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Two-Stage Exclusion Clause - Transparency Requirement 

by Jana Maria Siemens, LL.B.

Published: June, 2020

Submission: August, 2020

 



BAG dated December 3, 2019, 9 AZR 44/19


In this ruling, the German Federal Labour Court (Bundesarbeitsgericht – BAG) once again specifies the requirements for limitation periods in employment contracts according to the laws of general terms and conditions. In the opinion of the BAG, the second stage of a preclusion period in such employment contract, which gives the impression that the employee must assert the claim in court within the limitation period even if the employer has promised to fulfil the claim or has otherwise made it non-contentious, is invalid. In the present case, this led to the invalidity of the second part of the limitation period because it was not divisible from the rest of the preclusion period in terms of content.


FACTS


The parties argue about the reimbursement of expenses. The plaintiff had been employed by the defendant as a driver since 2007. Expenses were reimbursed to the plaintiff monthly after receipt of signed proofs by the defendant. The employment contract from 2007 contained the following provision under the heading "Limitation periods":


"(1) All mutual claims arising from the employment relationship and those connected with the employment relationship shall lapse if they are not asserted in writing against the other party within three months of the due date.


(2) If the other party rejects the claim or does not declare against it within two weeks of the claim being asserted, the claim shall lapse if it is not enforced in court within three months following the rejection or the expiry of the limitation period."


When the employment relationship ended on June 30, 2017, expenses of approximately EUR 1,700 were outstanding. In July 2017, the employer informed the employee that the latter should instead submit the outstanding expenses to the tax office for reimbursement. After the employee had unsuccessfully tried to do so, he requested his former employer by way of a letter dated 11 January 2018 to pay the expenses to him, which the latter refused to do on 23 January 2018. With his subsequent claim for compensation of the expenses, the employee was successful before the Labour Court, but the State Labour Court dismissed it.


RULING


The employee's appeal against the decision of the State Labour Court was successful. In the opinion of the BAG, the second part of the limitation period in the employment agreement violates the transparency requirement under the laws of general terms and conditions and is therefore invalid overall.


As a standard contract, the employment contract is subject to the laws of general terms and conditions according to §§ 305 ff. German Civil Code (BGB). On the basis of the transparency requirement anchored in § 307, Subsection 1, Sentence 2 BGB, the employer using the employment contract is obliged to stipulate the rights and obligations of the employee in a clear and comprehensible manner. The second stage of the limitation period does not meet these requirements. It stipulated the legal situation incorrectly and misleadingly. The reason for this is that it does not explicitly exclude cases in which the employer has promised to fulfil the claim or has even recognized the claim ("does it not declare [...] against it"). The same applies to cases in which the employer has otherwise made the claim non-contentious. Thus, for example, the employee is forced to assert the claim in court according to the second part of the limitation period even if the employer has initially promised to comply with it. This lack of transparency led to the invalidity of the entire second part of the limitation period. It was not possible to delete only the part of the clause that was too broadly defined, therefore the second stage was not divisible in terms of content (according to the so-called "blue pencil test"). As a result, under § 306, Subsection 2 BGB, the statutory limitation provisions apply instead.


PRACTICE TIP


With this ruling, the BAG provides a further indication of the legally admissible and transparent design of limitation clauses. Since exclusion clauses with two limitation periods are widespread in practice, a closer look at this decision is worthwhile. The decisive factor in the present case was the wording in the second stage that the contractual partner does not declare "against" within the period of the first limitation period. The wording of the second stage of a preclusion period that the other party "does not declare" at all within the period of the first limitation period is more widespread - the BAG continues to consider this to be permissible.


According to current law, when drafting limitation periods, legally binding claims such as the claim to a statutory minimum wage pursuant to § 3 Sentence 1 German Minimum Wage Act (MiLoG) must also be expressly excluded from the limitation period (BAG dated September 18, 2018, 9 AZR 162/18). Furthermore, it should be remembered that the first stage of the limitation period may no longer provide for written form, instead text form may be demanded at most (§ 309 No. 13b BGB). Both were dispensable in the present case, since the employment contract was already concluded in 2007.


 



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