Guide to International Employment Law

If the employment contract has been concluded despite it always having been clear that a work permit would be required, and there was never any intention to apply for it, the contract is deemed void from the outset.

Recently, an initiative was suggested by the German government to provide “green cards” for computer specialists – mainly from India – to meet an increasing demand for such skilled personnel. This initiative has not yet been adopted.

Contract of employment

Generally, a contract of employment does not need to be in writing to be legally binding – unless for a fixed term – and can be concluded verbally. However, the written form is recommended to avoid later differences of opinion over the contract’s precise details.

In line with a statute based on an EU-directive, employers have to give every employee a signed document with the essential terms of contract within two months of their starting work. However, the legal consequences of flouting these statutory provisions are unclear.

Labour courts have shown a tendency to shift the burden of proof in the employee’s favour regarding the interpretation of their contracts of employment.

Probationary period and protection against dismissal

During any probationary period all statutes, collective agreements and works agreements relating to employment law are applicable to the employee. During this period, which can last for a maximum of six months, the employment may be terminated with a notice period of two weeks. The employer is not required to give a reason for dismissal.

After the probationary period, the general statutory protections against dismissal apply: these are mandatory provisions, and the employer has to give an acceptable reason for dismissal unless it relates to the expiry of a fixed-term contract. However, such a contract is only permissible if a factual reason for the fixed term exists when it ends.

The only exception to this rule is under the Recruitment Promotion Act, which says fixed-term employment contracts may be concluded up to a maximum period of 24 months, even without a factual reason, if the employee is newly appointed. This Act is due to be phased out at the end of this year but it could be extended. If a fixed-term employment contract has been concluded without a factual reason, it is deemed to continue indefinitely.

Minimum working conditions

Some basic working conditions are provided in mandatory legal provisions. After six months’ continuous employment the minimum notice period is four weeks to the end of a calendar month. An employee may not work longer than 48 hours a week and the minimum holiday entitlement is 24 working days each year.

There is no legal provision regulating minimum wages. These are often settled in collective agreements between trade unions and employers’ associations, which often also regulate other working conditions. These agreements are mandatory and can be excluded only for the benefit of the employee.

About 41,700 collective agreements are still in force. It is estimated that in Germany, collective agreements have an impact on the employment conditions of 90 per cent of all employees. The question of whether an employment relationship is ruled by collective agreements is therefore of paramount importance.

• Clare Murray is a partner in employment and partnership law at Fox Williams

German employment law is unusual because while the legal system is based mainly on legislation, it also relies on binding law made by the courts, thereby facilitating greater flexibility. Below are some of the key issues employers have to consider when recruiting and engaging new employees.

Job advertisements

An employer must not advertise a position, either publicly or internally, as exclusively for men or exclusively for women. The only exception is when a particular gender is an essential prerequisite for the job at hand – for example, an advertisement for the role of a male actor. Discrimination against sex may give rise to a claim for damages against the employer.

Employer’s “right to question”

When invited to an interview, the applicant is obliged to answer truthfully any questions asked by the employer. However, the answers to these questions should be in the employer’s rightful and provable interest, and require an answer because of their relevance to the job. The applicant need not answer inadmissible questions.

The applicant should be allowed to answer inadmissible questions without adhering to the truth if their refusal to answer – or a truthful answer – could have negative consequences for them. Only a false answer to a perfectly valid question can entitle the employer to contest the contract of employment.

The employer is entitled to ask questions about professional skills, attachment of wages by creditors of the employee, physical disability, non-compete obligations under previous employment, state of health and previous convictions, if any connection with the employment exists. The employer may not ask for information regarding union membership, previous remuneration, pregnancy or an employee’s financial circumstances.

Reimbursement of interview costs

The employer is obliged to reimburse the costs incurred by the interviewee if he invites an applicant to attend. This applies independently of whether an employment contract is concluded or not. Travelling expenses and, if required, costs for a hotel and for board, as well as loss of income, are reimbursable items.

Engagement of foreign employees

Citizens of EU-member-states may be employed by an employer in the same way as German employees. Persons who are citizens of non-EU countries or who are stateless require a residence permit from the authority for foreign nationals and a work permit from the labour office. The expiry of a work permit for a limited period does not result in the employment contract being void, but giving notice may then terminate the employment.

If the employment contract has been concluded despite it always having been clear that a work permit would be required, and there was never any intention to apply for it, the contract is deemed void from the outset.

Recently, an initiative was suggested by the German government to provide “green cards” for computer specialists – mainly from India – to meet an increasing demand for such skilled personnel. This initiative has not yet been adopted.

Contract of employment

Generally, a contract of employment does not need to be in writing to be legally binding – unless for a fixed term – and can be concluded verbally. However, the written form is recommended to avoid later differences of opinion over the contract’s precise details.

In line with a statute based on an EU-directive, employers have to give every employee a signed document with the essential terms of contract within two months of their starting work. However, the legal consequences of flouting these statutory provisions are unclear.

Labour courts have shown a tendency to shift the burden of proof in the employee’s favour regarding the interpretation of their contracts of employment.

Probationary period and protection against dismissal

During any probationary period all statutes, collective agreements and works agreements relating to employment law are applicable to the employee. During this period, which can last for a maximum of six months, the employment may be terminated with a notice period of two weeks. The employer is not required to give a reason for dismissal.

After the probationary period, the general statutory protections against dismissal apply: these are mandatory provisions, and the employer has to give an acceptable reason for dismissal unless it relates to the expiry of a fixed-term contract. However, such a contract is only permissible if a factual reason for the fixed term exists when it ends.

The only exception to this rule is under the Recruitment Promotion Act, which says fixed-term employment contracts may be concluded up to a maximum period of 24 months, even without a factual reason, if the employee is newly appointed. This Act is due to be phased out at the end of this year but it could be extended. If a fixed-term employment contract has been concluded without a factual reason, it is deemed to continue indefinitely.

Minimum working conditions

Some basic working conditions are provided in mandatory legal provisions. After six months’ continuous employment the minimum notice period is four weeks to the end of a calendar month. An employee may not work longer than 48 hours a week and the minimum holiday entitlement is 24 working days each year.

There is no legal provision regulating minimum wages. These are often settled in collective agreements between trade unions and employers’ associations, which often also regulate other working conditions. These agreements are mandatory and can be excluded only for the benefit of the employee.

About 41,700 collective agreements are still in force. It is estimated that in Germany, collective agreements have an impact on the employment conditions of 90 per cent of all employees. The question of whether an employment relationship is ruled by collective agreements is therefore of paramount importance.

• Clare Murray is a partner in employment and partnership law at Fox Williams

Guide to International Employment Law edited by Clare Murray

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