Reducing the Christmas Bonus? Review the Clauses First
Reducing or cancelling the Christmas bonus: voluntariness reservation, company practice and cut-off date clause from the employer's perspective
Many companies are under economic pressure, and “Weihnachtsgeld” (Christmas bonus) is currently among the frequently searched terms according to Google Trends. Employers are asking whether the special payment can be reduced or suspended this year. The answer depends on the legal basis of the payment and the wording of the clauses.
Where an entitlement comes from
There is no statutory entitlement to a Christmas bonus. It can arise from the employment contract, a collective agreement (Tarifvertrag), a works agreement (Betriebsvereinbarung) or company practice (betriebliche Übung). Company practice means: if the employer pays repeatedly in the same manner and without reservation, employees may rely on future payments; in practice this is regularly assumed after three payments. Where a collective agreement applies (collective bargaining ties on both sides or a reference in the employment contract), the entitlement under the collective agreement cannot be reduced unilaterally.
Voluntariness reservation: often weaker than assumed
Many contracts declare special payments to be “voluntary” and “without legal entitlement”. Such pre-formulated clauses are subject to review of standard terms (AGB-Kontrolle). A voluntariness reservation that also covers later individual commitments unreasonably disadvantages employees (§ 307 para. 1 sentence 1 BGB) because it contradicts the priority of individual agreements (BAG, judgment of 25.01.2023 – 10 AZR 109/22). According to settled case law, the combination of “voluntary” and “revocable” in one clause is also invalid because it is not clear and comprehensible (§ 307 para. 1 sentence 2 BGB). If the reservation is invalid, a company practice may arise despite the clause. A clear reservation with each individual payment is safer.
An alternative is a reservation of revocation (§ 308 no. 4 BGB). According to case law it requires that the grounds for revocation are stated in the contract and that the revocable portion makes up only a limited part of total remuneration; the revocation itself must accord with equitable discretion (billiges Ermessen).
A later notice does not remove the practice
If an entitlement under company practice already exists, a subsequent voluntariness notice is not sufficient. In 2009 the BAG gave up its earlier case law: even if employees accept a payment made under reservation three times without objection, the entitlement does not lapse (BAG, judgment of 18.03.2009 – 10 AZR 281/08; idea of § 308 no. 5 BGB). A consensual amendment of the contract is then regularly required; a dismissal with notice of change (Änderungskündigung) to reduce pay is subject to very high hurdles.
Cut-off date, illness and equal treatment
Where the payment remunerates at least in part work performed (“mixed character”), a cut-off date clause in standard terms at year-end is invalid; employees who leave during the year receive a pro rata entitlement (BAG, judgment of 13.11.2013 – 10 AZR 848/12). An agreed reduction because of illness is permissible, but per day of illness by no more than one quarter of the remuneration attributable to one working day on annual average (§ 4a EntgFG). Anyone who excludes only certain groups needs an objective reason under the principle of equal treatment.
Involve the works council
The employer in principle decides alone whether and in what total amount a voluntary benefit is granted. The works council has a right of co-determination on the principles of distribution, insofar as there is no collective-agreement provision (§ 87 para. 1 no. 10 BetrVG). For an employer not bound by a collective agreement, even deleting one component can change the remuneration structure.
Practical checklist
Determine the legal basis and payment history
Review voluntariness, revocation and written-form clauses
Declare the reservation in writing with each payment
Reconcile the purpose of the payment with the cut-off date provision
Review the reduction rule for periods of illness
Justify differences between groups objectively
Observe co-determination
Conclusion
Whether the Christmas bonus may be reduced is decided primarily by the contract terms. A timely review creates clarity before payments are suspended. Please contact us if you have any questions.
As of: 27.10.2026
NIETZER Rechtsanwälte · Attorneys at Law (USA) · Heilbronn · www.unternehmensrecht.com
This article is for general information purposes only and does not replace legal advice in an individual case.
