August 18, 2022

Volume XII, Number 230

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Resolved Amendment of the Proof Act Germany

Actual need for adjustment manageable

Yesterday, the Bundestag passed the law implementing Directive (EU) 2019/1152 of the European Parliament and of the Council of June 20, 2019 on transparent and predictable working conditions in the European Union (OJ L 186 of July 11, 2019, p. 105). (“ Directive ”) adopted. Among other things, this provides for an amendment to the Evidence Act (NachwG), according to which employers must inform their employees in writing about the main working conditions. Companies will need further information for their employees, but there is no need to change employment contracts across the board. The clear rejection of digital employment contracts is more dramatic. An overview:

AMENDMENTS TO THE PROOF ACT 

According to the current legal situation, the Evidence Act already provides that the employer hands over the essential (more detailed) contractual conditions to the employee in writing and signed in the original. The "electronic form", with which the written form can be replaced by a qualified electronic signature, is expressly excluded. As a rule, the requirements of the Evidence Act were met by handing over the signed employment contract. In order to implement the directive (and unfortunately also beyond that), the Evidence Act is now to be expanded and the documentation obligation should include the following components in particular:

  • The length of the agreed trial period;
  • The agreed rest breaks and times; in the case of agreed shift work, the shift system, the shift rhythm and the requirements for shift changes;
  • If the employee should not only work at a specific place of work, an indication that he/she will be employed at different places or can freely choose his/her place of work;
  • The composition and amount of pay, including overtime pay, surcharges, allowances, bonuses and special payments and other components of pay, each of which must be disclosed separately, and when they are due and how they are paid;
  • In the case of on-call work, the agreement that employees have to perform their work in accordance with the workload, the number of hours to be paid as a minimum, the time frame (reference days and hours) that is specified for the provision of work and the deadline within which the employer must notify in advance of the location of the working hours;
  • Certain information about, among other things, the country and the remuneration if an employee is employed abroad for more than four consecutive weeks;
  • The possibility of ordering overtime and its requirements;
  • Any entitlement to training provided by the employer;
  • The name and address of the pension provider if the employer promises employees a company pension through a pension provider;
  • The procedure to be followed by the employer and employee when terminating the employment relationship (at least the written form requirement, the deadlines for terminating the employment relationship and the deadline for filing an action for protection against unfair dismissal).

So far, the employer had up to one month after the agreed start of the employment relationship to hand over the essential contractual conditions to the employee.

The legislator has now provided for a staggering of deadlines within which the employer must hand over the minutes of certain contractual conditions to the employee at the latest. In the future, he will have to hand over some of the key terms of the contract (name and address of the contracting parties, amount of wages and agreed working hours) on the first day of work. This also applies to changes to these essential working conditions. Further contractual conditions must be handed over either at the latest on the seventh calendar day or one month after the agreed start of the employment relationship.

Also new is an official sanction option for violations of the duties of the NachwG, which can be punished with fines of up to EUR 2,000.

ADJUSTMENT NEEDS FOR COMPANIES

First of all, most of the elements of the new requirements should already be included as standard in most model employment contracts. Hardly any company should provide just the reference to the formal aspects of a termination. In the future, a corresponding information sheet would have to be handed over together with the employment contract. Otherwise, this has no effect on the effectiveness of a termination.

However, there is also a transitional regulation that provides that for all employment relationships that already exist on August 1, 2022, the documentation obligation only applies after a corresponding request by the employees. Existing employment contracts therefore do not have to be changed immediately.

END OF DIGITAL EMPLOYMENT CONTRACTS 

So far, violations of the NachwG have had practically no negative consequences for companies, apart from conceivable evidential disadvantages in special constellations. For this reason, they were also able to conclude their employment contracts digitally (with or without a qualified electronic signature) and then file them digitally.

Such behavior is now subject to a fine, which for many companies should mean the end of purely digital employment contracts. However, this does not mean that the path back to the analog personnel file has to be started: It is conceivable that the companies will manage the employment contracts digitally even under the application of the new regulations. At the beginning there is only an analogue copy signed by both parties (possibly supplemented by a receipt, after which the employee confirms receipt of the signed original), which is scanned for the company and the original is then handed over to the employee.

Why the German legislature did not make use of the possibility of concluding employment contracts in digital form and therefore went beyond the directive is not explainable - also in view of the discussions in the legislative process. For some companies it is therefore time again to print out employment contracts.

© 2022 McDermott Will & EmeryNational Law Review, Volume XII, Number 176
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About this Author

Thomas Gennert Labor & Employment Attorney McDermott Law Firm Dusseldorf Germany New York
Associate

Dr. Thomas Gennert focuses his practice on labor and employment law. He advises clients on the entire field of individual and collective employment law, data-privacy law and compliance, and employment-related litigation as well as employment-related matters in mergers and acquisition transactions. He also advises managing directors and corporate bodies on negotiation and termination of service agreements and liability related matters.

Previously, Thomas worked for an international law firm in Düsseldorf and New York focusing on corporate law, merger and...

49-211-30211-310
Laureen Risse Employment Law Düsseldorf McDermott Will Emery
Associate

Laureen Risse focuses her practice on employment law.

Laureen studied law at the University of Münster and the Universitat de les Illes Balears in Spain. Before joining McDermott, she gained experience in employment law as a trainee lawyer with an international cosmetics group and an international law firm. She also worked as a research assistant in various legal departments, for example in corporate law/M&A, at two international law firms in Düsseldorf and Frankfurt am Main.

CREDENTIALS


Education
Higher Regional Court of Düsseldorf, Second State Exam...

49 211 30211 521
Ilva Woeste Labor & Employment Attorney McDermott Will & Emery Law Firm, Munich, Germany
Associate

Ilva Woeste advises and represents national and international companies and executive staff in all areas of individual and collective employment law. Ilva focuses on assisting in protection against dismissal disputes, restructurings as well as drafting and amending employment contracts and specific types of termination agreements.

During her legal traineeship, Ilva gained experience in the labor law department of a major international law firm in Düsseldorf and in an international law firm in London.

49 89 12712 111
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