A recently published decision of the Federal Labour Court of March 19th 2014(5 AZR 252/12) confirmed that language abilities of employees are not relevant for the validity of an employment contract. The case was brought forward by a Portuguese national, who, without being able to speak German signed a German employment contract, which expressly excluded a claim brought forward by him at the end of his employment.

The Federal Labour Court confirmed its previously held view, that language or intellectual abilities of employees are irrelevant as far as the conclusion and content of employment agreements are concerned. Nobody is obliged to sign a contract in a language, which he doesn't command. Any employee can ask for time to translate an agreement before he signs it. In view of the fact of the case the Federal Labour Court further outlined, that it is further not relevant, in which language the parties have negotiated (in this case Portuguese). Further it stated, that regularly a recession of the contract e.g. based on the argument that an error has been made, has no legal value.

Although the case concerned a German-language contract this does as well apply to English as contractual language. German Employment Law does not know any binding rules as regards the contract language. Such binding rules would anyhow be highly contestable in view of a recent decision of the European Court of Justice, who decided on April 16, 2013 (Az.: C 202/11), that a Dutch Law stipulating the use of Dutch as a contractual language violates European laws as far as cross-border contracts are concerned. Since English is language protected by European Law any restriction to use the English language for a contract in Germany would be highly contestable.

Employers must – however – be aware that the use of a foreign language in Germany has risks. In case of any dispute a German Labor Court must (by law) use the German language only therefore a translation of a foreign language contract is required. In case of any doubts or ambiguities those are held against the employer.

Further it needs to be mentioned, that an English language contract does not mean that foreign law is applicable on the employment relationship. Even if the contract itself or the interpretation lead to the application of foreign law the restriction of the Rome I convention need to be observed. In Germany this regularly lead to the applicability of many mandatory labor and employment laws. Thus employers using foreign language contracts and company regulations are well advised to take into account the need for thorough check of the language used and have to observe mandatory German employment laws. Careful drafting is therefore essential to avoid unnecessary risks. In our experience dual-language contractare useful and advisable.