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Germany

Capital: Berlin
Largest city: Berlin
Official Language: German
Government: Federal Parliamentary Republic
Area: 357,022 km2
Population: 83,166,711
Currency: Euro (EUR)
GDP total: EUR3.905 trillion (USD4.743 trillion)
GDP per capita: EUR46,893.19 (USD56,956)
Time zone: UTC +1/UTC+2
Calling code: +49
Internet TLD: .de
[Source: Wikipedia]

The number/participation rate of people in the workforce:
45.6 million (September 2022)

The general unemployment rates:
3.0% (September 2022)

[Source: www.destatis.de]

Q&A on Employment Law
  1. What are the laws and regulations governing employment, labour and industrial relations in Germany?
    In German law there is no single labour code, but several regulations. In addition, court decisions are increasingly important. The important legal regulations include:

    • German Civil Code (Bürgerliches Gesetzbuch, BGB)
    • Protection against Dismissal Act (Kündigungsschutzgesetz, KSchG)
    • General Equal Treatment Act (Allgemeines Gleichbehandlungsgesetz, AGG)
    • Parental Allowance and Parental Leave Act (Gesetz zum Elterngeld und Elternzeit, BEEG)
    • Federal Leave Act (Bundesurlaubsgesetz, BurlG)
    • Maternity Protection Act (Mutterschutzgesetz, MuSchG)
    • Nursing Time Act (Pflegezeitgesetz, PflegeZG)
    • Third Code of Social Law (Drittes Sozialgesetzbuch (Arbeitsförderung), SGB III)
    • Part-Time and Fixed-term Employment Act (Teilzeit- und Befristungsgesetz, TzBfG)
  2. Which authorities and/or regulatory bodies enforce employment, labour and industrial relations laws and regulations in Germany?
    In Germany, labour inspectorates are responsible for enforcing employment, labour and industrial relations laws and regulations.
  3. What are the main employment requirements under the employment laws and regulations in Germany that employers should be aware of?
    The employment contract must comply with the law on general terms and conditions e.g. being in writing, observing a probation period of a maximum of 6 months and the legal termination notice according to the time worked in the company. The minimum wage also has to be complied with. A non-competition clause has to be recorded in writing if this is to apply after termination of the employment relationship. If employees are employed in Germany by foreign companies, they must be registered with the customs authorities. In addition to wages, employers have to pay social security contributions to the state.The minimum working conditions must be observed.

    Employment/labour agreements can be concluded with limited time/termination date or be unlimited/open-ended.

  4. What are some of the employment rights and benefits to which employees in Germany are entitled to by law?
    The employee has the following rights:

    • the punctual and complete payment of wages
    • continued payment of wages in the event of incapacity to work or during holidays
    • a minimum amount of leave per year of 20 days (based on 5 days of work)
    • written pay-slips
    • compliance with occupational health and safety requirements
  5. What are the procedure and requirements to employ foreign persons and expatriates in Germany?
    A work permit is necessary to employ foreign people. EU citizens enjoy the free movement of workers and do not need a residence permit.A work permit is usually granted if the following conditions are met:

    • a firm job offer
    • no adverse effects on the German labour market due to the employment of foreigners
    • preferred workers (Germans, EU citizens, citizens from EEA states) are not available (this does not apply to specialists)
    • foreign workers are not employed under less favourable working conditions than comparable German workers

    It is generally easier to obtain a work permit for skilled workers in Germany.

  6. What are the common reasons that employers rely on to terminate employment contracts?
    A limited labour contract ends upon the conclusion of its time period.An employer and employee can agree on the dissolution of the employment contract.

    The employer may give ordinary notice of termination. The employment relationship does not end immediately – but only after a period of time. The basic principle is a notice period of 4 weeks, but in the case of a probationary period, the notice period is only 2 weeks. The notice period changes as the length of employment increases, see § 622 BGB.

    A unique feature of German labour law is that an employer who employs 10 employees or more has to justify the termination of an employee based on a limited number of available reasons -which are the subject of many labour judgments that are issued. A foreigner will need legal advice on the termination system at the outset and again on the details when there is the need to terminate an employment contract.

    For serious reasons, a termination without a notice period is possible.

  7. How do employees terminate employment contracts? Are employees strictly required to fulfil the termination notice period (if any)?
    • Ordinary termination

    A valid notice of termination must always be in writing, but no reasons need to be given by the employee. It must be clearly stated when the employment relationship is to end.

    An employee may terminate their employment “with four weeks notice to the fifteenth or to the end of a calendar month”. However, the contract or collective agreement may provide for a longer notice period. The same notice periods apply to termination by the employee as by the employer (as above).

    • Extraordinary termination

    Employees may decide to terminate their employment without notice for serious reasons within the 14 days after becoming aware that further employment is unreasonable. These include non-payment of wages, sexual harassment, and failure to comply with health and safety conditions. Termination without notice is to be regarded as a last resort and must be subject to a proportionality test.

  8. What employment dispute resolution forums are there in Germany and what are their respective jurisdictions/purpose?
    In labour disputes, the parties to a collective agreement may exceptionally agree to conduct arbitration proceedings by excluding labour jurisdiction in general or for the individual case (arbitration agreement). Otherwise, arbitration agreements are in principle not permitted in labour disputes.
  9. What are the laws governing trade unions and collective agreements in Germany?
    Trade unions, as social-political coalitions (formed under freedom of association), are under the special protection of the constitutionally guaranteed inalienability of the right to form associations for the protection and promotion of working and economic conditions. This is why agreements to restrict or hinder this right are invalid and illegal.A collective agreement is a contract between one or more trade unions and an employers’ association or an individual employer. The collective agreement is regulated by the Collective Agreements Act (Tarifvertragsgesetz), which sets out all the obligations of the parties involved.
  10. Must a trade union be registered in Germany? If yes, what is the procedure for it to be registered?
    Trade unions are often organised as associations and registered in the register of associations at the competent district court. A trade union must meet the following criteria to be registered as one:

    • Democratic organisation (elections and co-determination)
    • Promotion and protection of working conditions as a task
    • Voluntary association
    • Organisational, financial and personal independence from third parties
    • Collective bargaining capacity (assertiveness, social power, willingness to strike)
  11. What are the key elements to be incorporated in a trade union agreement?
    Trade union agreements set the minimum standards for income and working conditions. These include key elements such as:

    • amount of wages and salaries
    • weekly working hours
    • Christmas and holiday bonuses
    • holiday entitlement
    • notice periods
    • working conditions
    • contract duration
  12. What trade union dispute resolution forums are there in Germany?
    Workers can unite and enforce collective agreements, e.g. through strikes. They can elect a works council in their company. And they can also try to influence politicians and laws. If these steps prove ineffective, they can go before a Court and request the enforcement of a collective agreement.
  13. When an employee’s wages are unpaid by the employer, what legal options are available to the employee?
    The employee should demand payment from the employer in writing or verbally with a deadline for payment. If the deadline expires without payment, the employee can threaten to refuse to work or to take further legal action.Wages can also be claimed at the labour court. The employee is entitled to claim interest on the outstanding salary from the employer (so-called “interest on arrears”). In principle, the employer must also compensate the employee for any damage suffered as a result of the employer’s failure to pay the salary on time. For example, the employer must compensate for tax disadvantages.
  14. What are the types of dismissal cases in Germany?
    There are two types of dismissal:

    • Ordinary dismissal: An employment relationship entered into for a definite or indefinite period of time is terminated on specific dates and subject to specific notice periods.
    • Extraordinary dismissal: Involves terminating the employment relationship with immediate effect. The agreed or statutory notice periods do not need to be observed.
  15. What factors are taken into account when determining the types of dismissal cases in Germany?
    In the case of ordinary termination, the following reasons must exist:

    • Personal reasons:
      An employee no longer performs or performs less well due to personal characteristics or abilities and thus negatively affects the operational and economic interests of the employer, and it can be assumed that this will also be the case in the future. Example: chronic disease.
    • Behavioural reasons:
      An employee behaves in such a way that continued employment is unreasonable. A prior warning is required as well as a negative prognosis. Example: repeated unexcused absences.
    • Operational reasons:
      There must be objective operational reasons that justify a job reduction. The company’s situation cannot be improved with alternative technical, organisational or economic measures and dismissals are unavoidable. Examples: Loss of orders and turnover, plant closures, outsourcing.

    In the case of extraordinary termination, there must be facts which justify why the dismissing party, taking into account all circumstances of the individual case and weighing the interests of both parties to the contract, cannot reasonably be expected to continue the employment relationship until the expiry of the notice period or until the agreed termination of the employment relationship.

  16. When an employee has been unfairly dismissed, what legal options are available to the employee?
    Action before the Court for protection against dismissal (Kündigungsschutzklage).
  17. What is the limitation period imposed on employees to commence a legal action against the employer?
    The time limit for the action mentioned in Q&A 16 is 3 weeks after receipt of the notice of termination.
  18. When an employee decides to take legal action against the employer, what are the steps to observe and comply with?
    Although it is not required by law, it is advisable to send a written demand for payment to the employer before filing a claim.
  19. When taking legal action against the employer, can an employee represent himself?
    There is no obligation to be represented by a lawyer, but it is advisable to have legal representation in order to know whether the action has a chance of success.
  20. What happens if an employee’s death takes place before the completion of the legal action filed by the employee?
    The heirs of the deceased are entitled to the payment until death and can continue the dismissal protection proceedings. If the death occurs within the three-week period for bringing an action. Then, the heirs may bring an action for unfair dismissal themselves.
  21. Does the aggrieved party have a right to appeal against the decision? If yes, is there a limitation period to file for an appeal?
    An appeal against the first instance judgement may be lodged with the regional labour court within one month from the date of receipt of the judgement.An appeal against the second instance judgement (cessation) is possible, if it has been admitted in the judgement. This is the case if a legal question that is relevant to the decision is of fundamental importance.

    If cassation is not allowed by the district labour court, this decision can be challenged with a non-admission complaint.

  22. Is there any alternative dispute resolution available? If yes, what are the key differences between the alternative dispute resolution and a suit filed in court?
    To avoid going to court, the parties to the dispute can try to negotiate on their own and reach an out-of-court settlement. Alternatively, they can use arbitration courts, if the aforementioned requirements are met.A mediation hearing is a part of the court process, where the parties also try to reach an agreement in the presence of a labour judge.
ABOUT THE AUTHORS

Henning Von Zanthier
Founding Partner, Von Zanthier & Dachowski

Following his legal studies in Germany and France, Henning von Zanthier obtained the LL.M. degree at Tulane University in the United States in 1989. In 1991, he was admitted to the Berlin bar and started working at a large international law firm. In 1992, he founded a law firm in Berlin with its main focus on business law in Germany and Poland

In 1995, he established the first German linked law firm in Poznań, Poland. In 2003, he was the first member as a foreign lawyer at the Poznań Bar. He is the first non-Polish lawyer who has also been fully admitted to the chamber in Poznań in 2009. He lectured on Polish law at the Free University of Berlin between 2004 – 2007. He focuses on corporate law, commercial law and renewable energy law. Henning von Zanthier was the chairman of the Polish-German Association of Legal Experts between 1993 and 1998.

He is one of the founders and was President of the League of Lawyers in 2014-2020 – an association of 20 medium-sized business law firms from Asia and Europe. He has authored a number of articles on German Business law. He regularly gives lectures on this subject for various institutions. He also lectured at the Adam Mickiewicz University in Poznań on the UN Convention on International Sales of Goods (CISG). His law firm has clients from China, Japan and India, who invest in Germany or Poland. He has been a member of LAWASIA since 2006 and was a constant speaker in the M&A subcommittee (2006-2015). Since 2016 he is the Chairman of the Asian-European Subcommittee within LAWASIA.

Kamil Niciecki
Attorney at law in Germany

Kamil Niciecki studied law at the Humboldt University in Berlin. After finishing his legal traineeship he worked in a German-Polish law firm, where he gained experience in advising Polish companies in German Business Law. He has been working with the law firm VON ZANTHIER & DACHOWSKI since 2020, specializing in the area of labor law, business law and IT-law.

ABOUT THE FIRM

Name: Von Zanthier & Dachowski
Address: Lietzenburger Str. 54, 10719 Berlin Germany
Telephone: +49 30 88 03 59 0
Email: berlin@vonzanthier.com
Website address: www.vonzanthier.com
Key contact: Henning von Zanthier, Partner, vonzanthier@vonzanthier.com
Established: 1992
Number of lawyers: 3
Languages: German, English, Polish, French

Brief description:
We are an interprofessionally organised law firm of solicitors, auditors and tax consultants with offices in Berlin, Poznań and Warsaw. We offer consultancy services in Germany in the field of German business and tax law and can assess your economic situation. Since 1992, we have been dealing with international matters and guiding you in national and cross-border law. In Poland, we can support you with Polish business and tax law.

Key practice areas:
Commercial law, Corporate law, Real Estate law, IT law, Labor law, Law on Renewable Energy, Medicine law and Tax law

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