Coalition agreement & labour law: fixed-term employment relationships:

On 24 November 2021, the new coalition agreement of the forthcoming government of SPD, Bündnis90/Die Grünen and FDP was published. In the form of a short series, we would like to inform you of the statements contained in the coalition agreement on labour law issues and the concrete effects of the plans. Today’s topic: fixed-term employment relationships.

The statement

"[In] the public service sector [...] we are abolishing [...] the temporal limitation of budget-funded contracts [“Haushaltsbefristung”]. In cases where the federal government is the employer, we are gradually reducing the temporal limitation of contracts without material reason. In order to avoid chain fixed-term contracts, we are restricting contracts that are limited in term for a material reason with the same employer to six years. This maximum term can only be exceeded in narrowly defined exceptions." (Coalition agreement between SPD, Bündnis90/Die Grünen and FDP, p. 70)

The effects

The abolition of budget-funded fixed-term contracts comes as no surprise. It was already included in the draft bill of the German Federal Ministry for Labour and Social Affairs [Bundesministerium für Arbeit und Soziales - BMAS] concerning the amendment of general fixed-term contract law from spring 2021. Far more interesting is the fact that almost nothing remains of the plans of that time to restrict the temporal limitation of contracts without a material reason (inter alia a reduction to 18 months and the stipulation of a quota of a maximum of 2.5% of employees in larger companies). All that remains is the commitment to reduce - not abolish - "step by step” the temporal limitation of contracts without a material reason at the federal government. With a fixed-term contract rate of about 50% for new hires in the public sector, the announced changes are nevertheless likely to be drastic. In contrast, several companies will be able to breathe a sigh of relief that there are not going to be substantial changes in the law on fixed-term contracts without a material reason after all. Perhaps the coalition partners think that, in times of the corona crisis, a temporary job is better than none at all.

However, there are going to be noticeable restrictions in the temporal limitation of contracts for a material reason. To date, there has been no maximum contract term - which favoured the exploitation of so-called chain fixed-term contracts. In future, it looks like there is going to be a limitation to six years. Similar measures had already been planned, but not implemented, by the previous coalition partners. The 2017 coalition agreement between the CDU and SPD did, however, still provide for a maximum duration of five years for contracts limited for a material reason.

The amendments are expected to be quickly incorporated into the German Part-Time Work and Fixed-Term Employment Act [Teilzeit- und Befristungsgesetz - TzBfG]. As things currently stand, the Ministry of Labour and Social Affairs will continue to be run by Hubertus Heil. Thus, he is familiar with the matter and can build on the above-mentioned draft bill from the spring. Admittedly, this will now have to be adapted, but should be available soon.

Back to list