• Fixed-Term Employment Contracts and What to Watch Out For
  • June 16, 2015 | Author: Michael Rainer
  • Law Firm: GRP Rainer LLP - Munich Office
  • Newly concluded employment contracts can be restricted to a period of 24 months. Mistakes in a fixed-term employment contract can result in lawsuits before a labour court.

    GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London - www.grprainer.com/en conclude: The case of a former professional footballer who successfully sued his former club before the Mainz Labour Court to continue the employment relationship has attracted a great deal of attention. His first employment contract was initially for a fixed-term and was subsequently extended by two years. The club then allowed the contract to expire and the player instigated legal proceedings against this.

    Restricting an employment contract is only permissible in accordance with the German Part-Time and Fixed-Term Employment Act (Teilzeit- und Befristungsgesetz (TzBfG)). In the case in question, this meant that it was not possible to once again apply a fixed-term to an employment contract because an employment relationship had already existed previously. A further fixed-term is only possible if based on an objective reason, something which the Mainz Labour Court could not discern here. The club has already announced that it will appeal the judgment.

    Notwithstanding that the case of a former professional football player is an extreme example, it is clear that there are considerable pitfalls in the context of fixed-term employment contracts which can result in the fixed-term being ineffective.

    In principle, an employment contract can be restricted without an objective reason, yet only up to a maximum duration of two years. Shorter periods may also be agreed. The fixed-term contract is then only able to be extended up to three times and to a maximum duration of 24 months. A further extension is not possible in the absence of an objective reason.

    If there is an objective reason then employment contracts can be restricted. Examples of this include, for instance, a mere temporary need, pregnancy and sick leave cover or reasons that pertain to the individual employee. However, even then it is possible for certain circumstances to result in the ineffectiveness of the fixed-term, e.g. if the person covering for sick leave performs different tasks to the employee who is sick.

    Should the fixed-term of an employment contract be invalid, this gives rise to an open-ended contract.

    In order to avoid legal disputes, employment contracts - whether fixed-term or open-ended - ought to be watertight from the outset. Lawyers experienced in the field of labour law can see to this.