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Employment Contracts in Germany

1. Minimum Requirements

The employer has a statutory obligation to provide the main contractual terms in writing to the employee no later than one month after the commencement of the employment. The terms and conditions of the employment are regulated mainly by statutes, collective bargaining agreements and works council agreements. As a rule, the employment contract may not deviate from these provisions to the detriment of the employee. The written summary must contain at least the following: 1) name and address of the employer and the employee; 2) information on the starting date; 3) the anticipated duration (only in case of fixed term contracts); 4) the place of work; 5) the nature of the activity involved; 6) the composition and amount of the remuneration; 7) the working hours; 8) the length of annual leave; 9) the notice period and 10) a general reference to the collective bargaining agreements, works or service agreements applicable to the employment relationship, if any.

2. Fixed-term/Open-ended Contracts

As a general rule, the employment contract is entered into for an unlimited period. A fixed-term contract is possible, provided the term is agreed upon in writing before the employment commences. A fixed-term contract ends automatically without written notice being necessary at the end of its term. A fixed-term employment relationship must be justified by objective grounds, some of which are set forth in statutory law (e.g. temporary increase in work volume, substitution of an employee during parental leave). If no objective grounds exist, fixed-term employment is limited to a maximum duration of two years, provided that no previous employment contract with the same employer existed. If the parties continue the employment after the expiration of the fixed-term contract, the agreement is deemed to be concluded for an indefinite period.

3. Trial Period

The employer and employee may agree upon a trial period, which is limited by law to a maximum duration of six months. The notice period within the trial period is two weeks. The German Act on Protection Against Unfair Dismissal does not apply within the first six months of employment, regardless of whether the parties agreed upon a trial period.

4. Notice Period

The German Civil Code (BGB) sets forth the statutory notice periods. The length of the notice period of the employer depends on the employee’s length of service with the employer with notice periods ranging from 4 weeks for employees with less than 2 years’ seniority to 7 months for employees with more than 20 years’ seniority.

For more information on these articles or any other issues involving labour and employment matters in Germany, please contact Tobias Pusch, Partner at Pusch Wahlig Legal (www.pwlegal.net) at pusch@pwlegal.net
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