Cabinet intends to ease restrictions on fixed-term employment for pensioners

The current legal situation

Currently, the Part-Time and Fixed-Term Employment Act (Teilzeit- und Befristungsgesetz -TzBfG) stipulates that the conclusion of a fixed-term employment contract without objective grounds is not permissible if a fixed-term or permanent employment relationship with the same employer has already existed (Section 14 (2) sentence 2 TzBfG). According to case law, there are very few exceptions to this rule, e.g. if the previous employment relationship was a long time ago (in the cases decided, more than 20 years), if the previous employment was of a completely different nature (minor part-time jobs during school or university) or was only of very short duration (usually a maximum of three months). This practically means that fixed-term employment without objective grounds is only permissible in the case of new hires. Until now, this rule also applied to people who had already reached the standard retirement age. Although they could enter into a fixed-term employment agreement without objective grounds with another employer, they could not do the same with their previous employer. The German Federal Government now wants to remove this restriction in order to make it easier for employees to be rehired or continue working after reaching the age limit and to secure skilled workers.

What changes does the draft law bring for employers?

According to the cabinet draft, Section 14 of the TzBfG is to be supplemented by a paragraph stipulating that the prohibition on follow-up employment does not apply to employees who have reached the standard retirement age. In other words, they may also be employed on the basis of a fixed-term employment agreement without objective grounds by a past employer.

However, the maximum duration of the fixed term employment may not exceed eight years in total. In addition, no more than twelve fixed-term employment contracts may be concluded between the same parties. If these conditions are met, the employer may continue to employ persons who have already reached the standard retirement age on the basis of a fixed-term employment contract without objective grounds.

It is noteworthy that these contracts are subject to the statutory written form requirement, i.e., they must be signed by hand before the start of the fixed-term employment relationship. The legislature has failed to modernize the law to allow for the conclusion of digital fixed-term employment contracts.

When does the new law come into force?

The draft law has been passed by the Cabinet but must still go through the legislative process before it becomes effective. We will keep you informed on further developments.

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