Standard contractual terms and conditions of employment

Update on local legislation implementing the Directive on the Posting of Workers

By Dr. Astrid Schnabel LL.M. / 13 February 2020 13 February 2020 / Legislation, Standard contractual terms and conditions of employment

On 12 February 2020 the German Federal Cabinet adopted a draft law to implement the revised European Directive on the Posting of Workers in the framework of the provision of services. The revision of the Directive entered into force on 29 July 2018 after lengthy negotiations in Brussels (Directive 2018/957/EU amending Directive 96/71/EC). The revision of the Directive aims to improve the working conditions of posted workers while protecting the economy from wage dumping and unfair competition. The draft law implements the revised Directive. In the future, posted workers will benefit to a greater extent from working conditions that are …

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Termination agreements: Employees have no right of withdrawal

By Thomas Wiedmann / 28 March 2019 11 June 2019 / Sickness, Standard contractual terms and conditions of employment, Termination

On February 7, 2019 the Federal Labour Court (docket number 6 AZR 75/18) ruled that employees cannot withdraw a termination agreement even if it was concluded in the private apartment of the employee. In the case at hand, however, the termination agreement might be void if the fundamentals of fair negotiation (Gebot des fairen Verhandelns) have been ignored. The parties agreed to a termination agreement in the apartment of the plaintiff. The termination agreement comprised immediate termination of the employment without any severance. The reasons and the process leading to the agreement are contested. The plaintiff argued that she was …

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Current case law of the Federal Labour Court on forfeiture periods

By Thomas Wiedmann / 20 July 2018 11 June 2019 / Employment contract, Minimum Wage, Standard contractual terms and conditions of employment

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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The right to extend working hours – sec 9 Act on Part-Time Work and Fixed-Term Employment (TzBfG)

By Tom Stiebert / 22 February 2018 11 June 2019 / Part-Time Work, Standard contractual terms and conditions of employment, Working time

Many employees want flexibility at work; often, this means there is a desire to work part-time (less than 40 hours a week). However the reverse case is also not uncommon; an employee wants to increase his working hours, particularly to earn more money. Both cases are covered by German law. However, there is a claim (currently) only in respect of shortening the working time (sec. 8 TzfG). With an extension the conditions are different. Sec. 9 TzBfG stresses here that a request for extension should be taken into account when filling a vacant position. Thus, if a worker is employed …

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

By Pascal Kremp LL.M. / 28 November 2017 11 June 2019 / Employment contract, Standard contractual terms and conditions of employment, Termination

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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Employee’s request for fixed-term employment narrowly interpreted

By Volker von Alvensleben / 10 August 2017 11 June 2019 / Fixed-term employment, Pension, Standard contractual terms and conditions of employment

Entering into a valid fixed-term contract can be a bit of a challenge under German law. Under the Fixed Term and Part-Time Employment Act (TzBfG), one of the reasons which may be used to justify a fixed-term contract is that there are reasons relating to the circumstances of the particular employee. A recent case decided by the Federal Labour Court shows that these reasons will be narrowly interpreted (judgment dated 18 January 2017, docket number 7 AZR 236/ 15). Originally, the employee had had a contract that limited her employment to age 65, i.e. the former statutory pension age. When …

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Competing activities during notice period can justify an immediate termination for cause

By Dr. Isabel Schäfer / 7 August 2017 11 June 2019 / Conduct Related Dismissal, Dismissal, Standard contractual terms and conditions of employment, Termination

In its judgment dated 12 April 2017 (docket number 3 Sa 202/16), the Higher Regional Labour Court of Schleswig Holstein found that activities for a competitor during an employee’s notice period may justify an immediate termination for cause. Under the employment contract, the employee had committed not to hold any shares of a company in direct or indirect competition with his employer without first obtaining prior approval. In addition, under a statutory non-compete obligation, an employee may not carry out competing activities to the employer’s disadvantage. The employee was found to be in breach of both the contractual and statutory …

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Forfeiture clause was valid to prevent employee’s claim despite not excluding minimum wage entitlement

By Dr. Henriette Norda LL.M. / 3 August 2017 11 June 2019 / Minimum Wage, Standard contractual terms and conditions of employment

In a judgement of 9 May 2017 (docket number 7 Sa 560/16 ) the regional labour court of Nurnberg held that a forfeiture clause which did not exclude entitlement to minimum remuneration was not invalid. The forfeiture clause simply did not apply to claims for minimum remuneration. The parties had entered into an employment contract which contained the following forfeiture clause: All claims of the parties arising under the employment contract shall be deemed forfeited unless they are asserted in writing against the other party within three (3) months after they arise and, in case of a rejection of the …

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Internships do not count towards the probationary period for vocational training

By Dr. Astrid Schnabel LL.M. / 1 December 2015 11 June 2019 / Dismissal, Employment contract, Standard contractual terms and conditions of employment, Termination

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

By Saskia MacLaughlin / 14 April 2015 11 June 2019 / Dismissal, Employment contract, Standard contractual terms and conditions of employment, Termination

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 context of an extraordinarily short notice period of two days during a probationary period (judgment dated January 30, 2015, docket number 1 Sa 1666/14). Generally, German law allows for a short notice period of two weeks during a probationary period of up to 6 months. …

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Ins and Outs of Bonus and Commission Payments – Part I

By Dr. Kai Bodenstedt LL.M. / 8 April 2015 11 June 2019 / Benefits, Bonus Payments, Remuneration, Standard contractual terms and conditions of employment

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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Christmas (bonus) is for everyone

By Dr. Kai Bodenstedt LL.M. / 23 November 2013 11 June 2019 / Bonus Payments, Remuneration, Standard contractual terms and conditions of employment

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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