08. Jan 16

LAG Hamm on applying fixed terms to employment contracts

Employers have to be careful when applying fixed terms to employment contracts. A temporary employment relationship can quickly turn into a permanent employment contract.

GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London - www.grprainer.com/en conclude: Applying a fixed term to an employment contract cannot be based on a stand-in arrangement if the substituted employee’s employment contract comes to an end five months before the expiration of the fixed term and the employer still has no specific plans regarding the position. That was the decision reached by the Landesarbeitsgericht Hamm (Regional Labour Court of Hamm) in its ruling of July 2, 2015 (Az.: 18 Sa 91/15).

In the present case, an employee raised an action seeking to have her employment relationship continued. She was initially taken on by her employer as an intern, then as a temporary worker, a team leader and care supervisor, each time on the basis of fixed-term employment contracts. She most recently stood in for a colleague who had gone on parental / maternal leave. The colleague in question had also been on a fixed-term employment contract. This expired and was not extended. However, her substitute’s employment contract ran on for around another four months beyond that. The plaintiff thus no longer viewed the justification for the stand-in arrangement to be relevant and considered her fixed-term employment contract to have become a permanent one. Her claim was successful before the lower-instance courts.

The same can be said with respect to the appeal proceedings before the LAG Hamm. Applying a fixed term to an employment contract is only permissible for a maximum of two years in the absence of an objective reason. During this time, the employment contract cannot be extended more than three times. Both thresholds had been exceeded in this case, which is why the Court held that the fixed term could then only be justified with reference to an objective reason. While this condition was initially said to have been met due to the stand-in arrangement for the mother on parental leave, there was no longer an objective reason for the fixed term after her employment contract had expired. The LAG therefore ruled that the plaintiff had to be moved on to a permanent employment contract.

The employment contract regulates the central aspects of an employment relationship. Accordingly, it ought to be carefully drafted. This also particularly applies to fixed-term employment contracts. Those seeking to protect their interests can consult lawyers who are competent in the field of employment law.

For more informations: https://www.grprainer.com/en/legal-advice/employment-law.html

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