The Christian Democratic Union of Germany, the Christian Social Union in Bavaria and the Social Democratic Party of Germany recently concluded negotiations for a new grand coalition. The 177-page coalition agreement contains very specific proposals for changes to labour law, including with regard to the maximum duration of successive fixed-term employment contracts, substantial restrictions for fixed-term contracts and employees' entitlement to part-time work for a limited period.
The Pay Transparency Act bundles together some regulations and requirements that had already been established and is intended to close the adjusted gender pay gap. That the act's practical relevance has proved limited thus far can be explained by the fact that it was not possible to assert the information claim until January 6 2018. Nevertheless, it should be kept in mind that the legal consequences of failings to provide information have yet to be clarified.
The Act to Strengthen Company Pensions has introduced pure defined contribution schemes for the first time. This means that employers will not promise specific or calculable retirement benefits, but merely undertake to pay specific contributions to an external pension provider. However, it remains to be seen whether the legislature has managed to strengthen and further spread company pension schemes as intended based on the act.
Since the Berlin Higher Regional Court referred the question to the European Court of Justice of whether it is compatible with EU law that only workers employed in Germany are eligible to participate in the election of workers' representatives on the supervisory board, Germany's legal sector has been eagerly awaiting an answer. The answer is now available and is likely to allow the legal sector to breathe a sigh of relief.
In reorganisation scenarios, German employers must comply with a number of statutory regulations. If a reorganisation involves redundancies and if certain thresholds are exceeded in this respect, special attention must be paid to the regulations aimed at preventing collective redundancies. Any notice of dismissal given in violation of the regulations to prevent collective redundancies contained in Sections 17 and 18 of the Act on Protection Against Unfair Dismissal is invalid.
Discussions concerning the reform of temporary employment planned by the coalition government characterised 2016. It was intended that the Employee Assignment Act, the Works Constitution Act and the Civil Code be readjusted in order to "align temporary work with its core function and prevent the abuse of structures with contracts for work and services". As the legislative process has since been completed, it is now clear that in 2017 the temporary employment industry will face substantial changes.
The Federal Cabinet recently passed the Transparency of Remuneration Act, which is supposed to come into force before Summer 2017. The highly controversial preliminary draft was revised on several occasions. The requirement that the minimum remuneration be stated when advertising a position and an additional codetermination right be included when "implementing measures in terms of actual remuneration equality between women and men" were omitted and not replaced.
Data transfers between group companies are often regarded as an internal matter and this appears to be true, especially if the parent company cites plausible reasons for its inquiry. However, the transfer of personal employee data between legally independent companies in a group is not necessarily permissible. The Federal Data Protection Act permits the collection, processing and use of personal data only if it is permitted by law or if the data subjects have given their consent.
The legislative period is slowly coming to an end, and the last legislation projects under the coalition agreement are still being implemented. Planned legislation for 2017 includes the reform of the Temporary Employment Act. The Federal Cabinet has also passed a bill to revise legislation on maternity protection, which is intended to adapt maternity protection to today's work environment, taking new developments in health science and society into account.
As compliance breaches cannot be prevented, their disclosure through anonymous reports is important. There are different ways and means for a company to communicate with a potential whistleblowing employee, but the ombudsman model is frequently used in practice. The Bochum Regional Court recently decided that the confiscation provision in the Code of Criminal Procedure does not protect compliance ombudsmen with regard to obtaining information from anonymous whistleblowers.
Despite strict compliance regulations, it is customary to offer small gifts of friendship to business partners, especially at Christmas. Successful collaboration is based on trust. However, caution is required – non-compliance may have labour and criminal law consequences. Under criminal law, there are no objections to the common practice of offering small gifts on certain occasions. But to avoid the impression of bribery, employees should consult the company's compliance regulations.
Recent decisions of the Frankfurt am Main Regional Court and the Berlin Regional Court have caused uncertainty for German groups of companies with subsidiaries in Europe. In particular, the decisions concern businesses with employees and subsidiaries within Europe, but outside Germany. If it turns out that restricting German co-determination to Germany is incompatible with EU law, the co-determination scene in Germany will change considerably.
A social plan usually contains provisions regarding the amount of severance payments paid to employees who lose their jobs. In practice, employees who are about to retire often receive lower severance payments than younger employees. The Federal Employment Court recently decided that this differentiation is not permitted if the employee is entitled to early retirement only because he or she is disabled.
It is common practice to use the customary industry wage level determined by collective bargaining agreements as a guideline when deciding on employee remuneration. This often applies even if an employer is no longer a member of an employers' association or party to a collective bargaining agreement. However, it cannot be assumed that merely granting a wage increase under a collective agreement means that the employer intends to pass on such increases in the future.
Following strong criticism of the initial draft bill regarding the coalition government's last employment law project and its agreement concerning the planned re-regulation of temporary employment, the government coalition committee considered an amended draft bill in April 2016, but failed to reach an agreement. This update discusses the changes to be introduced following the unsatisfactory breakthrough that was finally achieved in May 2016.
A new form was recently introduced for physicians to attest incapacity for work. Employees must inform employers if they are ill with a medical certificate. If incapacity for work lasts longer than stated on the certificate, the employee must submit a new certificate. Even if the six weeks during which the employer is obliged to continue to pay remuneration have expired, the employee is still obliged to inform the employer.
Temporary employment contracts are to be regulated more strictly in Germany again. The Federal Ministry of Labour and Social Affairs recently presented a draft bill intended to complete the last major employment law project of the governing 'grand coalition'. In future, a contract concluded between a personnel service provider and an employer will have to state explicitly that it concerns the temporary contracting out of employees.
Strike action by the pilots' union over Lufthansa's low-cost carrier Wings project has been confirmed unlawful by the Frankfurt Labour Court. The court found that, as well as its stated target, the strike also concerned co-determination regarding Wings. As this could not be regulated in a collective bargaining procedure by the union, the strike was ruled unlawful.
Recent decisions of the Frankfurt and Berlin Regional Courts have caused uncertainty for German groups of companies with subsidiaries in Europe. The Frankfurt Regional Court decided that employees of foreign subsidiaries must be counted with regard to corporate co-determination on the supervisory board of a German group parent company. By contrast, the Berlin Regional Court continues to assume that employees of foreign subsidiaries need not be taken into account.
Certain particularities must be observed if there is a suspected breach of compliance and an employee interview is to be conducted. Before the employer can issue notice of termination on grounds of suspicion, it must interview the employee. In some cases, the employee may demand that a third party be involved. Employers should prepare interviews carefully in order to use the results at a later date.