Frequency of renewals for fixed-term contracts
In Germany, the Part-Time and Fixed-Term Employment Act (TzBfG) governs the use of fixed-term employment contracts. Generally, these contracts require an objective reason for their validity. However, there are exceptions where fixed-term contracts can be used without such a reason for up to two years.
For instance, a newly founded company can have an unjustified fixed-term employment of up to four years. If an employee is 52 years or older, unjustified fixed-term employment contracts of up to five years are possible. Valid reasons enabling a fixed-term contract with an objective justification include seasonal or project-related work, temporary replacement of absent employees, probationary periods, and more.
If no objective reason is provided, fixed-term contracts can only be concluded without reason if the fixed-term is limited to a maximum of two years, with the contract renewed a maximum of three times within this period. After this, the employment relationship continues as indefinite.
It's important to note that in small businesses, a valid reason must generally be present for the fixed-term employment. An unjustified fixed-term employment contract cannot be extended indefinitely. The total duration of an unjustified fixed-term employment has a maximum limit of six years, with a maximum limit of nine extensions beyond this total duration.
The maximum duration for an unjustified fixed-term employment is two years, with up to three extensions of up to six months each. In total, an employee can be under an unjustified contract for 24 months with three extensions.
However, for a fixed-term employment contract with a valid reason, different rules apply. The collective bargaining parties can agree on individual deviations for the company, with the works council involved.
In summary, the TzBfG requires fixed-term contracts to have valid reasons such as temporary staffing needs, replacement of absent employees, or transitional employment of older workers unless they do not exceed two years and the renewals comply with legal limits. Understanding these rules can help both employers and employees navigate the complexities of fixed-term employment in Germany.
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- In the case of a small business, a valid reason is generally necessary for a fixed-term employment contract to be used.
- For a newly founded company, an unjustified fixed-term employment contract can be used for up to four years, while for an employee aged 52 years or older, such a contract can last up to five years.
