In a judgement dated 6 July 2012 the Regional Labour Court of Düsseldorf (10 Sa 866/11) permitted social plan provisions which envisage lower social plan benefits for employees approaching pension age.

The claimant contested a clause in a social plan pursuant to which the individual points value would be reduced by 1/48 per month for employees who entitled to a statutory retirement pension within 48 months as of the date of the legal end of their employment relationship. In the claimant’s case, this meant a reduction of his redundancy pay by about € 9,600 to about € 28,800. His claim to payment of the balance was unsuccessful before the Labour Court. The Regional Labour Court of Düsseldorf also rejected the claim, albeit that it permitted the appeal on points of law before the Federal Labour Court [Bundesarbeitsgericht, BAG].

The Regional Labour Court of Düsseldorf did not deem this provision on the cut in redundancy pay to violate any higher ranking right. It was of the opinion that a distinction in the social plan between employees close to pension age and employees not close to pension age - also pursuant to the case law of the Federal Labour Court – is covered by Sec. 10 sentence 3 no. 6 German Labour Courts Act [Arbeitsgerichtsgesetz, ArbGG] and does not violate the EU directives on protection against age discrimination. In the opinion of the Regional Labour Court of Düsseldorf, the business partners have duly accounted for the essentially age-based chances on the employment market by putting a proportionately strong emphasis on age. The manner in which this was accounted for was, in the opinion of the Regional Court of Düsseldorf, not objectionable either because the reference basis was the regular age limit within the meaning of Sec. 235 German Social Code Book IV [Sozialgesetzbuch IV, SGB IV], hardship cases were avoided through the gradation as opposed to a strict qualifying date clause, and the cut in redundancy pay is minimal in relation to the overall sum.

The judgement confirms the structuring possibilities open to the business partners when regulating social plan provisions which are oriented on employees’ chances on the employment market. Even though the Regional Court of Düsseldorf has admitted the appeal on points of law before the Federal Labour Court, the Federal Labour Court is expected to deem such clause admissible in conformity with its previous case law on the distinction between employees approaching pension age and employees not approaching pension age in social plans.