Employment law for employees

In Germany, the term “employee” is defined in section 5 of the Labour Courts Act (Arbeitsgerichtsgesetz, ArbGG), which states, “For the purposes of this Act, “employee” shall refer to persons in dependent employment (salaried employees, workers) and persons employed for the purposes of their vocational training.” This means that employees differ legally from other types of employment, such as contractors or freelancers. Their status comes with various benefits, e.g. specific protections against dismissal, sick pay, and entitlements to parental leave and paid annual leave. The courts have added further criteria to this definition, focusing more on the actual circumstances of the employment and less on the contractually agreed arrangements. For this reason, a person who is defined as a freelancer in his or her contract might actually be a de facto employee – and be entitled to the associated rights.

Employees perform specific duties in exchange for remuneration. Whether they do this part time or full time is irrelevant. They are subject to direction by the employer, meaning that the employer gives them instructions, such as to wear particular work clothes, perform their duties in particular places or carry out certain tasks. Employees are embedded in their employer's work organisation and are economically dependent on their employer. They use the equipment and resources and usually (but not always) the premises of the employer to carry out their work, must agree their annual leave with their managers and colleagues, and assume no entrepreneurial risk.

Employees owe duties of confidentiality and fidelity to their employer. This duty of fidelity requires employees to take account of their employer’s interests and show loyalty to their employer.

Contracts

Employment contracts

The term “employment contract” is defined in section 611 of the German Civil Code (Bürgerliches Gesetzbuch, BGB). An employment contract is formed in the same way as any other contract, by offer and acceptance of an agreement. Although to a certain extent verbal employment contracts are also valid, it is always advisable to agree an employment contract in writing. Otherwise it becomes significantly more difficult to assert rights under the contract.

In general, the contents of an employment contract are a matter for negotiation between employer and employee. But because employees are in a weaker position due to their personal dependency on the employer, there are legal provisions in place to protect them. Usually, an employment contract contains precise information about the parties to the contract, the employee’s duties, hours of work and agreed remuneration. Ideally, it also contains details such as the employee’s annual leave entitlement, the notice period, and the precise composition of the employee's remuneration. The employment contract should also make clear whether the employment is for a fixed term or permanent. Fixed-term employment contracts are subject to certain requirements. In sectors or companies where collective agreements (such as general framework, wage or single-company agreements) apply, the provisions of those collective agreements prevail over diverging terms in the individual employment contract.

Some clauses and provisions in an employment contract between an employer and an employee may give rise to repeated disputes. Employees are well advised to take such disputes with their employer to a specialist employment lawyer. This not only gives them the benefit of the lawyer’s in-depth knowledge and superior negotiating capacities, but it also helps them largely avoid direct confrontation with their employer. For a smart advisor on employment law for employees, the first step is always to attempt to resolve the issue without involving the labour court.

Working abroad

Does your employer want you to work outside Germany for an extended period? This is referred to as a “posting abroad” – and it raises a whole range of questions. The posting must be for a limited period, contractually agreed or relate to a specific project. Key information about your posting abroad is set out in your “posting agreement”. If the posting is for more than four consecutive weeks, the agreement must also state which country or countries you are going to work in, for how long, what currency you will be paid in, and whether you are to receive any payments, in cash or in kind, relating to your time abroad (such as foreign posting supplements, or costs for travels, meals and lodging). It must also be clear whether you will return to Germany as an employee and on what conditions. As a rule, German employers and employees continue to be subject to German law during a posting abroad.

However, employers and employees must also comply with any national rules in force in the destination country – such as those relating to work permits, statutory working time, night-time and Sunday working, pay issues, and public holidays. In addition, your employer must comply with applicable registration requirements, which may vary greatly from country to country. Before you leave, it should also be clarified what social insurance coverage you have and what country you need to pay your tax in.

Posting an employee abroad can become something of a bureaucratic challenge. The information and registration obligations, the requirements around contracts for postings lasting longer than four weeks, and questions of tax and social insurance are key issues for employees and employers alike. Failure to comply with applicable rules and regulations can lead to significant penalties for the employer. Employers are strongly advised to seek advice from a certified specialist employment lawyer with a focus on the posting of employees abroad.

Warnings and termination

Warnings

If you do something wrong at work, your employer can give you a warning. If you do so repeatedly, your employment might even be terminated for misconduct. You can only be given a warning for a concrete instance of misconduct. The purpose of the warning is also to correct your conduct in future. Your employer must describe precisely what this means. In the first instance, a warning as such has no effect on your employment.

However, a warning is only valid if it meets a number of conditions. You must have done something contrary to your contract. This means that you must have breached either a condition of your employment or a contractual accessory obligation. And you must have done so deliberately. The warning must describe what you did as precisely as possible and provide information about the place and time of the misconduct and possible parties to it, and must ask you to conduct yourself correctly in future. It must describe what this correct conduct looks like. A warning must also be proportionate, and therefore can only be given for serious misconduct.

Warnings are recorded in your personnel file. That is why you should always have a warning looked at by an experienced employment lawyer. If the warning is invalid, perhaps because the allegations in it are untrue, or it is not proportionate, or the formal requirements for a valid warning are not met, you can take legal action challenging the warning. If enough time has passed, under certain circumstances you might be able to have even justified and valid warnings expunged from your personnel file.

Termination, severance packages and references

An employment contract can be terminated by either party, either you as the employee, or by your employer. Notice of termination must be given in writing, there must be a valid reason for termination, and the notice period must be adhered to. Another condition is the lawfulness of the termination.

If your employment is terminated by your employer, grounds for termination must be specified. A distinction is made between redundancy, termination on grounds relating to your person, and termination for misconduct. Extraordinary termination is only possible for good cause. There is usually no notice period for terminations of this kind. If your employer has a works council, it must be consulted before the employment is terminated. Failure to do so results in the request being invalid. The works council can also object to the termination.

If your employer has terminated your employment, you have three weeks to bring an action for unfair dismissal. This period begins to run when the notice of dismissal is delivered to you. In an action for unfair dismissal, a labour court determines whether the dismissal is legally valid. Sometimes, an action of this kind may go through several courts, i.e. to the higher labour court for your federal state (Landesarbeitsgericht) and the Federal Labour Court, the court of final instance. If the labour court finds that you were unfairly dismissed, you have the choice of keeping your job or receiving a severance payment, which is a one-time payment to compensate you financially for the loss of your job. The amount of the payment is a matter for individual negotiation between you and your employer. There is no statutory entitlement to this type of compensation.

During your employment, and most especially when it ends, you as an employee are entitled to a favourable, qualified reference. In such reference, the employer must give a full and accurate description of your performance and conduct. It must not contain anything that could lead to a lower rating of you as an employee or your performance.

You should therefore always have an expert take a look at your notices of termination and references. An employment lawyer helps protect and enforce your rights – with or without the involvement of a labour court. An employment lawyer can also be of great help in negotiating an appropriate severance package.

Expertise

Always by your side: Employment law for employees at Schultze & Braun

Whatever employment-related issue is on your mind – the certified specialist employment lawyers at Schultze & Braun are the right people to talk to. At Schultze & Braun, we help you exercise your rights against your employer. We review your employment contract to ensure that it is legally valid, safeguard your rights if you are posted abroad, and represent your interests if you are given a warning or dismissed. Our experienced certified specialist employment lawyers negotiate with your employer on an equal footing, preferably without involving the labour court. When there is no alternative, however, we also represent your interests effectively in court.

Why not make an appointment today?

Contact

Joachim Zobel
Rechtsanwalt (Attorney at Law), Fachanwalt für Arbeitsrecht (Certified Specialist in Labour Law)

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