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Germany: Abusive avoidance of law on fixed-term employment by actually and legally affiliated employers

The plaintiff was employed by the defendant, which operates a laboratory together with a research association, as a technical assistant. At first, the plaintiff was employed by the research association on a fixed-term basis. The plaintiff terminated this employment relationship and entered into a new fixed-term employment relationship with the defendant. This new fixed-term was not based on objective grounds and the employment relationship had the same content as the previously terminated employment relationship. The head of the research group in which the plaintiff was operating, who intended to keep her employed, initiated the change of employer. The plaintiff now claimed that the second fixed-term was invalid.

The Berlin-Brandenburg State Labour Court has ruled in favour of the employee and has confirmed that the fixed-term agreed upon in the employment contract with the defendant is invalid. This means that an unlimited employment relationship was concluded with the defendant.

Under German law, a fixed-term employment contract concluded without any objective grounds as stated in the law as justifying the fixed-term (e.g. substitution for another employee during parental leave) is only permissible for a maximum duration of two years. This term had been exhausted in the employment relationship between the employee and the research association. To avoid an unlimited employment, the affiliated defendant simply took over the position as the legal employer, even though the content of the employment relationship remained unchanged. According to the Berlin-Brandenburg State Labour Court, this change of employer was made exclusively to enable a fixed-term employment relationship, which could not be based on objective grounds and would, therefore, have been invalid if concluded between the employee and the research association. Therefore, the Court found that the change in employer was made against good faith and the second fixed-term was invalid due to this. In consequence, the second employment relationship is deemed to have been concluded for an unlimited time.