Employment 2022

Last Updated July 06, 2022

Germany

Law and Practice

Authors



Heuking Kühn Lüer Wojtek is a partnership of more than 400 lawyers, tax advisers and civil law notaries with eight offices in Germany as well as one office in Zurich. It is one of the major commercial law firms in Germany. It supports international clients and co-ordinates work in various jurisdictions. Internationally, it collaborates with leading law firms on a “good friends” basis. About 44 lawyers at the firm deal with employment issues on a regular basis, covering all aspects of employment law.

In 2020, the COVID-19 crisis overshadowed any legislative initiatives. However, very few legislative changes came into force, except for the new Immigration Act for skilled workers, which simplifies the visa application process (see 5.1 Limitations on the Use of Foreign Workers).

In order to implement the revised EU-Directive 2018/957, the federal cabinet of Germany also passed a draft law in February 2020. The intention of the Directive is to ensure the protection of workers posted to Germany and the protection of local wages as well as working conditions from unfair competition. The Implementation Act came into force on 30 July 2020.

COVID-19 crisis

The COVID-19 crisis has obviously affected German businesses to a great degree. Apart from the practical side, businesses had to cope with the (near-frantic) reaction of the legislature to the crisis.

Closing and restriction of businesses

Many of the legislature’s activities were focused on the various rulings and regulations with regard to COVID-19 protection and prevention. These included, in particular, the decisions on the closing of certain kinds of businesses (eg, fitness clubs, saunas, bars, pubs) and the massive restrictions with regard to the permissible number of customers allowed in each business (in particular, in the retail and restaurant sectors).

Short-term subsidies

One of the first and possibly most important measures of the legislature was the facilitation of short-term subsidies for companies. In previous economic crises, short-term work subsidies had proved to be a good measure to prevent massive lay-offs of employees. For the COVID-19 crisis, the legislature temporarily increased the amounts of the subsidy and prepared an extension of the permissible time period during which such subsidies may be claimed.

Works councils

Given the fact that employees were asked, where possible, to work from home rather than at the company premises, it has become very difficult for works councils to do their job, as they are required to convene in person. After short but intense discussions, the legislature introduced a temporary initiative (until the end of 2020) for works councils to convene via video-conference systems, as well as the option to hold town hall meetings via video-conference systems. In 2021, the legislature placed on statutory basis that virtual works council meetings are permanently possible.

Health protection measures

Last but not least, the legislature and the various occupational health and safety insurances have introduced checklists and criteria for the necessary health protection measures during the COVID-19 crisis. Those are also all only temporarily applicable. The Bundestag has passed the so-called “facility-based” vaccination requirement, which applies to employees in clinics, nursing homes, outpatient care services and similar facilities and is regulated in the Infection Protection Act.

In Germany, an employee (“arbeitnehmer”) enjoys a special status that is described as the personal obligation to perform work upon the employer’s instructions, without entrepreneurial risks and in a situation of economic dependence (to a certain degree) on the employer.

Employee protection rights do not, therefore, generally apply to directors and board members of companies, as they act mainly without instructions from superiors. Where protection rights derive from EU Directives, such board members and directors are treated as “employees” under German law as well.

Generally speaking, the employer and employee are free to negotiate employment agreements. These agreements may be put down in writing or concluded orally. There is no general form requirement under German law. However, as of 1 August 2022, the German implementation of the EU Directive on transparent and predictable working conditions imposes a documentation obligation on the employer, whereby they must provide the employee with the core terms and conditions of the employment in writing. Infringements of the Proof Act can result in fines of up to EUR2,000 per case. Apart from that requirement, a written agreement is also advisable to ensure that evidence of the employment relationship and its terms and conditions exists.

If employment is concluded for a fixed term, the fixed-term clause must be concluded in writing – meaning true ink on paper. Otherwise, the fixed-term clause is void and the employment agreement is considered to have been concluded for an indefinite period of time.

Furthermore, any post-contractual non-competition obligation must be agreed upon in written form as well. Again, such a clause is void if the requirement for a written form is not fulfilled.

The employment agreement can be written in any language; German is not required by law. A German translation is necessary only should a dispute be brought before the court.

The employment agreement should stipulate commencement and the terms of the employment relationship, place of employment, job, remuneration, working hours, annual vacation, notice period for termination, and applicable collective bargaining agreements. Furthermore, there are additional information requirements that are stipulated in the Proof Act (Nachweisgesetz – NachwG), for instance, the beginning and end of (limited) employment, probationary periods, details of remuneration, perquisites for overtime, procedure of termination, etc.

Work hours during working days may not exceed eight hours, according to Section 3 sentence 1 of the Working Hours Act (Arbeitszeitgesetz– ArbZG), and 48 hours per week for a six-day work week. This can be extended to ten hours per day if the average shift within six months or 24 weeks does not exceed eight hours per working day (Section 3 sentence 2, ArbZG). As most employees in Germany work a five-day week, this means, in effect, that employees may work up to 9.6 hours per day. In this case, the weekly maximum of 48 hours is not exceeded and, in addition, on average (based on the six-day-week calculation of the law) a daily working time of eight hours is not exceeded.

Breaks and Rest Periods

Weekly working hours of 35 to 40 hours are agreed upon in most collective bargaining agreements. If the daily work does not exceed six hours, a break (unpaid) of at least 30 minutes is statutory, and if the daily work does not exceed nine hours, the break must last at least 45 minutes.

After their daily work, employees must have a continuous rest period of at least 11 hours (Section 5(1), ArbZG) starting upon leaving the workplace. Shorter rest periods may be, and often are, agreed in collective bargaining agreements.

Extensions and Restrictions

Pursuant to Section 7 of the ArbZG, extensions of working hours are possible on the basis of a collective bargaining agreement or a works agreement.

In addition, further restrictions are applicable for special groups of employees, in particular, pregnant or breast-feeding employees, and employees younger than 18 years old.

Measuring Work Time

It is certainly worth mentioning that, pursuant to a recent decision of the European Court of Justice (14 May 2019 – C-55/18), each EU member state is obliged to mandate employers to implement systems enabling the duration of time worked each day by each worker to be measured. The German Federal Ministry of Labour is working on a legislative draft.

Before that decision, it was, at least in office environments, quite common to have a so-called “trust-working time” where employers did not monitor the actual time worked by their employees and, thus, avoided the payment of overtime.

In 2022, the minimum wage is increasing in two stages, with the first stage occurring on 1 July. With effect from 1 July 2022, the Minimum Wage Act (Mindestlohngesetz– MiLoG) stipulates a minimum wage of EUR10.45 gross per hour for any employee in Germany. From 1 October 2022, the minimum wage will be EUR12.00 gross per hour. The minimum wage does not apply to minors, apprentices, volunteers, former long-term unemployed workers and some trainees. In particular, with regard to trainees/interns, the minimum wage is always subject to a case-by-case assessment.

In the course of the minimum wage increase to EUR12.00, the upper earnings limit for mini-jobs is also set to rise from October. An increase from the current EUR450 to EUR520 per month is planned.

Since 1 January 2018, the statutory minimum wage has been in force in all sectors without exception. If the minimum wage is not paid, employees can claim the difference between their actual pay and the minimum wage from their employer. These claims cannot validly be excluded. Infringements of the MiLoG can result in fines of up to EUR500,000.

Since 1 January 2020, the Vocational Training Act (Berufsbildungsgesetz– BBiG) has stipulated a minimum wage of EUR515 per month in the first year for those in vocational training relationships.

Overtime

In general, overtime work must be paid in Germany, except where stipulated differently in the employment agreement. A general exclusion of overtime pay may be permissible only with employees who earn more than the social security contribution ceiling (currently EUR82,800 gross per year for the former West German federal states and EUR77,400 gross for the former East German federal states). For all other employees, an exclusion of overtime pay is permissible only if the exclusion is limited to a specific number of working hours and the overtime is not more than 20% of the weekly working hours.

Payment of overtime premiums is obligatory only where stipulated by a collective bargaining agreement or by employment agreement. Such premiums are, however, market standard in Germany.

Travel Expenses

If employees travel as part of their job (either as sales representatives or “just” to get to an internal/external meeting), that time spent must be paid as well. According to a decision of the Federal Labour Court, however, an employer and employee could agree on different pay levels for mere (passive) travel time, and an agreement to include a certain number of travel hours in the base salary is even possible. It must, however, be explicitly addressed. Otherwise, unless the general ban of overtime work is permissible, the employer has to bear the extra payment costs.

Executive Compensation

There are no regulatory requirements with regard to executive compensation; an employer can freely choose this form of compensation. According to European and German regulatory requirements, however, the remuneration of employees in the financial services sector is subject to several restrictions. These restrictions are aimed, in particular, at cutting back annual bonuses and aligning the long-term targets of the employer and the employee. As a consequence, in this industry, the percentage of bonuses as part of the total compensation is limited. Furthermore, it is necessary to have long-term incentives rather than (only) short-term incentives. Additionally, last but not least, part of the compensation must be held back to cover the future detrimental effects of a business that triggers bonus payments.

Special bonuses such as Christmas bonuses, vacation pay, gratuities or a 13th month's salary are the norm in many companies. However, there is no legal entitlement to such benefits from the employer. However, a claim to a Christmas bonus may still arise if a Christmas bonus is regulated in a collective bargaining agreement, a works council agreement or a company agreement, or if the payment of Christmas bonuses is a “company practice”. This applies particularly if the employer has paid Christmas bonuses without reservation for at least 3 years. If the payment of Christmas bonuses is guaranteed in a company agreement, individual employees cannot be excluded from the payment of Christmas bonuses, according to the principle of equal treatment.

Confidentiality and Non-disclosure Requirements

Employees are subject to statutory confidentiality obligations regarding the trade and business secrets of their employers. Additional confidentiality obligations must be agreed upon between the employer and employee. Such a confidentiality agreement should clearly define the scope of the confidential information. In this regard, it is important to highlight that a confidentiality agreement may not oblige an employee to keep everything they have learnt during the employment confidential. Otherwise, the entire agreement would be considered void, as it would seriously hamper the future professional career of the employee.

Following EU Directive 2019/943, a new law for the protection of trade secrets has been enacted and only such secrets as have been subject to the adequate protection measures of the company are protected by law. As a consequence, it will be necessary to make employees party to greater and more specific confidentiality agreements in future.

Maternity Leave

According to Section 3 of the Maternity Protection Act (Mutterschutzgesetz– MuSchG), there are special protection periods before and after birth during which female employees are subject to an employment ban. Maternity leave generally takes effect six weeks before the calculated delivery date. During this time, expectant mothers may only carry out their work if it is their express wish to do so. Heavy physical work during maternity leave is generally prohibited. Also generally prohibited are night work, holiday work, piecework, Sunday work, assembly line work and overtime.

After childbirth, maternity leave continues for eight weeks. According to the law on maternity protection, there is an absolute ban on employment during this period. Even if a mother would like to return to work, they are not allowed to. Special rules apply with regard to maternity protection in the case of premature birth, delivery of a handicapped child or multiple births. In such cases, a term of protection of 12 weeks will apply. If the birth takes place before the date calculated, then the protection period of eight weeks after the birth will be extended by the number of days before the calculated birth date that the birth occurred.

Sick Leave, Parental Leave and Nursing and Care Leave

According to the Continued Pay Act (Entgeltfortzahlungsgesetz– EFZG), every employee is entitled to six weeks of paid leave per year in case of sickness.

Pursuant to the Parental Leave Act (Bundeselterngeld- und Elternzeitgesetz– BEEG), both male and female employees are entitled to parental leave of three years, usually starting after completion of maternity leave. The employee must inform the employer in good time regarding how long they intend to go on parental leave.

During parental and maternity leave, the employer may terminate the employment relationship only after having gained the permission of a state authority to do so.

Since 2008, the Nursing Act (Pflegezeitgesetz– PflegeZG) has granted every employee leave of up to ten days, if necessary, to organise the nursing and care of relatives. In companies with more than 15 employees, employees are entitled to unpaid leave of up to six months if they take over the care themselves. The illness of a relative and a medical certificate as proof thereof are prerequisites for this entitlement.

Vacation

Furthermore, the Federal Vacation Act (Bundesurlaubsgesetz– BUrlG) grants annual minimum vacation leave to every employee. An employee is entitled to four times the number of days they work per week in vacation leave (ie, for a five-day week, 20 days of vacation per year, or for a three-day week, 12 days of vacation per year). Every working day that has been started counts as a working day, even for half-day jobs. During vacation leave, remuneration must be continued (including variable components). Many collective bargaining agreements provide for an increase of the annual vacation leave up to 28, 30 or even more days. It is generally market standard to offer between 25 and 30 days of vacation per year to employees.

These vacation days should be taken every year. Accrual over several years requires the employer’s consent, and pay in lieu of vacation is strictly forbidden, except at the end of the employment relationship. In accordance with Section 7 paragraph 3 of the BUrlG, unused vacation days have to be taken in the first three months of the following calendar year, otherwise the vacation is forfeited. The forfeiture of vacation entitlement is only considered if the employee was able to take the vacation. Accordingly, this does not apply in the event of long-term illness. The employer is also obliged to inform the employee of the forfeiture of the vacation. If the employer does not comply with this obligation, the vacation entitlement does not expire, according to the case law of the ECJ.

According to Section 207 of the Social Code IX (Sozialgesetzbuch IX– SGB IX), severely handicapped persons must be exempted from overtime upon application. In this context, overtime is defined as any working time exceeding the eight-hour daily limit. In addition, they are entitled to an extra five days of paid leave in accordance with Section 208 of the SGB IX. The five days are valid in addition to the basic vacation.

The Law on Business Secrets

After a long political debate, the Law on Protection of Business Secrets or Law on Business Secrets (Gesetz zum Schutz von Geschäftsgeheimnissen– GeschGehG) was passed by the German lower house on 21 March 2019 and by parliament on 12 April 2019. It came into effect on 26 April 2019. It was long overdue, as the deadline for national implementation of the EU Directive on Business Secrets on which it was based expired in June 2018. Below is a summary of what is primarily new about the law and what changes came about at the last minute during the legislative process. The Law on Business Secrets introduces several new aspects in comparison to the previous law, particularly the following.

  • A new definition of “business secret”: the definition of business secret is redefined (Section 2 No 1, GeschGehG) and is now more strongly based on international standards. For instance, for information to be deemed a business secret now, it will have to be shown that it has at least potential economic value and that it is subject to suitable confidentiality measures. 
  • A more differentiated civil-law liability system: while, until this point, business secrets were protected mainly through contracts, certain provisions of the criminal code or blanket clauses, the Law on Business Secrets provides, for the first time, a more differentiated civil-law liability system with regard to the specific conditions to be met under law (Section 4, GeschGehG) and legal consequences (Sections 6 et seq, GeschGehG). This provides more legal certainty. For instance, reverse engineering of products that are freely available will now be allowed (Section 3 Subsection 1 No 2, GeschGehG), a matter which had previously been a grey area in Germany.
  • Limitations protecting legitimate interests: for the first time, express limitations have been placed on a business's right to claim secrecy, making this subordinate to the legitimate interests of whistle-blowers and investigative journalists (Section 5, GeschGehG).
  • Business secrets in litigation: in future, courts will have more leeway to protect a party's business secrets in trials involving the breach of such secrets. For instance, the opponent may be subjected to obligations of secrecy, the breach of which would be separately punishable (Section 16 et seq, GeschGehG). Even if the opponents' access to business secrets based on the other party's duty of disclosure still cannot be restricted entirely, such access can now be limited to a narrow group of people (Section 19, GeschGehG).

During an employment relationship

German statutory law provides for a strict non-competition agreement during the existence of an employment relationship. For the duration of an employment relationship, an employee is not allowed to act as, or for, a competitor to the employer, according to Section 60 of the Trade Act (Handelsgesetzbuch – HGB). In the event of a violation of a non-competition agreement, an employer may (depending on the individual case) summarily dismiss the employee and claim damages. Instead of claiming damages, the employer may alternatively take over the contracts the employee has concluded on behalf of the competitor (Section 61, HGB). Traditionally, German labour courts are very employer-friendly when it comes to (alleged) illegal competition from employees.

Post-contractual non-competes

Furthermore, post-contractual non-competes are also permissible under German law. They must, however, be agreed in writing and observe the prerequisites set forth under Section 74 et seq of the HGB. Most importantly, the non-competition period may not exceed two years and the post-contractual non-compete is valid and binding only if the employer pays the ex-employee an indemnification of at least half their last income (50% of total annual compensation) during the post-contractual non-competition period. According to latest case law, the non-compete clause should concretely define the scope of the non-compete. Finally, the employer may waive the post-contractual non-competition agreement at any time. In this case, the obligation to pay the indemnification ceases, but only 12 months after the waiver.

Under German law, non-solicitation clauses with regard to employees are permissible, as long as they do not prevent the employee from exercising their freedom to terminate their employment with one employer and join a different employer (even a competitor) later.

Non-solicitation clauses are, however, difficult to implement. If an employer cannot prove that one of their former employees solicited other employees, there are only a few legal measures at hand.

Non-solicitation of customers is part of a non-competition restriction and, consequently, this must be agreed in writing and an indemnification must be paid (see 3.1 Non-competition Clauses).

The use, collection and processing of personal data within an employment relationship are subject to the restrictions set forth in the Federal Data Protection Act (Bundesdatenschutzgesetz– BDSG) which, as in other European jurisdictions, has been altered significantly by the General Data Protection Regulation (GDPR). Personal data means any information concerning the personal or material circumstances of a given natural person, including an employee (Sections 1 and 26, BDSG), and covers not only electronically processed data but also paper-based data. There are also state data protection laws providing legal requirements for data processing carried out by state-level public authorities or public bodies.

Apart from the general data protection laws, there are sector-specific regulations at both state and federal levels that provide for data protection requirements; the Telemedia Act (Telemediengesetz) regulates the control of electronic communication and information services, and the Telecommunications Act (Telekommunikationsgesetz) addresses the processing of personal data concerning users.

Employees' personal rights

The privacy of employees is further protected by their respective personal rights (allgemeines persönlichkeitsrecht), which are guaranteed as fundamental rights in the German constitution. In particular, the fundamental right of informational self-determination is a significant constitutional guarantee which applies to employment relationships in Germany.

As a general rule, any processing, transfer, etc, of personal data is permissible only if there is justification for it. Such justification may be the processing of the employment relationship (eg, bank account details are needed to pay remuneration), by individual consent of the employee (which must be very specific to be valid) and/or a works agreement concluded with the works council (Section 26, BDSG).

Transfer restrictions

The transfer restriction includes the prohibition on the transfer of personal data from one legal entity to another, even if they are part of one group of companies. From a data protection viewpoint, group entities are considered third parties like any other entity. Furthermore, additional legal challenges are raised where personal data is transferred into a country outside the European Union (except for Canada, Switzerland and Argentina). This is the case, in particular, if the data is to be transferred to the USA or China. Such a transfer outside of the European Union requires additional means of data protection and access restriction, for example, the use of certain EU standard data processing agreements with the third-country provider.

The GDPR

Since 25 May 2018, the provisions of the European GDPR and the correspondingly amended “new” BDSG have applied.

The new BDSG also contains restrictions on the processing of personal data of employees for the detection of criminal offences, and now expressly mentions the collective agreement (such as collective agreements and works agreements) as a possible legal basis for the processing of employee data. Such an agreement must now contain appropriate and specific measures to safeguard the human dignity, legitimate interests and fundamental rights of the data subject, in particular as regards the transparency of processing, the transfer of personal data within a group of undertakings (including those engaged in a joint economic activity) and the monitoring systems at the workplace.

In addition, the possibility of processing special categories of personal data is recorded in the employment context and the term “employee” is defined. The employee can demand information from the employer about the processing of their personal data in accordance with Article 15 of the GDPR. If the employee exercises this right, the employer must disclose:

  • the purposes for which the employee’s data has been processed;
  • what type of data has been processed;
  • who has access to the data and how long the data is expected to be stored;
  • the rights of employees with regard to the data;
  • how the employer obtained the data (unless communicated directly by the employee); and
  • whether automated decision-making (including profiling) has taken place.

More detailed rules have been laid down as to when the consent of an employee concerning the processing of data is valid.

Employer liability

In companies with more than ten employees processing personal data, the position of company data protection officer must be created (Section 38(1) sentence 1, BDSG). Finally, anyone processing personal data must establish a so-called list of processing activities. Employers have the burden of proof with regard to compliance with the applicable regulations.

The infringement fine increases to up to EUR20 million or 4% of global revenue (whichever is higher). Both the company and the responsible individuals can be held liable. In addition, there is the threat of consequences under criminal law.

There are no limitations on the use of foreign workers in Germany, as long as the foreign workers have valid work and residence permits. Before hiring a worker from abroad, the German employment agency must check and certify that there is no adequate German person or foreign person with unrestricted permission to work who is registered as unemployed and could take over the job. This provision is laid down in Section 39 of the Residence Act (Aufenthaltsgesetz– AufenthG).

A foreign person who is not a citizen of an EEA member state must have a residence title (Section 4 (1) sentence 1, AufenthG). In this case, the foreign person must apply for this residence title at the Foreigners Registration Office before entering Germany. There are four different types of residence titles:

•       visa (Section 6, AufenthG);

•       residence permit (Section 7, AufenthG);

•       settlement permit (Section 9, AufenthG); and

•       permanent EC residence permit (Section 9a, AufenthG).

The Blue Card, the ICT Card and the Mobile ICT Card

The residence permit (Section 7, AufenthG) also includes the Blue Card (Section 19a, AufenthG), the ICT card (Section 19b, AufenthG) and the Mobile ICT card (Section 19d, AufenthG). The EU Blue Card is a residence permit, in principle limited to four years on first issue, which third-country nationals with a university degree or comparable qualification may obtain in order to pursue employment commensurate with their qualification. As part of the implementation of the EU Directive on internal company transfers, the ICT card is a new residence permit for third-country nationals who work as managers, specialists or trainees in a company in another EU country and are posted to a branch of the same company in Germany. Third-country nationals who already hold a residence permit for an EU member state, according to the ICT Directive, and are planning a longer stay (over 90 days) in Germany, can apply for a separate residence permit, the Mobile ICT card.

For a work permit, it is essential for the employee to have a job offer (Section 18 Abs 2, AufenthG) The lack of such a work permit may be regarded as an administrative offence, which could lead to the imposition of heavy fines on the employer and the employee (Section 404 (2) No 3 and 4, SGB III).

New immigration rules since March 2020

On 1 March 2020, new migration rules specifically for highly qualified migrants came into force. The aim is to encourage qualified specialists to come and work in Germany. Skilled workers benefit from an easier and faster application process. A combined work/residence permit for qualified employment may be obtained, if the applicant is a skilled worker (university graduates and people with a vocational qualification) and holds a concrete job offer, the Federal Employment Agency grants its approval and, if necessary, the applicant holds a professional licence.

Union membership rates have fallen heavily since the early 1990s. Today, only certain industries have significant trade union representation, in particular the metal industry (IG Metall), the chemical industry (IGBCE), construction (IG BAU), public and banking services (Ver.di), as well as transportation (VC Cockpit, GDL, Ver.di, EVG, GDF) and the health sector (Marburger Bund, Ver.di). In these sectors in particular, the major trade unions still manage to call for industry-wide strikes.

In addition, in the last few years, highly specialised groups of employees (eg, pilots, train conductors, doctors) have unionised and called for strikes in order to drastically increase their remuneration.

It is important to note that in Germany, unlike in other European countries, trade unions may not call a strike for political reasons. They are entitled to strike only over issues that can be stipulated in collective bargaining agreements.

It is also important to understand that trade unions have no legal power to force employers into negotiations or the conclusion of collective bargaining agreements; their only route is to influence the employer by going on strike so that the employer “voluntarily” negotiates with the aim of finalising a collective bargaining agreement.

Employees may not bring representatives to any work-related meetings.

However, according to Section 81(4) of the Works Constitution Act (Betriebsverfassungsgesetz – BetrVG), if a meeting concerns the employee’s performance and/or professional development (ie, in particular grievances, warnings and dismissals) the employee is entitled to be accompanied by a member of the works council, if such a council exists. There is no obligation for the employer to allow trade union representatives or lawyers to be present in any such meeting.

Trade Unions

Union representatives are set up and elected by the organised workers of a company. However, the union is not entitled to have its representatives elected on the premises of the company, even if the election takes place outside working hours, because the election is an “intra-trade union act”. Elections are therefore regularly held in a bus (called an election bus) or in a rented room near the company grounds.

Union representatives have no right to visit the union’s members during working hours. The cost of the activities of the trade union representatives must be borne by the union itself. Tasks include, in particular, advertising for new members and informing employees about union activities, as well as collective bargaining with the employer.

Freedom of union organisation is protected by constitutional law and stems from the freedom of coalition in Article 9(3) of the Constitution Law (Grundgesetz– GG). At the same time, an employer may freely choose not to liaise with trade unions, that right being likewise safeguarded by Article 9(3) of the GG.

Works Councils

Apart from the trade unions, German law, by means of the Works Constitution Act (Betriebsverfassungsgesetz) provides for another type of employee representation – the works councils. In companies with at least five employees, the employees are free to elect a works council – a representative body composed of employees of the company. The works council, from a legal point of view, is completely independent of the trade unions, although in many cases works council members are active trade union members as well.

The works councils have very strong information and co-determination rights; for example, the works council’s permission is necessary before asking employees to work overtime or before implementing new IT tools. Works council members enjoy protection against dismissal and may drop their work immediately when they need to function as works council members. The employer may be regarded as committing an administrative offence or even a criminal act if the employer hinders works council members during their activities in the works council, or if the employer treats works council members differently from other employees, for example if the employer pays them better or worse than comparable employees. In summary, the works council can be an enormous obstacle to the employer’s business decisions and, consequently, many German companies have a collaborative approach with their works councils.

Collective bargaining agreements (Tarifverträge) in Germany are understood as agreements between trade unions and individual employers or employers’ associations. Such collective bargaining agreements set legally binding employment terms and conditions for the parties to the agreement and their respective members.

Works council agreements (Betriebsvereinbarungen) are agreements between employers and the works council of a given operation. All employees in the operation, irrespective of their membership in any trade union, are bound by such agreements. The agreements typically set the framework for most operational issues, such as working time models, shifts, codes of conduct at the workplace, etc. Only senior executive employees, as well as the directors of the employer, are exempt from the application of works council agreements.

Whether a cause is required for termination of employment depends on which party wishes to terminate the employment relationship. Employees may always give notice without any reason or cause needed to justify the notice of termination.

Employers in companies with more than ten employees, however, need to have a justifying reason before giving notice to an employee, if the employee has been employed by the company for more than six months. During the first six months, no reason is required.

The following reasons can be used to justify termination of employment.

Operational Reasons (Betriebsbedingte Kündigung)

As a consequence of the entrepreneurial freedom guaranteed by the German constitution, any employer is free to change the organisation of its company and to reduce it or shut it down. Such an entrepreneurial decision will be checked by the German courts only in so far as to determine whether the decision was utterly unfair regarding one employee (ie, made on purpose to dismiss just one employee). It is, for example, not necessary to prove the company is making a loss in order to justify the entrepreneurial decision.

In the case of dismissal for operational reasons, the employer must apply a social selection with all the employees who are comparable to those affected directly by the entrepreneurial decision; the employer may then terminate only the “socially strongest” employees, in accordance with Section 1(3–5) of the Employment Protection Act (Kündigungsschutzgesetz– KSchG).

Conduct-Related Reasons (Verhaltensbedingte Kündigung)

Obviously, severe breaches of contract or committing criminal acts while in the employ of a company may justify dismissal.

According to German jurisdiction, the employee must have culpably committed an unlawful breach of duty and the dismissal must be proportionate, meaning there must be no “milder means” than termination. Milder means could be a formal warning or transfer to another job. When weighing the conflicting interests, the employer's interest in terminating the employment relationship must prevail over the employee’s interest in continuing the employment relationship. This step of the legal review is called “balancing of interests”. It must be in favour of the employer for the dismissal to be legal.

Personal Grounds (Personenbedingte Kündigung)

In some cases, reasons relating to the person of an employee (albeit the employee may have no influence on them) may justify dismissal. Typical reasons are the loss of a driver’s licence for drivers, the loss of state permits which are prerequisite for a job (eg, a work permit, a permit to work at airports, etc), or sickness. Unlike in many other countries, sickness may be a valid reason for dismissal and employees may even be dismissed during sick leave. However, the employer must be able to prove that no milder means exist, and that the transfer of the employee to an easier/different job is not possible (and would not alleviate the employee's health issues).

Certain groups of employees enjoy special (ie, stronger) protection against dismissals, including pregnant women, employees on parental leave, works council members, severely disabled persons and data protection officers. Such employees can be dismissed only after the employer has received permission from the works council, a state authority or a labour court.

Furthermore, there is a distinction between ordinary dismissal and dismissal without notice – a dismissal for good reason. While an ordinary dismissal terminates the employment relationship after expiry of the notice period, dismissal without notice ends it immediately. In this case, the cause (as set out above) for the dismissal must be so strong that it becomes unacceptable for the employer to expect the notice of termination to expire. Where a dismissal without notice is intended, the dismissal must be delivered to the employee within 14 days of a responsible employee of the employer becoming aware of the facts justifying the dismissal.

However, if the employee's behaviour justifying the cause for dismissal is perpetuated, the 14-day deadline commences only at the end of the perpetuated breach of contract.

Similarly, where there is a series of breaches rather than a single breach, the 14-day period commences only after the last breach of the series becomes known by the manager authorised to give notice.

In the case of criminal acts committed by an employee, the employer may even wait for the criminal proceedings to end. Only then does the two-week notice period begin.

Procedures for Implementing Terminations

There are two kinds of internal procedures to be observed before issuing a dismissal.

Firstly, consultation of the works council

  • Before all dismissals, the employer must consult with the works council, so that the works council has a chance to convince the employer not to dismiss the employee. This is set down in Section 102 of the Works Constitution Act (Betriebsverfassungsgesetz–BetrVG).
  • Upon consultation, the works council has one week (for ordinary notices of termination) or three days (for dismissals without notice) to consider its approach and reply to the employer. Only after the works council’s statement or lapsing of the deadline may the employer validly give notice of termination to the employee.
  • Whether the works council supports or objects to the envisaged dismissal is of no importance, unless a works council member is to be dismissed. In that case, the works council’s consent is required. As already mentioned, an objection by the works council to an ordinary termination announced by the employer does not prevent the termination. However, it can help the employee in an action for protection against dismissal. If the works council has objected to the dismissal on the grounds of an objection set out in Section 102(3) of the BetrVG, the employer must, upon request, continue to employ the employee under unchanged working conditions after the expiry of the period of notice, until the legal dispute has been finally concluded (Section 102 (5) sentence 1, BetrVG).
  • The employer does not necessarily have to inform the works council in writing of a dismissal, but this is strongly recommended and is always done in practice.
  • If the envisaged dismissal concerns a severely handicapped employee, it is further necessary to consult with the severely handicapped employee’s representative as well. Where more than five severely handicapped employees are employed within an operation, these employees may elect their representative (Schwerbehindertenvertreter).
  • Should the employee to be dismissed be a senior executive employee (leitender Angestellter) and should a representative body for senior executive employees (Sprecherausschuss) exist, such representative body must be informed before the dismissal of the senior executive; otherwise, the dismissal is void.

Secondly, procedures dependent on the cause of dismissal

Operational reasons – where a redundancy measure is intended, the employer may be required to:

  • notify the employment agency of the envisaged (mass) dismissals before giving notice;
  • consult with the works council and negotiate a reconciliation of interests (Interessenausgleich) and social plan (Sozialplan);
  • apply a social factor test where necessary;
  • consult with the works council (and the severely handicapped employees’ representative, where applicable) with regard to the individual dismissal; and
  • involve state authorities in order to obtain permission to dismiss employees who enjoy special protection against dismissal. 

Conduct-related reasons – before dismissing an employee because of their behaviour, it is in most cases necessary to:

  • have discussed the issue(s) with the employee beforehand in a grievance procedure and, in particular, to have issued warning letters in this regard to the employee;
  • consult with the works council (and the severely handicapped employees’ representative, where applicable) with regard to the individual dismissal; and
  • involve state authorities in order to obtain permission to dismiss employees who enjoy special protection against dismissal.

Personal reasons – the dismissal of an employee for personal reasons requires internal procedures as well, in particular:

  • when it is necessary to have invited the employee to a discussion of any possible connection between their job and sickness (so-called betriebliches Eingliederungsmanagement), to have had such meetings (if the employee consents to them) and to have discussed possible solutions as to how the health status of the employee might be improved by any measures implemented on the job level;
  • to consult with the works council (and the severely handicapped employees’ representative, where applicable) with regard to the individual dismissal; and
  • to involve state authorities in order to obtain permission to dismiss employees who enjoy special protection against dismissal.

The law (Section 622, BGB) provides for statutory notice periods ranging from four weeks to seven months depending on the service term of the employee.

If the parties agree to a probationary period, then for the duration of the probation, but no longer than six months, the notice period will be two weeks (Section 622 (3), BGB). According to the latest change in legislation on limited employment contracts, as of 1 August 2022 (Section 15(3), TzBfG), the probationary period in a limited employment shall be appropriate, for example, no more than three months in a one-year-fixed contract. The scheme above applies only to notices of termination given by the employer. According to the law, the applicable notice period for employees is always four weeks to either the 15th or the last day of a calendar month. The parties are free to agree on different periods of notice, provided that they are not shorter than the statutory periods and the period of notice to be observed by the employee is not longer than that applicable to the employer. Furthermore, an employee’s right to give notice may not be hindered by economic disadvantages (ie, no “golden handcuffs”).

Severance

There is no general statutory severance under German employment law. Only in very exceptional cases may the courts award severance to an employee – if a senior executive sues their employer or where a court finds the continuation of the employment unbearable for the employee.

Further exceptions giving rise to claims can be found, for example, in social plans and collective agreements, as well as in termination agreements with severance arrangements. Finally, the employer can offer a severance payment with reference to Section 1a of the KSchG by giving notice for operational reasons. This can also lead to a claim for compensation.

It is, however, very common to agree on settlements/termination agreements providing for severance payments.

Notice Requirements for Collective Redundancies

  • Notices of termination must be made in writing (ie, actual ink on paper), signed by a person authorised to do so (ie, a managing director), and declared clearly and unambiguously. Also, the will to end an employment relationship and the point in time at which it should end must be stated with absolute clarity in the dismissal notice.
  • Furthermore, notice periods need to be observed (see the beginning of this section). Likewise, most collective bargaining agreements and employment agreements provide for (longer) notice periods.
  • Where a redundancy measure is intended, the employer may be required to notify the employment agency of the envisaged (mass) dismissals before giving notice and, furthermore, consult with the works council and negotiate a reconciliation of interests (Interessenausgleich) and social plan (Sozialplan).
  • The reconciliation of interests provides the “how” of implementing the redundancy (ie, when to dismiss whom, or on the basis of which selection criteria). However, this triggers entrepreneurial freedom to which the works council cannot, in the end, enforce any changes. It can, however, significantly delay the process. In some regions of Germany (depending on the legal standpoint taken by the local court), the works council can even prevent the employer from implementing redundancy measures before the negotiations on the reconciliation of interests have officially been concluded or have failed. That process may easily take three to nine months.
  • The social plan, instead, stipulates the compensation for the dismissals (ie, the severance amounts and their calculation). The works council may enforce the conclusion of this social plan by invoking a conciliation committee (Einigungsstelle). The conciliation committee may, even against the employer’s wishes, decide on the budget of the social plan (ie, define the total volume to be spent on severance).

In exceptional cases, the cause for dismissal may be so significant that even continuation of the employment relationship until the expiry of the applicable notice period is unbearable for the employer. See 7.1 Grounds for Termination for an overview of this type of dismissal.

It is permissible and usual in Germany to obtain releases in connection with termination agreements.

The following statutory requirements apply:

  • termination agreements must be in writing, Section 623 of the BGB (ie, actual ink on paper); and
  • both parties must sign the agreement.

Beyond that, only general contractual law applies, for example, the employer may not threaten the employee, the contractual clauses may not be unfair, a consideration must be agreed, etc.

The works council does not have to be heard in accordance with Section 102(1) of the BetrVG before the conclusion of the contract, since this regulation applies only to notices of termination and not to termination agreements.

See 7.1 Grounds for Termination.

An employee may challenge the validity of any notice of termination by issuing a lawsuit against their employer within three weeks of receipt of notice of termination. The court will then check whether the legal prerequisites of a dismissal were met, and can only then decide whether the dismissal was valid. Thus, as a result of the court proceeding, either the employee will return to their workplace (if the dismissal was invalid) or stay out of the company (if the dismissal was valid). In order to avoid the uncertainty of this situation, settlement agreements are usually concluded at the labour courts, providing for the termination of employment and the payment of a severance. The severance in such settlements is subject to the free negotiations of the parties; the judges may only make unbinding proposals (referring to the prospects of success in the lawsuit).

Employees may alternatively file lawsuits in order to raise any claim under the employment contract, or statutory claims relating to the employment relationship.

Retaliation/Whistle-Blower Claims

According to statutory law (Section 612a, BGB), retaliation against an employee who makes claims or who (rightfully) raises a complaint against their employer, is forbidden.

At the same time, given historical experiences with informers, whistle-blowers do not enjoy a good reputation. As a consequence, the labour courts are reluctant to protect whistle-blowers against retaliation unless:

  • they can prove that their complaint was true and well founded;
  • they first tried to escalate the disclosed issue internally; and
  • any negative measure taken with regard to them was actually retaliation rather than any unconnected business decision.

However, in April 2019, the European Parliament accepted a new EU Whistle-blower Directive, the regulations of which Germany were required to implement within the following two years. According to the Directive, the German point of view will have to change dramatically. Not only will whistle-blowers in future be allowed to escalate externally before undertaking any internal steps, but the employer will need to prove that any disciplinary measures against whistle-blowers are not retaliation but independent acts.

As Germany had not implemented the EU Whistle-blower Directive in time, the EU took action at the end of January 2022. The European Commission initiated formal infringement proceedings against Germany and 22 other member states in January.   The government bill of the Whistle-blower Protection Act was passed by the Federal Cabinet on 27 July 2022, thus initiating the actual legislative process. It is expected that the Bundestag will deal with the draft law after the summer break in September 2022. Over the last few years, many companies have introduced ethical guidelines that oblige employees to inform their employers about undesirable behaviour by other employees. Such whistle-blower regulations in ethical guidelines concern the so-called conduct of employees and are therefore subject to co-determination pursuant to Section 87(1) No 1 of the BetrVG. The right of co-determination of the works councils in the introduction of whistle-blowing regulations means that the employer can only introduce, amend or repeal such regulations together with the works councils.

At present and in general, German labour law requests that the employee should first complain internally before going public. An infringement of this duty may, under German law, actually justify the dismissal of the employee.

The General Equal Treatment Act (Allgemeines Gleichbehandlungsgesetz– AGG) implements the European Equal Treatment Directives and contains special rules prohibiting discrimination in the employment relationship based on the following specific characteristics:

  • race or ethnic origin;
  • gender;
  • religion or belief;
  • disability;
  • age; or
  • sexual orientation.

This applies in particular to the areas of job vacancies and application, the selection of employees and selection criteria, the conditions of employment and working conditions, as well as remuneration and the definition of conditions of discharge. The personal scope of application covers all kinds of employees, including trainees or employees working at home. Since 1 January 2018, the law has also stipulated that the representation of severely disabled persons must be addressed before a severely disabled person is dismissed.

Damages or Other Relief in Cases of Discrimination

Past remuneration

If the employee has been degraded or fired, or has suffered lower pay because of discrimination, they may be entitled to recover the pay that they would have received had the discrimination not occurred. This includes not only wages, but also the value of lost benefits, vacation time, bonuses and promotions, etc.

Future remuneration

While the courts prefer to see the employee placed in the position they were denied, the employee may be awarded (hypothetical) future pay if it would be unreasonable for the employee to work for the employer again. The payment of future remuneration is limited to the period until which the employee has, or would have, found an adequate new job.

Emotional distress/compensatory damages

Compensatory damages may be awarded in cases involving discrimination. This pays victims for expenses caused by the discrimination, such as costs associated with a job search or medical expenses, and compensates them for any emotional harm suffered. According to Section 15(2) of the AGG, the employee can get indemnification for non-pecuniary damage.

Punitive damages

These may be awarded as indemnification. Given that the concept of punitive damages is alien to German law in general and was introduced only through the Equal Treatment Directives, German labour courts are extremely reluctant to grant this.

Reinstatement

In general, no reinstatement can be ordered by the courts on the grounds of discrimination. Only in small operations with fewer than ten employees, where general dismissal protection does not apply, may a court award a reinstatement on the grounds of discrimination.

In the case of legal disputes between an employee, works council, trade union and/or employer, the labour courts are competent to decide the cases. Employees who wish to assert the claim that their termination was not in observance of social-equity laws or was legally ineffective for other reasons must file an action with the Labour Court within three weeks after receipt of the written termination declaration (Section 4, KSchG). The deciding chamber of a labour court consists of three judges, one “professional” judge who has studied law and one lay judge each for the employee and the employer, appointed by trade unions and employer associations.

The courts for labour law matters are organised into three levels:

  • the court of first instance named the Labour Court (Arbeitsgericht);
  • the appellate courts – the Regional Labour Court (Landesarbeitsgericht) in the second instance; and
  • the Federal Labour Court (Bundesarbeitsgericht) in the third instance.

The labour courts have exclusive jurisdiction over all disputes arising from an employment relationship, irrespective of the value of the matter in dispute. Appeals are heard in the regional labour courts; the value of the matter in dispute must generally exceed EUR600 to be admitted for appeal. The Federal Labour Court can, upon special petition, rule on appeals of the final decisions of the regional labour courts, and serves as the final court of appeal.

There is no provision for class-action claims.

Under German law, arbitration procedure agreements and mediation agreements cannot validly be concluded with employees, unless they are stipulated by collective bargaining agreements.

In the first instance at the labour courts, each party bears its own attorney’s fees, whether or not it has won the litigation. This provision was intended to prevent an economically weaker employee from enforcing their claim because of the cost risk. If an employee loses their court case against the employer, the employee must bear their own costs, but not the employer’s costs.

Heuking Kühn Lüer Wojtek

Georg-Glock-Straße 4
Düsseldorf
North Rhine-Westphalia
Germany
40474

+49 211 600 5500

+49 211 600 55050

arbeitsrecht@heuking.de www.heuking.de
Author Business Card

Trends and Developments


Authors



Heuking Kühn Lüer Wojtek is a partnership of more than 400 lawyers, tax advisers and civil law notaries with eight offices in Germany as well as offices in Zürich. It is one of the major commercial law firms in Germany. It supports international clients and co-ordinates work in various jurisdictions. Internationally, it collaborates with leading law firms on a “good friends basis“. About 44 lawyers at the firm deal with employment issues on a regular basis, covering all aspects of employment law.

Recent Trends in German Employment Law

Minimum wage increase

Since 1 July 2022, the minimum wage has been EUR10.45 gross per hour. As of 1 October 2022, the minimum wage will increase again to EUR12.00 gross per hour. Starting on 1 October the mini-job limit shall also increase to EUR520 per month. The minimum wage generally applies to all employees throughout all branches in Germany. The only exceptions are minors, apprentices, volunteers, former long-term unemployed people and some interns. Particularly in the case of apprentices/interns, the minimum wage is always subject to a case-by-case review. If the minimum wage is not paid, employees can claim the difference between their actual pay and the minimum wage from their employer. These claims cannot be effectively excluded. Violations of the Minimum Wage Act (MiLoG) can be punished with fines of up to EUR500,000 each.

Easier employment for Ukrainians

Since the start of the Russian war, more than 600,000 people from Ukraine have been registered as refugees in Germany. This means, besides the humanitarian challenge, it has also been a major task for the German Federal Ministry of Labour to quickly integrate Ukrainians in the German labour market.

At their conference on 17 March 2022, the European interior ministers agreed to swiftly accept war refugees from Ukraine. At the same time, those seeking protection will be guaranteed minimum standards such as access to social assistance and a work permit.

Legislative developments

For this purpose, the so-called Mass Influx Directive (2001/55/EG) was activated on 4 March 2022. The Directive has its origins in the wars of the 1990s in the former Yugoslavia. Its aim is to prevent the authorities responsible for asylum applications from being overloaded, as was the case with the Federal Office for Migration and Refugees during the large wave of Syrian refugees in 2015 and 2016. Germany implements this Directive through Section 24 of the Residence Act (AufenthG). It regulates the granting of residence for temporary protection. Refugees from Ukraine can therefore be granted a humanitarian residence title in an unbureaucratic manner without an individual case assessment. This is initially valid for one year and can be extended to up to three years (Section 24(1), AufenthG).

Refugees can also apply for asylum, but, in this case, access to the German labour market would be limited in the first three months if an individual lives in an initial host facility.

Access to the labour market

With a residence permit, Ukrainian refugees have unlimited access to the German labour market (Section 4a(1), AufenthG).

If a Ukrainian wishes to pursue a legally restricted occupation, work permission is required (Section 4a(2), AufenthG), as Ukraine is currently not a member of the European Union. On 17 June 2022, the European Commission recommended candidate status for Ukraine.

In order to avoid bureaucracy, the Federal Ministry of the Interior has recommended to the federal states that the authorities should already include the permission to take up employment in the residence title, regardless of whether it is an employment requiring a permit or not. The only requirement that must be proved by the applicant is that their residence before 24 February 2022 was in Ukraine.

Return to the office

The development of the COVID-19 virus and the surrounding crisis has changed significantly since the appearance of the Omicron variant. On the one hand, there have been high incidences of COVID-19, but, on the other hand, mild symptoms of the disease. Does that also mean that employees will return to the same working conditions as before the pandemic?

Limited until 19 March 2022, Section 28b(4) of the Infection Protection Law (IFSG) contained a legal obligation for employers to offer remote working. At the Prime Ministers' Conference on 16 February 2022, the federal and state governments decided not to extend this regulation if the development of the pandemic allowed this.

Furthermore, the occupational health and safety regulation no longer applies. This regulation included the obligation for employers to reduce business-related personal contacts.

The legal situation therefore allows companies to demand the return to the office, exercising their right of direction in accordance with Section 106 of the Trade Regulation Act (GewO).

Unless there is a contractual or collective legal agreement, employees no longer have a right to work from home. However, many employees and works councils would like to keep the possibility of working from home at least in part, regardless of the status of the pandemic.

Participation rights of works councils

A number of participation rights of the works council must be taken into account when employees return to work in the office. If employees are not to return to the office immediately but gradually, it makes sense to create a works council agreement to regulate this continued remote working and to address questions as to the gradual return to the office.

The (permanent) change of the physical company workplace (ie, the office) to a remote workplace and vice versa, even if work tasks remain unchanged, constitutes a transfer that requires the involvement of the works council. The works council must be informed in accordance with Section 99(1) sentence 1 and Section 95(3) of the Works Constitution Act (BetrVG).

This also applies where employees work partially remotely and partially at the office (so-called alternating teleworking).

If the assignment of the remote workplace is not permanent, the works council's right of participation depends on whether there is a significant change in the working circumstances in the individual case. This is to be evaluated not only in terms of space, but also in terms of function. The integration of an employee into the operational process and the performance of their tasks can be completely different from a technical and/or organisational point of view from when the work is performed on site.

The same applies to the reversed process, where an employee is no longer permitted to work remotely but must permanently or temporarily work at the company's premises.

However, if an employee only works from home occasionally and keeps their company workplace, there is no transfer according to works constitution law. An example of this situation would be one where the employer allows its employees to work remotely from home on one or two days per week, provided that there are no operational reasons preventing this.

When teleworking is introduced by a works council agreement, the works council may be entitled to participation rights in accordance with Section 87 subsection 1 No 1, 2, 3, 6, 7 and 14 of the BetrVG.

Implementation of the Working Conditions Directive (RL 2019/1152) into national law

On 23 June 2022, the German parliament passed the proposed legislative draft for the implementation of the Working Conditions Directive 2019/1152 (RL 2019/1152). It came into force on 1 August 2022. The aim of the Directive is to expand the catalogue of employer information obligations, introduce new substantial employee protection provisions and strengthen the enforceability of transparency requirements.

The legislative draft primarily includes amendments to the Verification Act (NachwG). Other amendments outside the Verification Act relate to the Part-Time Work and Fixed-Term Employment Act (TzBfG), the Temporary Employment Act (AÜG) and the GewO.

Amendments to the NachwG

The NachwG obliges the employer to record the essential terms of an employment contract, to sign the record and to hand it over to the employee.

Section 2(1) sentence 2 of the NachwG contains various extensions regarding the information that the employee must be provided with. The most important are listed below:

  • names and addresses of the contracting parties;
  • date of commencement of the employment relationship;
  • in the case of fixed-term employment, the end date or the foreseeable duration of the employment relationship;
  • the place of work or, if the employee is not supposed to work only at one particular place of work, an indication that the employee may be employed at different places or may freely choose their place of work;
  • a brief characterisation or description of the work to be performed by the employee;
  • the structure and amount of remuneration, including overtime pay, bonuses, allowances, special payments and other components of remuneration, each of which shall be stated separately, along with the due date and method of payment;
  • the agreed working hours, agreed rest breaks and rest periods and, in the case of agreed shift work, the shift system, shift rhythm and conditions for shift changes;
  • if agreed, the possibility of assigning overtime and its conditions;
  • work on demand ‒ work performance depending on the workload, minimum number of hours to be remunerated, time frame (reference days and hours) for the performance of work, period for advance notice of the working time;
  • the duration of the annual rest leave;
  • entitlement to training offered by the employer;
  • name and address of the pension provider (Occupational Pensions Act - BetrAV).

In addition, the provisions in Section 2(1) and (14) of the NachwG stipulate that the employer must inform the employee of the procedure for termination of employment by the employee and the employer. This information must cover, at least, the requirement of written notice of termination, the deadlines for termination of employment and the deadline for bringing an action for protection against dismissal.

There is also a change in the notice periods relating to contractual terms. Information under Section 2(1) sentence 2, No 1, 7 and 8 of the NachwG must be provided on the first day of performance of work; information under Section 2(1) sentence 2, No 2-6, 9 and 10 NachwG within seven calendar days after the agreed starting date; and information under Section 2(1) No 11-15 NachwG within one month after the agreed starting date.

Pursuant to Section 2(5) of the NachwG, certain information may be replaced by a reference to the statutory provisions or the relevant collective agreement, works agreement, etc.

Violations do not lead to the invalidity of the employment contract but may result in a fine of up to EUR2,000 (Section 4(2), NachwG)

Other legislative amendments

Of the remaining legislative amendments, the most important are briefly described below:

The Temporary Employment Act (AÜG)

Temporary workers are entitled to a claim against the hirer, according to which the hirer must inform the temporary worker of their name and address. In addition, a temporary worker shall be able to apply to the hirer for a transfer if they have been employed for longer than six months (Section 13a(2), AÜG).

The Part-time and Fixed-term Employment Act (TzBfG)

Part-time employees who have been employed for more than six months may express a wish to change their working hours (Section 7(3), TzBfG). This also includes the request for an extension. Employees may express that they wish their employment contract to become permanent after a period of employment of more than six months. In this case, a lock-up period of one year applies for a renewed request (Section 18(2), TzBfG).

In the case of work on demand, a time frame must be agreed upon within which work can be demanded by the employer (Section 12(3), TzBfG).

In addition, probationary periods for fixed-term contracts must in future be proportionate to the type and duration of the work (Section 15(3), TzBfG).

Outcomes

Although all employment relationships are potentially affected, employers only have to apply the initiative to new contracts that begin on or after 1 August 2022. Employees that were already employed before the effective date only have to be informed upon request.

In the future, employers will have to be prepared for additional work on new and existing employment contracts.

Heuking Kühn Lüer Wojtek

Georg-Glock-Straße 4
Düsseldorf
North Rhine-Westphalia
Germany
40474

+49 211 600 5500

+49 211 600 55050

arbeitsrecht@heuking.de www.heuking.de
Author Business Card

Law and Practice

Authors



Heuking Kühn Lüer Wojtek is a partnership of more than 400 lawyers, tax advisers and civil law notaries with eight offices in Germany as well as one office in Zurich. It is one of the major commercial law firms in Germany. It supports international clients and co-ordinates work in various jurisdictions. Internationally, it collaborates with leading law firms on a “good friends” basis. About 44 lawyers at the firm deal with employment issues on a regular basis, covering all aspects of employment law.

Trends and Developments

Authors



Heuking Kühn Lüer Wojtek is a partnership of more than 400 lawyers, tax advisers and civil law notaries with eight offices in Germany as well as offices in Zürich. It is one of the major commercial law firms in Germany. It supports international clients and co-ordinates work in various jurisdictions. Internationally, it collaborates with leading law firms on a “good friends basis“. About 44 lawyers at the firm deal with employment issues on a regular basis, covering all aspects of employment law.

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