September 19, 2017

Flexible forms of employment

In German employment law, an employer may terminate an employment contract only under very specific conditions. If the employment has lasted for more than six months and the company employs more than ten workers, a termination is only effective if it is socially justified, that is if the termination is based on behavioural, personal or operational grounds.

To soften the effect of these restrictions several possibilities of flexible employment exist:

Fixed-term employment

Generally, employment contracts are concluded for an umlimited period of time. But under certain circumstances it is possible to put a time limit on a contract of employment. With no substantial reasons for a time limitation, fixed-term employment may last for up to two years. If a substantial reason does exist – such as parental leave of another (permanent) employee – there are no restrictions on the length of the fixed-term employment (except for abuse of law).

Short-time work

Short-time work is an instrument designed to temporarily reduce the volume of work without redundancies. If it is made necessary by circumstances limited in time the working hours of employees can be reduced (even to zero). The correlating salary reductions are compensated for by subsidies to the employees paid by the Federal Employment Agency.

Temporary agency work

Temporary agency work is a tool to increase the workforce for a limited period of time, as temporary agency workers will return to the agency after their deployment. It requires a staffing contract with a licensed temporary employment agency. Since April 2017, further legal regulations are applicable: the length of a temporary employment within a particular job is now limited to a maximum duration of 18 months. Collective labor agreements however may stipulate a longer period of deployment.


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Julius Jacoby

Arbeitsrecht, Wirtschaftsrecht, Internationales Recht

Julius Jacoby
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