International aspects of German employment law – What you need to know
German employment law regulates the relationship between employers and employees and aims to create a fair and equitable labor market.
But when is German labor law applicable? Does German labor law apply when you are employed with a German company abroad? And does German law apply when an international company employs people within Germany? Read on and find out
How good is the protection of employees under German labor law?
Germany is known for its strong labor law system, which offers comprehensive protections for employees. These protections include protection against dismissal, working time protection, vacation entitlement and protection against discrimination in the workplace. German labor law aims to create a balance between the interests of employers and those of employees while ensuring a fair and secure labor market.
Overview of the most important employee rights under German labor law
German labor law guarantees a wide range of rights for employees. These include:
Protection against dismissal:
The German Protection against Dismissal Act (Kündigungsschutzgesetz – KSchG) is a core piece of German employment law that protects employees from unjustified dismissal. It applies to employment relationships lasting longer than six months and in companies with more than ten employees. The KSchG stipulates that dismissals must be socially justified, for example for reasons relating to the person or conduct of the employee or for urgent operational requirements.
Working hours:
The German Working Hours Act (Arbeitszeitgesetz – ArbZG) regulates the maximum permitted working hours, breaks and rest periods. It states that the working day may not exceed eight hours, whereby an extension to up to ten hours is possible, provided that eight hours are not exceeded on average over six months or 24 weeks. It regulates the maximum working hours and breaks.
Vacation entitlement:
The German Federal Leave Act (Bundesurlaubsgesetz – BUrlG) ensures the entitlement to paid annual leave. Employees have a minimum entitlement to 20 working days’ leave per year with a 5-day week. This statutory vacation entitlement is intended for recreation and to promote the health of employees.
Maternity protection and parental leave:
German laws on maternity protection and parental leave are designed to support families during the important first years of a child’s life, both through financial assistance and protective provisions in the employment relationship. They allow parents to care for their newborn without having to worry about their professional future. These laws offer extensive rights and entitlements for expectant and new parents to protect the health of the mother and child and to promote the compatibility of family and career. These include, for example, maternity protection periods, maternity pay and protection against dismissal. The entitlement to parental allowance and part-time employment is also regulated.
Equal treatment and protection against discrimination:
Protection against discrimination on the basis of gender, origin, religion, disability, etc.
Which employment law applies to foreign employers in Germany?
If you work for a foreign employer in Germany, German employment law is generally applicable. This applies in particular if the focus of your work is in Germany. However, there are exceptional cases in which the law of another country may apply due to special agreements or international regulations.
Generally, the following factors will be considered when establishing which law is applicable:
Choice of law
Generally, the parties to a contract are free to choose the law that shall be applicable to their contract. Parties may even choose a law that is not even directly connected to them or the work to be performed under the contract. For example, a Spanish employee and a German company may choose Italian law for their contract. However, European law dictates that the protection of the employee must always have the minimum standard that would apply, if no choice of law had been made. In Germany, this is called “Günstigkeitsprinzip” [i.e. prinpciple of the applicability of the most advantageous law]. This means that in a case where an employer and an employee have agreed on a specific law, German courts will check which law provides the more advantageous protection for the employee: The law of choice or the law that would be applicable had no choice of law been made.
Lack of choice of law: Habitual place of work
If no law has been chosen, other factors need to be considered to determine the applicable law:
Art. 8 of the Rome I Regulation states that the law of the country “in which or, failing that, from which the employee habitually carries out his work in performance of the contract” shall apply. Temporarily being employed in another country does not affect the determination of the habitual place of work as Art. 8 also states that “(T)he country where the work is habitually carried out shall not be deemed to have changed if he is temporarily employed in another country”.
In certain scenarios it can be difficult to determine the habitual place of work, for instance in case of sailors.
Which employment law applies abroad with a German employer?
If you work for a German employer abroad, the applicability of German employment law depends on various factors, including the duration of the posting and the contractual agreements.
For temporary placements abroad (Entsendung) ususally the contract of the employee will not be changed. Hence, in these cases, the German contract usually remains valid. Supplements to the contract may regulate the stay abroad.
In cases of a more permanent placement abroad, often a separate contract with a local company (often belonging to the same group of companies) is signed. In these cases the “base” contract in Germany remains valid, but both parties are relieved off their duties under the contract for the duration of the employment abroad. In these cases it is often unclear whether the law of the “base contract” or the law of the local contract (abroad) is applicable.
Under European law, both could be applicable as even a more permanent (local) work contract could still be deemed a placement, which would lead to the law of the “placing” country to be applicable. One would have to look at all the facts of the individual case to be able to dertemine the applicable law in such case.
Which employment law applies to working from home abroad?
With the increasing trend towards working from home, the question of applicable employment law also arises when employees work for a German employer from another country.
In principle, the employment law of the country in which the employee has their usual place of work may apply. However, the determination of the applicable law depends on the circumstances of the individual case, including the duration of the stay abroad and the contractual agreements. It is advisable to seek legal advice in advance to avoid surprises.
Conclusion
Employment law, both in Germany and internationally, is a complex field characterized by a multitude of national and international laws, regulations and agreements. Whether you are working in Germany for a foreign employer, working abroad for a German employer or working from a home office abroad, it is crucial to be aware of the applicable legal provisions. “corum Rechtsanwälte” is at your side to advise and support you in all matters of employment law so that you can fully exercise your rights.
Further questions?
Do you have any further questions regarding employment law in Germany? Would you like to have another aspect covered in this article? Or do you have any other legal subject that troubles you in Germany? Then drop us an email.
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