Employment law in the 21st century – what’s good to know about employment contracts and probationary periods

Labour law is a broad field and within its legal limits offers scope for a wide variety of interpretations, stipulations and contractual arrangements. This article is the beginning of a series of blogs that will give a deeper insight into the confusion of labour law.

Brief history - why labour law was introduced

Today, the second half of the 18th century is seen as the beginning of the history of labour law. With industrial society more and more people came into employment and a large part of the population developed into wage earners. More and more people moved from the countryside to the city and the social question arose, which addressed the grievances and consequences of industrialization. At that time there was a clearly unequal balance of power between the contracting parties and wages were so low that even children were forced to work in order to feed their families.

Finally, in 1833 a kind of labour law developed in England with the factory laws, which initially provided for the reduction of the working time of children between 9 and 13 years to eight hours and for children between 14 and 18 to 12 hours. Children under 9 were allowed to attend school. A few years later, the first provisions on the protection of young people at work also came into force in present-day Germany. From a historical point of view, these measures are the oldest in the area of statutory employee protection.

What does labour law regulate?

Today, a distinction is made between individual labour law and collective labour law. The former regulates the relationship between employer and employee, the latter deals with the legal relationship between employers and employee representatives (e.g. works council, trade union). German labour law includes ordinances and laws governing general working conditions, such as working time, holiday entitlement, agreed field of activity and much more. However, German labour law is very much oriented towards European labour law. In the following text, the topics of employment contract and probationary period are first examined in more detail, as they are regulated in German legislation. In the period that follows, the topics of permanent employment after the probationary period, including working hours, part-time work, company pension schemes and much more, as well as the topics of dismissal and correct writing of employer's references, will also be considered.

The employment contract

The basis for an employment relationship between employer and employee is the employment contract. In Germany, there are basically no requirements on the form of the contract and so an employment contract can also be concluded orally. However, the employer has the obligation to disclose the contractual conditions of the employment relationship to the employee in writing at the latest one month after the start of work, which is formally seen but not the employment contract. This document serves only to provide security for both parties and to avoid later ambiguities.

In Germany, there are basically no guidelines on the form of the contract; it can be concluded orally or in writing.

The basis for an employment relationship is the employment contract. This is used to create security for both parties and to avoid later ambiguities.

An exception are fixed-term employment contracts: these require the written form, whereby it is decisive that actually only the fixed-term contract must be recorded in writing, but not the employment contract. If an oral contract is concluded and a time limit is agreed, the employment contract is effective, but not the time limit. The employee would then automatically be hired for an indefinite period.

The evidence of the employment relationship must be signed by the employer in writing and may not be transmitted in electronic form. This is excluded by law.

According to § 2 Evicende Law a lawful contract includes

  • name and address of the contracting parties

  • date of commencement of the employment relationship (in the case of fixed-term contracts: expected end of the employment relationship)

  • place of work or indication that the activity can be carried out in different places.

  • a brief description of the activity to be carried out by the employee

  • amount and composition of remuneration, including bonuses, surcharges, premiums and special payments and their due dates

  • the agreed working times

  • number of days of annual recreational leave

  • deadlines for termination of employment (for both parties)

  • a general reference to collective agreements, works agreements or service agreements applicable to the employment relationship

Therefore, check who binds himself forever: Scarecrow Probationary period

As soon as the employment contract has been concluded, the probationary period usually begins on the first working day for employees and, in this respect, also for employers. This is not required by law. The "whether" and the actual duration of a probationary period is then agreed individually in the employment contract. The probationary period is always set at the beginning of an employment relationship and is usually set at 6 months - which is probably due to the fact that the law stipulates 6 months as the maximum duration for a probationary period. During this period, the contract may be terminated by either party at any time with a notice period of two weeks, unless otherwise stipulated in the collective agreement. It is not necessary to state a reason for termination. A probationary period is not mandatory, except for trainees. According to the Vocational Training Act (BBiG), a training relationship must begin with a probationary period, which may last between one and a maximum of four months during training.

If an employment relationship is agreed without a probationary period or if there is no provision to this effect, the general protection against dismissal shall nevertheless only apply after a waiting period of six months. In order for this statutory protection against dismissal to apply, the employment relationship must last longer than 6 months without interruption.

The probationary period is an orientation phase for the participants, and it is advisable to use it to identify any differences in the perception of the volume and method of work as well as the cultural fit before firmly tying oneself to one another. Both parties are given the opportunity to check whether their expectations are being met.

There are two forms of trial period ratios. Firstly, the employment contract with a preceding probationary period; here the employment contract automatically continues after the end of the probationary period without the need to change the contract. In the alternative of a fixed-term probationary employment relationship, the employee on probation receives an employment contract that is limited to the period of the probationary period and ends at the end of the probationary period without having to give notice. In this case, if the employer wishes to employ the employee beyond the probationary period, he must then offer him a new employment contract.

There are two forms of probationary periods.

The probationary period is intended to provide orientation for the parties in order to check whether the respective expectations can also be fulfilled.

Special cases during the probationary period

The probationary period may be shortened by the employer in agreement with the employee. Nevertheless, the general protection against dismissal only applies after a waiting period of six months, even if the agreed probationary period has already ended. At the end of the shorter probationary period, only the notice period changes, which then amounts to four weeks, as well as the time of notice, since a notice of dismissal no longer has to be declared at any time, but at or on the 15th or at the end of a month. On the other hand, a probationary period can also be extended if the six months have not yet expired. The extension can only take place by mutual agreement between the employee and the employer and only up to a maximum period of 6 months.

It is possible to extend the trial period after the statutory six months have expired, but from the 7th month onwards the provisions of the legal protection against dismissal apply. In this case, the regular statutory notice periods apply and no longer the special period of two weeks for probationary periods.

Special cases during the probationary period are the occurrence of illness or pregnancy. If the employee falls ill during the probationary period after having worked for four weeks without interruption, he is still entitled to the employer's wage within the framework of the continued payment of remuneration in accordance with the Continued Payment of Remuneration Act. In the event of illness within the first four weeks, the health insurance fund pays the employee sickness benefit. In this case, it is also possible to extend the originally agreed probationary period by mutual agreement.

If a pregnancy occurs during the probationary period, the Maternity Protection Act applies. This regulates the employment ban, the special protection against dismissal and the maternity pay to which the employee is entitled in any case. She cannot therefore be dismissed during the probationary period or after it.

In the case of dismissals for operational reasons, the employees who are in the probationary period are often dismissed first. However, pregnant women are immune to this because of the special protection against dismissal. If there is a works council, it should be noted that it must also be consulted beforehand in the event of dismissal during the probationary period.

In addition, there is no general holiday ban during the probationary period. However, the employee is only entitled to the entire holiday after six months. Of course he can take also before vacation, but it applies: the vacation must be trained and in such a way is entitled to him per full month one twelfth of its annual vacation.

Empathy ratio

In an empathy ratio, there is a loose legal relationship between the employer and the jobseeker. The purpose of this relationship is to clarify the prerequisites for a potential later employment relationship. The empathy ratio usually lasts only a few days and differs from the trial employment relationship in that the potential employee has no obligations, not even a duty to work, and the employer has no rights of direction and instruction vis-à-vis him. In this context, the jobseeker is not entitled to any remuneration.

Successful probationary period - and then?

During the probationary period, both employers and employees found that the cooperation was promising and decided to continue working together.

The statutory notice periods or the collective or individual contractual agreement thus apply, and after a total of six months the general protection against dismissal under the Dismissal Protection Act applies to the employee. With the continuation of the employment relationship, all other agreements which are regulated in the employment contract come into force, insofar as these were not yet effective during the probationary period.

To be continued…

With the decision to continue on the road to work together, many new questions and legal issues arise. What about overtime and overtime, how can I stay interesting as an employer and how can I motivate and keep my employees? Is Home-Office an option to do justice to the employees' call for flexibility and what must be considered? What forms of remuneration are there and what happens if a termination is due - regardless of which party? Another challenge is to write a correct reference. What is the difference between a simple and a qualified certificate and what is the point of the covert wording?

These topics will be discussed in the following blogs.

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