Amendment on the German Law on Documenting Essential Applicable Conditions for Employment Relationship (Documentation Act / Nachweisgesetz short: Documentation Act / NachweisG)

  • 06/14/2022
  • Reading time 6 Minutes

The EU-directive 2019/1152 on transparent and predictable working conditions from 2019 has to be implemented into national law by the German Federal Government by 1 August 2022. From this date onwards, employment contracts have to contain a number of specified additional information as for example details on termination or probation periods – and has to be supplemented accordingly if not already stated in the employment contract. It seems that very few employers have already realised what kind of bureaucratic avalanche they are facing.

Since 1995, the German Law on Documenting Essential Applicable Conditions for Employment Relationships (Documentation Act / NachweisG) has obliged employers to give their employees a signed hard copy (in paper) of the agreed on main terms and conditions of the employment relationship after the employment relationship has commenced. However, this is not a prerequisite for the effectiveness of an employment relationship. As there are no further legal consequences attached to the absence of a written form of an employment contract, except in the context of fixed-term contracts, the law is generally regarded as a toothless tiger. A lager number of employment contracts are still sealed by handshake. 
A draft law for the implementation into national law was discussed in the German Bundesrat in May and according to the German government’s plans shall be passed by the German Bundestag before the summer break.

According to the version of the Documentation Act that is already in force the following information has to be included in the signed written minutes of the terms and conditions of the employment agreement:

  • name and full address of the contracting parties,
  • date of commencement of the employment relationship,
  • in the case of a fixed-term employment relationship, the duration of the employment relationship,
  • the place of work or an indication that the employee can be employed at different locations,
  • a brief description of the work to be performed by the employee,
  • the composition and amount of remuneration, including supplements, bonuses and special payments as well as other components of remuneration and their due dates,
  • the agreed working hours, 
  • the duration of the annual leave,
  • the deadlines for terminating the employment relationship,
  • a general reference to collective bargaining agreements, company or service agreements that are applicable to the employment relationship.

Now the following information shall become compulsory to be included in the written form: 

  • Duration of the probation period: in addition, it is to be added to the Part-Time Working and Fixed-Term Employment Act (TzBfG) that the probation period for fixed-term employment relationships must be in proportion to the expected duration of the fixed-term and the type of work. A clear regulation on the permissible duration of the probation period in fixed-term employment relationships was favoured by the committees of the German Bundesrat but rejected in the German Bundesrat itself. 
  • Agreed on breaks and rest periods as well as in the case of agreed on shift work the shift system, shift rhythm and conditions for shift changes. It remains unclear whether only contractual rest breaks and rest periods or also statutory rest breaks and rest periods are to be covered by the regulation. 
  • Information on the arrangement and remuneration of overtime and its preconditions.
  • In case of on-call work: the agreement that the employee is to perform work in accordance with the workload, the minimum number of hours to be paid, the time frame, determined by reference days and reference hours, set for the performance of work, and the period within which the employer is to give advance notice of the location of the working time. 
  • Any entitlement to training provided by the employer. 
  • Name and address of the pension provider, if the employer provided occupational pensions through a pension provider; if the pension provider itself is obliged to provide this information, the employer is not obliged to do so. 
  • Procedure to be followed in the event of termination by employer and employee: so far, the scope of this information obligation is unclear. At the very least, information on the written form requirements for termination, the notice periods as well as the period for filing a complaint for unfair dismissal will be required. A duty to provide evidence on the procedure for termination agreements is not intended. 
  • Extension of the information requirements for postings, e.g. conditions for return. 

With regard to the opportunities offered by the progressive digitalisation, the draft law also stays far behind the existing possibilities. The proof is explicitly required in written form (with original signature). The electronic form is explicitly excluded. This has even been revised by the responsible committees of the German Bundesrat. However, no majority could be found for a respective amendment. It can only be hoped for that the German Bundestag will be able to come up with a more progressive version.

The deadlines for providing the required evidence are now to be staggered: information on the name and address of the contracting parties, remuneration and working hours including breaks, rest periods and shift systems is required on the first day of the employment relationship at the latest. No later than on the seventh calendar day, the beginning, end, place of work, job description, probation period, information on work on call and overtime regulations must be proven. Employers have one month to provide the remaining evidence.

In future, breaches of the obligation to provide evidence will be punishable by a fine from the first infringement. The draft law itself does not specify the amount of the fine, so fines of up to 1,000 EUR per violation can be imposed according to the provisions of the German Administrative Offence Law (OWiG).

My practical tip

These obligations to provide evidence and the stipulated deadlines shall not only apply to new employment relationships entered into from 1 August 2022. In the case of existing employment relationships, employers must provide the required evidence within the same deadlines at the request of the employee. Thus, in addition to adapting existing model contracts, the respective information must therefore also be provided for a large number of existing employment relationships. 
We will continue to monitor the legislative process for you and keep you informed. As soon as the final law has been passed, we plan to hold a webinar on this topic to prepare you in the best possible way for the existing need for adaption. 
If you have any questions on this topic, other employment contract or labour law issues, please do not hesitate to contact us.

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