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German Bureaucracy Reduction Act is to eliminate “bureaucracy burnout” also in labor law

  • 09/04/2023
  • Reading time 3 Minutes
Labor Law Law

The coalition agreement already stipulated the parties’ intention to introduce a new bureaucracy reduction act. The cabinet’s closed meeting in Meseberg marked the “kickoff for a turnaround in bureaucracy”, as announced by Federal Minister of Justice Marco Buschmann.

According to the Federal Minister of Justice, many companies in Germany are suffering from “bureaucracy burnout” because the countless European and federal regulations are hindering them in their actual activities.

The IV Bureaucracy Reduction Act (“BEG IV”) is intended to remedy this situation, inter alia also in connection with labor law regulations. The Cabinet’s white paper provides for the following amendments relevant to labor law: 

  • The electronic form or – if appropriate – the text form is to become the new standard form in the German Civil Code (“BGB”). Therefore, numerous written form requirements are to be cancelled as far as possible. The written form is to be retained only as replacement for the electronic form. Art. 126 et seq. BGB will be amended. The particularities in labor law are to be taken into account. What this is supposed to mean in detail, however, has not been mentioned in the White Paper.

    Even under the current legal situation, employment contracts do not have to be concluded in writing. This does not apply to fixed-term agreements. The German law on the documentation of conditions governing an employment relationship (“NachwG”), which has only been adopted last year, also requires the written form in order to verify the essential employment conditions. In future, the written form will be no longer required provided the employment contract has already been concluded in a legally required electronic form replacing the written form. The NachwG will be amended accordingly.
     
  • Amendments to contracts and amendment agreements can also be concluded in electronic form. However, this does not apply to all industries. The industries listed in Art. 2a (1) of the German Law to Combat Undeclared Work and Unlawful Employment (SchwarzArbG) are excluded from such regulation. 
     
  • In future, references (Art. 630 BGB) can be signed electronically. 
     
  • The German Working Hours Act (“ArbZG”) and the German Youth Employment Protection Act (“JArbSchG”) are to be adjusted in order to ensure that the relevant notification obligations will also be met if the demanded information on the information and communication technology customary in the company, such as the intranet, can be provided electronically. However, this applies only if all employees have access to such technologies. 
     
  • It must be possible to create and send documents electronically as part of the administrative procedure under the Youth Employment Protection Act.
     
  • The “Ordinance on the Prohibition of the Employment of Young People under 18 with Morally Endangering Activities” will be repealed, as Art. 22 (1) No. 2 JArbSchG already contains a corresponding provision.
     
  • The written form requirement in the German Federal Act governing Parental Allowance and Parental Leave (“BEEG”) for applications to reduce working hours and such applications’ rejection as well as the assertion of the entitlement to parental leave are to be replaced by text form. 

It is unclear when the law will actually be introduced, and whether this will happen this year. It will also be decisive for which contracts/declarations text form will be sufficient in the future, as the qualified electronic form does not bring real relief for all companies.

Experts are debating whether the German government’s key points – some of which are very detailed – actually represent a major step toward reducing bureaucracy. It remains to be seen what specific regulations the BEG IV will contain.