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Business Transfers in Germany – New Decisions by the Federal Labor Court with Potential Great Impact

Derived from EU Directive 2001/23/EG, the German law on Transfer of Business (“TUPE”) protects employees in a business transfer situation. As a starting point, TUPE transfers the employment of affected employees from one employer to another on their existing terms and conditions. However, a potential  impact of recent decisions by the German Federal Labor Court on TUPE is that, even many years after restructurings and – supposedly – concluded transfers of business transactions, employees may claim ongoing employment with their original employer (”transferor”) if it is held that no transfer of business actually occurred.

The case law in this area has continued to develop based on rulings by the Federal Labor Court/ (“BAG”). Recently the BAG rendered two decisions (BAGE 8 AZR 265/15 and BAGE 8 AZR 309/16) with far reaching consequences for companies doing business in Germany.

How long after a “transfer” will the Courts intervene?

In the most

GDPR HR series: Data breaches – what you need to do when you discover a data breach

Welcome to the third post in our ‘GDPR HR Issues’ blog series. Drawing on key insights from across Bryan Cave Leighton Paisner’s global Employment & Labor team, the series highlights key GDPR issues affecting employers.

This blog focuses on new obligations imposed by the GDPR to notify the relevant supervisory data protection authority (“DPA”) and those individuals whose data have been violated, when an employer becomes aware of a violation affecting personal data that it processes (a “data breach”).

If an employer discovers that the personal data it holds concerning its employees is, for example, accidentally accessed by a third party without authorization, what practical steps should it take to manage such a breach?

  • What is a “data breach”?
  • A personal data breach occurs when a breach of security affects the personal data’s confidentiality (unauthorized disclosure or access to the data), integrity (data is involuntarily or unlawfully modified

    New developments on time restricted employment contracts – more “red tape” and further restrictions

    The “Große Koalition” (the Grand Coalition) recently concluded a variety of legislative projects which will result in additional headaches, administrative hurdles, thresholds and new deadlines for HR professionals and employment experts. Traditionally, labor and employment laws in Germany have tended to be employee friendly. Now it appears that the few remaining employer-friendly laws enacted in the early 1980s to improve overall employment in Germany will also be reversed.

    One area subject to challenge is time restricted employment. Until now, German employers could use time restricted employment even without substantive reasons for up to two years. This concept, known by the somewhat technical German term “sachgrundlose Befristung”, became extremely popular due to wide coverage which extended outside the legal press.

    Federal Constitutional Court narrows use of time restricted employment contract

    In June 2018, the Federal Constitutional Court in Germany (“Bundesverfassungsgericht”) overruled a 2011 judgment of the Federal Labor Court (“Bundesarbeitsgericht”). The

    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

    GDPR HR Series: Subject Access Requests Under the New Regime – What You Need to Know

    Welcome to the 2nd post in our ‘GDPR HR Issues’ blog series. Drawing on key insights from across Bryan Cave Leighton Paisner’s global Employment & Labor team, the series highlights key GDPR issues affecting employers.

    With the General Data Protection Regulation (‘GDPR’) coming into effect today, employers with EU-based staff need to ensure that they properly comply with the new regime. Failure to do so can result in significant fines and disruption to your business.

    This blog focuses on the changes made by GDPR to a fundamental data protection right – an employee’s right to find out what information their employer holds on them by making a data subject access request (‘DSAR’).

  • Complying with a DSAR can involve a lot of work and significant cost, not least because the request may require the employer to search in many different places for the employee information, which by its nature may not
  • Post-Contractual Non-Competes – a never ending story

    April 30, 2018

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    There are few clauses in employment contracts more heavily debated than Non-Competition Clauses (post-contractual non-competes). While employers tend to include them rather easily in order to protect company secrets beyond the term of an employment, strict and mandatory provisions under German law differ from those found in most other jurisdictions. For post-contractual non-competes to be enforceable, an entire catalogue of requirements must be met, including a mandatory compensation payment of at least 50% of the employee`s total earnings for the maximum term of two years – to name just the two most prominent requirements. Because of the potential financial impact on employers, it is highly advisable to carefully consider whether post-contractual non-competes are necessary at all and, if so, whether they will be enforceable.

    Two recent decisions in January 2018 by the Federal Labor Court/ BAG (10 AZR 392/179) and by the Appeals Court/ LAG Düsseldorf (Az: 7 Sa 185/17)

    GDPR HR Series: Employee Information Notices About Personal Data – Your Key Questions Answered

    Following the combination of the Labor & Employment practices at Bryan Cave and BLP, Bryan Cave Leighton Paisner’s combined team now includes over 120 employment lawyers in offices across the US, UK, France, Germany and Russia, with excellent capabilities and a strong network in Asia. Committed to collaboration, and with our strengthened offering, experience and substantive knowledge advising clients on GDPR, we bring you our new ‘GDPR HR Issues’  blog series. Drawing on key insights from across our team, the series highlights the key GDPR issues affecting employers.

    The General Data Protection Regulation (‘GDPR’) comes into force in less than two months. From an HR perspective it imposes data obligations on any US, European or other employer with EU-based staff. Failure to comply with the GDPR regime can result in significant fines and disruption to your business. Are you ready?

    Our first blog deals with ‘privacy notices’ aimed at staff.

    Less than 90 days to go – are you GDPR compliant?

    “GDPR – please not again …” In recent times there is hardly any other legal topic more often written and talked about than the new EU General Data Protection Regulation (“GDPR”).

    In light of the severe penalties and with less than 100 days until the GDPR goes into full effect (on May 25th, 2018), it is time for U.S. companies to take steps to prepare. Below are some key points to consider and pragmatic to-dos to assist in assessing whether your organization is ready for GDPR compliance.

    • GDPR may apply to U.S.-based companies with zero employees and no offices within the boundaries of the EU territory

    While the EU Data Protection Directive of 1995 did not apply to businesses outside the EU territory, this is no longer the case under GDPR.

    Now any business may be subject to the new law if it processes personal data of an

    Works Council Elections in Germany – Avoid mistakes and be aware of special termination protections! Final Part III

    February 16, 2018

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    March 2018 is getting closer and works council (re)elections will again be on the agenda in Germany. We started this three-part blog last November with an overview to this topic and the second part highlighting the election proceedings. See link to November 7, 2017 blog and link to January 11, 2018 blog. In this final Part III, we briefly address the potential risks of reruns of elections due to mistakes and provide you with an overview of the special termination protection resulting from works council elections.

    Avoid mistakes – elections can be challenged or even be null and void!

    German employers are well advised to closely monitor the election proceedings. In the event of substantial breaches of the election process, the elections can be null and void, i.e., if such serious mistakes occurred that no democratic process was granted, or in less obvious breaches, elections can be challenged

    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

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