Terms of Employment
1.1 Status of Employee
In Germany, an employee (Arbeitnehmer) enjoys a special status that is described as the personal obligation to perform work upon the employer's instructions, without entrepreneurial risks and in a situation of economic dependence (to a certain degree) on the employer.
Employee protection rights do not, therefore, generally apply to directors and board members of companies – as they act mainly without instructions from superiors. Where protection rights derive from European Union Directives, such board members and directors are treated as 'employees' under German law as well.
1.2 Contractual Relationship
Basically, the employer and employee are free to negotiate employment agreements. These agreements may be put down in writing or be concluded orally. There is no general form requirement under German law. The employer is only obliged to provide the employee with a text that provides the core terms and conditions of the employment. Obviously, a written agreement is advisable to ensure that evidence of the employment relationship and its terms and conditions exists.
If employment is concluded for a fixed term, the fixed-term clause must be concluded in writing – meaning true ink on paper; otherwise the fixed-term clause is void and the employment agreement is considered to have been concluded for an indefinite period of time.
Furthermore, any post-contractual non-competition obligation must be agreed upon in written form as well. Again, such a clause is void if the requirement for a written form is not fulfilled.
The employment agreement can be written in any language; German is not required by law. A German translation is necessary only should any dispute be brought before a court.
The employment agreement should stipulate commencement and the terms of the employment relationship, place of employment, job, remuneration, working hours, annual vacation, notice period for termination, and applicable collective bargaining agreements.
1.3 Working Hours
Work hours during working days may not exceed eight hours — §3 sentence 1 ArbZG (Working Hours Act, Arbeitszeitgesetz) — and 48 hours per week for a six-day work week. This can be extended to ten hours per day if the average shift within six months or 24 weeks does not exceed eight hours a working day (§3 sentence 2 ArbZG). As most employees in Germany work a five-day week, that means in effect that employees may work up to 9.6 hours per day; then, the...