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Fines for employers for infringing documentary evidence requirements

As part of the implementation of EU Directive 2019/1152 on working conditions, the Act on Notification of Conditions Governing an Employment Relationship (Nachweisgesetz, NachweisG) was updated. While, up to now, the NachweisG provided for the essential elements for an employment relationship to be specified without any fines, now, numerous information obligations have been laid down and heavy fines of up to €2,000 will be imposed on employers for each infringement.

Information obligation

In future, it will no longer be sufficient to simply make reference to statutory notice periods in the employment agreement. In fact, it will be necessary to specify the specific notice period for the respective length of service. By contrast, it will still be possible to make reference to a collective agreement without defining it. It will also be mandatory to provide information about the written form requirement for a notice of termination and about the three-week period for filing an action following receipt of a notice of termination from the employer.

It should no longer be possible to generally agree probationary periods of six months if this period appears to be disproportionate for the overall length of a fixed-term employment relationship. What that specifically means for fixed-term employment relationships has not been laid down. For those involved, the probationary period allows for the possibility of the short two-week notice period, insofar as this is agreed. The applicability of the German Employment Protection Act only after six months shall apply regardless.

Details on the individual remuneration components, such as, basic remuneration, bonus payments, supplements and allowances as well as overtime payments will have to be provided separately together with the respective payment dates. Besides the agreed working time, from now on, the agreed breaks and rest periods as well as shift systems and the requirements for shift changes will have to be set out in writing.

Please note: If an employer does not comply with the documentary evidence requirements and does not present the essential elements of the agreement in written form then, depending on the infringement, they can expect fines of up to €2,000.

A change in the case of expiring time limitations

Employees with fixed-term employment relationships may indicate that they want to continue the employment relationship after the end of the first six months. In the individual case, the employer would then be obliged to provide a justification within one month as to why continued employment cannot be considered. The same applies in cases where temporary employees are deployed. The requirements for the justification by an employer have not been laid down. Having regard to private autonomy, the requirements should however not be set too high.

Please note: In the case of new agreements, the above-mentioned notification obligations should, in cases of doubt, be fulfilled on the first working day; in the case of legacy agreements, employers would have seven days to fulfil their notification obligations once requested to do so by employees.

Fines for infringements

If employers do not comply with the new obligations this would not actually result in the employment agreement becoming invalid. However, the employers would risk being fined. A review can occur in the course of a tax audit, customs checks or following reports by third parties. Besides fines, the employer would have to bear the respective burden of proof as regards any terms of the agreement.

Recommendation: The changes addressed here are examples and are non-exhaustive. Employers would be well advised to update their employment agreement templates, or to have appendices with the respective information available.

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