Germany: Employment Law Update - December 2012 (Germany)

This is a contribution to the European Employment Law Update - December 2012. Please find the other contributions by country in the menu to the left.

An employee is temporarily bound by the employer's unjustified instructions until a final court decision determines that the instruction was in fact unjustified and hence non-binding.

- Impact date: 22 February 2012

The Federal Labour Court (Bundesarbeitsgericht) has decided, contrary to existing case-law, that an employee cannot just defy unjustified instructions given by the employer. Instead, the employee is obliged to take legal action against the employer's unjustified instructions.

In the meantime, the employee has to follow the employer's unjustified instructions, until the labour court decides by final judgement that the instruction was unjustified and therefore non-binding.

With this decision the Federal Labour Court has deviated from established case-law in Germany, namely that an employee is not bound by unjustified and invalid instructions given by the employer.

This change in case-law can lead to severe consequences for the employees.  According to the new ruling of the Fifth Chamber of the Federal Labour Court, an employee could face the risk of receiving a written warning or even a dismissal if he refuses to follow the employer's unjustified instructions.

(BAG, decision dated 22/02/2012 – 5 AZR 249/11)

The conclusion of a fixed-term employment contract can be invalid due to abuse of the law in spite of a given justified reason for the limitation of the employment contract.

- Impact date: 18 July 2012

The Federal Labour Court has confirmed its previous case-law that the conclusion of a fixed-term employment contract is, in principle, justified if the employee is hired to fill in for another employee. 

This is the case even if the parties agree upon several fixed-term employment contracts in a row due to the permanent need for a substitute.

However, the Federal Labour Court has held that a limitation of an employment contract can be invalid in exceptional cases (despite an exception contained in the Part-Time and Limited Term Employment Act if the agreed limitation has to be considered an abuse of law).

The Federal Labour Court clarified (in two parallel proceedings), that:

such an abuse of law can be assumed if the parties concluded thirteen fixed-term em-ployment contracts in a row during a period of eleven years; whereas 

the conclusion of four limited employment contracts in a row for a duration of altogether more than seven years cannot be considered abusive.

(BAG, decisions dated 18/07/2012 – 7 AZR 443/09; 7 AZR 783/10)

The dismissal of a public service employee can be based on off-duty activities for the NPD (National Democratic Party of Germany).

- Impact date: 6 September 2012

The Federal Labour Court has decided that public service employees have to have a certain level of constitutional loyalty even if they are not subject to an increased duty of loyalty like civil servants. The membership in or the activities for the National Democratic Party of Germany are no valid grounds for a dismissal as such, even assuming anti-constitutional attitudes of the organisation. Public service employees are, however, not allowed to call on the elimination of the state, its constitution or its institutions or to insult the state even if the employee performs such activities outside of the work place.

(BAG, decision dated 06/09/2012 – 2 AZR 372/11)

New regulations for so-called mini-jobbers

- Impact date: 1 January 2013

The German Parliament has decided for new rules that provide for a higher income limit for so-called mini-jobbers. At present, the remuneration from a low-income job is tax-free provided that the employee's monthly salary does not exceed a maximum limit of EUR 400.00. The German Parliament decided to increase this maximum income limit from EUR 400.00 to EUR 450.00 with effect as of 1 January 2013.

This change of law will lead to a further increase of the number of low-income jobs. At present, there are over 7 million employees in minor employments with a maximum income of EUR 400.00.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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