Starting from 1 October 2016 stricter statutory provisions apply to standard business terms. Employers must revise their standard employment contracts or face possible disadvantages during court disputes. 

The modified statute is § 309 nr. 13 of the German Civil Code, which deals with notifications and declarations. The modified Code now explicitly invalidates pre-formulated contract terms which require notifications and declarations to contractual partners to be in a "stricter form than the textual form". Under the previous version of the law, standard business terms were invalid if they required declarations in a "stricter form than written form". In the future, such standard terms may therefore only request that the contractual partners provide declarations in textual form. 

Written form vs. textual form

In general, written form is only satisfied if the document is signed by the issuer with his name in his own hand, by his notarially certified initials, or through a qualified electronic signature. According to § 127 section 2 GCC it also suffices for compliance with the written form, if the message is transmitted by way of telecommunications and, in the case of a contract, by the exchange of letters, unless a different intention of the parties is to be assumed. An email or telefax however in general does not satisfy the written form requirement. 

Textual form, on the other hand, is broader and is fulfilled where a person makes a legible declaration which states the name of the declaring party on a permanent data carrier, i.e. writes an email or sends a facsimile. 

According to the legislature, the modification of § 309 nr. 13 GCC was necessary because there was uncertainty amongst consumers and employees, as to when the requirements of the "written form" as stated above are met. 

Contractual cut-off periods also affected

The new statutory provision also effects cut-off periods, which are common to standard employment contracts and typically contain two stages. Cut off periods aim to swiftly clarify claims arising from the employment relationship and require the parties to make their claims extrajudicial within a certain time period (first stage) or, if the other party does not comply, within another time period at court (second stage). For cut-off periods in employment contracts employers will have to adjust the required form of notifications in the first stage in order to comply with the new law; such clauses can no longer validly require employees to submit "written assertion" of alleged claims. 

Time window until 30 September 2016

The stricter requirement in § 309 nr.13 GCC only applies to contractual obligations which arise after 30 September 2016. Employment contracts which have been concluded by that date do not have to be revised by the employer. However, it is an open issue whether the law will apply to subsequent changes of existing employment contracts as newly created contractual obligations. For the purpose of certainty, employers should treat each contractual change starting from 1 October 2016 as a new conclusion of the contract. 

Dual disadvantage in the event of a lack of adjustment

If employers do not adapt their future contract templates, they likely face a dual disadvantage in the case of cut-off periods because the commonly used wording conflicts with § 309 nr. 13 GCC, making the contractual extinguishment mechanism invalid. For that reason employees will have three years to assert their claims and file them in court. 

However, the employer’s claims continue to be extinguished after the expiry of the contractually stipulated time limit if the employer does not assert them in writing to the employee.