On 24 February 2016, the Federal Labour Court (Bundesarbeitsgericht) ruled that the validity of a fixed-term probationary assignment of “higher” and more demanding tasks has to be evaluated under Sect. 307 Subsect. 1 German Civil Code (“BGB”), which states that an agreement is invalid, if it leads to an “unreasonable disadvantage” for the other party (docket number 7 AZR 253/14). According to the court ruling such an unreasonable disadvantage will not exist if the assignment of the higher task is actually aimed at testing the employee’s skills, and the time period agreed upon seems reasonable with respect to the objective of probation in the individual case.

In the present case, an employee had been working as a vendor in a store and was entrusted with the role of cashier for a probationary period of six months. He sued his employer claiming that the fixed-term assignment of the “higher” role was invalid. He wanted the court to find that – due to the invalidity of the fixed-term assignment – he would be entrusted with the more demanding role of a cashier permanently. His main interest was to receive higher remuneration (indefinitely), because according to the applicable collective bargaining agreement employees working as cashiers were entitled to be paid more.

The Federal Labour Court confirmed its previous authorities that the Part-Time Work and Fixed-Term Employment Act (“TzBfG”) is only applicable if the entire employment relationship is for a fixed term. If the employment itself is for an indefinite period of time and only certain contractual terms are agreed for a fixed term, the validity of this agreement is evaluated under Sect. 307 Subsect. 1 of the BGB – a more general provision dealing with the validity of terms and conditions in contracts. However, the Federal Labour Court emphasized that the underlying values of Sect. 14 of the TzBfG are not irrelevant in cases like the present.

To clarify: Sect. 14 Subsect. 1 No. 5 of the TzBfG allows employers to limit the duration of an entire employment relationship in order to use the time as a probationary period. In respect of this provision and its requirements there is a long history of case-law. The Federal Labour Court now states that Sect. 14 Subsect. 1 No. 5 of the TzBfG is not directly applicable in cases like the present one. But if – in the particular case – its requirements were fulfilled and an employer would be allowed to agree on a fixed-term probationary period regarding the entire employment relationship, then a fixed-term probationary assignment of a more senior role is likely also to be valid. These circumstances would be an important indication that there was no “unreasonable disadvantage” for the employee and that therefore the fixed-term assignment was valid under Sect. 307 Subsect. 1 of the BGB.

In the present case the Federal Labour Court then had to decide whether the installment of new and more complicated cash register systems made a probationary period of 6 months as a cashier seem reasonable. As the previous ruling of the Higher Labour Court did not do sufficient fact-finding to answer this, the Federal Labour Court sent the case back to the Higher Labour Court.

The judgement shows that the provisions of the TzBfG are also to be taken into account if parties agree on certain contractual terms for a fixed term. However, the Federal Labour Court is not very clear about the differences regarding the requirements of a valid agreement under Sect. 307 of the BGB on the one hand and under Sect. 14 TzBfG on the other hand. Therefore some legal uncertainty remains. It should be further noted that, as Sect. 14 of the TzBfG is not directly applicable if parties agree on certain contractual terms for a fixed term, the requirement of “written form” under Sect. 14 Subsect. 4 of the TzBfG does not apply. This means that parties are not required to agree on the limited duration of certain contractual terms in writing, although this is advisable for reasons of proof.