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Home Working in Germany Labor Law German labor law and work contracts
Last update on June 03, 2021

Are you an expat living in Germany? Make sure you know your legal standing with our guide to German labor laws and work contracts.

As the largest economy in Europe, Germany has a whole host of job opportunities for expats of all skillsets. However, if you’re living and working in the country, it’s essential you’re aware of the local labor law and how employment contracts work. To help you out, this expert guides takes a closer look at these technicalities, including redundancy, parental leave, and more.


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In civil law, the party who loses the case has to pay the court fees and the legal expenses of the winning party.

This differs in labor law cases. In the first level of jurisdiction (1. Instanz) each party has to for pay its own lawyer – regardless of which party wins or loses, which can be costly. Therefore legal protection insurance (Rechtsschutzversicherung) is necessary. Note that the insurance is valid from three months after signing for insurance coverage.

Don’t sign anything

A rule of thumb is not to sign anything, even if you think you understand the context. German labour law is extremely complex and riddled with traps. Therefore, it is sensible to ask a lawyer first. The good news is that if your employer pressures you to sign a cancellation contract or else risk redundancy. Then, your insurer must pay for you to consult with a lawyer before signing such an agreement.

Work contract (arbeitsvertrag)

Nearly every work contract consists of general terms and conditions made by the employer pertaining to a large number of employees (Allgemeine Geschäftsbedingungen). The employer has the power and dictates the conditions of the work contract without negotiations between employer and employee. Because the employee’s negotiation position is the weakest, the law (clause 305 ff. BGB – German civil code) protects the employee. This means that not everything that is written in your contract is possible by law. Generally, you are powerless when asked to sign a work contract that contains conditions not permitted by law. But if the conditions aren’t permissible in the contract they may be invalid. In brief, your lawyer will check the contract and identify permissible conditions as well as impermissible ones. The latter do not apply since they are unlawful to begin with.

Often work contracts refer to collective labour agreements. That means the collective labour agreements applies to the work contract even if the employee is not a union member.

Redundancy agreement/ cancellation agreement (aufhebungsvertrag)

Maybe your employer suggests a redundancy or cancellation agreement. If so, they have a simple reason: you should go without “making a fuss” (employment lawsuit). In Germany there is a very strong labour law that protects employees. Caution is due if your employer suggests a cancellation contract. First of all, don´t sign anything!

In 90% of all cases in which employees sign a cancellation contract, they cannot claim unemployment benefits for the first 12 weeks. If the employer offers sufficient financial compensation or other benefits, you could consider signing. However, have a lawyer check the conditions before you do so.

Fixed-term-contract (befristung) and part-time and fixed-term contract Law (teilzeit-und-befristungsgesetz)

  • Without any grounds – two years max. – or four fixed-term contracts (altogether not longer than two years: for instance a consecutive series of six-month contracts).
  • No time lapse between two fixed term contracts can lead to an unlimited contract; a trap for employers which they sometimes step into it. In such a case, the employee can sue the employer and get a permanent contract.
  • When the fixed term contract ends, but the employee continues working and the employer says nothing, the employee automatically gets an unlimited contract. Employers need to watch out for such a situation as in these circumstances, the employee can sue the employer and achieve a permanent contract.
  • With grounds– longer than two years (for instance, the employee is pregnant and is not at work for the next three years (parental leave) – a fixed-term contract is possible. A fixed-term contract is also possible for a project which is estimated to last five years.


  • Versetzung – relocation (transfer of personnel) is possible if your work contract allows for relocation (this also depends on such things as the kind of job or distance from home).
  • Änderungskündigung – dismissal with the option of altered conditions of employment – the employer has to check alternatives before they make the employee redundant. If there were alternatives not taken advantage of by the employer then the employee will win the employment lawsuit.

Making employees redundant – notice of cancellation of work contract (kündigung)

  • Only three-week period for filing suit (3 Wochen Klagefrist).
  • Employer must prove that you received notice.
  • Notice has to be written and signed by the employer – verbal notices are not valid.
  • If you are uncertain whether the signatory has legal power in this instance, you have a maximum of five days to inquire.
  • Three types (operational – betriebsbedingt, behavioural / breaking the rules of the contract – verhaltensbedingt, for reasons which are not based on bad behaviour such as a long illness– personenbedingt).
  • To be protected by the German Employment Protection Act (Kündigungsschutzgesetz – KSchG), the company has to have employed at least 10.5 employees (apprentices do not count) and the employee has to be at least six months “on board”.

Operational notice – economic reasons:

The employer has to prove:

  1. Internal or external causes.
  2. Corporate decision.
  3. Why the job is ending.
  4. Exactly why your job is ending; for example, no other comparable job is available in the company.
  5. Social criteria (e.g., age, seniority, familial reasons, disability) – the weaker win, the stronger have to go.

Maternity protection (mutterschutzgesetz)

  • From the beginning of pregnancy until four months after giving birth, the employer cannot give notice to the employee;
  • type of work allowed is restricted;
  • work is not possible at certain times;
  • working isn’t possible six weeks before giving birth;
  • working isn’t possible eight weeks after giving birth;
  • breastfeeding mothers can claim special breastfeeding breaks of at least half-an-hour twice a day or one hour once a day.

Parental leave (elternzeit)

Good News: You can take elternzeit until your child is three years old – so the third birthday is the first day of work. You decide when you would like to take elternzeit. The employer doesn’t have to agree.

Here are some points to note:

During elternzeit you have a ‘sleeping contract’. This means that your contract still exists but you don´t have to work and your employer doesn´t have to pay. In other words, the two main duties – to work and to pay – both ‘sleep’, so you don’t receive money from your employer. Both parties must, however, observe the other’s rights and duties. That means that both have to be loyal to each other – for instance, the employee may not work for other employers or as a freelancer without asking the employer; otherwise, your employer has the right to fire you.
It is legally possible to work part-time during elternzeit.

You do not have to take all three years at once. If you wish you can take just a few days (which doesn’t make much sense although possible). After all, your employer will want to plan. German law requires that an employee make a decision for a period of two years.

You can take elternzeit from 1 February 2009 until 31 January 2011 or you could split the period from 1 February 2009 to 31 January 2011 as follows: 1 February 2009 to 30 September 2009 and 3 March 2010 to 31 January 2011. Only two blocks can be taken within two years.

If you take elternzeit the period is fixed. The decision you make is binding — you have practically no chance of changing your decision (to prolong or shorten the Elternzeit).

One takes elternzeit, it is not given. That means that your employer doesn’t have to agree with your decision. If they don’t agree with it then it’s their problem, not yours.

(Note: In many cases parental leave or having children is not good for your career. In Germany the attitude to this is ‘medieval’. But if nobody wanted children and wished to continue working then nothing would change. Nowadays, many employees make the choice to work and have children, so there is some hope.)

How to apply
You can’t take elternzeit from one day to the next. Your employer must be informed at least seven weeks in advance.

The letter you need to write goes along these lines:

”Sehr geehrte Damen und Herren,

ich nehme elternzeit für meinen Sohn …., geboren am …., für die Zeit vom … bis zum ….“

You must sign the letter yourself.

Fathers also can take elternzeit. It may not be good for your career, but at least you’re being a pioneer!

Part-time work during elternzeit

If you take elternzeit you can work part-time, but no more than 30 hours per week (75 percent). It makes no difference if you work part-time for your employer or freelance for another employer – 30 hours per week is the maximum. To work as a freelancer you need your employer’s permission, so ask first.

You could qualify for ‘elterngeld‘. It is paid by the state and can be paid from the date of birth until the end of the 14th month. If you want to get elterngeld, ask the ‘elterngeldstelle‘. They can tell you how much it might be in your case.

Work after elternzeit

The employer must take you back because you still have a working contract. Part-time work after Elternzeit is also possible.

In many cases part time work is not possible, because the employer doesn´t want it due to their belief that you will be absent frequently due to your children being ill or other child-related reasons for being off work. The employee may also be offered a contract with unfriendly conditions. Sadly, you might also hear the argument, “Management positions need employees who are able to work around the clock.” It isn’t easy to have children and develop a career in Germany!

Certificate of employment (zeugnis/ zwischenzeugnis)

When there is a change in your working condition, such as relocation, a new boss, maternity leave or elternzeit, ask your employer for a ‘zwischenzeugniss‘ (interim performance review). Have it checked by a lawyer.

Warning Letter (abmahnungen)

One warning could be enough to give notice in the next similar case. It must contain:

  • an exact description of what went wrong;
  • an exact description of your duties;
  • a comment from your employer indicating he will not tolerate a repeat of this performance.

So what should you do when you receive a warning letter? Surprisingly, doing nothing is the best way to go! Most employees don´t understand this, because they feel the warning is not correct and violates their rights. But a warning ‘offers’ a lot of traps to employers. Even an insignificant error renders the warning letter ineffective. If the employer only realises that  in the lawsuit it’s too late for them. So employees should check a warning with a lawyer before doing anything else.