Topic: Germany

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Unlimited term for members of the works council – part two

As discussed in my post of 28 May 2014, the German Federal Labour Court was about to decide on a case where a member of the works council claimed against her employer for an employment unlimited in time after the expiration of her agreed fixed-term employment contract. The decision is now available.

The Federal Labour Court, which is the highest labour court in Germany, decided against the employee, as she could not prove that she was discriminated against due to membership of the works council.

Although this is good news for employers, they should be aware that the court … Continue Reading

Company pensions need to be adjusted to inflation

Under German law, employers are obliged to check regularly (at least every three years) whether benefit payments from company pensions ought to be adjusted for inflation. In their check they may consider the company’s economic situation. Employers are not obliged to increase pension payments if they believe (and such belief is reasonable with a sufficient degree of probability) that they will not be able to meet the inflation adjustment from the company earnings in the following three years.

In a recent case the claimant had been working for Dresdner Bank for many years and was receiving a company pension. In … Continue Reading

Employees’ rights on redundancy in Germany

In the event of a termination for redundancy or similar reasons, employees in Germany have the right to file a lawsuit in order to have a court review the validity of the termination. If the termination is invalid, the law provides for a continuation of the employment relationship. As a basic principle, there is no statutory right of an employee to receive any kind of financial compensation in the event of a termination. De facto, however, most termination cases are settled by the payment of a negotiated compensation.

Where there is a major redundancy and a works council exists, the … Continue Reading

Unlimited term for members of the works council?

Recently, a German Higher Labour Court had to decide on the following question: Where an employee becomes a member of the works council during his/her fixed term, is or can an employment unlimited in time be created automatically at the end of that fixed term?

Generally speaking, an employer can agree a fixed term for an employee of up to two years without any specific reason. Provided that the legal formalities are met (in particular, the term must be in writing) and the employee is not employed after the expiration of the term, the employment terminates automatically on the agreed … Continue Reading

Whistleblowing – what protection do employees have in Germany?

Although we saw a legislative initiative to introduce a whistleblowing act in 2011 and despite numerous revelations in the food sector and the NSA scandal in 2013, there is still no general law on the protection of whistleblowers in Germany.

Few explicit statutory whistleblowing rights and duties

Whistleblowing is lawful where statutory provisions give an employee the right (or impose a corresponding duty on the employee) to “blow the whistle”. However, there are only a few laws that explicitly stipulate reporting rights or duties for specific situations, such as

  • the German Data Protection Act (Bundesdatenschutzgesetz – BDSG) allowing
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Incapacity to work in a shift system

This post was contributed by Moritz Kunz, Of counsel, Norton Rose Fulbright LLP (Frankfurt a.M.) and Thomas Olbrich, Trainee, Norton Rose Fulbright LLP (Frankfurt a.M.) 

Shiftwork is considered a necessity in many job sectors and industries. The healthcare sector in particular requires a functioning shift system to guarantee optimum and consistent clinical care of patients by the nursing staff. Therefore, for hospitals and other healthcare service providers, the availability of their employees to work on allocated shift rotas is decisive.  

A recent decision by the German Federal Labour Court, delivered in April 2014, stipulates that new principles apply … Continue Reading

What about non-compete compensation payments in case of the employer’s insolvency?

In reference to a previous post, entitled “Limits on non-compete and non-solicitation clauses under German law” by Bettina Goletz, we have been asked about non-compete compensation payments in case of the employer’s insolvency. This post will address whether the employee is entitled to compensation payments under a post-contractual non-compete clause in the situation where the employing company files for insolvency under German law.

In general, under German law a post-contractual non-compete clause is only valid if an amount of 50% of the most recent compensation has been granted to the employee. In the situation where the employing company files for … Continue Reading

Annual bonus payments in Germany

This post was contributed by Moritz Kunz, Of counsel, Norton Rose Fulbright LLP (Frankfurt a.M.) and Thomas Olbrich, Trainee, Norton Rose Fulbright LLP (Frankfurt a.M.) 

Many companies provide their employees with annual bonus payments to that are subject to the terms and conditions of the employment contract, company bonus schemes and/or agreements with the works council. In many cases, the applicable terms and conditions require that the employment relationship continues to exist (and is not under notice of termination) at the end of the financial or calendar year. Due to a recent decision of the Federal German Labour Court, … Continue Reading

Do Employers have a duty to inform about occupational pension schemes?

In Germany, employees have the statutory right to ask their employers to pay part of their future earnings – up to 4 % of the relevant contribution assessment ceiling for the statutory pension fund – into an occupational pension scheme through the conversion of earnings into pension contributions. The German Federal Labour Court recently ruled that employers are not obliged to make their employees aware of this entitlement.

In the present case a retired employee sued his former employer on the ground that he had failed to inform him about this right. The employee argued that if he had been … Continue Reading

May a call to strike be distributed via the employer’s intranet?

The German Federal Labour Court recently held that an employee is not entitled to use an email account that has been provided to him by his or her employer for official work purposes in order to distribute a strike call within the company.

In the case at issue, the German trade union ver.di decided to call for a warning strike at a hospital. An employee of the hospital, who served as chairman of the hospital´s works council and member of the trade union, ver.di, forwarded the call over his work email account via the hospital´s intranet to all hospital employees … Continue Reading

Introduction of a statutory quota for women’s representation: Are the days of the “boy’s network” numbered?

Despite all attempts of the previous German government to increase the quota of women in senior positions, e.g. directorships or members of supervisory boards, the percentage remains consistently low. For this reason, the new government has undertaken in the coalition agreement to introduce a gender quota of at least 30 percent for supervisory boards of companies that are publically-listed or subject to employees’ representation on supervisory boards (voll mitbestimmungspflichtige Unternehmen). The statutory quota will apply to vacant positions on supervisory boards from 2016.

The preparation of the draft bill to introduce a statutory quota for women’s representation in supervisory boards … Continue Reading

Temporary workers in Germany

You may recall that on 12 August 2013 my colleagues, Annegret Mueller-Mundt and Nicola Pamler, explained some basics about temporary workers in Germany. Coming back to this topic, please be aware of a recent interesting and important decision of the German Federal Labour Court. The court had to decide on the question of whether an employment between the employee and the hiring company (Entleiher) is created by law if the assignment is not “limited in time”. To understand the decision, please let me outline the most important facts about temporary workers for you:  

  • Three parties: The employee is
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Christmas parties around the world: time to worry for the employer?

We have good news for all employers hosting a Christmas party in Germany: You can relax and simply enjoy the event, as there are no specific employer obligations when hosting a work party / event.

There is no general obligation for companies to host a work party / event for their employees. However, such obligation may be created if the party has been held for several consecutive years or if it is provided for in an agreement with the company’s works council. If an obligation exists, the employer is free to decide whether to host the party during or outside … Continue Reading

Childcare obligations – what are an employer’s obligations and an employee’s rights?

German law generally requires employers to take care of their employees’ needs. This obligation may become crucial in situations in which employees with children are affected. This article illustrates the most important childcare related rights of employees and the corresponding obligations employers can be faced with. 

Protection of pregnant employees

The German Maternity Protection Act (Mutterschutzgesetz) prohibits pregnant women from working within the last six weeks before the expected date of birth. Further, pregnant women are generally not allowed to work more than 8.5 hours per day. This limit is reduced to 8 hours a day if the woman is … Continue Reading

German law changes quickly!

On 29 July 2013, a blog entry on time limitations of employment relationships in Germany stated that the employer may agree on a fixed term contract for a period of up to two years if the candidate was not employed by the company within the last three years. This has been the opinion of the German Federal Labour Court since 2011.

Guess what – this opinion is now outdated due to a new decision of the Higher Labour Court of Baden Wuerttemberg that contradicts the Federal Labour Court’s decision and states that such agreement is valid only if the candidate … Continue Reading

Go abroad?

The German Federal Labour Court recently decided that dismissals for redundancy reasons can be made even if free positions are available at another business unit abroad.

In the case at hand, an employer decided to move its production from Germany to the Czech Republic. Only the administration department remained in Germany. Thus, the employer dismissed all staff employed in production for redundancy reasons. The claimant argued that her dismissal was unlawful as the employer should have offered her the opportunity to move to the Czech Republic by issuing a “dismissal with the option of altered conditions”. The court, however, decided … Continue Reading

Occupational pension schemes in Germany

Occupational pension schemes are becoming more and more popular as trust in the governmental pension scheme fades. Therefore, occupational pension schemes are an attractive benefit which companies can offer to employees in the ever stronger competition for a qualified work force. Besides, due to mandatory regulations entitling employees to demand employee funded occupational pension schemes, it is nearly impossible for any employer in Germany to avoid this issue. 

As the German occupational pension system is very complex and differs hugely from both the English and American systems, the following background information should be considered in setting up an occupational pension … Continue Reading

Pflicht zur Beteiligung der Schwerbehindertenvertretung im Bewerbungsverfahren

Bewirbt sich ein schwerbehinderter Mensch auf eine ausgeschriebene Stelle, ist der Arbeitgeber grundsätzlich verpflichtet, die Schwerbehindertenvertretung nach § 81 SGB IX zu beteiligen. Verletzt er diese Obliegenheit, kann dies zu Gunsten des Schwerbehinderten eine Benachteiligung wegen seiner Behinderung im Sinne des Allgemeinen Gleichbehandlungsgesetzes indizieren. Dies kann zu einer Schadensersatz- und Entschädigungszahlungsverpflichtung des Arbeitgebers führen. 

In diesem Zusammenhang hatte das Bundesarbeitsgericht am 22.08.2013 folgenden Fall zu entscheiden: 

Der Kläger – schwerbehindert mit einem Grad der Behinderung von 50 – ist bei der Beklagten, einer Spielbank, als Sous-Chef beschäftigt. Er ist der Stellvertreter des in der Spielbank gewählten Schwerbehindertenvertreters. 2009 schrieb die … Continue Reading

Temporary worker or employee?

This post was also contributed by Nikola Pamler, Trainee, Norton Rose Fulbright LLP (Munich)

Temporary employment is an important tool for many German companies, as hiring a temporary workforce allows companies to adjust easily and quickly to workload fluctuations without being constrained by restrictive German employment laws.  

That is why the “temporary industry” is constantly growing. There were 822,000 temporary employees in Germany in 2012, meaning that the rate of temporary employment in Germany is now eight times higher than it was 20 years ago. 

This temporary provision of labour is based on an employee hiring agreement between an employee … Continue Reading

Time limitation of employment relationships in Germany

Legal background 

In Germany, there are two cases where employment relationships can be limited in time, i.e. have a fixed term. In the first case, an employment relationship can be limited in time for a specific purpose, if certain statutory grounds exist (such as temporary demand or temporary filling-in for an employee on leave). Secondly, an employment relationship can be limited in time without any such ground for a maximum period of two years provided that there has not been a previous employment relationship between the parties within the last three years. 

Any time-limited employment agreement has to be signed … Continue Reading

Dismissals in Germany

This post was contributed by Annegret Müller-Mundt, Associate at Norton Rose Fulbright LLP (Munich)

Basic principle

In Germany, in principle, either party may terminate an existing employment relationship without reason by complying with the contractual notice period. However, this general rule applies only in the rarest of circumstances because the Act on Protection against Dismissals (Kündigungsschutzgesetz) requires that in most cases there must be an objective reason for the dismissal to be effective. The Act is applicable if an employer employs more than five employees (more than ten, if the employee has been hired after 31 December 2003). … Continue Reading

Kündigung zum „nächstmöglichen Termin“?

In einer aktuellen Entscheidung des Bundesarbeitsgerichtes hat dieses zur Bestimmtheit einer Kündigungserklärung Stellung genommen.

 

Der Sachverhalt:

Die Klägerin war seit Ende der 80er Jahre als Industriekauffrau bei dem Arbeitgeber beschäftigt. Mitte 2010 wurde über das Vermögen des Arbeitgebers das Insolvenzverfahren eröffnet und ein Insolvenzverwalter bestellt. Nachdem die Betriebsstilllegung beschlossen und der Betriebsrat ordnungemäß angehört wurde, kündigte der Insolvenzverwalter das Arbeitsverhältnis der Klägerin ordentlich „zum nächstmöglichen Zeitpunkt.“ Das Kündigungsschreiben enthielt ferner einen Hinweis auf die Kündigungsfristen nach § 622 BGB und § 113 InsO, der eine Begrenzung der einschlägigen Kündigungsfristen auf drei Monate bewirkt, wenn eine längere Frist nach Gesetz, Tarifvertrag … Continue Reading

Relocations and transfer of business in Germany

In Germany, where there is a transfer of business, only the employees who belong to the relevant transferred entity automatically transfer to the new employer.  

How would you decide the following case? A company offered call-answering services and back office activities. All employees of the company performed both services. The company decided to split the business into two parts: (i) the call-answering department and (ii) the back office department, and in doing so to relocate some of the employees to the call-answering department and the rest of the employees to the back office department. The business of the call-answering department … Continue Reading

Limits on non compete and non solicitation clauses under German law

During the course of their employment relationship, employees are prohibited from competing with their employer and from soliciting other employees and/or customers; this applies even if there is no express provision in the employment agreement.

With regard to a post contractual non-compete covenant agreed before the employment’s termination there are several restrictions which have to be considered:

  • The post contractual non-compete covenant must be agreed in writing. Two copies must be originally signed by both parties on the same document (email, scan, facsimile etc. are not sufficient), and one copy of the original signed documents must be handed
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