Amendments to the Part-Time and Fixed-Term Employment Act

Work on demand

Information on working time in atypical employment relationships – in particular, work on demand – was a major reason for the adoption of the Directive.

Reference frame

The new provision in sec. 12 para. 3 sentence 1 Part-Time and Fixed-Term Employment Act stipulates that the employer is now obliged to "define the time frame, determined by reference hours and reference days, in which work can take place at the employer's request". A determination of the reference framework to the entire normal working time is likely to be ineffective. This means for employers that they have to make a restriction, such as "Monday to Thursday from 9 a.m. to 3 p.m.". In addition, the new provision in sec. 2 para. 1 sentence 2 no. 9c Documentation Act stipulates that the reference framework is also part of the essential contractual conditions the employees must be notified about. It is disputed at this point whether the determination of the reference framework is part of the employer's unilateral right of determination (sec. 106 Commercial Code) or whether it is a contractual condition that can only be regulated by mutual agreement in the employment contract. Considering the regulatory purpose of the new sec. 12 para. 3 sentence 1 Part-Time and Fixed-Term Employment Act, according to which employees are, among other things, to be granted more planning security in atypical employment relationships, there is much to suggest that the reference framework must be determined by mutual agreement. Otherwise, the employer would be able to unilaterally change the reference framework at any time and employees would never know when to expect a call-up. Hence, this would not provide any additional security for employees compared to the previous legal situation.

The legal consequence of a corresponding determination of the reference framework is that employees are only obliged to perform work during this period. Reworded: In the event of a call-up outside the defined reference period, employees may justifiably refuse to work; however, they won’t receive any remuneration. The provision in sec. 12 para. 3 sentence 1 Part-Time and Fixed-Term Employment Act also applies to old contracts without a transitional provision. Thus, a subsequent agreement on the reference framework should be concluded for these contracts.

Minimum workload

In addition, sec. 2 para. 2 sentence 2 no. 9b Documentation Act stipulates that employees must be informed (in writing) of the minimum number of remunerated working hours. Even before the legal amendment, the duration of the weekly working time already had to be specified in accordance with sec. 12 para. 1 sentence 2 Part-Time and Fixed-Term Employment Act. Otherwise, a weekly working time of 20 hours was previously deemed to be agreed in accordance with sentence 3. Now the question arises as to what the legal consequences are, if a minimum weekly working time was agreed, but was not properly notified to employees within the meaning of sec. 2 para. 1 sentence 2 no. 9b Documentation Act (e.g. only by e-mail instead of – as required – in writing). There are indications that in this case there is a rebuttable presumption in favour of the employees that 20 hours are deemed to be agreed. According to Art. 15 para. 1a) of the Directive, the member states must ensure that in the event of insufficient documentation the more favourable regulation applies to employees. In addition, German case law has so far assumed that the burden of proof is reversed to the employer if the latter claims that anything different to what is stated in the documentation was agreed.

Takeover request

Also newly added are the provisions in secs. 7 para. 3 and 18 para. 2 Part-Time and Fixed-Term Employment. These provide for the possibility of a "takeover request" to a full-time position or permanent employment for employees who are employed part-time or on a fixed-term contract. Employees who have already been employed for 6 months can notify the employer of a corresponding request in text form. The employer subsequently has one month to provide the employee with a reasoned response in text form. However, the law does not link any specific legal consequence to non-compliance. In the event of non-compliance by the employer, a corresponding employment relationship is not deemed to exist (as is the case in sec. 8 para. 5 Part-Time and Fixed-Term Employment Act), nor does the violation constitute an administrative offense. It is conceivable that employees could be entitled to claim damages. In practice, however, it is unlikely that employees will be able to prove such damages.

The legislator has also added a similar provision for a takeover request to the Temporary Employment Act. According to the newly added sec. 13a para. 2 Temporary Employment Act, temporary workers, who have already been employed by the same hirer for 6 months, can inform the hirer in text form that they wish to be transferred to a permanent employment. Afterwards, the hirer has to respond within one month. Here too, however, the law does not link any specific legal consequences to the lack of response.

Proportionate probationary period

Based on Art. 8 para. 2 sentence 1 of the Directive, the new sec. 15 para. 3 Part-Time and Fixed-Term Employment Act was introduced, according to which an agreed probationary period in a fixed-term employment relationship must be "in proportion to the expected duration of the fixed term and the type of activity" from now on.

Duration of the probationary period

The duration of the probationary period must therefore be in reasonable proportion to the length of the employment relationship and the content of the activity and may (still) not exceed 6 months. If the probationary period is disproportionately long, this leads to the invalidity of the probationary period agreement, i.e. to the non-applicability of the shortened notice periods in sec. 622 para. 3 German Civil Code (Bürgerliches Gesetzbuch "BGB"). However, it remains completely open how the permissible length of the probationary period is to be determined. The only thing certain is that blanket agreements of a 6-month probationary period carry a high risk of being invalid. Neither the wording of the new law nor the explanatory memorandum to the new law indicate at which time frame proportionality in the legal sense can still be assumed, which leads to considerable uncertainty in practice. The explanatory memorandum confines itself to setting out the legal consequences of disproportionate duration. Reliable case law on proportionality is not yet available due to the topicality of the amendments. The same applies with regard to the consideration of the "type of activity". There are no explanations in the explanatory memorandum either.

The recital 28 of the Directive states that the Member States must ensure that, in the case of probationary periods for fixed-term employment relationships of less than 12 months, the probationary period is reasonable and proportionate to the expected duration of the contract and the nature of the work. This initially leads to the conclusion that, for all employment relationships with a duration of more than 12 months, the previous limit of a 6 months duration for the probationary period continues to be appropriate. However, this restriction is neither found in the wording of the Directive nor in sec. 15 para. 3 Part-Time and Fixed-Term Employment Act, which clearly speaks against a corresponding restriction. In 2018, the European Parliament had proposed in Amendment 91 to base the calculation on 25% of the term as a reference value up to a fixed term of 12 months. However, this amendment has not been implemented.

In respect of this, it seems advisable to impose a corresponding restriction on the probationary period for all fixed-term contracts, even beyond 12 months. Overall, it seems appropriate to assume a rate of 1/4 of the ratio of the probationary period to the duration of the employment relationship. Under certain circumstances, we also consider a rate of up to 1/3 to be justifiable. However, from a practical point of view, a rigid rate system is problematic, as certain fixed-term contracts would result in probationary periods that could no longer be expressed in months. For example, a fixed term of 6 months and a rate of 1/4 would lead to the "crooked" result of a probationary period of 1.5 months. In these cases, it is advisable to specify the number in weeks, rounded down for safety. 1.5 months would then correspond to a 6 weeks probationary period.

However, there are no guidelines on how the type of work should determine the proportionate probationary period. The recitals keep also silent on this. It is probably certain that a light activity with little responsibility can require a shorter probationary period. On the other hand, activities that require complex training may justify a longer probationary period. This means: the simpler the activities, the shorter the probationary period. If this is combined with what has just been said about the rate system, an agreement on a probationary period of 1/3 is the more justifiable, the more complex the corresponding initial training of the new employee is.

Due to the existing uncertainty in the law, the risk of invalidity increases with each increasing of the rate. Legal certainty for employers can only be expected if the new regulation is interpreted accordingly by the courts.

Excursion: Combination of sec. 15 para. 3 Part-Time and Fixed-Term Employment Act with sec. 622 para. 5 German Civil Code for short-term employees

At this point, it is worth mentioning the interaction of sec. 622 para. 3 German Civil Code in conjunction with sec. 15 para. 3 Part-Time and Fixed-Term Employment Act and sec. 622 para. 5 no. 1 German Civil Code in short-term employment relationships and their combinability.

Sec. 622 para. 5 no. 1 of the German Civil Code stipulates that the statutory notice period may be shortened during the first three months of a short-term employment relationship. A minimum notice period is not prescribed by law here; for example, an ordinary termination without notice can be agreed. Sec. 622 para. 5 no. 1 of the German Civil Code applies not only to short-term employment relationships that are limited to a maximum of 3 months, but also to those that are concluded for a longer period. Only the shortened notice period can be agreed during the first 3 months.

Sec. 622 para. 3 of the German Civil Code allows the agreement of a 2-week notice period for a maximum of the first 6 months, regarding all employment relationships.

Thus, the standards have different prerequisites and legal consequences (only in short-term employment relationships/for all employment relationships, for a maximum of the first 3/6 months, also without notice/minimum of 2 weeks notice).

Sec. 15 para. 3 Part-Time and Fixed-Term Employment Act stipulates a special provision for the agreement of the probationary period in accordance with sec. 622 para. 3 German Civil Code for fixed-term employment relationships. However, the new provision in sec. 15 para. 3 Part-Time and Fixed-Term Employment Act does not affect the regulation of the shortened notice period in sec. 622 para. 5.

A combination of the regulations is illustrated by the following example:

Employee A is hired as a short-term employee for a limited period of 18 months as a parental leave replacement. A probationary period of 4 months is agreed, during which the employment relationship can be terminated with a notice period of 2 weeks. With a probationary period of 4 months, the duty of appropriateness pursuant to sec. 15 para. 3 Part-Time and Fixed-Term Employment Act is also likely to have been complied with. After the end of the probationary period, the statutory period of notice pursuant to sec. 622 para. 1 or 2 German Civil Code applies. During the first 2 months, a shortened notice period of 1 week is now agreed at the same time.

This results in the following notice periods:

Existence of the employment relationship Length of the notice period
< 2 months 1 week
≥ 2 months < 4 months 2 weeks
≥ 4 months 4 weeks

Since such a combination of sec. 622 para. 5 no. 1 German Civil Code and sec. 622 para. 3 German Civil Code in conjunction with sec. 15 para. 3 Part-Time and Fixed-Term Employment Act is rather unusual in practice, however, it is important to ensure that the corresponding provision in the employment contract is clear and comprehensible (key word: transparency requirement).