Provisos on the discretionary nature of payments and their revocation in employment contracts – How long will they continue to exist?

Can entitlements to benefits be effectively
excluded in the future?

The use of provisos governing the discretionary nature of payments and their revocation in employment contracts aims to exclude a long-term commitment of the employer to paying out additional benefits such as Christmas bonuses, rewards, retention bonuses etc. This exclusion of a contractual obligation is becoming increasingly difficult as a result of pertinent case law established by the Bundesarbeitsgericht (BAG; Federal Labor Court). The only type of payment that is still unproblematic is the following: the employer pays,...