Germany: Employers’ Duty of Care and Employers’ Options for Action during the Ukraine Crisis

Authors: Thomas Wahlig and Teresa Gabele, LL.M.

We are all deeply shocked by the developments in Ukraine. We intend to provide employers guidance with regard to the employment law related aspects of the Ukraine crisis, in particular how they best support their employees working in Ukraine and how they manage the further administration of employment relationships in Russia in light of the exclusion of some Russian banks from the SWIFT system.

The employer’s duty of care

According to German law, employers are obliged to ensure that employees’ interests are not harmed. They have to take account of the rights, legal interests and other interests of the other party under the employment contract. This also includes the responsibility to protect the employees’ life and health. According to international law this also applies to employees being employed under German law, but working abroad (e.g. in the Ukraine). If a choice of jurisdiction has not been made in the employment contract, the employment relationship is governed by the law of the country in which the employee usually performs his work. Accordingly, German law applies, if the employee usually works in Germany and is only in Ukraine for a business trip or on a foreign assignment.

Regardless of the question of applicable law, employers should currently support their employees from or in Ukraine. Employees on a business trip or a foreign assignment can be immediately recalled from the war regions or can be assigned (as far as possible) to a safe workplace, e.g. in another country.

Ukrainian employees in Germany

If Ukrainian nationals living and working in Germany are called up for their compulsory military service in Ukraine, employers can issue certificates that their workforce is urgently needed in Germany. It is possible that the Ukrainian authorities will accept such a certificate as an important reason to release the Ukrainian employees from military service.

Business trips and secondments to Ukraine

Due to the current high level of risk and danger in Ukraine, employers should not order business trips or secondments to Ukraine. Employers should cancel planned business trips and request employees currently in Ukraine to return. Employers have to bear the costs for the return journey, as they instructed the business trip/foreign assignment. Where travel policies are in place, employers should update these policies in order to avoid business trips to Ukraine. If employees have given up their homes in Germany due to a longer foreign assignment, employers can offer help, e.g. by providing loans or by covering the costs of hotel accommodation.

Employees with EU citizenship working in Ukraine

German citizens are urged by the German government to leave Ukraine. The German foreign representations might assist. Nevertheless, employers who employ German or EU citizens in Ukraine should again explicitly request them to leave Ukraine immediately. It is also advisable to appoint a contact person in the company who is available to answer questions from employees who are currently still in Ukraine and who can coordinate return journeys. EU citizens can continue working in Germany without having to comply with any restrictions regarding residence law.

Third-country employees working in Ukraine (including Ukrainian nationals)

Although the obligations arising from German law do not apply to employment relationships without connection to Germany, there are possibilities for German companies to support their employees from non-EU countries, especially Ukraine itself. Ukrainian employees can be offered to temporarily come to Germany. If necessary, employers could also support by coordinating the departure or by paying for accommodation costs. Financial support can also be given by offering advances on salaries.

Nevertheless, residential law requirements must be taken into account as well: Third-country nationals require a visa to enter Germany. If Ukrainian nationals hold a biometric passport they are privileged under the Residence Act and can enter Germany visa-free for a period of 90 days.

German employers should note that even in the case of visa-free entry, employment in Germany is not generally permitted. Special rules apply to managing employees, board members, managing directors and employees who carry out a qualified occupation and have special, company-related knowledge. However, German companies should carefully check whether any such exception applies, as otherwise the activity constitutes illegal employment.

On 4 March 2022, the Council of the European Union adopted the decision to take in displaced persons under Article 5 (1) of Council Directive 2001/55/EC of 20 July 2001 on minimum standards for giving temporary protection. This decision entered into force the same day. In that, Sec. 24 of Germany’s Residence Act on granting residence for temporary protection, applies immediately to those people referred to in the Council decision.

With regard to the Council Directive 2001/55/EC, people displaced by the conflict are (i) Ukrainian nationals and their family members, (ii) Non-Ukrainian nationals and stateless people who hold national or international protection status in Ukraine and their family members and (iii) Non-Ukrainian nationals and stateless people who can prove that they were legally residing in Ukraine before 24 February 2022 who can’t return to their country of origin. All people not fitting into these categories do not profit from the temporary protection under Sec. 24 of the Residence Act.

In addition, the Federal Ministry of the Interior released an ordinance on the temporary exemption from the requirement of a residence permit of persons entering the country on the occasion of the war in Ukraine (Ukraine-Aufenthalts-Übergangsverordnung – UkraineAufenthÜV). It became effective on 9 March 2022 and is retroactive to 24 February 2022. The regulation is initially limited until 23 May 2022. Within this period, a report must be made to the competent immigration authority for the issuance of a residence title in accordance with Sec. 24 of the Residence Act.

For the individuals under temporary protection, this status implies the following:

• They can legally enter German territory without a residence permit and apply for it once being in Germany.
• Displaced persons who are granted a temporary residence permit under Sec. 24 of the Residence Act do not need to undergo the asylum procedure. They receive the same financial benefits as asylum applicants. The Federal Ministry of the Interior strongly advises against the asylum application.
• Paid employment must be approved by the responsible immigration authority. The Federal Ministry of the Interior has urged the federal states when issuing temporary residence permits to note on them that employment is permitted, even if the permit holder does not yet have a concrete offer of employment. We therefore assume that a concrete job offer will most likely lead to the issuance of a permission to work.

Employment via Employer of Records (EOR)

The employment via so-called EORs also requires special attention. Depending on the specific form of the contractual relationship between the German “assignment company” and the EOR, there is a risk that the German “assignment company” is also to be considered a (co-)employer. Even if (only) the EOR is considered the employee’s employer, the employee’s German “assignment company” could ask the EOR to send the employee from Ukraine to another country to which the employee is allowed to enter and also work without a visa.

Employees working in Russia/Belarus

Due to the exclusion of some Russian banks from the SWIFT system, some employers are facing problems when transferring salaries to their employees in Russia and Belarus. A short-term solution is to use the telex system (which is less secure) that was used before the SWIFT system was created, or to send money by fax. In addition, the Russian central bank has created its own system in the past as a counterpart to the SWIFT system, the SPFS system, which some European banks have also joined. It can be assumed that the SPFS system will become more popular in Russia and Belarus within the next weeks.

However, in order not to circumvent the sanctioning of Russia and Belarus associated with the SWIFT exclusion, German companies should think about relocating their Russian and Belarussian employees to Germany (e.g. temporarily as part of a secondment). However, this requires that the employees obtain a visa from the German embassy in Russia or Belarus to enter Germany. Here, we have already experienced some obstacles in the past days since some official Russian and Belarussian authorities seem to have technical problems to issue notarisations and apostils. In any case, we recommend employers considering relocating their employees in Russia and Belarus to act rather quickly as long as it is still possible to leave Russia and Belarus.

Key Action Points for Human Resources and In-house Counsel

• German employers should strive to ensure that their employees are not exposed to any hazards with regard to the war in Ukraine. Therefore, employees should be instructed to leave Ukraine if they have not already done so. Any business travel to Ukraine should be suspended.
• German employers can help e.g. by organising and paying for their employees’ journey to Germany as well as by assisting with accommodation in Germany. Once Ukrainian employees have arrived in Germany, employers can provide help with regard to immigration matters and assist when it comes to taking up employment in Germany.
• German employer should carefully assess whether they have employees in Russia and Belarus whose services are crucial for their business and whether they want to relocate them to Germany/the European Union in order to further be able to rely on their services even if Russia and Belarus close their borders. This especially applies to male employees of military age (18 to 60).