Employee contributions to reorganization measures and unemployment benefit

BSG, judgment dated 11.6.2015 – B 11 AL 13/14 R

Work remuneration, waived by employees under a collective reorganization agreement, must not be taken into consideration as assessment remuneration when calculating unemployment benefit, even if the claim is revived in the event of insolvency of the employer.

The plaintiff worked for S GmbH as flat screen printer. S GmbH and the trade union V concluded a collective reorganization agreement to apply in the period from July 1, 2009 to December 31, 2013, to avoid an existence-threatening situation. This provided for the employees waiving remuneration components and the employer refraining from dismissals for operational reasons. The waiving of remuneration was subject to the condition subsequent of S GmbH not submitting an application for insolvency during the term of the collective agreement. Insolvency proceedings for S GmbH were opened at the beginning of 2011. The insolvency administrator dismissed the plaintiff for operational reasons. The Federal Labor Office approved unemployment benefit for the plaintiff. The remuneration components waived by the plaintiff were not taken into consideration when calculating the level of the unemployment benefit.

Facts

The plaintiff therefore considered the benefit notification to be unlawful. While the previous instances upheld his legal action for higher unemployment benefit, the Federal Social Court (BSG) set these decisions aside and dismissed the legal action.

Calculation of unemployment benefit

The authoritative remuneration for assessment of the unemployment benefit is the respective average contributory work remuneration per day, achieved by the unemployed person during the assessment period. Due to fiction of law, work remuneration, to which the unemployed person was entitled at the time of leaving the employment relationship, is considered achieved if it (i) has been paid or (ii) has not been paid solely as a result of illiquidity of the employer. The revived wage parts, waived by the plaintiff, had not been received by the latter, but rather were registered under the schedule of creditor’s claims.

Principal of monocausality

As such, they could only be taken into consideration if they were not received by the plaintiff solely as a result of the employer’s illiquidity. In this respect – according to the BSG – the principle of monocausality applies. The illiquidity of the employer must be the sole cause of non-payment; it is not sufficient if the remuneration is not paid for other reasons and the illiquidity is merely an added reason. Here, the cause of non-payment was the plaintiff’s waiving of remuneration on the basis of the collective reorganization agreement, during a period in which S GmbH was still solvent. The employer’s illiquidity did not occur in addition until later.

No passing on of the reorganization risk

In the opinion of the BSG, the reorganization risk must not be passed on to the social community. The possibility of the parties to an employment relationship retrospectively and amicably agreeing higher work remuneration, with the aim of obtaining higher unemployment benefit without the employer being required to pay the employee a higher amount and to (retrospectively) pay contributions on this, should be prevented.

Contributions to reorganization more difficult

Most collective reorganization agreements include so-called “reversionary clauses”, under which waiving of remuneration lapses retrospectively upon submission of an application for insolvency. This is intended to protect employees against failure of the reorganization efforts. However, this goal is increasingly no longer achieved, as now confirmed by the present decision from the perspective of social insurance law. Even under insolvency law, revived claims to remuneration are only simple insolvency claims, not insolvency-asset debts. This is designed to satisfy the principle of equal treatment of creditors.

In reorganization practice, the question arises of how the employee contributions to reorganization can be protected if necessary. Employer guarantees are highly likely to be voidable, third-party guarantees cost money that is typically not available in this situation. In future therefore, the sole counter-performance for the waiving of remuneration will be the temporary exclusion of dismissals.

Summary

With reorganization, relief through salary waiving is frequently the only alternative. Without this, insolvency occurs earlier. With insolvency benefit, it is a recognized fact that, following conditional waiving of remuneration and the occurrence of insolvency, the remuneration claims are revived and replaced by insolvency benefit. It remains to be hoped that the lawmaker will see the problem of employee contributions to the reorganization of an ailing company and their effects on assessment of unemployment benefit, and will make corresponding adjustments.