Cologne Labour Court - Judgement of 17/10/2025 - Ref. 1 Ca 1133/25
Collective agreement grouping: Fixed-term contracts must not be a career barrier
Many employees only realise at a late stage that they have been paid too little for years. It is often not the pay grade that is at issue, but the Collective bargaining group level - and therefore the question of which periods of employment are actually recognised. The judgement of the Employment Court Cologne, 02.07.2014, Case No.: 14 Ga 65/14 of 17 October 2025 provides important clarity here and significantly strengthens the rights of employees on fixed-term contracts.
At the centre of the decision is a collective agreement cut-off date regulation that meant that previous fixed-term contracts were effectively treated as a „fresh start from scratch“ - with noticeable financial disadvantages for those affected.
The starting point: Group levels in the collective wage agreement
The plaintiff was employed by the defendant for many years, initially for a fixed term and later for an indefinite term. The collective wage agreement of D AG applied to the employment relationship. This provides for several group levels within a pay grade, the achievement of which is dependent on the Years of service in the pay group depends.
The collective agreement differentiated between employees who were already employed before the cut-off date of 30 June 2019 and those whose employment relationship was „newly established“ after this date. For the latter, significantly longer step durations applied - even if they had previously worked for the same employer for a limited period of time.
Permanent employment is not a „new start“
The defendant was of the opinion that the transition from a fixed-term to a permanent employment relationship was to be recognised as a New foundation is to be regarded as a "higher grade". Consequence: Application of the less favourable step durations and subsequent upgrading within the pay group.
Although the Cologne Labour Court followed this view in its starting point, it withdrew its legal basis. The decisive factor was not the collective agreement definition alone, but its Compatibility with higher-ranking law.
Violation of the prohibition of discrimination under the TzBfG
The Chamber clarifies: The extension of step durations for previously fixed-term employees based on the cut-off date violates Section 4 (2) sentence 1 TzBfG. Fixed-term employees may not be treated less favourably than comparable permanent employees due to the fixed term - unless there is an objective reason.
No such objective reason was recognisable here. The provision in the collective agreement meant that identical periods of employment were assessed differently. Previous years of employment were effectively „devalued“ simply because the employment relationship was initially limited in time.
Indirect discrimination through cut-off date regulations
The court's criticism of the key date logic is particularly clear. The Chamber speaks of a indirect discrimination, because it is based on a seemingly neutral characteristic - the reference date - but in fact it is precisely fixed-term employees who are systematically disadvantaged.
Employees with identical professional experience and the same job remained in lower group levels for longer and received lower pay. This contradicts the meaning and purpose of group levels, which are intended to honour increasing experience.
Consequence: Application of the more favourable step runtimes
As a legal consequence of the infringement, the court did not declare the entire tariff mechanism invalid. Instead, it clarified that only the more favourable step runtimes for employees prior to the reporting date.
In concrete terms, this meant that the plaintiff was entitled to the group step earlier than the defendant had assumed. Only longer periods of incapacity for work due to illness, which can only be taken into account to a limited extent under the collective agreement, postponed the entitlement by a few months.
Back payment and interest
The labour court ordered the defendant to pay the outstanding remuneration from the correct date and to pay interest on the arrears. Although the plaintiff did not receive the full period claimed, she did receive a substantial part of the difference claimed.
At the same time, the decision shows that classification actions are an effective means of ensuring correct remuneration in the long term - even beyond the specific payment claim.
Significance for practice
The judgement has considerable practical relevance:
- Fixed-term periods of previous employment may not be devalued under collective agreements.
- Cut-off date regulations are subject to strict abuse controls.
- Differentiations under collective agreements must be compatible with the TzBfG.
- Employees can still have their correct classification clarified years later.
The decision is particularly explosive in sectors with a high proportion of fixed-term contracts.
Conclusion: experience counts - regardless of the type of contract
The Cologne Labour Court makes it clear: anyone who has worked for years brings experience with them - regardless of whether the employment contract was initially fixed-term or permanent. Collective agreements that devalue precisely this experience do not stand up to legal scrutiny.
The judgement is a strong signal for employees. For employers, it is a clear reminder to carry out collective bargaining groupings carefully and without discrimination.
