Employment contract

Mandatory information in the employment contract

Since the reform of the Evidence Act (NachwG) in August 2022, the scope of information that employers must record in writing has been significantly expanded. The new regulation sets the EU Transparency Directive and is intended to ensure that employees are informed about their essential working conditions. Violations of the obligation to provide evidence can result in a fine of up to 2,000 euros.

According to the reformed NachwG, the mandatory information includes, among other things: name and address of the contracting parties, start date and, if limited, end date of the employment relationship, the place of work or an indication that the employee can work in different locations, a brief description of the job, the agreed remuneration including surcharges, allowances and special payments and their due date, the agreed working hours, overtime regulations, duration annual leave, the procedure for termination and information on applicable collective agreements or operating agreements.

Much of this information must be available to the employee no later than the first day of work, some within one week after the start of the employment relationship. Employees who do not have a written If you have received proof, you should explicitly request this, the proof makes it easier In the event of a dispute, the evidence is significant.

Verbal vs. written employment contract

In German labor law, the principle of freedom of contract applies with regard to the form: A The employment contract generally comes about through a mutual declaration of intent by both parties come about - verbally, in writing or even implicitly through the actual start of the work. This means: Anyone who starts work at nine in the morning without signing a written contract to have an effective employment relationship.

The decisive disadvantage of a purely oral contract lies in the evidence situation. If there is a dispute about salary agreements, vacation entitlements, notice periods, or special regulations, anyone who relies on an oral agreement must prove its content. This is difficult. Witnesses are often non-existent, and emails or messages rarely provide coverage of all relevant points. However, there are exceptions where written form is mandatory: fixed-term agreements. According to Section 14 Paragraph 4 TzBfG, they must be in writing and there must be a verbally agreed time limit.

However, there are exceptions where written form is mandatory: fixed-term agreements According to Section 14 Paragraph 4 TzBfG, they must be in writing and there must be a verbally agreed time limit invalid, which means that the employment relationship is deemed to have been concluded for an indefinite period of time. Non-competition clauses and some collective bargaining agreements also require the written form.

Invalid clauses in the employment contract

Employment contract clauses are subject to general terms and conditions control according to §§ 305 ff. BGB, as they are generally pre-formulated and not individually negotiated. The Federal Labor Court has in one A long line of case law has declared numerous standard clauses that are common in practice to be ineffective. In such cases, employees automatically benefit from the legal minimum standard.

Typical ineffective clauses:

• Flat rate overtime pay: Clauses such as "Overtime is paid for with salary" are ineffective if no specific number of hours is stated and the extent of the overtime is not transparent.
• Short exclusion periods: Single-stage exclusion periods of less than three months violate Section 309 No. 13 BGB; Two-stage clauses, which also require legal enforcement within three months of the due date, are regularly classified as unreasonably disadvantageous.
• Revocation reservations for salary components: The employer may not reserve the right to revoke essential compensation components indefinitely. If the share is more than 25 to 30 percent of the total salary, such a clause is usually ineffective.
• Repayment clauses for training costs: Such clauses are only effective if the duration of the commitment is proportionate and the training actually benefits the employee. Commitment periods that are too long or clauses that also apply in the event of termination for operational reasons are ineffective.
• Post-contractual non-competition clauses without compensation: Without the promised payment, the ban is not binding for the employee and he can ignore it.

If you consider a clause in your employment contract to be questionable, you should consult a lawyer about it. Have it checked—especially before you feel bound to them or waive them— to assert claims.

Limitation of the employment contract

The Part-Time and Fixed-Term Employment Act (TzBfG) regulates the conditions under which an employment contract can be concluded may be limited in time. The law distinguishes between two variants: the fixed-term contract objective reason and the non-objective time limit.

The unfounded time limit is according to Section 14 Paragraph 2 TzBfG for a total duration of two years, which may be extended up to three times within this period. What is crucial is that there is no previous employment relationship between the employee and the same employer may have existed - even if the previous employment relationship dates back a long time. This The Federal Labor Court had limited this so-called "previous employment" to a time limit However, the Federal Constitutional Court has corrected this case law: the complete ban applies basically without any time limit.

A limitation with objective reason is possible without a time limit. Permissible factual reasons are listed as examples in Section 14 Paragraph 1 TzBfG and include, among others: temporary operational needs, replacement of another employee, nature of the work performance, testing, personal reasons of the employee, and budgetary reasons in public service. Important: The factual reason must actually exist when the contract is concluded - it cannot be constructed later.

If a time limit is invalid because the factual reason is missing and the written form was not adhered to or there was inadmissible previous employment, the employment relationship is considered to be indefinite time closed. The employee must notice the ineffectiveness within three weeks of assert the agreed end of the fixed-term contract in court (action for termination of the fixed-term contract), otherwise the time limit is considered effective.

Contract changes

In principle, employment contracts can only be changed by mutual consent. The employer wants it essential conditions, such as salary, working hours, area of activity or place of work - one-sided deteriorate, he is not entitled to do so without the consent of the employee. Is that right? If the employee does not agree, the original contract remains relevant.

If the employer wants to enforce a contract change against the will of the employee, he must give notice of change: He terminates the existing employment relationship and at the same time offers to conclude a new contract with changed conditions. The employee can accept the offer, reject it or - in order to secure his job - assume with the caveat that the change is socially justified, and at the same time file a complaint with the labor court. Notice of change is subject to the same requirements as a normal termination, in particular the requirements of the Dismissal Protection Act.

Small adjustments within the framework of the employment contract management law, i.e., instructions on location, The time and type of work within the agreed framework are not required Contract change. How far this right of direction extends must be assessed on a case-by-case basis depends heavily on how precisely the employment contract is formulated.

Non-compete clause after departure

Post-contractual non-competition clauses are only permitted under strict conditions in German labor law Requirements effective and binding. According to Section 74 of the German Commercial Code (which also applies to employees outside the commercial sector is applied accordingly) the employer must throughout the entire period Duration of the ban Waiting compensation of at least 50 percent of the pay the last contractual services received. Is this promise completely missing or lies if they are below, the ban is non-binding for the employee; he can decide for himself whether he adheres to it or ignores it.

Furthermore, the ban may not go further than this in terms of place, time and material scope it corresponds to the employer's legitimate interests. A maximum period of two years is seen as a limit. If the ban is disproportionately broad, the employee can sue the court for a declaration that the ban is not binding on him.

A statutory non-competition clause applies during the current employment relationship, which does not require a contractual agreement: employees are allowed to do so during their employment not engage in competitive activities that harm the employer. This ban no longer applies the end of the employment relationship, unless an effective post-contractual agreement has been made Ban agreed.

Checklist: Check the employment contract before signing it

Before you sign an employment contract, you should consider the following points systematically go through. A carefully reviewed contract can avoid later disputes.

• Job description: Is the description precise enough, or does it give the employer too much leeway in terms of direction?
• Compensation: Are basic salary, allowances, bonuses, and special payments clearly defined? Is there a voluntary reservation that allows bonuses to be canceled at any time?
• Working hours and overtime: How many hours are agreed? Is an overtime allowance included and is it effective?
• Vacation: How many days are granted? Does that exceed the legal minimum entitlement of 20 days (for a 5-day week)?
• Notice periods: Do they correspond to the legal minimum or have longer periods been agreed, to your advantage or to your disadvantage?
• Exclusion periods: How long do you have to file a claim? Are the deadlines reasonable?
• Limitation: If the contract is for a limited period, is there an objective reason given and does it actually exist?
• Non-compete clause: Is there a post-contractual ban and is the waiting compensation expressly agreed?
• Probationary period: How long is the probationary period and what special rules apply during this time?

If there are any uncertainties or unusual clauses, we recommend that you consult a lawyer before signing, because once the regulations are in the contract, they can only be changed with considerable effort Change effort again.