Topic: Germany

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Bilanzsteuerrechtliche Risiken bei älteren Betriebsrentensystemen

Ältere Versorgungsordnungen nehmen hinsichtlich des Anspruchsbeginns häufig nicht ausdrücklich auf die aktuelle gesetzliche Regelaltersgrenze Bezug, sondern verweisen nach wie vor auf die starre Altersgrenze von 65 Jahren. Gleichwohl erbringen die meisten Unternehmen in der Praxis erst ab dem gesetzlichen Regelrentenalter Versorgungsleistungen und bilden auch ihre Rückstellungen entsprechend. Fallen folglich Schriftform und Rückstellungen auseinander, so kann dies zukünftig unangenehme steuerliche Auswirkungen haben. Die so gebildeten Pensionsrückstellungen werden künftig nicht mehr anerkannt, sondern sind gewinnerhöhend aufzulösen. Die erforderlichen Anpassungen der Versorgungsregelungen sind ggf. nur noch bis zum Ablauf des aktuellen Geschäftsjahres möglich.

Bislang unproblematisch: Starre Altersgrenze von 65 Jahren in Versorgungsordnungen

Verweisen … Continue Reading

What is the latest on employees’ rights in the event of redundancy in Germany?

In business, the restructuring of a company (such as by the closure of an individual business unit or a necessary reduction in the number of staff) may result in an employee’s redundancy. However, dismissing an employee by reason of redundancy has strict prerequisites under German law.

The main requirements which must be observed under German law for a dismissal based on redundancy are as follows:

  • In business units with more than ten employees (more than five if hired before 31 December 2003), and if an employee has been at the company for more than six months, a specific justification for
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The German law on employee participation is compatible with European law

On July 18th 2017 the European Court of Justice (ECJ) held, that employees of a subsidiary located in the territory of another member state do not have the right to vote and stand as a candidate in elections of workers’ representatives on the supervisory board of the German parent company of that group and that such an exclusion is not contrary to EU law.

The plaintiff is a shareholder of a company, which is the parent company of a group of companies operating in the tourism sector. In the European Union, that group employs around 50,000 people, of which … Continue Reading

Do employees who are pregnant or on maternity leave enjoy any special protection in the event of redundancy in Germany?

This post was also contributed by Tony Rau, Trainee, Norton Rose Fulbright LLP (Munich).

German law provides for extensive protection of pregnant employees and employees on leave in connection with pregnancy. Regarding the latter, German law distinguishes between maternity leave (i.e. 6 weeks before until 8 weeks after childbirth – or 6 weeks before until 12 weeks after childbirth in certain cases) and parental leave (i.e. longer periods of leave granted after childbirth in order to care for newborns or children). The relevant rules are primarily aimed at protection against dismissal, but also protect against, for example, certain working conditions … Continue Reading

Key employment law developments expected in 2017

A significant amount of new employment legislation is expected or is already in place for 2017. Key changes will be in the hiring of temporary workers through an agency (referred to as “personnel leasing” in Germany), employee protection and equal treatment.

Reform of laws regarding personnel leasing

One of the main developments in 2017 will be the long expected reform of the German Act on Temporary Employment (Arbeitnehmerüberlassungsgesetz – AÜG), as well as other related laws, with effect from 01 April 2017. Aiming to reinforce the rights of temporary workers during personnel leasing and in particular to prevent … Continue Reading

Geplantes Entgelttransparenzgesetz

Mit dem geplanten Entgelttransparenzgesetz will die Bundesregierung Lohnunterschiede zwischen Frauen und Männern abschaffen. Durchschnittlich ist die Vergütung von Frauen in gleichwertigen Positionen 7 Prozent niedriger als die von Männern. Dieser sogenannte „Gender Pay Gap“ soll mit dem am 11. Januar 2017 vom Bundeskabinett beschlossenen „Gesetz zur Förderung der Transparenz von Entgeltstrukturen“ bekämpft werden.

Mehr zum Thema finden Sie in einer Kolumne von Rechtsanwältin Dr. Anja Lingscheid.

 … Continue Reading

Recent changes to the law on the dismissal of severely disabled employees

In Germany, as of 1 January 2017, various amendments to the law on severely disabled persons came into force. Of particular importance is a new regulation relating to the dismissal of severely disabled employees.

Until the recent changes came into force, before the dismissal of a severely disabled employee the representative body for severely disabled employees had to be heard in accordance with the relevant provisions of the German Social Code Book IX (SGB IX). However, this was not a prerequisite for the effectiveness of the dismissal and therefore rather irrelevant.

Since the beginning of this year, however, the hearing … Continue Reading

What rights do workers have to rest breaks in Germany?

This post was also contributed by Sebastian Kutzner, Trainee, Norton Rose Fulbright LLP (Munich).

Due to increasing demands for a work life balance, uncertainty as to employees’ rights to rest periods, in particular, is widespread. German law distinguishes between two types of rest periods:

  • Rest breaks (to be granted during working time); and
  • Resting time (the period between two working days)

Subject to special rules for different industries both are regulated by the German Working Time Act (Arbeitszeitgesetz). During both periods employees cannot be required to work but must be free to use this time for their own … Continue Reading

What rights and protections are there for part-time workers?

This post was also contributed by Dimitri Schaff, Trainee, Norton Rose Fulbright LLP (Munich).

Currently, about one quarter of all employment relationships in Germany are based on part-time models, the proportion of part-time to full-time employees having increased by about 12 per cent since 2001. Furthermore, as a result of the implementation of the EU Part-time Workers Directive 97/81/EC into German law in 2001, an enforceable right for current full-time employees to switch to part-time work exists in Germany. Besides this, employees with children (under the age of eight) may additionally claim the right to part-time parental leave.

Although employers … Continue Reading

What rights and protections are there for workers on zero hours contracts in Germany?

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 Continue Reading

“What are the latest developments on whistleblowing in the workplace in Germany?”

Apart from the well-known Wiki-leaks, recent prominent cases of whistleblowing such as Lux-leaks, the Panama Papers or the case of the German geriatric nurse Brigitte Heinisch, who was dismissed after revealing the ill-treatment of elderly people in a Berlin retirement home, continue to highlight the continued relevance of the topic “whistleblowing”. While this has resulted in an increased public awareness and consequent expectation of global corporate accountability, the subject remains a complex matter of opposing interests: on the one hand, the public interest in ensuring that companies, authorities and organisations comply with the law, and on the other hand, the … Continue Reading

Reform of the German Law on Temporary Employment

This post was also contributed by Bastian Semmel, International Trainee, Norton Rose Fulbright LLP (Frankfurt).

With effect from 1 January 2017, the German legislation on temporary employment will be reformed, as the Federal Cabinet recently passed a draft law regarding this matter on 1 June 2016. These changes are designed to address the misuse of temporary employment and to strengthen the position of temporary employees. The following article provides a short overview of the main modifications that will be made to the German Law on Temporary Employment (Arbeitnehmerüberlassungsgesetz – AÜG).

In future, a temporary employee will only be … Continue Reading

Fair P(l)ay in Germany? – What measures are in place (or proposed) to address gender pay inequality in the workplace

This post was also contributed by Ebru Tirel, Trainee, Norton Rose Fulbright LLP (Munich).

In Germany, “Equal Pay Day” is widely observed. It marks the day from which women are deemed to start to earn wages in that calendar year, where men have started to earn wages since January 1st. This year, Equal Pay Day was on 19 March.

According to a report of the German Federal Statistical Office DESTATIS dated 16 March 2016 regarding the gender pay gap in 2015, women earn 21 percent less than men. This inequality is due to various factors: Women often choose professions in … Continue Reading

To what extent can employers be held vicariously liable for the acts of their employees?

This post was also contributed by Ebru Tirel, Trainee, Norton Rose Fulbright LLP (Munich).

Imagine a forklift truck driver damaging the car of a customer of the employer, resulting in a loss of EUR 200,000. Who will be liable for the damage?

Generally speaking, of course, the employee is directly liable for the damage caused by a negligent act or intentional fault. However, the employer can also be held responsible for wrongful acts of employees, even if the employer has not committed any wrongful act himself, provided that the fault occurred in the course of the employment and while fulfilling … Continue Reading

Is it possible for employers to change the terms of employment contracts?

At first sight, the answer to this question would be: only by mutual agreement. But once you take a closer look there are many ways and situations that make it possible for an employer to unilaterally change the contractual terms.

  • Collective bargaining agreements (CBAs) are binding for members of those employers’ associations (firms)  and labour unions (employees) who have concluded the respective agreements. In such case, any existing or newly concluded CBA will constitute new rules and obligations for the employee unless expressly stated otherwise in the employment contract. Since employers who are members of the employers’ associations do not
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What protection do employees have against race discrimination in Germany?

Due to the large number of refugees now living in Germany, protection against race discrimination has recently become an issue of greater importance.

Under the German Anti-Discrimination-Act, which is derived from European directives, all employees in Germany, including apprentices and job applicants, are legally protected against discrimination on grounds of race or ethnic origin. In particular, it is unlawful to discriminate during the recruitment or promotion process. It is also unlawful to discriminate on grounds of race or ethnic origin in the giving of instructions during the daily working process or in the payment of remuneration.

The aim of the … Continue Reading

Enforcing employee restraints of trade after termination of employment – an update

The legal framework for post-contractual non-compete covenants is unchanged since our last post on the topic in 2013. It is nevertheless worth mentioning the following interesting court decisions which deal with the enforceability of employee restraints and the employer’s obligation to pay compensation:

  • Pursuant to the statutory provisions in sec. 74 et. seq. German Commercial Code (HGB), a post-contractual non-compete covenant must be in writing and the compensation payable for each year of the restraint period must be at least 50 per cent of the last remuneration received by the employee.

In a recent decision the German Federal Labour CourContinue Reading

(Night-)Time is Money

Even though, unarguably, few employees would give up a good night’s sleep in order to work night shifts, operational necessity often dictates otherwise. Certain businesses can only remain competitive and survive in the market if they require their employees to work during night-time. Parcel services, bakeries and hospitals are just a few examples of businesses where working night shifts seems to be an absolute necessity.
Under German law, employees may be required to work during night hours (defined by law as from 11 p.m. to 6 a.m.), provided that a works council (if any) has been involved and any collective … Continue Reading

What are the employment implications of the transfer of a business in Germany?

The employment implications of the transfer of a business are regulated by sec. 613a German Civil Code (Bürgerliches Gesetzbuch – BGB). A transfer of a business takes place where an economic entity is transferred by a legal transaction and the economic entity is continued by the new owner of the business.

In order to determine whether such continuation occurs the courts have set various criteria,depending on the nature of the business being transferred. For example, where the business creates most of its value from the operation of machinery (e.g. an automobile plant), the transfer of those machines is normally the … Continue Reading

What protection from discrimination do employees have on grounds of gender in Germany?

All employees in Germany, including apprentices and job applicants, are fully protected against discrimination on grounds of gender under the German Anti-Discrimination-Act which is derived from European directives. In particular, it is unlawful to discriminate during the recruitment or promotion process. It is also unlawful to discriminate on grounds of gender in the giving of instructions during the daily working process or in the payment of remuneration. However, statistical surveys continue to demonstrate that men, in general, receive a higher salary even when working in a similar position to women.

Collective agreements and works agreements or other rules with regard … Continue Reading

Notice Rights – What Rights Do Employees Have To Notice On Termination Of Employment

Notice rights have the purpose of giving the employee the opportunity to take appropriate measures in preparation for the termination. The obligation of the employer to adhere to certain notice periods and the length of these notice periods depend - amongst other things - on the characterisation of the termination and the duration of the employment relationship.
 For an ordinary dismissal (ordentliche Kündigung), advance notice must always be given, regardless of the circumstances of the dismissal. In most cases, the German Act on Protection against Dismissal (the Act) applies, allowing dismissal only for certain causes. If an employer 
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Altersdiskriminierung bei Kündigung im Kleinbetrieb

Eine altersdiskriminierende Kündigung kann unwirksam sein und Entschädigungsansprüche auslösen. Dies gilt auch im Kleinbetrieb, obwohl dort eine Kündigung grdsl. ohne Grund möglich ist.

In der Entscheidung ging es um eine 1950 geborene Klägerin, die seit gut 20 Jahren bei einer Arztpraxis als Arzthelferin beschäftigt war. In der Praxis waren noch vier (jüngere) Arbeitnehmerinnen angestellt. Die Klägerin war zuletzt im Labor tätig.

Der Arbeitgeber kündigte das Arbeitsverhältnis der Klägerin wegen Veränderungen im Laborbereich, die eine Umstrukturierung des Betriebs erforderten. Dabei führte der Arbeitgeber an, die Klägerin sei bereits pensionsberechtigt. Den anderen Arbeitnehmerinnen wurde nicht gekündigt.

Die Klägerin machte geltend, die … Continue Reading

What protection from discrimination do employees have on the grounds of sexual orientation in Germany?

Discrimination against people on grounds of their sexual orientation is a topic widely discussed in European politics. For example, only recently, in Ireland marriage between same sex partners became lawful. In Germany, it is still not possible for same sex partners to marry. They can only enter into a so-called registered civil partnership (eingetragene Lebenspartnerschaft), which is different to marriage in some respects, for example, regarding adoption rights.

From an employment law perspective, employees are fully protected against discrimination due to their sexual orientation under the German Anti-Discrimination Act. This includes gay men, lesbians and bisexuals. Transsexuals are … Continue Reading

Working time – are there any restrictions on an employee’s working week in Germany?

Under the German Act on Working Time (Arbeitszeitgesetz), an employee’s working time is limited to a maximum of eight hours per working day and 48-hours per week. This 48 hours threshold applies to all employees working a five or six day week. However, most employees in Germany work five days and 40 hours per week at the most.

Under German law, an increase to up to ten hours per day is permissible without a special reason being necessary if the average of eight hours per day is not exceeded over a six-month reference period. However, as European … Continue Reading

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