Unlike in the U.K. and other EU member states, zero hours contracts are not (yet) common practice in Germany. To date, other arrangements aimed at achieving “flexible working” such as fixed-term or part-time contracts, secondment of personnel and – more recently – contracts to provide services have been more widespread. However, as German case law and legislation are gradually restricting the flexibility once offered by these arrangements, zero hours contracts are increasingly being used in Germany (in particular with regard to care workers, teachers, and paramedics).
Typical provisions which can be found in employment contracts read for example:
“The working time is variable. An assignment of the employee shall occur on the instruction of the employer. The employee has no entitlement to a monthly average working time in order to obtain remuneration of a certain amount”
By way of such provisions, many employers – in particular those operating in highly competitive markets – seek to circumvent their obligation to assign the employee a fixed working time and a fixed amount of remuneration, therefore intending to achieve a high level of flexibility and reduced personnel costs.
However, unlike in other countries, it is not possible to enter into a valid zero hours contract in Germany. German law follows the inherent principle that the economic and employment risk of the employer should not rest with the employee. The parties must either always designate the specific working time in the employment contract or conclude a “work on demand” relationship as part of an employment limited in time pursuant to Sec. 12 of the German Act on Part-Time Work and Fixed-Term Employment (TzBfG). A “work on demand” relationship is only valid on complying with strict requirements to protect the employee, which in certain cases may be varied by way of a collective agreement. The work on demand agreement must include a specified duration of weekly as well as daily working time. The law merely permits the employer flexibility with regard to the allocation of each work assignment, not the overall working time. Where weekly working time is not provided for, the agreement will be deemed to provide for ten hours. Where the contract is silent as to the daily working time, the employer must always provide the employee with a minimum of three successive hours where engaged to provide work. Furthermore, the employee is only under an obligation to provide work where the employer has made the request at least four days prior to the intended assignment. Where the parties agree a flexible work on demand component in addition to a fixed minimum working time, the Federal Labor Court has held that the weekly amount of flexible work on demand may not amount to more than 25 per cent of the weekly minimum working time. Notwithstanding this, the employer is in any case obliged to set out a fixed weekly or monthly working time and pay a certain monthly remuneration.
Furthermore, even if the parties do enter into a zero hours contract, disregarding the rules set out above, this will be considered to amount to an employment relationship therefore granting the employee all applicable rights and protections guaranteed under German law. In particular the employee would be entitled to:
- Minimum wage;
- Protection against unfair dismissal pursuant to the German Protection Against Dismissal Act (KSchG);
- Special protection against dismissal (pregnant women, employees on parenting leave, severely disabled persons);
- Continued payment of salary in case of illness and on public holidays;
- Minimum amount of holidays as statutory;
- Working hours as restricted by the German Act on Working Time (ArbZG);
- Statutory notice periods; and
- Adherence to occupational safety regulations.