A contract of employment, often known as an employment contract, is a sort of agreement used in labour law to assign rights and duties between parties to an agreement. An “employee” and an “employer” are the parties involved in the contract. The employment contract is extremely significant because it establishes the employee-employer relationship. It details important characteristics of a person’s working life, such as their income and the number of vacation days they are entitled to, as well as whether the job is for a certain length of time or for an unlimited period of time.
If you have just gotten a job in Germany or you hope to get one, this article is for you. In this article, I share the types of employment contracts in Germany and also what to look out for before signing an employment contract in Germany.
Types of Employment Contract in Germany
Regulations, collective terms, and agreements control the terms and conditions of employment. The employment contract cannot differ from these rules to the employee’s disadvantage. That is, every employment contract usually follows some regulations that ensure employees’ rights.
There are two major kinds of employment contracts in Germany, namely; Permanent employment contracts (Unbefristeter Arbeitsvertrag) and fixed-term contracts (Befristeter Arbeitsvertrag).
Permanent Employment Contract (Unbefristeter Arbeitsvertrag)
The duration of a permanent contract is undisclosed and indefinite. It often contains a six-month probation period, after which your contract will be renewed on a permanent basis. Your permanent employment contract in Germany can only be renewed If you do not quit or if your employer finds legal reasons to relieve you of your duties.
Fixed-term Contract (Befristeter Arbeitsvertrag)
This type of employment contract, like the name implies, has a fixed period. It is usually short and does not exceed two years. Fixed-term contracts might be beneficial to a company when they have a specific short-term goal in mind and no need for the employee after that goal has been met. It’s also feasible that the business will hire a contract worker from a staffing agency for this job. It can also benefit the employer if the company is experiencing financial difficulties and the employee will only be needed for a limited period of time. At the expiration of the contract, your employer may, or may not, extend the contract. It goes both ways. If your employer still requires your services, they may choose to extend your contract, but you also have the right to accept or decline the offer. However, if your employer still needs your service after the two years have elapsed, you will need a permanent employment contract with them.
Other contracts include; Minijob contract, Recruitment Agency contract and Freelance contract, Contract for services, and Contract for specific jobs.
Things to Look out for Before Signing an Employment Contract in Germany
Getting a job is usually exciting and you can not wait to accept it and start, especially if you have been searching for one for a while. However, you may need to slow down and take time out to read your employment contract, carefully. There are important things to look out for in your employment contract before signing it.
- Job Description: You should carefully read your job role and description to ascertain if it is something you can do or can learn fast. If it contains activities you can not handle, you may want to reconsider taking the job.
- Probation Duration: Take note of how long your probation period will last. During this time, you are not protected by a regulatory law, and you can be dismissed at any time.
- Work Hours: Do not be in a haste to sign an employment contract in Germany before you confirm the working hours and if it works for you. You should also consider the break you get during your working hours and how long it will last.
- Overtime: Ideally, when you work overtime in Germany, you should get compensated for it. Working overtime means that you are assigned to work duties outside your working hours. Before signing your contract, take note of their policy your employer has concerning working overtime.
- Holiday: Based on the German Labour Law, you are entitled to 20 days leave in a year, aside from public holidays. Confirm if this is specified by your employer in your employment contract.
- Salary: It is not enough to just get a job in Germany, you should assess the salary being offered, how much is taken on tax and if it can pay for your basic needs. Confirm if your employer agrees to pay your salary at the appointed time, and to keep paying you during your illness. Furthermore, the employment contract usually specifies that your future employer will determine and expect to be paid your taxable income and social security payments correctly.
- Confidentiality: Take note of the areas of confidentiality. As an employee, you will learn confidential information about the organization, and it is expected that you keep that information within the walls of the organization. In the course of reading your employment contract, if the confidential aspects do not sit right with you, reconsider taking the job. If you go on to sign and do not adhere to the rules of confidentiality, you have breached an agreement and will have consequences to face.
- Working Conditions: You may want to confirm if your employer considers cases like sick leave and maternity leave. Some employers may not be big on that, so before signing your employment contract, be sure to check that your employer cares about your well-being.
- Restrictions: Your employment contract will likely have significant secrecy terms, especially if your new business works in a highly competitive sector. These restrictions are frequently backed up by high contractual penalties. A non-competition condition in your employment contract, for example, may ban you from working in the same industry throughout your employment. You should consider this, especially if you wish to take on side jobs. You can not collaborate with your company’s competition if your employer has this sort of clause.
- Unfair Dismissal: Confirm that your employer offers a policy against offer dismissal. Usually, you are supposed to receive some weeks of notice before dismissal, and you are entitled to get paid for the work you have done. If your employer does not address this in your employment contract, it is likely that they do not consider fair dismissal as an option.
- Benefits: Look out for benefits that your company offers. In Germany, most employers often give their employees benefits like company telephone and others.
- Pension Plan: Confirm if there is a pension plan offered by the company to ensure that you are covered for retirement in the future. It is common for German employers to include this, especially in a Permanent employment contract. Check your employment contract to be sure if your employer has included it. This will let you know what you are signing up for.
All of the above listed are usually stated in a typical employment contract in Germany. It is your duty to go through the contract thoroughly, and confirm that all its terms and conditions work for you. You do not want to sign an employment contract in Germany in haste because you are happy that you got a job. You need to slow down to confirm that it works for you in order to avoid disappointments, or getting a job that you do not like. In addition to this, it is important to note your duty as an employer in Germany because if you do not adhere to these regulations, you stand the risk of breaching your contract, and you may get dismissed or pay some fine, depending on the severity of your actions.