Minimum requirements
The employer has a statutory obligation to provide the main contractual terms in writing to the employee no later than one month after the commencement of employment. The terms and conditions of employment are regulated mainly by statutes, collective bargaining agreements and works council agreements. As a rule, the employment contract may not deviate from these provisions to the detriment of the employee.
The written summary must contain at least the following:
- name and address of the employer and the employee;
- information on the starting date;
- the anticipated duration (only in case of fixed-term contracts);
- the place of work;
- the nature of the activity involved;
- the composition and amount of the remuneration;
- the working hours;
- the duration of annual leave;
- the notice period; and
- a general reference to the collective bargaining agreements, works or service agreements applicable to the employment relationship, if any.
To avoid future disputes, a version of the employment contract should be drafted in German. However, this is not required by law.
Fixed-term/Open-ended Contracts
As a general rule, the employment contract is entered into for an unlimited period. A fixed-term contract is possible, provided the term is agreed upon in writing before the employment commences. A fixed-term contract ends automatically without written notice at the end of its term.
A fixed-term employment relationship must be justified by objective grounds, some of which are set forth in statutory law (e.g. temporary increase in work volume, substitution of an employee during parental leave). If no objective grounds exist, the fixed-term employment is limited to a maximum duration of two years, provided that no previous employment contract with the same employer existed. If the parties continue the employment after the expiration of the fixed-term contract, the agreement is deemed to be concluded for an indefinite period.
Trial Period
The employer and employee may agree upon a trial period, which is limited by law to a maximum duration of six months. The notice period within the trial period is two weeks, unless otherwise agreed. The Dismissal Protection Act does not apply during the first six months of employment, regardless of whether the parties agreed upon a trial period.
Notice Period
The length of the notice period for the employer depends on the employee’s length of service, ranging from 4 weeks for employees with less than 2 years’ seniority, to 7 months for employees with more than 20 years’ seniority. Unless otherwise stated in the employment contract, the extended statutory notice periods are only applicable to terminations by the employer, whereas the employee may terminate the employment with a notice period of four weeks to the 15th or the end of a calendar month. Most employment contracts align the notice periods for employees with the extended periods applicable to employers. Collective agreements may specify longer or shorter notice periods, whereas individual contracts of employment may only specify longer notice periods.
