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REMUNERATION

GERMANY
ARBEITSENTGELT
REMUNERATION

Payment of the agreed remuneration is the employer's main obligation under the contract of employment; it is the counterpart of the employee's obligation to provide the agreed performance of work. The amount of remuneration may be set by collective agreement or works agreement as well as by the contract of employment . If there are no express terms of pay, the employer is liable for the payment of the rate for the job (Civil Code ยง 612). In addition to actual pay in the form of wage or salary , remuneration may include bonuses, commission and a share of profits .

The employer's basic liability is for the payment of gross pay unless, as an exception, the parties have agreed on a net pay arrangement . The payment of remuneration is in principle effected in cash, but cashless methods of payment may be agreed on and these are very common. There is a ban on the truck system ; despite this, payment in kind is permissible.

The general principle is that the employer has to remunerate the employee only for the performance of work that the employee has, in turn, provided. The only cases in which this principle does not apply are sick pay , employer's non-acceptance of the work performance, impossibility of performance and "works risk" , and leave .



Please note: the European industrial relations glossaries were compiled between 1991 and 2003 and are not updated. For current material see the European industrial relations dictionary.

Page last updated: 14 August, 2009