Voluntary Corona bonuses – free access for garnishing of wages?

Judgment of the Regional Labour Court of Berlin-Brandenburg of 23 February 2022 in Case No. 23 Sa 1254/21

A Corona bonus, which is the subject of a collective agreement and is granted to all employees but does not take into account the specific burden suffered or exposure faced by individual employees during the Corona crisis, is not protected by the emoluments exemption in § 850a No. 3 of the Code of Civil Procedure (Zivilprozessordnung, ZPO) and can be garnished (subject to the attachment-exempt threshold).

Facts of the case

The employee had filed for private insolvency and had relinquished “all attachable claims for earnings” under his employment contract to the insolvency administrator. The applicable collective agreement foresaw a one-off Corona bonus that would be paid to all employees without distinction for 2020 and 2021 (as a tax-free grant). Based on the relinquishment order, the employer paid the Corona bonus to the insolvency administrator rather than the employee. The employee brought a claim seeking to have the bonus paid (again) directly to him arguing that the emoluments exemption in § 850a No. 3 of the ZPO applied to the bonus as “danger or hardship pay”.

The judgment

The Regional Labour Court (Landesarbeitsgericht, LAG) of Berlin-Brandenburg did not share this view. Even though the provisions of the collective agreement expressly stated the aim of the bonus as “mitigating the additional burden caused by the Corona crisis,” it was still not protected against garnishment. The emoluments exemption in § 850a No. 3 of the ZPO only applies to bonuses and premiums that are paid to employees to balance out a particular hardship that goes beyond the normal levels or a danger associated with the performance of their work. As the rule granting the bonus payments did not differentiate based on the extent to which individual employees were exposed to particular hardship or danger due to the Corona crisis (e.g. through increased risk of infection due to frequent direct contact with customers), and the bonus was instead paid to all employee regardless of the type of work they performed, the collective bonuses only served to balance out or mitigate the “overall societal effects of the Corona crisis” without establishing a connection to the individual performance or circumstances of the performance of the work. Considering the purpose stated in the collective agreement, this is not a “danger or hardship pay” within the meaning of § 850a No. 3 of the ZPO. As a result, the bonus may be garnished and the employer’s payment to the insolvency administrator was legal.

Consequences for practice

The judgment not only provides legal certainty – the question of whether Corona bonuses can be garnished is highly controversial (except for Corona bonuses paid to those working in the care sector, which may not be garnished under statute). The LAG in Lower Saxony, for example, took the opposite view in an earlier decision (of 25 November 2021 in Case NO. 6 Sa 216/21) and affirmed that the bonus was protected from garnishment. Both Courts allowed the appeal so that the Federal Labour Court (Bundesarbeitsgericht) will now have the final say on the issue. It is at least doubtful whether the scope of § 850a No. 3 of the ZPO should be interpreted as narrowly as it was by the LAG of Berlin-Brandenburg. It is not apparent from the wording of the provision that the emoluments exemption only applies to bonuses that take the degree of hardship or danger faced by the individual employee into account.

Practical tip

Until the BAG has issued its final clarification, employers are well advised not to pay out any Corona bonus affected by the garnishing of wages to either the employee or the attachment creditors, but to try instead to reach an agreement with the employee and the creditors that the payment will be provisionally withheld. Where it is not possible to reach an agreement, the employer should deposit the monies with the relevant court to be held until the issue of entitlement is clarified. The employer will otherwise run the risk of paying the wrong party so that they would have to claim the payment back from that party and repay the bonus to the other (correct) party.

If the opinion of the LAG Berlin-Brandenburg is followed, the question of exemption from garnishment will depend on the specific arrangements in the (collective or works) provisions concerning the bonus, which will necessitate the consideration and check of the specific provisions on a case-by-case basis.

Dr Michael Matthiessen