Teacher’s Pay Retraction Opens New Front in German Labour Law
Published on 07/03/2026 at 08:27 | Redaktion boerse-global.de
A teacher who received top-scale salary for years has been forced to accept a lower grade after a Cologne labour court ruled that a sustained overpayment does not create a binding right to keep it. The decision, handed down by the Landesarbeitsgericht (LAG) Köln on 26 March 2026 (case number 6 SLa 496/25), reaffirms that employers may align pay with actual tariff qualifications, even when the error has persisted for a long time.
The teacher had been classified in salary group EG 12 but was subsequently downgraded to EG 11. She argued that the years of higher payments should protect her status. The court disagreed, noting that her training at the Sporthochschule Köln lasted only six semesters, falling short of the six-semester net study period required for the higher tier. Longer payment history, the judges found, does not generate “Vertrauensschutz” (legitimate expectation), and the employer is also entitled to offset past overpayments against future earnings.
Unauthorised Deductions: Care Manager Wins Back Pay
In a second ruling from the same court, dated 26 February 2026 (Az. 6 SLa 497/25), a nursing home manager who left her job received only a fraction of her final salary. The employer had deducted training costs without a written agreement permitting repayment. The LAG declared the deduction invalid and ordered the full amount to be repaid. The decision underscores that post-employment settlements require explicit contractual backing.
The Bundesarbeitsgericht (BAG) has meanwhile clarified that, in certain situations, employers can reclaim sick-pay overpayments. In a judgment from 31 March 2021 (Az. 5 AZR 197/20), it held that the right to reclaim does not expire until the employer actually learns of a recurring illness that should have broken the payment chain.
Coalition Reform Targets Top Earners and Fixed-Term Caps
On 1 July 2026, the coalition committee approved a reform package that will take effect on 1 January 2027. Among the key changes, workers earning €15,000 or more per month will find it easier to have their employment terminated by mutual agreement with a severance payment, as the legal hurdles for such “Auflösung” are lowered.
The law also expands fixed-term contracts without a cause. Until the end of 2030, employers can hire for up to 48 months with a maximum of six renewals, and it will become permissible to rehire the same person on a fixed-term basis without a reason after a previous such contract ends. In a bid to cut red tape, the requirement for written form in fixed-term agreements will be dropped from January 2027.
Mass Dismissal Form Errors and New Garnishment Floors
A separate BAG ruling from 25 June 2026 tempered expectations about procedural perfection. A company that submitted a mass-dismissal notice with a slightly overstated number of redundancies did not invalidate the terminations, the court found, because the error did not undermine the purpose of the notification procedure.
From 1 July 2026, new garnishment exemptions apply. The basic protected amount for wage deductions rose to €1,587.40 net per month. Employers must automatically apply these thresholds or face liability. Holiday bonuses remain exempt from garnishment, but regular holiday pay may be subject to attachment, depending on how it is structured.
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