When is a fixed term valid under the TzBfG?
The fixed term of an employment contract is governed by the Part-Time and Fixed-Term Employment Act (TzBfG). It distinguishes between a fixed term with an objective reason (§ 14(1) TzBfG) and a fixed term without an objective reason (§ 14(2) TzBfG). Both require the written form under § 14(4) TzBfG. An oral fixed-term agreement is invalid; the contract is then deemed permanent under § 16 sentence 1 TzBfG.
A fixed term without an objective reason is permissible under § 14(2) sentence 1 TzBfG up to a total duration of two years and may be extended at most three times within that period. § 14(2) sentence 2 TzBfG bars it where an employment relationship already existed previously with the same employer.
This bar does not apply without exception. The Federal Constitutional Court restricted it in a constitutionally compliant manner by decision of 6 June 2018 (1 BvL 7/14): where the previous employment lies very far in the past, was of a quite different nature, or was of very short duration, for example a minor side job during school, a fixed term without an objective reason remains permissible.
For a fixed term with an objective reason, one of the grounds under § 14(1) sentence 2 TzBfG must be present, for example a temporary operational need (no. 1), covering for another employee (no. 3), a trial period (no. 5), or budget funds for fixed-term employment (no. 7). The reason must objectively exist when the contract is concluded; the burden of pleading and proof lies with the employer.
Three-week deadline for the claim for permanent status
Anyone who considers the fixed term invalid must, under § 17 sentence 1 TzBfG, bring a claim before the labour court within three weeks of the agreed end of the contract. In practice this review-of-fixed-term claim is called a claim for permanent status.
§ 17 sentence 2 TzBfG refers to §§ 5 to 7 KSchG. If the deadline is missed, the fixed term is deemed valid from the outset under the legal principle of § 7 KSchG, even if it was substantively defective.
The deadline is tied to the end date agreed in the contract, not to the last day worked. For a fixed term tied to a purpose, the contract ends under § 15(2) TzBfG on achievement of the purpose, but at the earliest two weeks after receipt of the employer’s written notice of the point at which the purpose is achieved. Only this end of the contract starts the three weeks running.
Anyone who begins the review before the agreed end of the contract has the full claim period available.
Common mistakes in fixed-term contracts
The points of attack depend on what the employer bases the fixed term on. For a fixed term without an objective reason under § 14(2) TzBfG the mistakes usually lie in the numbers and the form; for a fixed term with an objective reason under § 14(1) TzBfG they lie in the length of the chain of contracts.
Mistakes with a fixed term without an objective reason
Five mistakes recur again and again with a fixed term without an objective reason: exceeding the two-year limit, more than three extensions, changing further contract terms on extension, missing written form before work begins, and an overlooked earlier employment relationship with the same employer.
An extension within the meaning of § 14(2) sentence 1 TzBfG requires that only the duration of the contract is changed (Federal Labour Court, judgment of 23 August 2006, 7 AZR 12/06). If the pay or working hours are also adjusted on this occasion, a new contract exists. This new contract requires an objective reason.
A previous assignment as an agency worker at the same establishment does not by itself constitute prior employment. The Federal Labour Court held this on 5 April 2023 (7 AZR 223/22), because no employment contract exists between the employee and the hirer.
Chain of fixed terms and abuse of rights
Even a formally correct chain of contracts can amount to an abuse of rights. The Federal Labour Court examines chains of fixed terms with an objective reason using graduated thresholds (judgment of 26 October 2016, 7 AZR 135/15).
A review for abuse is required where the total duration exceeds six years and more than nine extensions were agreed, likewise from a total duration of more than eight years or more than twelve extensions. If the total duration exceeds ten years or the number of extensions exceeds fifteen, an abuse of rights is as a rule indicated.
The employer must then set out special circumstances that support the continued use of fixed-term contracts. If it fails to do so, the employment relationship is deemed permanent under § 16 sentence 1 TzBfG.
Claim for permanent status: procedure and prospects of success
The claim for permanent status establishes that the employment relationship was not ended by the fixed term (§ 17 sentence 1 TzBfG). If it succeeds, the contract is deemed under § 16 sentence 1 TzBfG to have been concluded for an indefinite period, with all the rights of a permanent employment relationship.
How the claim proceeds
The claim is filed with the labour court, for businesses in the Augsburg area with the Augsburg Labour Court. Under § 54(1) ArbGG the conciliation hearing before the presiding judge comes first. If it produces no agreement, a chamber hearing with judgment follows.
§ 12a(1) ArbGG excludes reimbursement of lawyers’ fees in first-instance judgment proceedings. Each side therefore bears its own lawyers’ fees regardless of the outcome.
Continued employment or severance pay
If the fixed term is invalid, you are entitled to continuation of the employment relationship on the previous terms (§ 16 sentence 1 TzBfG). Many employers instead offer a severance payment at the conciliation hearing.
There is no statutory entitlement to this severance payment. The amount is freely negotiated in the settlement; a common point of reference is the rule of thumb of 0.5 gross monthly salaries per year of employment, borrowed from § 1a(2) KSchG. Anyone who does not in any case want to return to the business negotiates from a different position once the claim has been filed.
Further information on employment law
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