German Labor and Employment Law
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German labor law myths – The 10 biggest misconceptions
German labor law is considered highly complex by international standards. There is no doubt that it has some national peculiarities, some of which entail considerable risks. But not everything you hear and read about German labor law is true.
1. The weekly working hours are limited by law to eight hours per day
That is not true across the board. It is true that working hours may not exceed eight hours per day, but they may be extended to up to ten hours per working day if an average of eight hours per working day is not exceeded within six calendar months or within 24 weeks.
2. Fixed-term contracts in Germany may last a maximum of two years
If there is an objective reason for the fixed term, employment contracts may be limited in time for longer periods. There is no upper limit. Substituting someone who is on parental leave is one example of an objective reason.
3. Works councils cannot be dismissed
Members of the works council can be dismissed, but they enjoy special protection against dismissal. Therefore, they can only be dismissed for cause and with the works council's consent. In practice, the dismissal of works council members is thus only considered in the event of serious breaches of duty or a closure of business.
4. Illness protects against dismissal
Employees can also be dismissed while they are ill. Employees may only not be dismissed due to health impairments.
5. A formal warning must be given before any termination of an employment relationship
That is not correct either. As a rule, formal warnings are required prior to an ordinary dismissal being issued for reasons of conduct, but not in the case of dismissals for operational or personal reasons.
6. Notice of dismissal cannot be given without the works council's consent
Wrong! The works council's consent is required only for certain groups of employees, such as for the dismissal of a works council member. Normally, the works council does not have to agree to an employee's dismissal, but must only be informed of the employer's intention to dismiss them. The works council then has the option of objecting to the dismissal, agreeing to it or simply allowing a period of notice to elapse without comment. The works council usually chooses this latter "most diplomatic" option if it has no reason to oppose the dismissal. Regardless of how the works council reacts, the employer may give notice as long as he/she properly informs the works council, even if the works council objects.
7. Every employee who is dismissed receives severance pay in Germany
Severance payments are very common in Germany. However, there is no legal entitlement to severance pay in the event of a dismissal! Severance pay is almost always the result of an agreement between the employer and his/her (former) employee. In order to avoid or end a legal dispute, settlements or contracts that end the employment relationship in return for a severance payment are very common.
8. Additional payment is due for work on Sundays
According to German law, Sundays and public holidays are days of rest on which work should generally not be performed. There are exceptions, though. Where Sunday work is permitted, such as in the food service industry or in certain manufacturing companies, there is no legal entitlement to additional pay, however.
9. Employees who are only temporarily seconded to Germany are subject to German labor law
This is not true. First and foremost, it depends on which law applies to the employee's employment contract. This will usually be derived (by implication) from the employment contract and will be the law of the place of business, i.e. domestic law. Of course, it is advisable to play it safe and expressly agree on the applicability of domestic law before seconding to Germany, if so desired.
Regardless of this, however, there are areas of law that apply in any case when working in Germany, even if the employment relationship as such is not subject to German law. These include, for example, the minimum wage according to the German Minimum Wage Act (MiLoG), the minimum leave according to the German Federal Leave Act (BUrlG), maximum working hours and minimum rest periods according to the German Working Hours Act (ArbZG), as well as German occupational health and safety standards.
Furthermore, it depends on the duration of the secondment: If this lasts longer than twelve months, all working conditions prescribed in German legal and administrative provisions and in generally binding collective bargaining agreements are generally applicable to the employee seconded to Germany.
10. Company sales are permitted only with the works council's consent
No, it is solely the decision of the management whether to sell or not. However, if the sale also involves a significant operational change, e.g. a relocation or (partial) closure of the business, the employer would have to involve the works council in good time.
We know where you’re coming from
Every industry has its own peculiarities, whether with regard to specific issues such as collective agreements or work practices and how work is organised. Although they are often generalists, HR staff and in-house employment lawyers need to engage with the relevant sector-specific factors.
Through our employment law practice, we have built up a huge pool of real-world knowledge from across many different industries over the decades. Our 100+ employment lawyers thus not only provide technically outstanding advice, but also practical support for operational and strategic issues, whether working out of our own offices or at your site.
- Automotive
E-mobility and other major market trends are transforming the way work is organised in the automotive industry. We provide legal support around the associated employment-related changes.
- Banking & Finance
From structuring remuneration for senior executives to implementing compliance systems in a highly regulated sector, we understand the regulatory requirements and compliance standards that HR departments must meet.
- Consumer Goods & Retail
These sectors are labor intensive and have tight profit margins. We assist with the deployment of external staff, collective agreements and other specific HR issues.
- Energy
Employment law aspects of implementing unbundling regulations, and specific employment law issues associated with network acquisitions/concession changes. We bring together specialist knowledge on issues relating to the energy supply sector.
- Life Sciences & Healthcare
In this multi-faceted field, we advise on employment law in the healthcare sector (hospitals, clinics, medical centres), in the pharmaceutical sector (drug manufacturers) and in the care sector (operators, investors and owners), including facilities run by church organisations, taking due account of the many public law provisions and the special features of church employment law.
- Logistics & Transport
Last-mile delivery, digital transformation, international operations and new market players. We advise HR departments on employment law, whether with regard to outsourcing projects, service level agreements, software and data protection agreements or when designing new working time and remuneration models.
- Manufacturing & Engineering
A backbone of the German economy; many special issues arise in the various sub-sectors around negotiating collective agreements or where operational arrangements and works councils span multiple companies. With us as your employment law advisor, you benefit from our in-depth understanding of these issues.
- Technology, Media & Communications (TMC)
The gig economy and digital business models, plus long experience of advising/representing companies in the media sector, including aspects such as the use of freelancers and employment law exemptions designed to protect editorial freedom. You can rely on our employment law experts to provide excellent advice.
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German Labor and Employment Law
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