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  • Hari Krishnan

Types of Employment Contracts in Germany and How to Review Them

Updated: Jan 2

If you are planning to work in Germany, you may wonder what kind of employment contract you will have and what rights and obligations it entails. In this article, we will explain the different types of employment contracts in Germany, and some of the main aspects you should be aware of before signing one.


Types of employment contracts in Germany


What includes in an employment contract in Germany?

An employment contract is a legal agreement between an employer and an employee that defines the terms and conditions of their working relationship. It usually includes information such as:

  • The names of the employer and the employee

  • The start date and duration of the employment

  • The job description and duties

  • The place of work and working hours

  • The salary and benefits

  • The holiday entitlement and sick leave

  • The notice period and termination clauses

  • Any other special provisions or agreements


The employment contract in Germany not necessarily have to be in writing, but it is highly recommended to have one for clarity and security. If there is no written contract, the employer must provide the employee with a written summary of the main contractual terms within one month of the start of the employment.



What are the different types of employment contracts in Germany?

There are several types of employment contracts in Germany, depending on the duration, scope, and nature of the work. The most common ones are:


Permanent employment contract (unbefristeter Arbeitsvertrag)

A permanent employment contract or otherwise called the unlimited contract in Germany, is the most common and standard type of contract in Germany. It is for an indefinite period of time, and does not have a fixed end date. It usually includes a probationary period of six months, during which the employer or the employee can terminate the contract with a shorter notice period (usually two weeks). After the probationary period, the contract can only be terminated if the employee resigns or the employer has a valid reason to dismiss the employee, according to the strict German labor law.


How to review a Permanent job contract in Germany?

When reviewing a permanent employment contract, you should pay attention to the following aspects:

  • The job description and duties

  • The salary and benefits, including any bonuses or incentives

  • If you are an expat, check if there’s a relocation package

  • The holiday entitlement and sick leave

  • The notice period and termination clauses

  • The location and working hours

  • Any other special provisions or agreements

  • Notice period


Fixed-term employment contract (befristeter Arbeitsvertrag)

A fixed-term employment contract, as well as called a limited contract is valid for a specified period of time, and ends automatically when the term expires. Fixed term contracts may be renewed once or several times, but the total duration of the contract cannot exceed two years, unless there is a specific reason for a longer term (such as a project, a replacement, or a start-up business). In Germany, a fixed-term contract does not usually include a probationary period, and can only be terminated before the end date if there is a mutual agreement or a serious breach of contract.


How to review a Fixed-term contract in Germany?

It’s important to keep some points in mind while reviewing a fixed-term employment contract, like:

  • The start date and end date of the contract

  • The possibility and conditions of renewal or extension [important]

  • The job description and duties

  • The salary and benefits, including any bonuses or incentives

  • The holiday entitlement and sick leave

  • The notice period and termination clauses

  • The place of work and working hours

  • Any other special provisions or agreements



Mini-job and midi-job

A mini-job and a midi-job are forms of marginal employment in Germany, where the employee earns a low income and pays reduced or no social security contributions. A mini-job is a job that pays up to 450 euros per month, and a midi-job is a job that pays between 450.01 and 1,300 euros per month. Both types of jobs are subject to income tax, but the employee can opt out of paying it. A mini-job and a midi-job can be combined with a regular job or a pension, but the total income cannot exceed certain limits.


How to review a mini-job contract in Germany?

Make sure the blow points in your mini-job contract are reviewed carefully. They are very important

  • The exact amount of income and how it is calculated

  • The tax liability and how to opt out of it

  • The social security contributions and how they are calculated [important]

  • The coverage and benefits of health insurance, nursing care, unemployment benefit and pension [important]

  • The working hours and how they are distributed

  • The holiday entitlement and sick leave

  • The notice period and termination clauses

  • Any other special provisions or agreements


Part-time contract (Teilzeitarbeitsvertrag)

A part-time contract is a type of employment contract in Germany that involves working fewer hours than the standard full-time contract, which is usually 40 hours per week. The working hours of a part-time contract can vary depending on the agreement between the employer and the employee, but they cannot exceed the legal maximum of 10 hours per day or 48 hours per week. A part-time employee has the same rights and obligations as a full-time employee, such as salary, holiday, sick leave, and social security, but they are calculated proportionally to the working hours.


Part-time contracts can be either permanent or fixed-term, depending on the needs of the employer and the employee. Part-time employees have the right to request a change in their working hours, either to increase or decrease them, after six months of employment. The employer must consider the request and respond within one month. The employer can only reject the request if there are operational reasons that prevent the change.


How to review a part-time job contract in Germany?

When reviewing a part-time contract, you should pay attention to the following aspects:

  • The exact number of working hours per week, month, or year

  • The distribution of working hours over the days, weeks, or months

  • The flexibility or predictability of the working hours

  • The salary and benefits, including any bonuses or incentives

  • The holiday entitlement and how it is calculated

  • The notice period and termination conditions



Freelance contract (Freiberuflervertrag)

A freelance contract is for services (Dienstvertrag) in Germany, where a freelancer makes their services available to the client in exchange for remuneration. The freelancer is not an employee of the client, but an independent professional who works on a project basis or for a specific period of time. The freelancer is responsible for paying their own taxes and social security contributions, and for managing their own business affairs.


Freelance contracts can vary in terms of scope, duration, and complexity, depending on the nature of the service and the agreement between the freelancer and the client. Freelance contracts are usually more flexible and less regulated than employment contracts, but they also entail more risks and uncertainties for both parties.


How to review a part-time contract in Germany?

When reviewing a freelance contract, you should pay attention to the following aspects:

  • The description and scope of the service to be provided

  • The deadlines and milestones for the delivery of the service [important]

  • The payment terms and conditions, including the amount, frequency, and method of payment [important]

  • The ownership and intellectual property rights of the service and its results

  • The liability and indemnity clauses, in case of errors, damages, or disputes

  • The confidentiality and non-compete clauses, if applicable

  • The termination and cancellation clauses, in case of changes or problems


Additionally, here are some additional tips for reviewing an employment contract regardless of its type:

  • Read the entire contract carefully.

  • Ask questions if you do not understand something.

  • Make sure you understand your rights and responsibilities.

  • Do not sign the contract unless you are comfortable with all of the terms.

  • Keep a copy of the contract for your records.


Is it possible to get an English job contract in Germany?

In general, there is no legal requirement for an employment contract in Germany to be in German, but it is the most common and preferred language for both employers and employees. Having said that, most multinational companies as well as new generation companies in Germany provides the contract in both German and English.


If the contract is not in English, it is advisable to have a certified translation or a bilingual version, to avoid any misunderstandings or disputes. The employee should also make sure that they understand the contract fully before signing it, and seek legal advice if necessary.


You can either ask the employer to provide an English version of the contract, or you can translate it to English using a certified translation service. A certified translation offers dependable translation of legal terminology and complex labor laws compared to a document translated by Google Translate.



What is the probationary period in Germany?

The probationary period in Germany is a trial period at the beginning of an employment contract, where the employer and the employee can test the suitability and compatibility of the work relationship. It usually lasts for six months, but it can be shorter or longer depending on the type and level of the job. During the probationary period, the employer or the employee can terminate the contract with a shorter notice period (usually two weeks), without giving a reason or a justification. The probationary period can be extended or waived by mutual agreement.


What is the job security in Germany?

The job security in Germany is relatively high, especially for permanent employees who have passed the probationary period. The German labor law protects the employees from unfair or arbitrary dismissal, and requires the employer to have a valid reason to terminate the contract, such as misconduct, poor performance, redundancy, or operational changes. The employer must also follow a proper procedure, which includes giving a written notice, respecting the notice period, and consulting the works council (if applicable). The employee can challenge the dismissal in court, and claim compensation or reinstatement.


What are the working hours in Germany on a part-time job?

A part-time job in Germany is a job that involves working fewer hours than the standard full-time job, which is usually 40 hours per week. The working hours of a part-time job can vary depending on the agreement between the employer and the employee, but they cannot exceed the legal maximum of 10 hours per day or 48 hours per week. A part-time employee has the same rights and obligations as a full-time employee, such as salary, holiday, sick leave, and social security, but they are calculated proportionally to the working hours.


Conclusion

Working in Germany can be a rewarding and fulfilling experience, but it also requires understanding and complying with the German labor law and employment contracts. Before accepting a job offer and signing a contract, it is important to know the different types of contracts, their advantages and disadvantages, and their implications for your rights and duties as an employee. If you have any doubts or questions, you should consult a professional lawyer or a trusted source of information, such as the Federal Ministry of Labour and Social Affairs.


Some frequently asked questions

What is a "Tarifvertrag" (collective bargaining agreement) in Germany, and how does it affect my employment contract?

A Tarifvertrag is a collective bargaining agreement negotiated between employers' associations and labor unions. It sets standards for wages, working hours, and other employment conditions within specific industries. If your employer is bound by a Tarifvertrag, your employment contract's terms and conditions should align with the provisions outlined in the agreement.

Are there specific clauses or terms I should pay particular attention to while reviewing an employment contract in Germany?

How can I verify if my employment contract aligns with German labor laws and regulations?

Can I negotiate terms or clauses in my employment contract in Germany, and if so, what aspects are typically negotiable?

What are the key differences between a full-time permanent contract and a fixed-term contract in terms of benefits and job security in Germany?

Are there legal implications or restrictions on non-compete clauses in German employment contracts, and how should I approach reviewing them?

How does parental leave or maternity/paternity rights factor into employment contracts in Germany, and what should I look for in these clauses?

What should I consider before signing an "Aufhebungsvertrag" (termination agreement) if it's offered instead of continuing an existing employment contract in Germany?

Is it advisable to seek legal advice when reviewing an employment contract in Germany, and how can a lawyer assist in this process?

How can I ensure clarity regarding salary, bonuses, and other financial aspects outlined in my employment contract in Germany?



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