Adaptation of written form requirements

Until now, employers were obliged under Section 2 (1) NachwG to hand over essential contractual terms to their employees in writing – i.e. in paper form and with an original signature (see our publication of 5 July 2022) in order to avoid fines. In practice, they did this through written employment contracts.

Following these rules for Germany, which go beyond the underlying EU directive, it is now planned that the text form in accordance with Section 126b of the German Civil Code (BGB) should be sufficient in the future for the documentation of the essential contractual conditions in employment contracts.

Implications for employers

Once this planned change occurs, employers in Germany would be able to agree on essential contractual terms of employment contracts digitally, e.g. by e-mail or digital signature, without fear of fines. This would bring relief and benefits not only to global, multinational companies, but also to remote work.

However, the amendment is only limited to significant changes to contracts and does not include the requirements, for example, for fixed-term employment contracts. 

There are exceptions

However, it is to be expected that the written form will continue to be retained for some constellations. At the request of the employees and for activities in certain sectors such as the transport, employer’s will further be obliged to provide written proof. The new freedom of written form also does not include statutory formal requirements for fixed-term agreements, the pension clause) and agreements on a post-contractual non-compete clauses. Of course, terminations and termination agreements still require the written form in order to be effective.

In principle, text form will only by sufficient as proof if the document is accessible to employees and can be stored and printed. In addition, the employer should receive proof of receipt from the employee. However, e.g. e-mail receipts should also meet these requirements.

Recommendation

Since the government draft is currently in the legislative process, the details of the final legal provisions are still uncertain. Nevertheless, a welcome relaxation of the written form requirements of the NachwG is to be expected. 

Employers who make all employment contract agreements in writing and in accordance with the requirements of Section 2 NachwG are on the safe side, for example because they are supposed to conclude a fixed-term employment contract or keep the pension clause anyway. This means that there is no longer any need for separate proof. Especially in the case of contract adjustments, such as salary changes, the simplifications made by the text form can probably bring about significant simplifications in day-to-day personnel work in the future.