Revision of limitation periods in future employment contracts required: Amendment of sec. 309 no. 13 German Civil Code (BGB)

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As of October 1, 2016 employment contracts may only require text form, not the more formal written form, for all notices or statements issued by employees. Text form is met e.g. by an email. Any clause in an employment contract requiring written form will be void, as employment contracts are subject to a review of general terms and conditions.

Notices or statements that by law require written form are excluded from the new regulation (e.g. termination notices). Additionally, all employment contracts in force prior to October 1, 2016 are subject to protection of legitimate expectation.

Previously, employment contracts issued by employers could require written form for any assertion of a right or notice given by employees. The amendment of sec. 309 no. 13 BGB changes the previous situation and requires the alteration of newly concluded employment contracts. This especially includes limitation periods, which establish a period during which employees have to assert a claim arising out of, or in connection with, their employment relationship. Thus, limitation periods can protect employers against the assertion of claims that arose a long time ago (e.g. claims for overtime compensation and bonus payments).

The new regulation requires employers to alter their template employment contracts and adjust the respective regulation accordingly, as long as they are willing to continuously utilize the advantages of limitation periods in employment contracts.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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