Tag Archive: employment contract

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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Exclusion Clauses: “Textual Form” to be Sufficient

Many employees are not adequately informed as to what a requirement for notification in “written form” encompasses. With regard to exclusion clauses, this lack of information can lead to an inability to exercise certain rights. Generally, exclusion clauses in employment contracts include provisions under which claims arising from the employment contract become void if they are …

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Multiple fixed-term employment contracts of university scientists and the academic precariat

Multiple fixed-term employment contracts of university scientists may be lawful, as recently confirmed and specified by the German Federal Labour Court (Bundesarbeitsgericht, BAG) in its decision of 8 June 2016 (docket number 7 AZR 259/14). The Court did not find an abuse of legal right. The practice of multiple or repeat fixed-term employment (Kettenbefristung) may …

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Repayment of costs of continuing training

The Higher Labour Court (Landesarbeitsgericht, LAG) Rheinland-Pfalz decided on 3 March 2015 (docket no. 8 Sa 561/14) that a repayment clause for costs of continuing training in an employment contract is void if it only provides for an annual reduction of the repayment obligation. In this case,  the employee was obliged to participate in a …

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Circus artists: Employees or independent contractors?

The Federal Labour Court (Bundesarbeitsgericht, BAG) ruled on 11 August 2015 (docket number 9 AZR 98/14) that where an activity agreed by contract may typically be performed in an employment relationship as well as by an independent contractor, the decision of the parties regarding the type of contract has to be considered as part of the necessary overall balance …

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Financial compensation entitlement for post-contractual non-compete based on standard saving clause

In German law, a post-contractual non-competition agreement with an employee is only effective if it provides the employee with appropriate financial compensation. The financial compensation must amount to at least 50% of the previous income. If no such compensation is provided, the post-contractual non-competition clause is, by force of law, invalid.   Nevertheless, the Hamm …

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No need for back pay – if employment was established with retroactive effect

On 19 August 2015, the Federal Labour Court (Bundesarbeitsgericht) ruled that employees are not entitled to back pay if the employment relationship was established with retroactive effect (docket number 5 AZR 975/13). The plaintiff was the defendant’s employee until 1986 when her employment contract was transferred to the newly established C-GmbH as part of a …

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Roundup on the New Minimum Wage

Since the nationwide statutory minimum wage of EUR 8.50 per working hour entered into force on January 1, 2015, court cases dealing with minimum wage issues are slowly starting to trickle in. Here we present two new decisions on this topic. The Berlin Labour Court (Arbeitsgericht Berlin, ArbG) recently held that the dismissal of employees …

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Too short a notice period will not render a termination null and void

Even if an employment contract invalidly provides for a notice period of two days and the employer subsequently issues a termination with a two-day notice period, this will not render a termination null and void. The Hamm Higher Regional Labour Court (Landesarbeitsgericht, LAG) was called to rule on the validity of a termination in the …

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