Increase in base salaries for permanent employees?
Non-Union Employees Not Entitled to Future Wage Increases Based on Voluntary Employer Practice
A recent ruling by the Labor Court of Appeal in Cologne, Germany, has determined that voluntary wage alignment with union-negotiated increases does not automatically guarantee future wage increases for non-union employees if the employer changes.
In a specific case, a non-union employee of an insurance company filed a lawsuit after stopping receiving the full collective wage increase. The case number for this decision is AZ: 4 Sa 399/24. The specific case involved a non-union employee who had always received the full collective wage increase for their entire salary in the past.
However, the court's decision set a precedent for similar cases involving wage increases for non-union employees. The ruling was based on the lack of evidence that the employer intended to subject itself to the rules of collective agreements. The employee argued that the new employer broke an "established practice" of passing on full collective wage increases. However, the employment contract did not explicitly state that the employee's salary should dynamically orient itself to the collective agreement.
The court saw insufficient evidence that the employer intended to legally bind itself to the "established practice". This ruling does not apply to all cases, as the specific circumstances of each case may vary.
It is essential to note that voluntary wage increases aligned with union agreements do not legally guarantee non-union employees entitlement to future increases upon an employer change unless there is a separate contractual or policy basis to that effect.
Legal obligations focus on compliance with minimum wage, overtime, and other wage-related laws, but not on voluntary parity with union contracts. Programs like the Department of Labor’s PAID program focus on ensuring compliance with minimum wage and overtime laws and correcting violations but do not establish rights related to voluntary parity with collective bargaining wages.
Non-union employees' entitlements to wages are governed by their individual employment contracts, company policies, or sometimes precedent under state labor laws, not by union bargaining agreements unless explicitly extended by the employer. If an employer voluntarily makes wage increases to non-union employees to match union increases, this is usually considered a business decision and can be changed or discontinued, especially if the employer changes or restructures.
In summary, voluntary wage increases aligned with union agreements do not legally guarantee non-union employees entitlement to future increases upon an employer change unless there is a separate contractual or policy basis to that effect. The case in Cologne serves as a reminder that employers are not automatically bound to continue such practices when they change ownership or management.
- In light of the court's decision, it appears that a voluntary business practice of aligning wages with union agreements does not automatically ensure future wage increases for non-union employees, even if the employer changes.
- The entitlement of non-union employees to wages, even if they mirror union contracts, is primarily determined by individual employment contracts, company policies, or state labor laws, not by union bargaining agreements, unless explicitly stated by the employer.
