Guide to German Employment Law
Most expats come to Germany because of work. Therefore, it is inevitable to deal with German labor law sooner or later.
In this featured article of our esteemed partner MAYR Kanzlei für Arbeitsrecht will get you the most important information about labor law:
At the center of “Employment law” is the employment contract, determining the relationship between employers and employees. In general, the parties can freely choose the applicability of German law and determine the working conditions. German Employment law is governed by a variety of statutory provisions restricting the freedom of contract and guaranteeing employee protection rights. Aside from statutory provisions, there are numerous collective bargaining agreements between employer’s associations and unions, so called “Tarifverträge”. These can set rules for working conditions in certain fields or companies which may trump the regulations in the individual employment contract and deviate from the statutory provisions. In companies that have a works council or “Betriebsrat”, there may be additional agreements between the employer and the works council, so called “Betriebsvereinbarungen”. These, too, may prevail the regulations of an individual employment contract.
Whereas a collective bargaining agreement is negotiated by the unions and therefore independent of the employer’s company, the works council (“Betriebsrat”) is an organ of employee representation that can be elected in most companies and that has a range of participation rights.
Signing an Employment contract
Most employment contracts are concluded for an unlimited period of time. A temporary contract can generally be limited and extended for a maximum period of 2 years, without giving a reason for the limitation. After that, any time limitation must have a valid reason. Otherwise, the employment contract may be considered to have been concluded for an unlimited period.
Most contracts include a probationary period of 6 months, during which a notice period of 2 weeks must be observed. A longer probationary period or shorter notice period are not permitted by law.
Being Employed in Germany
Employers are obliged to deduct employees income tax and register employees with the social security system. The contributions to social security are split between employers and employees, and deducted from the gross income along with the income tax.
There are numerous regulations for employee protection, such as a right to six weeks of continued remuneration in case of sickness, a minimum holiday entitlement of 20 days per year, a right to request part-time work and parental leave, maternity protection and a minimum wage of currently EUR X. There are numerous other regulations regarding maximum working hours, health and safety at the workplace, etc.
Ending and employment contract
An employment contract can be ended my mutual agreement, or by notice of either party. Giving notice or signing a separation agreement bears the risk, for employees, of receiving disadvantages later on, when applying for unemployment benefits. We highly recommend to seek professional advice before signing a separation agreement or giving notice.
In German employment law, employees are protected against unjustified termination by the “Kündigungsschutzgesetz”, termination protection act. This provision generally applied to employees who have worked for the same employer for at least six months, and in companies that regularly employ more than ten employees. This provision sets a high bar to justify a termination in a lawsuit, as the employer is then obliged to prove the reasons for the termination, and the lack of alternatives to a termination, in each individual case.
A termination must be hand signed by the responsible representative of the employer. There are two types of termination: A termination with a notice period, and a termination without a notice period. The minimum notice periods are determined by law, within the first two years of employment, a notice period of four weeks before the 15th or the end of the month generally must be observed.
Employees have the right to contest a termination before the labour court, within 3 weeks of receiving a termination. If they do not do this, the termination becomes valid. Termination lawsuits are common, and the risk of cost is comparatively low as each party carries their own lawyer’s fees. Most termination lawsuits are settled by a severance payment.
It is well worth it to sign up for a legal insurance that covers employment law. This way, employees can consult a specialist employment lawyer in case of an unjust termination and there is virtually no financial bar to accessing their rights before the labour courts.
Do you have any further questions?
If you need labour and employment law services offered in English, Lorenz Mayr’s MAYR law firm for labour law with its offices in Berlin and Cottbus is your best bet. Lorenz Mayr, who’s a certified specialist attorney for labour and employment law, founded this law firm in Berlin in 2003. This firm has several dedicated attorneys and specialist lawyers, all of whom have previously demonstrated their expertise successfully in employment law firms in Berlin, Frankfurt am Main, Birmingham/USA, Brussels, Prague, and Regensburg.
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