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I wish I had a fixed-term contract…

The conversion of an unlimited-term employment relationship to a fixed-term contract can be justified for an objective reason if it is the employee’s own wish to be employed under such a fixed-term contract according to a ruling of the Higher Regional Labour Court Baden-Wurttemberg (Landesarbeitsgericht, LAG) dated March, 4, 2015 (docket number 2 Sa 31/14). The plaintiff was – as employee –  part of the defendant’s management. Since 2003, the defendant intended to end the employment relationships of the members of its management when the employees turned 60 – new employees in such positions were only offered fixed-term contracts with an age limit of 60. Existing employees were offered amendment agreements including financial compensation. The employees were comprehensively informed by the defendant and they were also given time to consider the offer.

 

In 2005, the plaintiff signed a fixed-term agreement converting her unlimited employment relationship. This amendment had already been offered to her in 2003. Later on, she claimed that the fixed-term agreement would be void due to lack of an objective reason. The LAG ruled that this fixed-term contract was, in the individual case, justified by the objective reason of the employee’s own wish to enter into the agreement, taking into account in particular the financial compensation,  the time the employee took for consideration and that the employee accepted the offer without persuasion. However, this decision has to be considered on its facts. A careful assessment on a case-by-case basis is necessary concerning any fixed-term contract based on the objective reason of the employee’s own wishes – in particular, if an unlimited employment relationship is being converted to a limited term.