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Temporary employment once, entitlement to a permanent job thereafter

Employment contracts for a fixed period within the same company without stating factual reasons are allowed only once, the German Federal Constitutional Court Bundesverfassungsgericht ruled.

Last year, the number of employees with a job for a fixed period soared to an all-time high in Germany: 3.15 million people had a temporary employment contract in 2017. About half of these contracts were temporary employment contracts without stating factual reasons: a record the German government would have liked to avoid, as the coalition agreement between CDU/CSU and the SPD mentions plans to limit the number of temporary contracts without stating factual reasons as soon as possible. So far, these plans have not met with any success.

Currently, an employment relationship for a period of maximum two years may be concluded without the employer being obliged to substantiate this. Within this two-year time frame, the temporary job may be continued up to three times. For example, if an employment contract has a duration of six months, this contract may be extended three times by a term of six months. However, pursuant to the provisions relating to the way in which the collective agreement counts consecutive periods in order to establish whether there is successive employment, the so-called chain provision, the employee in question may not have been employed with the same company for at least the preceding three years.

Prohibition of any further temporary employment

Of course, many employers assume that they will be able to offer temporary employment to a former employee after these three years, without this employee being entitled to a permanent job. However, a recent judgment delivered by the Bundesverfassungsgericht, the German Supreme Court, now stipulates that temporary employment contracts between the same contracting parties without stating factual reasons are allowed only once, which means that every further employment relationship of such nature on a temporary basis with the same employer is prohibited by law.

In principle, this is in conformity with the constitutional guidelines, as the government is obliged to protect employees as structurally weaker partners in the employment relationship, to prevent such chain agreements, and to ensure that regular permanent jobs remain the standard. However, this only applies insofar as, measured by the nature and scope of the previous employment, employees actually have to be protected against chain agreements and the principle of permanent employment as a standard is called into question. Employers that applied the supposedly correct principles in the past and are still applying them today should pay proper attention to any impact that this fundamental judgment of the highest German judicial authority may have on them.

Do you have any questions right now?

If you have any questions about employment law in Germany, feel free to contact us via welcome@interfisc.eu, at telephone number +31 (0)70 313 3000, or use the contact form on our website for asking your question.

Source quoted: Strick july 2018

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