All the more so as the European Commission seeks tighter rules for it in the interest of consumer protection.

Recent labour law decisions on company pension schemes

Legal framework and restrictions in practice

In our current overview of labour law judgments, we discuss two judgments of the German Federal Labour Court on the tariff-dispositivity of the statutory provisions of Sec. 1a para. 1a of the German Company Pensions Act (Betriebsrentengesetz, "BetrAVG") on the employer's contribution in the case of deferred remuneration and on the discretion of the parties in the content-related structuring of a company pension scheme agreement with regard to the eligibility of variable remuneration components, as well as two higher court judgements on the classification of a surrender value from a terminated direct insurance contract as a company pension scheme within the meaning of Sec. 229 para. 1 s. 1 no. 5 of Volume V of the German Social Code (Fünftes Buch Sozialgesetzbuch, "SGB V") and on the requirements under company pension law for the admissibility of the conversion of a pension benefit to a lump-sum benefit.

Deloitte Legal Webcast Series

In our German language Deloitte Legal Update webcast series, we address current legal issues and developments that are important for corporate practice.

In our upcoming "Legal Update" webcasts we will discuss:

Update on carbon pricing, carbon credits and certificate trading - comments from a tax and legal perspective: In this webcast our experts Johannes Passas and Björn Heidecke will talk about a selected area on the topic of "climate protection law" and address topics like carbon pricing, certificate trading and "Greenwashing". | Wednesday, 7 December 2022 | 11:00 - 11:45 a.m. Register here (Webcast in German language)

You can download the presentation of our latest webcasts here: 

• EU Data Strategy - New Regulation and Challenges for Companies: presentation (in German language);
• Arbitration as a dispute resolution tool: pros and cons, tips and tricks, dos and don'ts: presentation (in English language);
• "Tipping points in the corporate crisis - when corporate financing "breaks down”: presentation (in German language).

In our Webcast Archive, you can find a list of previous webcasts and also download the corresponding presentations.

Should you be interested in topics discussed during one of our German language webcasts, do not hesitate to contact the respective presenters – they will be delighted to provide you with additional information in the English language.