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German Employment Contract

Employment contracts for employees working in Germany

A German employment contract is the foundation of the German employer-employee relationship and summarizes agreements regarding

  • salary,
  • vacation days,
  • notice periods,
  • work location(s), and
  • working hours.

Employment contracts should be tailored

When drafting a contract between employer and employee, both parties are often hesitant to spell out exactly what they need, want and expect. Instead, they work with model contracts, which may cover the basics of a professional relationship, but are not very refined and can become a liability in the event of a legal dispute. Thus, model contracts should only be used as a framework for personalized contracts that are tailored to the needs of both parties.

    Important contents in a German employment contract

    Given the litigation risks associated with using a model contract "as-is," the following contract terms should always be negotiated, agreed upon and included:

    • provision of a company car,
    • non-compete clauses,
    • preclusion periods,
    • reimbursement policies,
    • commissions,
    • bonuses,
    • probationary period, and
    • overtime pay.

    Common mistakes in German employment contracts

    When drafting an employment agreement in Germany, clauses regarding non-competition and overtime often pose problems and can lead to litigation if not carefully prepared. Thus, for example, a post-contractual non-competition clause is always invalid unless a "waiting allowance" was agreed to at the same time.

    Our attorneys for German employment contract law are familiar with these and other risks and can help you draft an agreement that will avoid potential pitfalls and expensive litigation.

    German equal treatment principle

    When drafting individual employment contracts, firms must comply with Germany’s equal treatment principle - as interpreted and applied under German employment law.

    Generally speaking, the equal treatment principle requires that employers treat equally any two employees performing comparable activities in a comparable way. In addition, employers are prohibited from creating extraneous groups to seek to justify disparate treatment.

    The equal treatment principle in Germany is particularly important when drafting terms regarding additional remuneration or special allowances (e.g. Christmas bonuses, commissions, etc.), so that no employee is unjustifiably discriminated against.

    Unequal treatment still possible

    Despite the equal treatment principle, unequal treatment with regard to a variety of terms, including remuneration, is still possible as long as long as such unequal treatment is factually and legally justified. Our German employment attorneys can gladly review your particular case to determine if there are adequate factual and legal grounds for unequal treatment.

    Your German Labor Attorney

    Do you need a German employment contract lawyer? Your contact for comprehensive advice regarding drafting and reviewing of German employment contracts is Attorney Dr. Eric Uftring (Certified Specialist for Employment Law). Please feel free to contact us by e-mail (info@winheller.com) or by phone (+49 69 76 75 77 80).

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    azur100: Top Employer for Lawyers 2021

    Handbook German Employment Law

    Specialist for Employment Law Dr. Eric Uftring contributed a detailed chapter on staff leasing agreements. Order here

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