Continued payment of salary
A claim for continued payment of salary usually follows a labour dispute. This may be because the employment contract is terminated or in case of summary dismissal. The employee disagrees with the reasons for dismissal and demands continued payment of salary.Similarly, the winding up of an employment contract after the employee ended it, is often cause for disputes, e.g. regarding the number of holidays not taken. Sometimes employers deduct expenses such as study costs or damages suffered. The employee often disputes such deductions.
If continued payment of salary is granted, the legal surcharge for non-timely payment can also be claimed. This is a legal fine that the employee must pay to the employee for not paying his/her salary in time. The reason behind the fine is that untimely payment of salary often causes damages to the employee because s/he can no longer meet his monthly obligations. The fine can be up to 50 percent of the net salary due. In practice judges have the tendency to limit the fine to a maximum of 10 percent. The fine can be utilized as a concession during negotiations.
One aspect that should always be included in a claim for continued payment of salary is: demanding the corresponding payment slip. Employers quite often have a tendency to forget to provide it, especially in the case of labour disputes. However, he is legally required to provide it. Only by checking the salary slip can the employee (or his lawyer) check whether the amounts deducted from the salary by the employer are correct. If the employer has been ordered to provide the salary slip in question and he nevertheless fails to produce it, he will automatically have to pay a fine for damages to the employee.
In addition to the legal fine for non-timely payment referred to above, the claim for continued payment of salary will also include payment of the legal interest up to the date of full payment, the collection costs of up to 15% of the main sum (including the penalty claimed) and reimbursement of any legal costs made.
The following documents are required when filing a claim for continued payment of pay:
The employment contract;
- The applicable collective labour agreement, if any;
- Any additional agreements made;
- The second-last salary slip (because it refers to a full payment period);
- The last salary slip (because it is the official settlement of the employment);
- The correspondence exchanged between the parties with appendices, if applicable;
- The claimed salary arrears, specified by period.
If you do not qualify for assignment, we will charge a fixed fee of € 1,500 (not including VAT and expenses such as court levies and costs of summons) for our work involving claims up to a total value of € 7,000 before taxes. This work includes the intake briefing, drawing up a reminder, drawing up a summons and the preparations for and attendance at the personal appearance of the parties. If further work is necessary such as salary calculations and the hearing of witnesses, additional arrangements shall be made. In fact, the majority of cases do not require such additional work. The condition for qualification is that we consider your chances of success to be realistic.
A bankrupty petition
It can also happen that, at any point in time, the employer is no longer able to meet his obligations to pay the salary. In such cases action should be taken quickly by filing for bankruptcy. This is particularly important with reference to possible claims with retroactive effect regarding a special arrangement of the Unemployment Insurance Act (know as the "pay security arrangement"). This arrangement covers the salary that was missed out on during a maximum of 13 weeks preceding the date of the bankruptcy.
A bankruptcy petition requires a minimum of 2 different creditors with full name and address and a detailed statement of the outstanding claims. It suffices to make the existence of such claims plausible. Chances are that the bankruptcy petition will be dismissed when the employer can make the justification of the creditor claims sufficiently doubtful. In other words, the rightfulness of the claims must be sufficiently substantiated.
In practice, a bankruptcy petition often turns out to be the right means to put pressure on the employer to force him to pay the claim quickly. A bankruptcy petition also often helps to come to a settlement regarding payment. When bankruptcy is filed for the employer, the employee should always bear in mind that there is a real chance that the employment will meet an inglorious end. For filing a bankruptcy petition, arranging a maximum of 4 postponements, attending the court case and the transfer of the claim to the curator, we will charge € 950, not including VAT, court levies and summons costs. Such costs are high-preferential and will be returned to you by the curator when it appears after the completion of the bankruptcy proceedings that there are enough assets.