Do certain forms of remuneration transfer on the transfer of an undertaking?

An interesting decision from the Federal Labour Court Germany in the case of Endres v. T-Systems International GmbH has recently been published concerning the transfer of remuneration on the transfer of an undertaking. Our colleagues at CMS Hasche-Sigle, Stuttgart represented the defendant in this claim and they were successful in arguing that specific forms of remuneration do not transfer with the undertaking.

The claimant, Mr Endres, was a former employee of Daimler-Benz AG (DaimlerChrysler AG since 1998). In certain specific circumstances Daimler-Benz AG granted its employees special conditions for acquiring vehicles produced by the company, i.e. Mercedes-Benz cars (the so called "company member scheme"). Employees were able to purchase the vehicles at a reduced purchase price, have them serviced free of charge or at a reduced price, buy spare parts at cheaper prices and sell the vehicles back to Daimler-Benz AG at a later date.