In its second decision (Case No. 21 Cdo 3471/2024), the Supreme Court again addressed the conditions for granting a variable wage component. The main conclusions as follows:
- If the conditions under which an employee is entitled to a variable wage component have been clearly established (or agreed) in advance – and one of these conditions is that the employee does not breach his or her duties during the period in question – then the failure to award this wage component (or part thereof) in the event of a breach of duty does not constitute an impermissible sanction.
- The prohibition under Article 346b(1) of the Labour Code, which prevents the withdrawal of a wage or part thereof already accrued, cannot be confused with a situation where, as a result of a breach of employment duties, the employee does not accrue the right to a variable component of wages at all.
- Arrangements on the conditions for the award of variable wage component do not constitute an impermissible agreement on deductions from wages under section 146(b) of the Labour Code, nor do they constitute a waiver of the right to wages within the meaning of section 346c, since they relate only to the part of the wages to which the entitlement may yet arise.
- What does this imply for practice?
It is permissible to agree that a variable wage component will only be awarded if the employee does not breach his or her duties during the relevant period
Recommendation for employers:
Pay attention to the fact that the conditions for granting variable wage components are clearly formulated, understandable and predictable – whether in the employment contract, internal regulations or collective agreement.