Employees should have precise knowledge about the amount to be deducted from their remuneration and give written consent to a deduction. 

Blanket consents to deduct “all amounts due” are invalid. In a case recently adjudicated by the Supreme Administrative Court (NSA) (judgment of 16 July 2020, I OSK 3015/19), a consent given to make deductions was also deemed to be invalid since it pertained to future amounts due to be calculated in accordance with an algorithm agreed upon by the employee and the employer in the employment agreement.

The employee could use a company car for personal use; however, he was supposed to bear the costs. The employment agreement contained a consent to make deductions and the method of calculating these costs based on a rate per kilometre. 

The employer terminated the employee’s employment agreement and deducted the amount calculated according to the agreement from his remuneration. An inspection was conducted by the State Labour Inspectorate (PIP). The labour inspector ordered the employer to return that amount of the employee’s remuneration because the consent to the deduction was invalid as it failed to state a specific amount. The employer lodged a complaint against this order but both the Regional Administrative Court (WAS) and the NSA concurred with the labour inspector and refused to alter this decision.

Find more in the PRO HR September 2020.