Extension of employment contracts after the statutory pension age

Effective 1 July 2014 a new law (sec. 41 sentence 3 of Book 6 of the German Social Code, SGB VI) allows for fixed-term extensions of employment contracts after the employee has reached the statutory pension age. The new provision is part of a series of statutory changes regarding retirement and pensions.

If an employment contract provides for the end of the employment upon achieving the statutory pension age, the parties to the employment contract can agree to postpone the end of the employment relationship, if necessary several times. The new law increases the flexibility to employ older employees for fixed periods. However, the law does not specify whether and, if so, to what extent, additional changes to the employment conditions are also allowed upon renewal. Absent any applicable court decision, changes to employment conditions should be avoided.