Dr. Kai Bodenstedt LL.M.

(Not) nice seeing you again? Federal Labour Court decides on fixed-term employment

The problem In the year 2018 8,3 % of all German employees worked on the basis of a fixed term employment contract. Various rules apply to this kind of employment and breaching one of them often leads to the employment contract being indefinite. One of the most important rules is the time limit on fixed-term employment contracts. If the time limitation is not justified by factual reasons (e.g. needing a substitute for an employee being on maternity leave) the duration of the time limitation may not exceed 2 years. Furthermore this time-limitation is invalid if the employee has already been …

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Member States must require employers to set up a time recording system

On 14 May 2019, the ECJ held (docket no. C-55/18), that Member States must oblige employers by law to set up a system for recording the time worked each day. In proceedings between the Federatión de Servicios de Comisiones Obreras (CCOO) – a Spanish Union – and Deutsche Bank SAE concerning the lack of a system for recording the time worked each day by the workers employed by the latter, the National High Court of Spain asked the ECJ for a preliminary ruling. The proceedings had the following background: The union brought a group action before the National High Court …

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Right of part-time employees to return to full-time

The German parliament has recently passed a law which amends the current Part-Time and Fixed-Term Act and will likely enter into force on 1 January 2019. Under the new law (so-called bridge-part-time-work), employees have the right to work part-time for a period of one to five years (“Part-Time-Period”) and return to full-time after the Part-Time-Period has expired. This right only applies if (i) at the time of the application the employee has been employed by his current employer for more than six months and (ii) the employer (e.g. the respective employing entity) employs more than 45 employees in Germany in …

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Age 60 as a legitimate reason to terminate a service relationship with a managing director

The attainment of age 60 can be agreed as an age limit in a service agreement allowing for the termination of the contract. This was decided by the Hamm Higher Regional Court in a judgment dated 19 June 2017, docket number 8 U 18/17. Such an age limit does not violate the General Equal Treatment Act, at least as long as the managing director is entitled to a pension payment thereafter. The plaintiff, born in 1955, had been the managing director of the company since 2005. The service contract was last renewed up to 31 August 2018. However, the contract …

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Ins and Outs of Bonus and Commission Payments – Part I

Employers may grant their employees bonuses in addition to fixed basic salary for a variety of reasons, for example, to reward performance, loyalty to the company or just as a Christmas gratuity. In this context different questions arise. This two-part post addresses the most common questions regarding bonus and commission payments.    What are the different types of bonuses payments? The term “bonus” is not limited to a special kind of a bonus payment. In fact, there are numerous different kinds of bonus payments. These can be categorized in line with the reasons they are paid, as follows: Performance based …

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Details of how Mrs Merkel’s new administration wants to be “Shaping Germany’s Future”

Almost three months after the general election, the biggest political parties CDU/CSU and SPD have agreed to form a joint administration under the lead of Chancellor Angela Merkel.  In a 185-page coalition agreement named “Shaping Germany`s Future”  the parties have specified their plans and contemplated actions in respect of the forthcoming legislative period. In this post we will outline the key points relating to employment and labour issues that might be relevant to your business and your daily work. However, it remains to be seen if all of these projects will be implemented in the form described in the coalition deal. …

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Christmas (bonus) is for everyone

The Federal Labour Court (Bundesarbeitsgericht, BAG) ruled on November 13, 2013 (docket number – 10 AZR 848/12) that employers cannot validly exclude grants of special payments such as Christmas bonuses in their regulations with respect to employees whose employment ended during the calendar year, if such bonus shall not only reward company loyalty but also remunerate performed work. The court argued, that such exclusions are void, because they unreasonably deprive employees of their earned salary. Consequently, affected employees are entitled to pro-rated payments of such bonuses. Employers must therefore ensure that Christmas bonuses are exclusively granted as a reward of …

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