Topic: Germany

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Issues of employment status: pseudo self-employment and hidden personnel leasing in Germany

Global Workplace InsiderBy Pia Popp on Posted in Europe, Germany

German labour law follows the “all or nothing” principle: Labour law regulations presume an existing employment relationship between employer and employee. If no such relationship exists, protective labour law regulations cannot be applied (with a few exceptions e.g. in the case of managing directors of a “GmbH” (limited company)). Assessing whether an employment relationship exists requires evaluating the nature of the relationship in question and assessing it against the legal definition of “employment”.

As in many other countries, Germany witnessed the trend of reducing core workforces in favour of a more flexible use of external resources. This in particular lead … Continue Reading

Artificial intelligence and the workplace

Global Workplace InsiderBy Pia Popp on Posted in Europe, Germany

These days especially in view of “Arbeiten 4.0”, the so called fourth industrial revolution in Germany, digitalization pervades the whole working world and is reflected in a vast number of different phenomena. As one of them artificial intelligence can complement – and in some cases even replace – manpower as we can see in the automotive industry. Yet the commitment is no longer limited to pure routine activities: Artificial intelligences can just as well assume employer’s responsibilities for example by giving automated instructions to employees. Therefore, digital changes also affect highly qualified positions, scientists and management – all of which … Continue Reading

Employment Law and Financial Institutions

Photo of Stefanie RadinaBy Stefanie Radina on Posted in Data privacy and GDPR, Europe, Germany, Whistleblowing

In the financial sector, in addition to individual employment contracts, working conditions can be subject to various industry related statutes and regulations, collective bargaining agreements and works agreements.

Laws and regulations

As a reaction to the global financial crisis, the participants of the 2008 G20 summit in Washington, including Germany, agreed on the establishment and implementation of global standards of regulation, cross-border supervision and management to avoid conflicts of interest and to create an early warning system to avoid a repetition of the financial crisis.

In response to this resolution, the Financial Stability Board (FSB) published principles for sound compensation … Continue Reading

What rights does an employer have to suspend an employee in Germany?

Photo of Maria SiemensBy Maria Siemens on Posted in Europe, Germany

Under German law, an employer can only suspend an employee in certain cases. One of the core obligations of the employment relationship is an obligation on the employer to provide the employee with relevant work to be performed. If it fails to do so without justification, it must nevertheless continue to pay the employee. Notwithstanding this, a mutual agreement to suspend the employee, whether paid or unpaid, is of course always possible.

Suspension without continued payment of remuneration

An employer may not suspend an employee without payment of salary unless it is explicitly provided for by law or in collective … Continue Reading

Bericht zur Gleichstellung und Entgeltgleichheit erstmals in 2018 aufzustellen!

Photo of Anja LingscheidBy Anja Lingscheid on Posted in Europe, General, Germany

Die Umsetzung guter Vorsätze: Erstmaliger Entgeltbericht nach dem Entgelttransparenzgesetz

Ganz oben auf der To-Do-Liste für 2018 steht – neben den Vorsätzen für das neue Jahr – für viele Unternehmen die erstmalige Aufstellung des Berichts zur Gleichstellung und Entgeltgleichheit nach dem Entgelttransparenzgesetz. Der Bericht ist im Jahr 2018 erstmals zu erstellen – Berichtszeitraum ist dabei das Kalenderjahr 2016 – und dem nächsten Lagebericht nach § 289 HGB als Anlage beizufügen sowie im Bundesanzeiger zu veröffentlichen.

Wer ist betroffen?

Betroffen sind alle Arbeitgeber mit in der Regel mehr als 500 Beschäftigten, die zur Erstellung eines Lageberichts (§§ 264 und 289 HGB) verpflichtet … Continue Reading

Working as a freelancer and as an employee for the same company

Photo of Anja LingscheidBy Anja Lingscheid on Posted in Europe, Germany

In Germany, the distinction between employees and independent contractors (also referred to as freelancers) is particularly important. For example, the question of whether a person is an employee or an independent contractor determines whether they are protected against unfair dismissal and also affects how they are treated for statutory social security and income tax purposes. The key factor which indicates that an individual is an independent contractor is that he performs the agreed services working independently. By contrast, an employee is characterised by his dependency on the employer. An employee performs his work in accordance with the employer’s instructions and … Continue Reading

Bilanzsteuerrechtliche Risiken bei älteren Betriebsrentensystemen

Photo of Claudia PosluschnyPhoto of Frank WeberndörferBy Claudia Posluschny and Frank Weberndörfer on Posted in Europe, Germany

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?

Photo of Stefanie RadinaBy Stefanie Radina on Posted in Europe, General, 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
… Continue Reading

The German law on employee participation is compatible with European law

Photo of Christoph ValentinBy Christoph Valentin on Posted in Discrimination and harassment, Germany

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?

Photo of Jannis BreitschwerdtBy Jannis Breitschwerdt on Posted in Europe, 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

Photo of Jannis BreitschwerdtBy Jannis Breitschwerdt on Posted in Contracts, General, Germany

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

Photo of Anja LingscheidBy Anja Lingscheid on Posted in General, Germany

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

Photo of Anja LingscheidBy Anja Lingscheid on Posted in Europe, Germany

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?

Photo of Jannis BreitschwerdtBy Jannis Breitschwerdt on Posted 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?

Photo of Stefanie RadinaBy Stefanie Radina on Posted in Contracts, Europe, Germany

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?

Photo of Jannis BreitschwerdtBy Jannis Breitschwerdt on Posted in Contracts, Europe, 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?”

Photo of Jannis BreitschwerdtBy Jannis Breitschwerdt on Posted in Discrimination and harassment, Europe, Germany, Whistleblowing

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

Photo of Anja LingscheidBy Anja Lingscheid on Posted in Europe, General, Germany

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

Global Workplace InsiderBy on Posted in Discrimination and harassment, Europe, Germany

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?

Global Workplace InsiderBy on Posted in Europe, General, Germany

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?

Global Workplace InsiderBy Philipp Raben on Posted in Contracts, Europe, Germany

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
… Continue Reading

What protection do employees have against race discrimination in Germany?

Photo of Wiebke MatternBy Wiebke Mattern on Posted in Discrimination and harassment, Europe, 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

Photo of Daniela LoyBy Daniela Loy on Posted in Contracts, Europe, General, Germany

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 Cour… Continue Reading

(Night-)Time is Money

Photo of Jannis BreitschwerdtBy Jannis Breitschwerdt on Posted in Europe, Germany

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

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