More pay only with a new contract? Not possible!

A company that grants all employees a pay raise cannot make it contingent on the signing of a new employment contract. The distinction solely between "old" and "new" contracts is not justified, ruled the Federal Labor Court.

It is no legitimate aim of the employer to retain employees with old contracts To force a change of contractby removing them from a excludes a wage increase, Germany's highest labor court declared this. It awarded a wage increase to an employee who had rejected a new employment contract. The court ruled that differentiating solely between "old" and "new" contracts violates labor law. Principle of equal treatment. The employer must also provide him with this information in the event of a freewill The Federal Labor Court clarified that wage increases must be taken into account. If an employer grants all employees a wage increase as a general measure, they may not arbitrarily exclude individual comparable employees.

The case

In February 2022, an employer offered his entire workforce new employment contracts with many new regulations and a four percent wage increase. Most of the employees accepted this, one employee rejected She declined the offer and continued to receive her old basic salary. Effective January 1, 2023 increased Employers increased the basic wage again by five percent, but only for employees with new employment contractThe employee was on sick leave at that time and received continued payment of wages for January and February 2023 based on her old, lower basic wage.

She demanded additional payment of 148,81 euros gross and argued that the employer was complying with labor law Principle of equal treatment I have injured myself.

The judgment

The lower courts had dismissed the lawsuit, but the woman had appealed to the Federal Labour Court (BAG). Success.The Federal Labor Court (BAG) ruled that the labor law Principle of equal treatment applicable here and injured the employer must also provide him with this information even in the event of a voluntary wage increase . note

The sole prerequisite for the wage increase in 2023 was the existence of an employment relationship. The woman was therefore in a comparable situation to the employees who received the benefit. different contract models does it come at this point not The Federal Labour Court (BAG) emphasized that these factors should not be considered when assessing comparability, but only when justifying unequal treatment. 

No objective reason for exclusion

The court ruled no objective reason, the employees differently to be dealt with. The employer wanted the wage increase to ensure that all employees standardized their employment contracts.

According to the Federal Labour Court justifies However, this goal no Unequal treatment. The favored employees could no longer contribute to standardization through the wage increase because they had already signed the new contract. Therefore, the wage increase was ineffective. not the Purpose fulfill, this group an additional Attraction It is not enough to simply reward new contracts with a bonus and thereby permanently exclude other employees from a pay raise. Wages are compensation for work performed, therefore employers must pay particular attention to equal treatment.

The pay increase should not compensate for worse working conditions. Therefore, the employer was not allowed to exclude the woman and must pay her the €148,81 – pay increase and additional sick pay. count.

Federal Labor Court, judgment of 26 November 2025, Ref. 5 AZR 239/24

Conclusion

"This ruling clarifies that employers have a right to... in the case of company-wide... freewill greatest achievements Care "must let things take their course," he explains. Specialist lawyer Dr. Jens Usebach LL.M"The principle of equal treatment acts like an invisible guardrail: If bonuses, salary increases or special benefits are granted according to a general principle, it is not permissible to discriminate against each other." niemand in a comparable position without objectively good Reason excepted Otherwise, disadvantaged employees can retroactively claim the lost benefit, as the case before the Federal Labor Court impressively demonstrates."

Practical tip for employers

"At freewill "When it comes to benefits (such as bonuses or salary increases), it is important to establish transparent and objective criteria for their distribution," advises Usebach.Unequal treatment Comparable employees without objective justification should definitely be dismissed. avoided "This will be the case, as it can trigger claims for back payments. Particular caution is advised with regard to permanent salary components such as basic wages – here, case law requires strict equal treatment." Salary incentives Any amendments to the contract should be drafted in such a way that they are legally valid – for example, as individually negotiated one-off payment instead of as a permanent one-sided service, the specialist lawyer knows.

The Federal Labor Court's ruling aligns with established case law on the principle of equal treatment and reaffirms that employees with existing contracts who are entitled to their current benefits should not be pressured into switching to new contracts by withholding their salary. Employers should alternative routes Finding ways to make contract changes attractive – without violating the principle of equal treatment.

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