Special Newsletter: Current Legislation: All companies must revise their employment agreements

Overview

The goal of the Working Conditions Directive shall be achieved with the help of the following measures:

The seemingly mundane amendments to the German Act on the Notification of Conditions Governing an Employment Relationship (Nachweisgesetz - NachwG) significantly extend the employer’s obligation to provide (prospective) employees with information about key aspects of the employment relationship. Crucially, while the Act previously played an insignificant role, fines may now be imposed for failure to comply.

The package establishes minimum working conditions concerning the maximum duration of any probationary period, parallel employment, minimum predictability of work, requests for a transition to a different form of employment as well as mandatory training. This will lead to changes, e.g. to the German Vocational Training Act (Berufsbildungsgesetz - BBiG), the German Act on Temporary Employment (Arbeitnehmerüberlassungsgesetz

AÜG), the German Trade, Commerce and Industry Regulation Act (Gewerbeordnung - GewO) and the German Part-Time Work and Fixed-Term Employment Act (Teilzeit- und Befristungsgesetz - TzBfG).

The changes to the NachwG

The numbering currently included in the NachwG will be amended to implement the "Working Conditions Directive" and extended to include a few essential aspects. In a nutshell, these are the changes to the NachwG from 1 August 2022:

• In case of fixed-term employment relationships, the end date shall be determined if a limited term was agreed.
• In case of a remote work, the agreement must specify that employees are free to choose their place of work.
• The duration of any agreed probationary period needs to be recorded.
• The components and the amount of the remuneration (basic remuneration, any premiums, special payments, allowances, bonuses etc.) must be listed separately.
• In addition to agreed working hours, information on the agreed breaks and rest periods must be provided. In the case of shift work, the shift system, the shift schedule and the prerequisites for a shift change must also be indicated.
• For on-demand work, the agreement regarding on-demand work, the minimum number of paid working hours, the time period set for the performance of the working hours as well as the respective notice period for the employer must be specified.
• Whether there is a possibility to order overtime hours as well as their requirements must also be specified in writing.
• Any entitlements to training courses provided by the employer must be documented.
• In case of a commitment under a company pension scheme, the name and address of the pension provider must be indicated unless the pension provider is obliged to provide this information. In addition - but not new - the key information to the pension scheme must be stated anyhow.
• The procedure to be complied with in case of a termination of the employment agreement must also be specified. Information regarding the written form requirement for termination, the notice periods as well as the period for filing a complaint for unfair or wrongful dismissal are required as a minimum.

Shorter periods for the written information concerning new and existing agreements

Until now, employers had one month from commencement of the employment relationship to specify in writing the essential working conditions included under the NachwG. In the case of new employment relationships starting from 1 August 2022, employers will have to inform employees in writing about the details of the contractual parties, the remuneration as well as the working hours (including breaks and rest periods) at the latest on the first day of work. In addition, the employer has one month from the agreed commencement of the employment relationship to inform the employee about the duration of annual leave, any entitlement to training courses, the details of the pension provider, the procedure for giving notice as well as to make reference to any collective agreements; all other information must be provided to the employee by the seventh calendar day after the agreed commencement of the employment relationship.
Existing agreements may also require adjustments. Employees who are already in an employment relationship may request a copy of the essential working conditions in writing. This record must be presented to them at the latest seven days after the request.

Consequences in case of violations of the NachwG

So far, there have been no direct sanctions for a violation of the NachwG requirements. Employers merely had the burdens of proof and presentation in proceedings before the labour courts in regard to the essential contractual terms if no written proof was available.
From 1 August 2022, violating the NachwG will be penalised. Violating the obligation to record the essential contract terms in writing is an administrative offence which may result in a fine of up to EUR 2,000.