Electronic signature on fixed-term employment contracts

Generally, employment contracts are not subject to the written form. An employment contract can eventually also be concluded orally in order to be effective. Naturally, it makes sense to conclude an employment contract in writing for evidentiary purposes. The German law on notification of conditions governing an employment relationship (NachwG) also requires that an employment contract’s essential terms must be stipulated in writing. However, a breach of the NachwG’s provisions does not render the employment contract invalid. At most, such breach might entail claims for damages.

If written form is required, this can be replaced by electronic form in accordance with Art. 126 (3) of the German Civil Code (BGB), unless otherwise required by a statutory provision. Electronic form means that the document must be provided with a qualified electronic signature by the issuer (Art. 126a BGB). The qualified electronic signature is regulated in an EU regulation (EU No. 910/2014). The certificate replaces the handwritten signature in legal transactions if this is provided for by a legal regulation or agreed between the parties. The qualified signature is issued by qualified trust service providers that are certified by government-designated bodies. A card reader, a signature card and a certificate are required. The qualified signature must be distinguished from the so-called simple electronic signature which does not require any special technical precautions. It is created using freely available software or an Internet browser.

Termination agreements and notices of termination must be declared or concluded in writing in accordance with Art. 623 BGB. The qualified electronic signature is not permitted in this case (Art. 623, 2nd half sentence BGB).

Pursuant to Art. 14 (4) of the German Part-Time Working and Fixed-term Employment Act (Teilzeit- und Befristungsgesetz - TzBfG), fixed-term employment contracts must also be in writing. The provision does not contain any regulation as to whether the qualified electronic signature is sufficient.

On September 28, 2021, the Berlin Labor Court has now ruled - 36 Ca 15296/20 - that a simple electronic signature on a fixed-term employment contract is not sufficient. However, the Berlin Labor Court did not decide whether a qualified electronic signature would have been sufficient, since the employment contract had not been provided with a qualified electronic signature. However, according to the provisions of Art. 126 BGB, Art. 126a BGB, such a signature would be sufficient.

The labor court assumed that the simple electronic signature did not comply with the written form requirement and, therefore, the parties did not enter into an effective fixed-term contract. Consequently, an unlimited employment contract was concluded instead of the intended fixed-term employment contract. An appeal against the decision is possible. It remains to be seen how the Berlin-Brandenburg Regional Labor Court will decide.  

Practical Tip

In order not to risk for the fixed-term being invalid, a fixed-term employment contract should be signed by both parties. In case of doubt, this also includes all employment contracts containing an age-related limitation, i.e. the employment contract’s automatic termination upon reaching the statutory retirement age. Alternatively, a qualified electronic signature is possible.