An employment contract contains a clause according to which the parties will set the targets for the performance-related remuneration (bonus) in the first months of the new year. But what happens if the employer remains inactive and no targets are set?

According to the established case law of the Federal Labour Court (see most recently the judgment of 17 December 2020,8 AZR 141/20), in this case the employee generally receives the bonus in full, as compensation for the fact that the employer has remained inactive. In the case decided, the court reduced the bonus by 10%: It considered contributory negligence on the part of the employee, who had never made the employer aware of the lack of agreement in this respect.