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How to understand your German employment contract

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You’ve found a job, gotten through the interviews, and been offered the position! However, before you can begin working in Germany, you must first review an employment contract with your new employer to ensure that the specifics of your position are clear.

First job or new job? That definitely means change. After applications, interviews and an acceptance, the joy is great. Now all you have to do is sign the employment contract. We explain to you what is important.

Overview of your German employment contract

  • The employment contract regulates all important conditions of your professional activity. It can be concluded orally or in writing.
  • Employment contracts can contain ineffective clauses, for example for the flat-rate compensation for overtime or for transfer. Your employer cannot rely on such regulations.

This is how you do it

  • You should first negotiate with your employer about salary, bonuses and vacation days.
  • Pay attention to a precise job description in the contract. This restricts the employer’s right to transfer you to jobs that you do not want.
  • Compare your employment contract with our sample contract. If you recognize important differences to your disadvantage, you could inquire about this with your employer.

What is regulated in your employment contract?

employment contract

Your employment contract is the legal basis for your working life and is therefore very important both for you as an employee and for the employer.

The main obligations in the contract are:

  1. You have to work and
  2. Your employer pays you a salary for this (§ 611a BGB).

When it comes to your wages, your boss is tied to the minimum wage. Since July 1, 2021, it has been € 9.60 gross per hour. The minimum wage always rises twice a year. The Germany federal government will increase it to 9.82 euros from January 2022 and to 10.45 euros from July 2022. Exceptions apply to schoolchildren and students who complete a mandatory internship of up to three months.

In addition to the main obligations, the employment contract usually contains specific provisions on these points:

  • Beginning and termination of the employment relationship
  • Place of work, possibly also something about the home office
  • Your weekly working hours
  • Trial period and notice periods
  • Vacation and remuneration despite prevention or illness

The employment contract gives rise to special welfare and fiduciary obligations on the part of the employer and employee. If the employee violates his duties, the employer can give him a warning and, in the event of recurrence, even terminate him, for example if he does not come to work without excuse.

Does your employment contract have to be in writing?

As a rule, you and your employer sign an employment contract, even if this is actually not legally necessary.

If the employer does not give you a contract, he still has to give you something in writing – a document with the essential contractual conditions and his signature (§ 2 NachwG). If the employer does not adhere to this requirement, it is at his expense: if there is a dispute, he has to prove in court what he verbally agreed with you, for example if he does not want to pay your wages even though you have been working.

In the case of fixed-term employment relationships, the written form is always decisive, as a time limit cannot be agreed orally (Section 14 (4) TzBfG).

How should your position be described?

employment contract

Usually, you won’t find much in the contract about what kind of tasks you should actually do. The more blurred your area of ​​responsibility, the more varied are the tasks that your boss can assign to you. The more precisely the job title and activity are described, the easier it is for you to reject activities that do not correspond to your qualifications. You should have a general designation, for example as a clerk, specified. Reference points for the description can be found in the job advertisement.

Important: The employer may not simply assign you to an activity that is lower paid.

As an employee, you do not owe any particular work performance. You are only obliged to work within your abilities under a reasonable load. This is why employee appraisals are particularly important. If the employer is very dissatisfied with the employee’s performance, he may terminate the contract due to behavior or personal reasons. However, he must provide evidence that the employee has worked significantly worse than an average other employee with the same or comparable tasks over a longer period of time. Such evidence is rarely successful.

In the employment contract it can be stipulated that you may be employed at different places of work, possibly in different cities or countries or at other group companies. If you don’t want that, you have to negotiate with the employer.

What are typical regulations in the employment contract?

employment contract

Employment contracts are often several pages long. In addition to your salary, there is a lot of fine print. A well-negotiated employment contract is the best prerequisite for good and constructive cooperation.

Take your time to calmly review the contract. It is important that all the points that you have discussed actually appear again in the employment contract.

As an example, we offer you a model employment contract that contains the essential provisions. Compare your employment contract with this pattern to see any differences. If there are clauses that are rather disadvantageous for you or if you are unsure about individual formulations, then you should clarify these questions before signing.

Trial period – As a rule, there is a trial period in your employment contract. A corresponding contractual clause reads, for example: “The first six months of the employment relationship are considered a probationary period. During this probationary period, both contracting parties can terminate the employment relationship with a notice period of two weeks on any day.

If there is no such provision in your employment contract, the employment relationship is concluded without a probationary period. You can find more information in our probation period guide.

Vacation – Usually the employment contract also states how many vacation days you are entitled to in a year. According to the law, you are entitled to at least 20 working days of vacation for a five-day week. However, 30 days are now common. Sometimes the employer also writes in the contract that the longer you work for the company the longer your vacation days increase.

That is also permissible. You can negotiate about vacation days – maybe you can get more out than you are legally entitled to. You can read everything about your vacation under labor law in the vacation law guide.

Notice periods – Most employment contracts state the deadline with which you can terminate the employment contract. For your protection, the employer may not fall short of the statutory or collectively agreed notice periods in the contract.

Longer periods are allowed, but with one restriction: What applies to the employer also applies to you as an employee. The contract often states that the statutory or collective notice periods should apply.

Fixed-Term – A permanent employment contract is always better than a fixed-term one. There are now many industries and employers who generally offer their new employees a temporary position first. If your employment contract is limited in time, this is permissible if there is a factual reason for it, for example, to represent an employee during parental leave.

If there is no objective reason, a time limit of up to two years is permissible. The time limit for an employment contract must always be in writing. You can read more information and tips in our guide to fixed-term employment contracts.

Part-time – If you have regular weekly working hours that are shorter than those of your colleagues, then you are working part-time. If a certain distribution of your weekly working hours is important to you, because otherwise you cannot reconcile work and family, sports or studies, you should include in the contract specifically on which days you work how many hours.

In principle, the same rules apply to you part-time as to all other employees. You are legally protected from discrimination by the Part-Time Limitation Act.

Special allowances and bonus payments – If your employment contract does not include special payments such as Christmas bonuses or bonus payments, ask your employer whether such payments can be agreed as an incentive for your special commitment.

Non-compete obligations – Sometimes employment contracts contain non-compete obligations. By doing this, your employer wants to make sure that you don’t run to the competition immediately after you quit. However, such prohibitions are only effective if compensation is provided for the period of the non-competition clause.

In the absence of such a compensation regulation, the post-contractual non-competition clause is null and void. A so-called severability clause also does not make the ban effective (BAG, judgment of March 22, 2017, Az. 10 AZR 448/15). Such clauses are usually at the end of the employment contract and provide those ineffective regulations should be replaced by effective ones.


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Which clauses in the employment contract are ineffective?

employment contract

Many employment contracts are not negotiated individually. Rather, they are pre-formulated contracts – so-called general terms and conditions that the employer uses for all employees.

If there is a dispute between you and the employer, the responsible labor court will review the contract (§§ 305 ff. BGB). Your employer may have used clauses that are ineffective because they are surprising, ambiguous, or detrimental to you.

Overtime regulation

Overtime clauses can be found in many employment contracts. Not all clauses are effective. In the following we have classified typical clauses legally:

  • “Necessary overtime is not paid for separately, but is settled with the salary.” Such a clause is ineffective because the employee cannot see when overtime is required (BAG, judgment of September 1, 2010, Az. 5 AZR 517 / 09).
  • “Overtime is not paid for separately, but is remunerated with the monthly fixed salary.” Such a clause is ineffective because the employee cannot know how many unpaid overtime will be required from him in the future (LAG Düsseldorf, judgment of July 11, 2008, Az 9 Sa 1958/07).
  • “Overtime is not paid for separately, but is included in the salary, provided it does not exceed three hours per week / ten hours per calendar month. Any additional overtime is paid separately on the basis of the monthly basic salary. ”Such a clause is effective (BAG, judgment of May 16, 2012, Az. 5 AZR 331/11).

Relocation clauses

Often, so-called transfer clauses can be found in employment contracts. Accordingly, the employer may relocate his employee to another place of work if he assigns him work of the same value there. Such regulations are often a pitfall for employees.

Employers transfer unwelcome employees not only for operational reasons, but also to persuade them to quit. However, not all relocation clauses are effective.

  • “The employer reserves the right to assign the employee to another job.” This clause is ineffective as it does not sufficiently take into account the interests of the employee. With a transfer, the employer may only specify his requirements, but not change them fundamentally.
  • “The employer reserves the right, if necessary, to deploy the employee at another place of work and / or at another company in the group, depending on his or her previous education and skills, for jobs of the same value. In doing so, his personal interests are adequately taken into account. ”According to the Federal Labor Court, this clause is effective (BAG, judgment of April 13, 2010, Az. 9 AZR 36/09).

Disclaimer and sunset clauses

Many employment contracts contain regulations according to which the employee must request claims from the employment relationship, for example vacation days, in writing within a specific period. If you let the deadline pass, you get nothing. But not all of these so-called sunset clauses are effective.

Here is an example: “All mutual claims from the employment relationship lapse if they are not asserted in writing against the other party within six months of the due date.” This clause is ineffective for two reasons.

  • Written form: The clause has been ineffective in contracts since October 1, 2016. Because employers are not allowed to demand that employees can only claim their claims with a signed letter. If you send an email to your boss in good time, your claims will not expire (Section 309 No. 13 BGB).

However, not all old contracts have to be adjusted. But with every change and addition to the contract after September 30, 2016, an old contract becomes a new one. Consequence: If the employer left the old expiry clause when changing the contract and did not replace the written form with text form, then it is now ineffective.

  • Minimum wage law: expiry clauses that do not differentiate according to which claims are affected by the preclusive period are also ineffective. The employer may not exclude all claims because he is thereby violating the Minimum Wage Act (Section 3 sentence 1 MiLoG). This has been in effect since January 1, 2015.

With this justification, the Federal Labor Court declared an expiry clause to be ineffective. The employer had to pay for vacation days not taken by an employee, even though the employee filed for entitlement too late. The claims had not expired because the expiry clause was not clear and understandable (BAG, judgment of September 18, 2018, Az. 9 AZR 162/18).

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Michelle Halterman
USA, China, South Africa and now Munich - Michelle has come a long way in the world. She is an outdoor person and loves to be in nature with friends and on her mountain bike. Or she meets up with friends for pasta, vino, cappaccino & Co.
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