The Coalition Agreement signed on 7 February 2018 contains numerous proposals for changes to German part-time and fixed-term law. The objective of the Coalition Agreement is "to abolish the abuse of fixed-term employment" by:
- granting a right to temporary (bridge) part-time work
- Introducing significant changes to on-call work
- limiting the possible number of unfounded fixed-term employment for larger companies
- limiting the unfounded fixed-term employment themselves
- limiting the maximum duration of so-called chain fixed-term employment
These changes are to be implemented immediately by policymakers.
On 1 January 2019, a new law came into place introducing "bridge part-time" work. The purpose of the new law is to provide employees with the right to temporary part-time work. Employees who had previously made use of the right to reduce working hours often had to remain in part-time work, even after the reasons for asserting that right ceased to apply.
Employees were unable to bring claims against their employer for their inability to return from part-time to full-time employment (the so called "part-time trap"). Given that more than 35% of German employees work part-time and this trend is increasing, the amendments to the law will have far-reaching impacts on the German working population.
Under German law, there is now the entitlement to request part-time work for a limited period. The employee can return to their previous working hours after the part-time phase if:
- the employer has more than 45 employees
- the employment relationship lasts longer than six months
- the employee requests this in writing, at least three months before the start of the reduction
- the requested period for part-time work is between a minimum of one year and a maximum of five years.
In all other respects, the law corresponds as far as applicable with the previous part-time work rules.
Reasons for refusal
Employers with 45 employees or less do not have to provide bridge part-time work and employers with 46 to 200 employees only need to grant one bridge part-time per 15 employees or part thereof.
Employers can reject any further applications in excess of this. Additionally, employers can reject the application for bridge part-time work if the organisation, work processes or safety of the company would be significantly impaired as a result.
However, it is difficult for an employer to reject the request for part-time work for an "operational reason" such as this.
How should employers react?
Employers should respond quickly to an application for bridge part-time work. At the latest, an employer must inform their employee in writing of their decision one month before the desired start of the reduction.
Furthermore, employers must discuss an employee's request for part-time work with the aim of reaching an agreement. If this is not complied with, the bridge part-time work shall be deemed to have been approved in the form in which it was applied for.
Finally, employers must respond to the request in a written letter; e-mail or fax will not be sufficient. Employers should have therefore have systems in place internally and create positions of responsibility for processing bridge part-time work applications.
Once agreed, the distribution and location of work, as well as the date of return, are binding and employees may not demand a reduction or extension of working time or a date for early return. This ensures a minimum degree of planning security for the companies concerned.
Nevertheless, employers must be prepared to be able to offer the employee a job on the date of his return. However, there is no requirement that the role with the adjusted working time also takes place at the same workplace. Employers can assign an equivalent job, as long as this complies with their employment contract.
As a result, when formulating employment contracts, employers should take care not to restrict them to a particular place or job.
On-call work originally refers to an employment relationship in which the duration of the working time within a certain period is not fixed. Whereas off-call work was previously less restricted, there are now considerable constraints for employers. The Act on the Further Development of Part-Time Work - Introduction of a Bridge Part-Time Act provides for substantial changes to so-called "on-call work" ("Arbeit auf Abruf").
Important legislative changes
For on-call workers, if no working time is expressly specified, this will now be deemed to be 20 hours per week (an increase from 10 hours per week previously). The proportion of additional work that can be called up by an employer during work on call is limited to no more than 25% of the agreed minimum weekly working time.
In the case of an agreement on the reduction of the agreed weekly working time, the amount may not be less than 20% of the agreed maximum working time. In the event of illness or the payment of wages on public holidays, the average working time in the last three months prior to the incapacity to work or the public holiday is generally determined as the basis for calculating the continued payment of wages.
Ongoing changes from the Coalition Agreement
Limiting the total number of unfounded fixed-term employment to 2.5%
In order to limit the abuse of unfounded fixed-term employments, there are plans to limit the maximum number that can be in place. German law does not yet provide for such a limit for unfounded fixed-term employments. In future, employers with more than 75 employees must limit the number of unfounded fixed-term employment contracts to a maximum of 2.5% of employees.
If this quota is exceeded, any further fixed-term employment relationship without an objective reason shall be deemed to have been concluded for an unlimited period. The quota shall relate to the date of the last unfounded fixed-term employment. This would mean a drastic change for an employer, particularly since it would require a further increase of documentation on their part.
Limiting unfounded fixed-term employment to 18 months
As a further restriction, the Coalition Agreement provides that unfounded fixed term employment contracts are only permissible for a period of 18 months. Within this period, only one extension is possible. Previously, an unfounded fixed-term contract of up to a total duration of 24 months and three extensions during this period was possible.
However, this does not apply to start-up companies, which have previously been able to renew their contracts several times for a period of up to four years. Changes to this exception were not addressed in the Coalition Agreement.
Limiting "chain" fixed-term employment
According to the Coalition Agreement, "infinitely long chains of fixed-term employment contracts" should no longer exist. Therefore, fixed-term employment agreements will not be permitted if the same employer has already had an employment relationship with a total duration of five or more years with an employee.
This regulation covers both:
- unfounded fixed-term limits (now limited to 18 months)
- fixed-term limits with objective reasons.
Until now, there have been no legal limits to the use of chain fixed-term employment with objective reasons. The exception to this is for the objective reason of the "individual character" in the employment relationship. This refers, for example, to actors or football players. The maximum duration of five years also includes previous employed temporary workers.
Thus, fixed-term employments with an objective reason after a period of employment of 5 years are not permitted by law. Fixed-term limitations without an objective reason are permissible for a maximum period of 18 months. In both cases, a new fixed-term employment relationship would only be possible after a waiting period of three years.
There is a lot going on in German Part-Time and Fixed-Term Law. At present, we can only estimate how many employees will make use of bridge part-time work. However, it is assumed that more than 15,000 requests will be filed in 2019 alone.
A law on the further objectives of the Grand Coalition with regard to the above changes is not yet available. However, the Federal Minister of Labour and Social Affairs, Hubertus Heil (SPD), intends to present such a proposal before the end of this year.