The employment contract

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At last! Your hard work has paid off. You have the job in the bag.

The employment contract puts a seal on your employment relationship and contains important conditions of your employment. This is why you should read through the contract carefully before signing, and not hesitate to ask questions. There is no obligatory template for employment contracts. Nonetheless, certain minimum conditions required in Germany must be met.

One of the most important points for you is the definition of the salary. It is important to ensure that not only the agreed salary but also any increase after the end of the probationary period is fixed in writing. The mode of payment is also to be specified.

Other important elements are the definition of your tasks, your position within the company, the beginning of your employment relationship and the specification of your place of work. Pay particular attention to the definition of your tasks. The more vaguely your job description is worded, the more tasks can be assigned to you. The more precisely your job title and description are worded, however, the easier you will find it to reject tasks which do not match your qualifications or yield a lower salary.

The employment contract must also specify when your employment begins and the length of the probationary period. In Germany, the probationary period usually makes up the first three months of employment.  The maximum probationary period is six months. During this time, the employment relationship can be terminated by either party with two weeks’ notice. After the probationary phase, you may resign without giving reasons, keeping to a set notice period which is likewise agreed in the contract. Your employer, however, must give reasons for terminating the contract if you have been employed for more than six months. After six months, the German Employment Protection Act applies in businesses employing more than five full-time staff, irrespective of the probationary period. More information on the Employment Protection Act is available here.

The employer can then only terminate the employment relationship for very serious reasons.

Note: The employer can dismiss you without notice (termination for exceptional reasons). However, the legal barriers to dismissal without notice are extensive in Germany. Only after a significant transgression by the employee, followed by appropriate warning, can the employer dismiss without notice. Reasons might include, for instance, theft of company property. If you are on a fixed-term contract, your employment automatically ends after the agreed period of time. Ordinary notice of termination during fixed-term employment is open to you only.

Working time is also to be specified in your contract. Specification of hours to be worked per week, and of payment for overtime, are crucial here. There may be hidden potential for future conflict here. Pay attention to how much overtime can be expected and the supplements your employer is prepared to pay for it. The German Working Time Act limits permissible working hours to no more than ten per day.

Rest forms part of your employment in Germany and must be agreed in the contract. After six months of employment, you are legally entitled to holidays totalling 24 business days per year. If this holiday entitlement cannot be taken in a single year – if you took up your position on the first of September, for instance – you will be entitled to partial holidays: a twelfth of your annual holiday entitlement for each month. If you do not claim your holiday entitlement, it will expire by an agreed date in the following year.

In Germany, companies may also be bound by wage agreements.

Wage agreements regulate pay, working time and other employment conditions for employees in a particular sector or company. The level of remuneration and the length of working time can only be agreed within the wage agreement.  Once concluded, a wage agreement is binding and has the force of law.

German contractual language is not always simple.

If you are unsure you should always query the point and, if the contract is long and complicated, ask a lawyer to check the contract for unlawful clauses.But there is no need to panic: Most large companies have their own legal departments to draw up employment contracts, and their terms only very rarely run contrary to the law. Smaller companies make more frequent use of standardised employment contracts, which they adapt to their businesses. Here too, however, unlawful clauses are fairly rare.