Statutory inflation adjustment premium: employer's obligation to pay despite lower instance dismissals

The Federal Labour Court (BAG) issued a judgment by default (Anerkenntnisurteil) reversing the lower instances, ordering the employer to pay the employee €1,500 plus interest from March 21, 2023, with the defendant bearing all litigation costs. The dispute concerned the employee’s claim to the statutory Inflation Adjustment Premium (Inflationsausgleichsprämie), where the plaintiff challenged the dismissal of his claims at the first-instance and appellate levels. The decisive legal basis was the employer’s acknowledgment of liability in the revision proceedings, which rendered a separate statement of facts and reasoning unnecessary and established the mandatory nature of the tax-exempt subsidy under German labor law.