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Silence is golden: employers’ information obligations in Germany

Written by
Kliemt.HR Lawyers, the first port of call in employment law for top-class and future-proof advice.
A recent judgment in Germany clarifies employers the extent of and circumstances in which employers’ have an information obligation towards employees on matters that affect their financial interests and specifically in relation to deferred compensation in occupational pension schemes.

To what extent are employers obliged to clarify or inform employees about matters affecting their financial interests? This question has already preoccupied the labour courts in the past. The German Federal Labour Court recently considered employers’ notification and information obligations in the field of occupational pension schemes, especially in the field of deferred compensation. The statements made by the judges are pleasingly clear, convincing and can be applied to situations outside the field of occupational pension schemes.  

What was the issue? 

On 20 March 2003, the employer in this case concluded a framework agreement on company pension schemes via a pension fund or direct insurance with a pension provider. At a works meeting held on 9 April 2003, the pension provider informed about the opportunity of deferred compensation and its tax aspects and the employee concerned took part in the works meeting. On 23 September 2003 he concluded a deferred compensation agreement with the defendant employer. The employer then concluded a pension insurance contract with a capital option with the pension provider for the employee  

The employee used his capital option in 2015, upon which the public health insurance demanded social security contributions from him under s229.1 sentence 3 of the Social Code V. Since 1 January 2004, this provision has created an obligation to make contributions under social security law for lump-sum benefits under occupational pension schemes. This change in the law was under discussion since summer 2003. The employee demanded compensation from his employer for failing to provide information on the obligation to contribute to the public health and nursing care insurance on using his option. 

Federal Labour Court rulingno general obligation to provide information 

The Federal Labour Court rejected the employee’s damages claim. It emphasised that in principle, each party is responsible for protecting its own interests and must clarify the consequences of its actions. The duties of protection and consideration in the employment relationship could indeed result in a notification and information obligation of the employer. This concerns in particular cases in which: 

  • an agreement detrimental to the employee is concluded at the initiative of, and in the interest of the employer; or 
  • the employer is closer to the informationi.e. he can obtain information without difficulty, unlike the employee, or 
  • the employer had already voluntarily provided information and was able to recognise given special circumstances that the correctness of the information would also be important to the employee in the future.  


In these cases, the employer would have an obligation to inform employees about changes in the factual and legal situation.  

The Court emphasised, in connection with the last bullet-point, that voluntary information the employer provides without a legal obligation must be correct, clear and complete. This applies in view of the effects of information on employees’ long-term life planning particularly in the area of occupational pension schemes. 

In the decided case, however, the Federal Labour Court rejected the claim the employer had an obligation to provide information. Neither had the deferred compensation agreement been concluded on the initiative of the employer, nor was the employer ‘closer’ to the informationThe employee and the employer could equally well inform themselves about the planned change in the law on the social security treatment of lump-sum pension benefits in 2003.   

The judges pointed out in that the employee was able to obtain the necessary information, for example, by looking through the parliamentary printed materials which are accessible to everyone and clearly understandable. Admittedly, this remark is likely to make readers of the decision smile: few employees (or employers) will regularly spend time reading parliamentary papers.  

In addition, the Federal Labour Court assumed that an information obligation did not arise from the fact that pension provider employee had informed employees about the deferred compensation during the works meeting on April 2003. Social insurance law issues of deferred compensation were not discussed there. Accordingly, no information was provided which could have triggered an obligation to inform in the event of subsequent changes.  

Practical tip 

In practice this means: less is more. To avoid liability, employers should be wary of proactively providing staff with information about the deferred compensation and further occupational pension scheme possibilities. If employees ask for this information, it is a good idea to refer them to specialist consultants.  

However, this legal situation is unfortunate from a socio-political point of view. The much-cited desire for a further spread of occupational pension schemes is not encouraged by the current legal situation. Legislators could counteract this by limiting the employer’s liability for information provided. 


Thorsten Lammers
Associate - Germany
Kliemt.HR Lawyers