Increase in allowances when extending part-time to full-time

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Part-time employees are entitled to an extension of their working hours (Section 9 sentence 1 of the Part-Time Fixed-Term Employment Act (Teilzeitbefristungsgesetz (TzBfG)). In a recently published judgement, the Federal Labour Court (BAG) found that the adjustment of remuneration is the responsibility of the parties to the employment contract. If they cannot reach an agreement, a proportionate increase in remuneration corresponding to the extent of the increase in working hours is deemed to have been agreed. The legal classification of bonuses must be determined by (supplementary) interpretation of the contract (BAG, judgement of 13 December 2023 – 5 AZR 168/23).

Legal basis

The TzBfG aims to promote part-time work and prevent discrimination against part-time employees. Under the conditions of Section 9 sentence 1 TzBfG, employees can request an increase in their working hours. However, Section 9 TzBfG does not regulate the consequences of the increase in working hours for remuneration.

The case

The parties disputed the amount of an allowance after the plaintiff's working hours were increased to full-time.

The plaintiff was employed by the defendant employer in the past and moved to another employer. In 2014, she returned to the defendant with a working time of 50%. Since rejoining the defendant, she received a monthly payment of EUR 250 gross, which was not mentioned in the written employment contract and labelled as a ‘performance allowance’ in the payslips. It was verbally agreed that this allowance would compensate for the difference between the collectively agreed salary at the defendant and the salary at her previous employer. Without this allowance, the plaintiff was not prepared to return.

When the plaintiff increased her working hours to 100%, the defendant offered her a new written employment contract tailored to full-time employment. However, this did not include the increase in the allowance in dispute. The plaintiff did not accept the contract amendment and applied for a declaratory judgement that the allowance should be adjusted accordingly.

The decision

The BAG ruled in favour of the plaintiff. There was an above-tariff allowance which constituted part of the remuneration owed under the employment contract. This was to be increased accordingly if the working hours were extended.

The adjustment of the remuneration does not follow from Section 9 TzBfG; no provision is made there for an increase in remuneration in the event of an extension of working hours. The legislator left the consequences of the extension of working hours for the remuneration to the parties to the employment contract. In the present case, they were unable to agree on a corresponding contractual amendment. The adjustment of the remuneration for the increased working hours therefore had to be made by way of supplementary interpretation of the contract.

The BAG stated that when part-time hours are increased to full-time hours, an increase in remuneration proportionate to the extent of the increase is usually agreed. There were no deviations from this usual practice in the present case. The defendant had wrongly failed to recognise the allowance in dispute as a component of remuneration. Its labelling as a ‘lump sum for recruitment purposes’ was not accurate. Rather, due to the verbal agreement between the two parties to compensate the salary difference to the previous employer with the allowance, the allowance should be legally categorised as a static allowance above the collective agreement.

As a result, if the working hours were increased by 100 %, the bonus should also be increased by 100 % to EUR500 gross per month.

Practical advice

The decision emphasises the importance of carefully documenting contractual agreements. If the employer wishes to grant a part-time employee an allowance, he should be aware that this is generally to be increased accordingly if the working hours are increased. Deviating agreements are only possible in individual contracts.