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Federal Labour Court: Effectiveness of preclusion periods in old contracts

In its ruling of September 24, 2019, the Federal Labour Court (BAG) dealt with the requirements for the effectiveness of preclusion period regulations in socalled old contracts which were concluded before the Act to Modernize the Law of Obligations came into force on January 1, 2002.

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BAG: Employer may access contents of privately used business device

In view of the widespread activity of home offices since the outbreak of the Corona pandemic and the associated problems and risks, we would like to take this opportunity to once again refer to the Federal Labour Court (BAG) ruling on access to the contents of a privately used device (BAG, dated January 31, 2019 – 2 AZR 426/18). According to this ruling, the employer is entitled to view files that are located on a business device and are not marked as “private” or are obviously private in nature – even if there is no justified suspicion of a criminal offence or serious breach of duty.

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Main reforms of the Social Protection Package II

According to the recently adopted law to further mitigate the social and economic consequences of the corona pandemic (Social Protection Package II), the impact of the corona pandemic on employers and employees is to be further mitigated in the coming months. The Social Protection Package II mainly includes the following measures:

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Federal Social Court (Bundessozialgericht – BSG): Accident Insurance Coverage also applies on a “Trial Working Day” BSG, Decision of August 20th, 2019 B 2 U 1 / 18 R

Anyone who completes a trial working day in a company and is injured during work on that day is legally insured against accidents as a “quasi-employee”.

In the case decided by the Federal Social Court (Bundessozialgericht – BSG) on August 20th, 2019, the prospective employee seeking work and a waste disposal company agreed on a single trial working day in order to get to know each other. The prospective employee rode along on the rear end of a waste truck and collected rubbish. During the trial working day he fell off the truck and injured himself severely. The defendant, the statutory accident insurance institution, refused to acknowledge an accident at work for lack of integration of the prospective employee in the organisation of the company and thus for the lack of an employment relationship. The BSG ruled in favour of the defendant insofar: a trial working day does not yet establish an employment relationship with statutory accident insurance coverage.

However, the BSG also clarified that even without an employment relationship trial working can be qualified as an insured occupation within the meaning of social security law. According to the BSG, the prospective employee was covered by statutory accident insurance as a “quasi-employee”, since he did not carry out his work solely in his own interest. The prospective employee acted in the interests of the waste disposal company by collecting waste. The waste disposal company thus had the opportunity to get to know the prospective employee. The trial working day therefore also had an objective economic value for the waste disposal company.

The decision of the BSG is particularly welcome, since the court acknowledges thereby the probationary employment relationship (in labour law rather known as trial work placement (Einfühlungsverhältnis)). In contrast to the employment relationship, the probationary employment relationship does not contain any obligations to perform services and grant remuneration. Accordingly, within the context of the probationary employment relationship the prospective employee is not bound by instructions and the company has no right of direction.

However, in case the prospective employee should receive work instructions regarding time, place and execution of the activity during the trial period and, even being integrated into the company’s operations for a short period of time, an employment relationship may exist despite deviating contractual regulations. In particular, there is a risk that some of the company’s instructions (including those that are necessary for the successful conduct of the trial working relationship) may be seen as the exercise of the right of direction that characterises an employment relationship.

If the contractual relationship is to be qualified as an employment relationship due to the contractual agreement and/or the actual execution, this usually results, among others, in the following consequences, which are far-reaching for the company:

  • Obligation to pay the minimum wage
  • Obligation to pay employer’s and employee’s contributions to the statutory social insurance (with limited recourse)
  • Reduction of the probationary and waiting period according to the law on protection against dismissal (Kündigungsschutzgesetz – KSchG) in a subsequent employment relationship
  • Restrictions on the agreement of an unfounded fixed term for a subsequent employment relationship
  • Restrictions on the agreement of a temporary employment without cause in case of a subsequent employment
  • Employee representatives’ participation rights in connection with the establishment of the contractual relationship and its termination

Considering the jurisdiction of the German Superior Courts trial work relationships should only be agreed in exceptional cases and only after prior careful examination. Longer-term trial working contracts should be avoided (rule of thumb: no more than one to three days, maximum one week).

FAQ on short-time working

The following explanations are of course neither to be understood as conclusive nor as generally valid. In particular, a different assessment may be required on the basis of the applicable employment contract, company and collective bargaining regulations as well as personal, company and other circumstances.

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Update on antitrust law – Extension of examination period for merger control and cooperation between competitors in times of the corona pandemic

1.         Merger control – in the case of mergers, extended examination periods may have to be observed

In response to the COVID-19 pandemic, the German government intends to extend the examination periods for merges which are subject to merger control.

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Exceptions to the Working Hours Act as a result of the COVID 19 pandemic

The new Section 14 para. 4 of the Working Hours Act (Arbeitszeitgesetz – ArbZG), which was inserted with the statutory social protection package (Act to facilitate access to social security and to the deployment and protection of social service providers on account of the coronavirus SARS-CoV-2e), authorises the Federal Ministry of Labour and Social Affairs to issue statutory ordinances in order to permit uniform nationwide exemptions from the requirements of working hours legislation. Based on this, the COVID-19 Working Hours Regulation was issued on 07 April, 2020. This regulation provides the following essential regulations, initially limited until 31 July, 2020:

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