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Advocate-General’s opinion may have significant implications for holiday law in Germany

June 1, 2018

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Under German law, employees generally apply for holiday during the holiday year so that their claims can be fulfilled. If they fail to do so, their entitlement lapses at the end of the year. When employees leave their firms, they cannot claim compensation for unused holiday. A recent Advocate-General’s opinion has now thrown doubt on this practice.

This area has been under scrutiny, as several Regional Labour Courts have granted employee claims for compensation in the form of a substitute holiday (or compensation) specifically in cases where the employee has not applied for holiday during the year. Up to now, the question of whether the employee is also entitled to compensation after failing to submit the appropriate holiday request was unresolved because the German Federal Holiday Act does not contain a corresponding provision.

Two cases on this issue presented by the Federal Labour Court and by the Higher Administrative Court of Berlin-Brandenburg (Case Nos.: C-619/16 and C-684/16) are currently being considered by the European Court of Justice (ECJ). In one, an employee sued a former employer for damages for untaken holiday although the employee had not applied for leave during the relevant calendar year. The claim was upheld by the Regional Labour Court. However, on appeal the German Federal Labour Court had its doubts and asked the ECJ to consider whether a holiday request is required before an employee is entitled to be compensated for untaken holiday at the end of the period under consideration.

Advocate-General Yves Bot presented his

Serious changes for fixed-term employment in Germany announced

The formation of a new government in Germany has not yet been completed however since February 7, 2018, the coalition agreement has been signed. Such political guidelines were consistently implemented during the last legislative periods.

The changes affect fixed-term contracts which require no objective grounds for limitation. The maximum permissible duration of such fixed-term contracts will be reduced from 24 to 18 months. While previously a three-time extension of these contracts was allowed, this should now be possible only once within those 18 months.

The permitted number of such fixed-term employment contracts will also be limited. Employers with more than 75 employees should only be allowed a maximum of 2.5 percent of the workforce for non-material fixed-term contracts. Exceeding the quota leads to the ineffectiveness of any further fixed-term employment contract, and to permanent employment contracts.

Fixed-term contracts with objective grounds for limitation, in practice used if the employee has been previously employed or the maximum duration of fixed-term employment contracts as per above has expired, are also affected by the new regulations. If the employee previously had an indefinite, or one or more fixed-term employment contracts with a total duration of five years or more with the same employer, a renewed time limit is prohibited – even if there are recognized objective grounds for the limitation. An important point to note is: The maximum period of five years, also includes periods during which the employee was lent to the employer by other companies.

The announced changes to the law

Have you heard of our Scandinavian Desk? Interested in Labor Law?

September 25, 2017

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Based in our Hamburg office, our Scandinavian desk advises Scandinavian companies and individuals operating in Europe as well as non-Scandinavian clients doing business in Sweden and other Scandinavian countries.

In this article, Staffan Wegdell (Swede) and Martin Lüderitz elaborate on the differences between Swedish and German labor and employment law, with a focus on how to terminate employees for performance issues.

To read the full article, please click here.

 

Act on Transparency of Pay Structures – Another hassle for Companies in Germany

July 17, 2017

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Although Germany faces next elections in September, the current government still establish new employment law acts, inter alia the new Act to Promote Transparency of Pay Structures (Entgelttransparenzgesetz) which came into effect July 6 2017.

In an effort to advance pay equity between men and women who perform the same work or work of equal value, the new act will allow employees, starting after January 6 2018, to claim for information about their pay structures and impose reporting obligations on particular companies.

Companies who employ more than 200 employees may face claims for information about

  • the average of monthly gross salary of at least six colleagues of the other gender who perform the same work or work of equal value,
  • information about up to two remuneration components (e.g. bonus), and
  • the criteria and procedure for the determination of the remuneration.

Companies which do not provide the requested information within three months are at risk to be deemed to act discriminatory and to may be suited for paying the difference to the salaries of comparable employees.

Besides, employers with more than 500 employees are obligated to implement operational review procedures and safeguards to ensure their compliance with equal pay principles, starting 2018. This includes information into their management report in terms of the commercial code (handelsrechtlicher Jahresbericht) about their intended measures to promote gender equality and to achieve pay equity between men and women.

There is a lot of uncertainty among German companies how to comply with this new

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