Special Payments in Part-Time Work: When Employers May Reduce Them
- Aug 3
- 3 min read
Where an employer pays a flat amount that is the same for everyone, the same question arises with part-time staff every time: the full sum or a proportionate share? For the collectively agreed inflation compensation premium (Inflationsausgleichsprämie), Germany's Federal Labour Court (Bundesarbeitsgericht) has now answered it (judgments of 17 March 2026, case nos. 9 AZR 1/25 and 9 AZR 80/25).
1. The Case: Half the Premium During Partial Retirement
Two public sector employees had agreed partial retirement (Altersteilzeit) under the block model. Their weekly working time was halved to 19.5 hours for the entire term. Under the collective agreement on special payments to cushion increased consumer prices, concluded between the trade union ver.di and the Association of Local Authority Employers' Associations (Vereinigung der kommunalen Arbeitgeberverbände, VKA), employees covered by the public sector collective agreement TVöD were entitled to inflation compensation for 2023 of 1,240 euros and monthly special payments of 220 euros.
Both employers paid half of that. The claimant in case 9 AZR 1/25 sought a further 1,500 euros, the claimant in the parallel case 9 AZR 80/25 a further 620 euros. Their argument: during the active phase they had worked in full, so the premium had to be paid without reduction. In the alternative, they relied on the protection against less favourable treatment on grounds of part-time work.
The labour courts in Dortmund and Aachen awarded them the money. The Regional Labour Courts (Landesarbeitsgerichte) of Hamm and Cologne dismissed the claims.
2. The Decision: The Agreed Working Time Is What Counts
The Ninth Senate dismissed both appeals on points of law.
The collective agreement refers to Section 24(2) TVöD, which applies accordingly. Part-time staff receive the share corresponding to their contractually fixed average weekly working time. Under the block model, that working time is halved across the full term of the partial retirement. The fact that full hours were actually worked during the active phase makes no difference, because only the agreement itself matters.
The collective agreement on flexible working time arrangements for older employees (TV FlexAZ) did not assist the claimants either. Its Section 7(2) merely governs how the credit balance built up during the active phase is paid out later. It contains no separate basis of claim departing from the proportionate approach.
The Senate also gives an economic reason. Had the second half of the premium gone into the credit balance, the employee would have received it only during the release phase. Tax exemption under Section 3 no. 11(c) of the Income Tax Act (Einkommensteuergesetz, EStG) depended on the money actually being received by the end of 2024. That detour would have made the premium more expensive for both sides.
3. The Standard
The Senate expressly leaves one question open: whether a reduction is permitted where a payment is tied solely to the employment relationship existing on a particular cut-off date. Anyone designing a premium that way is therefore still on uncertain ground. And because Section 22 of the Part-Time and Fixed-Term Employment Act (Teilzeit- und Befristungsgesetz, TzBfG) bars the collective bargaining parties from departing from the non-discrimination rule, that uncertainty cannot be removed by collective agreement either.
Unsure Whether a Special Payment Could Be Reduced?
Whether a premium is due in full or pro rata turns on how it is designed: is it tied to an entitlement to pay, to work actually performed, or merely to a date in the calendar?
If you have received a reduced special payment, or if you are an employer who wants to put a premium on a sound legal footing, I offer you a short, free initial assessment. In that conversation we clarify how your situation should be assessed and which next steps make sense.
