Federal Labour Court eases previous employment prohibition

Judgment of the Federal Labour Court of 6th April 2011 – Case 7 AZR 716/09

The German Federal Labour Court in Erfurt has overturned an important ruling on behalf of the act on part-time work and fixed-term contracts which Sec. 14 para. 1 only allows a repeated time-limited employment if this can be justified by factual reasons at which In the absence of such reasons, fixed-term employment is only permitted for a maximum duration of two years. This corresponds at least with the interpretation of sec. 14 para. 2 sentence 2 TzBfG by the Federal Labour Court, which was last confirmed in 2009, any employment will have to be considered under this provision, irrespective of the time that has elapsed since the termination of this contract. The term ‘before’ was understood by the Federal Labour Court as meaning ‘never before’.

Therewith, the Federal Labor Court has eased this so-called previous employment prohibition in the current decision. The time limitation without material reason of a labor contract is permitted up to the duration of two years if the last empüolyment of the corrent employee dates back more than three years. Consequently, in future the employer can respond better with this flexibility to fluctuating order situations and changing market conditions.

However, Great caution is still required If the labor contract dates back less than three years and is nonetheless concluded as a contract limited without material reason. If the employer conclude a further time-limited contract with the employee, it wil change into an unlimited contract according to act on part-time work and fixed-term contracts (TzBfG). Regardless of the change in jurisprudence, a fixed-term contract without justification may be followed by time-limited employment justified by factual reasons.

If you have questions according to this judgement or German labour law in general please contact

Rolf Halbig
Attorney

Fon +49 (0) 6181 . 2702 . 72
Fax +49 (0) 6181 . 2702 . 73
Mail halbig@nickelonline.de