Category Archive: Employment contract

Penalty clause unenforceable where non-compete obligation is invalid

If a post-contractual non-compete obligation is invalid and therefore non-binding, a penalty clause intended to protect this clause is unenforceable (judgment of the Solingen labour court dated 20 June 2017, docket number 3 Ca 153/17). The employee worked for a travel agent and had mainly sold cruises. The employee’s contract included a post-contractual non-compete obligation …

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New to age limits: What is allowed, what is not allowed?

Age limits remain a permanent issue in employment law in Europe. They come into play in different ways: On the one hand, as a maximum age limit for the commencement of a particular career;  on the other hand – even more relevant – as an age limit at which the employment relationship automatically terminates. A …

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Bogus self-employment – right to paid leave without any time limit?

According to the Advocate General’s opinion to the European Court of Justice (dated 8 June 2017, C-214/16, C. King v The Sash Window Workshop Ltd and Richard Dollar) the right to paid holiday carries over until the worker has an opportunity to exercise his right to paid leave. On termination of the employment relationship, the …

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Ramadan – Impact on the employment relationship?

Ramadan is a challenge for both employers and employees alike, e.g. if employees do not perform as usual because of their daily fasting. The ever-changing period of the fasting month falls between 27 May and 24 June this year. For a month Muslims abstain from eating food between five o’clock in the morning and nine …

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New legislation on Act on Part-Time Work and Fixed-Term Employment postponed

In the course of assembling a parliamentary majority after the 2013 federal elections in Germany, the CDU and SPD parties agreed in their coalition agreement on adopting legislation on increasing flexibility for employees. One of the proposals provides for the employee’s right to return to full-time work after a fixed period of part-time work. As …

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Non-compete clauses – No Compensation for Abstention – Severability Clause

Non-compete provisions valid for the period after an employment relationship has ended are invalid unless the agreement provides for a compensation payment of 50% of the employee’s former salary during the entire duration of the post-contractual non-compete obligation. This decision by the German Federal Employment Court (docket no. 10 AZR 448/15, dated March 22, 2017) …

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Dismissal Protection Act not applicable to managing directors despite employee status

While recent EU law developments on the potential employee status of managing directors (cf. ECJ, June 9, 2015, docket no. C-229/14 – Balkaya) and decisions of the German Federal Labour Court regarding the procedural issue of giving managing directors access to the Labour Courts under certain circumstances have somewhat blurred the dividing lines between managing …

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40 Euro lump sum compensation in the event of late or incomplete wages

On 22 November 2016, the Labour Court Cologne decided that an employer who pays late or incomplete wages is obliged to pay lump sum compensation in the amount of 40 Euros to the affected employee (Judgement of 22.11.2016 – 12 SA 524/16). In 2011 the European Parliament and the Council of the European Union passed …

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Federal Labor Court rulings to watch in 2017 (edition Jan – March)

Already in the first quarter of the New Year Germany’s Federal Labor Court will deliver a number of judgments important for advisors and practitioners alike: Time Credits for works council members? (- docket no 7 AZR 224/15 – expected for 18 January 2017- ) Although members of a works council act in an honorary role …

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Remuneration Transparency Act: A look ahead

The coalition committee set the outline for a Remuneration Transparency Act in October 2016, thereby affirming that the current gender pay gap between men and women is no longer acceptable. The Act is planned to come into force in summer 2017. The draft law expressly states that it aims to promote and enforce the equal …

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