Adjustment of employment contracts due to amendments to the Nachweisgesetz (NachwG)

Essential terms and conditions of employment

a) Additional information required

The previous mandatory disclosures under Section 2(1) sentence 2 of the Nachweisgesetz is extended to include the following points:

• The procedure to be followed when terminating the employment relationship (including the period for bringing an action for protection against dismissal);
• In the case of fixed-term employment relationships, also the end date;
• If agreed, the possibility to free choice of workplace;
• If a probationary period is provided for, the duration of the agreed probationary period;
• Separate presentation of the components of remuneration (including remuneration for overtime, bonuses, allowances, premiums and special payments as well as other components of remuneration) and their due dates;
• The method and form of payment;
• The agreed rest breaks and rest periods; 
• In cases of agreed shift work: the shift system, the shift pattern and the conditions for shift changes;
• Where an employee may be “on-call”: The agreement with the employee that they will carry out work in accordance with the workload; the minimum number of hours for which they will receive remuneration; the time frame (reference days and hours) set for the performance of the work; and the period within which the employer must provide advance notice of the workplace for carrying out the work;
• The options for working overtime and the conditions that apply; 
• The extent of the right to training provided by the employer;
• Where there is a company pension plan, the name and address of the external pension provider, if applicable;
• A general reference to the collective agreements, works or service agreements applicable to the employment relationship as well as regulations of commissions with equal representation which determine working conditions for church employers on the basis of church law.

b) Written form and time of delivery

As before the information must be in written form, the copy must be signed by the employer and handed over to the employee.

In contrast, transmission in electronic form, e.g. using electronic signatures (e.g. DocuSign), is expressly excluded. On this point, the German legislator has dispensed with the option of digitizing HR processes provided for in the Directive. This is likely to be particularly relevant for international companies, where digital contract execution has become common practice. 

In the case of new hires, the legislation provides for staggered deadlines for providing the information to the employee. On the date that the employee commences  work, information relating to the name and address of the contracting parties, the amount of remuneration and the agreed working hours must be provided. Previously, the employer had up to one month after the agreed employment start date  to do this. Seven days after the commencement of employment at the latest, further information must be provided, relating to the place of work or the details relating to overtime and its conditions. All other information must be provided no later than one month after the agreed start of the employment relationship. In the event of a change to the essential terms of an existing employment contract, the employer must inform the employee in writing no later than the day on which the change takes effect. Changes in the law or in collective agreements or company or service agreements still do not have to be notified in writing. 

c) Existing contracts

Employment contracts already existing on July 31, 2022 (“old contracts”) do not have to be amended. However, following a request by an existing employee, the employer must provide them with the majority of the information within seven days of the request. The other information (e.g. the reference to the time limit for bringing an action) must be provided within one month of receipt of the request at the latest. 

d) Penalties

In the future, violations of the provisions of the Nachweisgesetz will constitute an administrative offense that can be punished with a fine of up to EUR 2,000 per contractual condition. An employer is deemed to have committed an administrative offense if it fails to hand over the essential terms of the contract, or fails to do so in the prescribed manner or in good time. 

e) Notice of termination procedure

Of particular importance are the newly regulated elements of proof with regard to the termination procedure under section 2(1) sentence 2 number 14 NachwG. Whereas under the previous statutory provision only notice periods had to be stated, the legislator has now extended this to the entire "procedure to be followed in the case of termination".

However, this provision is likely to be interpreted restrictively. Accordingly, it should be sufficient to refer to the statutory provisions that are relevant for any termination and essential for the employee to enforce their rights. In any case, reference must be made to the written form requirement (section 623 BGB), the notice period (section 622 BGB or deviating employment contract or collective agreement) as well as the period for bringing an action for protection against dismissal (Sections 4, 7 Kündigungsschutzgesetz – KSchG).

With regard to the information on the dismissal provisions required in the future, it should be noted that the three-week period for bringing an action for protection against dismissal will also commence and, if applicable, expire if there is no reference to this period in the employment contract. However, the employee may be able to claim damages if the employer failed to mention it in the employment contract.

Amendment to the Part-Time and Limited Term Employment Act

a) On-call work

In the future, employers are required according to Section 12 (3) of the Part-Time and Limited Term Employment Act (Teilzeit- und Befristungsgesetz – TzBfG) to provide the employee with a reference time frame within which the employer can call on the employee to work and the employee must expect such a call. If this does not happen, the employee is not obliged to perform the work l. This provision is in addition to the minimum notice period also regulated there. It is intended to improve the predictability of the performance of  on-call work for the employee by specifying reference hours and reference days (example: Monday to Friday, 9 a.m. to 5 p.m.).

b) Probationary period

The newly inserted section 15 (3) TzBfG regulates the duration of the probationary period in relation to the duration of the employment relationship. If the duration of the probationary period is disproportionately long, the probationary period will be invalid, which means that the shortened notice period under Section 622 (2) of the German Civil Code does not apply, so that the basic notice period of four weeks to the fifteenth or to the end of a calendar month applies.

Conclusion

Employers should review existing employment contract templates with a view to setting out the essential terms of employment in order to avoid fines. The contract templates commonly used up to now generally do not meet these new requirements. Of less practical importance are the obligations towards employees already hired until 31 July 2022. However, care should be taken to ensure that if an employee actually requests this, a corresponding document is handed over within the legal deadlines.