On 1 January, the Fourth Paperwork Reduction Act (Viertes Bürokratieentlastungsgesetz – “BEG IV”) got here into impact. This laws introduces important modifications to necessities across the type of contracts in Germany with the target of simplifying sure administrative processes, amongst them the completion of employment contracts.
What’s the establishment?
Till the tip of final 12 months, the “written type” was a regular requirement for employment contracts. With the intention to adjust to the written type requirement as set out in Sec. 126 of the German Civil Code (Bürgerliches Gesetzbuch), the doc should be signed with a “wet-ink” signature by the issuer or, within the case of a contract, by each events on the identical doc. Though an employment contract can theoretically be concluded orally, the primary contractual components are required to be in written type by the Act on the Notification of Phrases and Situations of Employment (Nachweisgesetz) which offers for fines of as much as EUR 2,000.00 per breach, so that’s one piece of concept not value exploring additional.
What does “textual content type” imply?
BEG IV now goals to streamline administrative processes for employers, notably by changing the written type with a “textual content type” requirement (Part 126b of the Code) for sure issues. In distinction to written type, the textual content type requirement is glad by a legible declaration naming the declaring occasion made on a sturdy medium. The medium should allow the recipient to maintain a document of and retailer the declaration. This enables employers to adjust to that requirement by, for instance,
- sending the doc through electronic mail or fax,
- or scanning and saving it as a PDF earlier than handing it over on an appropriate medium, akin to a flash drive.
What are the particular implications for employment legislation and HR processes?
With regard to employment legislation, BEG IV is especially related within the following three areas:
Employment contacts
- It consists of an modification to the Act on the Notification of Phrases and Situations of Employment (Nachweisgesetz), which beforehand required materials contractual phrases and variations of them to be in writing and signed by each events.
- As of 1 January, this enables employers to make use of textual content type for many employment contracts.
- The modifications permit the usage of textual content type for the time restrict on retirement age, which is usually included in employment contracts, however by Part 14 of the Half-Time and Restricted Time period Employment Act (Gesetz über Teilzeitarbeit und befristete Arbeitsverträge), this doesn’t apply to every other time-limited employment contracts. Common mounted time period contracts should subsequently nonetheless adjust to the written type requirement and subsequently proceed to require a moist signature by each events.
- BEG IV permits requests for parental depart to be submitted in textual content type, e.g. through electronic mail, which beforehand needed to be submitted in written (signed) type.
- One other consequence of BEG IV is that, with the worker’s clear consent, job references can now be issued in “digital type” as an alternative of the beforehand necessary written type. Therefore, job references will now not require moist signatures. An worker provided an oral reference solely can take authorized motion to compel the previous employer to offer it in writing.
- It must be famous that “digital type” differs from textual content type, so it can’t be supplied through a easy electronic mail or any of the opposite examples talked about above. This way requires the employer to make use of an digital doc bearing their official “signature”, for instance utilizing DocuSign.
- Consequently, as that signature can solely be utilized by employers with enough software program and solely by these staff with entry to it, along with the necessity for specific worker consent, this doesn’t signify a big simplification of HR processes as far as references are involved.
Parental depart request
Job references
The place will written type nonetheless be required?
Whereas BEG IV impacts a wide range of cases in relation to employment legislation and allows employers to modernise and digitalise sure components of their administrative processes, the written type will nonetheless be required for a number of essential duties. For instance, notices of termination, termination agreements and post-contractual non-competition clauses should nonetheless be in written type, i.e. with a wet-ink signature. If they aren’t, they are going to merely be void and so completely ineffective at legislation. As talked about above, fixed-term contracts proceed to require written type as effectively.
Moreover, these simplifications won’t apply to employment contracts in sectors which might be frequently affected by unlawful work. This consists of financial sectors akin to catering, industrial cleansing, non-public safety providers and others listed in Sec. 2a of the Act to Fight Undeclared Work and Illegal Employment (Schwarzarbeitsbekämpfungsgesetz). The pre-2025 necessities will proceed to use in these sectors.
What does your organisation have to do now?
In mild of those new rules, corporations want to determine clear pointers as to which type is adequate for which process. Distinguishing between the particular necessities of written, textual content and digital type is particularly essential. To recap:
“written” means in writing bearing a number of wet-ink signatures
“digital” means in writing bearing an digital signature
“textual content” means in writing with no particular type of settlement mandated.
Consequently, whereas pre-2025 processes for the issuing and completion of employment contracts stay legally efficient for these employers that are proud of them, scope now exists for corporations to conduct a assessment of their normal contract methods to find out whether or not they stipulate a stricter type than is now required by legislation.