Employment contract

Crowdworkers are not employees under German Labour Law

Crowdworkers are not considered employees under German labour law under a ruling by the Higher Regional Labour Court of Munich on 4 December 2019 (docket number: 8 Sa 146/19). What are Crowdworkers? Crowdworkers are persons to whom so-called microjobs are offered via an Internet platform which they then carry out independently, if they accept the offers. According to the “Crowdworking Monitor” of the Federal Ministry of Labour and Social Affairs (BMAS) from 2018, around 4.8 percent of the eligible voters in Germany work as crowdworkers. The case The defendant operates an Internet platform and, among other things, carries out checks …

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The hazards when working from home

As more and more employees enjoy home office options, litigation with regard to work accidents suffered when working from home has also become more relevant. While statutory accident insurance coverage is triggered when working from home, this does not extend to non-work-related activities. In a recent judgment, the Munich social court held that an employee who works from home and injures himself on the way to the bathroom which is located on the ground floor and not closely connected to the space used as a home office, is not protected by the statutory accident insurance (judgment dated 4 July 2019, …

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Imminent invalidity of limitation periods

In a Judgment dated 18 September 2018 the Federal Labour Court ruled that limitation periods, which do not exclude a claim for the Minimum Wage (Mindestlohn) according to the Minimum Wage Act (Mindestlohngesetz), are invalid. This results in the ineffectiveness of thousands of limitation periods in employment contracts. In Germany, limitation periods within which a claim must be asserted are commonly agreed in employment contracts. These generally amount to three months and are therefore considerably lower than the limitation periods provided by law. However, the exclusion periods may be invalid, because employment contracts are subject to the terms and conditions …

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Current case law of the Federal Labour Court on forfeiture periods

In June 2018, the Federal Labour Court (Bundesarbeitsgericht, BAG) dealt intensively with forfeiture periods. The judgments addressed: The date when the deadline starts to run (07 June 2018; docket number 8 AZR 96/17); The suspension due to settlement negotiations (20 June 2018; docket number 5 AZR 262/17); and The entitlement for statutory minimum wage during the period of incapacity for work despite forfeiture periods under tariffs (20 June 2018; docket number 5 AZR 377/17). Start of the deadline run (8 AZR 96/17) In this case, which concerned the disappearance of an unpaid car, the Court held that an employee could …

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Minimum wage increase

The statutory minimum wage increases: to 9.19 euros on 1 January 2019 and to 9.35 euros per hour on 1 January 2020. This has been decided by the minimum wage commission. The increase is higher than expected. The minimum wage is currently 8.84 euros gross per hour. Every two years, the Minimum Wage Commission (which consists of representatives of employers, unions and science) advises on adjusting the amount. . In doing so, it examines the level of the minimum wage that is suitable for contributing to an adequate minimum protection of employees, to enable fair and efficient conditions of competition, …

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Change of case law for time limit contracts – Time limit without reason in case of previous employment always inadmissible

  I. General Problems of time limit contracts The agreement on a time limit for the employment contract often leads to problems in practical use. Caution is, however, required, since a fixed term is only permitted under special statutory conditions. If these reasons are not available and nevertheless a – impermissible – time limit is agreed, then the employment agreement with the limited term shall be deemed to have been concluded for an indefinite period of time (sec. 16 (1) Part-Time and Limited Term Employment Act (“Teilzeit- und Befristungsgesetz – TzBfG”). The Part-Time and Limited Term Employment Act enables the …

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Reduction of a Special Payment Possible Despite Unrestricted Granting for Years

On 23 August 2017 the Federal Labour Court decided that despite the unrestricted granting of a special payment for multiple years, the employer may reduce the amount of a special payment in the future provided that the employment agreement contains a reservation in this respect (docket number 10 AZR 97/17). The employee and later plaintiff was employed by the defendant from 1999 and received through the years, in addition to her regular salary, a Christmas payment. Until 2013 this Christmas payment amounted to the equivalent of one monthly gross salary. The payment method was that employees regularly received with the …

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The sweet sorrow of parting – 3 year long termination notice period puts employee at disadvantage

German employment law allows the parties to an employment contract to agree a specific notice period in derogation from the statutory standard period as set out in § 622 para. 1 German Civil Code (Bürgerliches Gesetzbuch, BGB), as long as the notice period for an employee does not exceed the notice period for the employer. However, the German Federal Labour Court (Bundesarbeitsgericht, BAG) recently ruled (26 October 2017; docket number: 6 AZR 158/16) that significantly extending the termination notice period for an employee by general terms and conditions might not be in good faith and therefore lead to an unreasonable disadvantage, even if the notice …

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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 for the duration of three months post-termination.  After leaving the company, she joined another travel agent. Under statutory law, a non-compete obligation is not binding insofar as it does not protect the employer’s legitimate interests. A legitimate interest can exist if the non-compete aims to …

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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 third similar case  is the provision of benefits (for example additional leave days) from or to a certain age. All these instances have already been the subject of several decisions of the ECJ, most recently on 5 July 2017 (docket number C-190/16). The reason for …

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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) was made after a plaintiff filed a claim for monthly compensation for abstention after she had her employment contract terminated. The employment contract itself contained a paragraph in which the parties had agreed on a non-compete for a period of two years after the end …

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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 directors and employees, a recent decision of the Higher Labour Court of Berlin-Brandenburg seems to bring some clarity to the issue. It has been a fundamental principle of German employment law that all protective laws and regulations relevant for employees do not apply to the …

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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 the Directive 2011/7/EU on combating late payment in commercial transactions. “The aim of this Directive is to combat late payment in commercial transactions, in order to ensure the proper functioning of the internal market, thereby fostering the competitiveness of undertakings and in particular of SMEs. …

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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 when assessing the employment status. Individual aspects of the performance of the contract may only change its legal character contrary to the wording of the contract, if they are representative of a different employment status, rather than being an exception to the agreed working relationship. …

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Internships do not count towards the probationary period for vocational training

A previous internship will not count towards the mandatory probationary period for vocational training in order to effectively shorten the agreed probationary period (judgment of the Federal Labour Court, Bundesarbeitsgericht, BAG, dated 19 November 2015, docket number 6 AZR 844/14). Traditionally, many professions in Germany require a formal vocational training program which commonly takes three years. As part of this vocational training, trainees attend school but also work in companies under a training contract. When concluding such a training contract, German law provides for a mandatory probationary period between 1 and 4 months. During the probationary period, the training contract …

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