Fixed-term employment contract
Fixed-term employment contract – your rights and the action to convert the contract to a permanent one
Not every fixed-term contract is valid. If there is no valid reason, the written form requirement has not been met, or the contract involves an unlawful chain of fixed-term contracts, you are entitled to a permanent employment contract. Important: You must take legal action within three weeks of the agreed end of the contract. Our specialist employment lawyers in Augsburg will review your fixed-term contract and ensure your right to a permanent contract is upheld.
When does a fixed-term contract take effect?
The fixed-term nature of an employment contract is governed by the Part-Time and Fixed-Term Employment Act (TzBfG). In principle, the Act distinguishes between two types: fixed-term contracts with objective grounds (Section 14(1) TzBfG) and fixed-term contracts without objective grounds (Section 14(2) TzBfG). In both cases, the fixed term must be agreed in writing – a verbal agreement on the fixed term is invalid, and the contract is then deemed to have been concluded for an indefinite period.
Strict limits apply to fixed-term contracts without objective grounds: they are only permissible for a total duration of up to two years and may be extended no more than three times within this period. A prerequisite is that no previous employment relationship with the same employer has existed (prohibition on prior employment). If even one of these conditions is breached, the fixed-term contract is invalid.
In the case of a fixed-term contract with objective grounds, there must be a recognised reason under Section 14(1) of the Fixed-Term Employment Act (TzBfG) – such as standing in for another employee, temporary operational requirements, a probationary period, or a fixed-term allocation of budgetary funds in the public sector. The objective grounds must exist objectively at the time the contract is concluded and must be proven by the employer in the event of a dispute.
The three-week deadline – why swift action is crucial
Anyone who considers the fixed term of their employment contract to be invalid must bring an action to review the fixed term (action to remove the fixed term) before the employment tribunal within three weeks of the agreed end of the contract (Section 17(1) of the German Part-Time and Fixed-Term Employment Act (TzBfG)). This is a strict time limit – if it is missed, the fixed term is deemed valid, even if it was clearly flawed.
The period begins on the termination date agreed in the contract, not on the last day of work. In the case of a fixed-term contract for a specific purpose (e.g. covering for a colleague until their return), the period begins two weeks after the employer’s written notification of the date on which the purpose was achieved. Employees in Augsburg should therefore seek advice before the end of their contract to ensure they do not miss the deadline.
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Fixed-term contract check: Is your fixed-term contract open to challenge?
Please answer a few short questions about your fixed-term employment contract. The assessment will show you whether there are any common errors and whether a claim to convert the contract to a permanent one has a chance of success.
Common mistakes regarding fixed-term contracts
At our practice in Augsburg, we regularly review fixed-term employment contracts and find that a significant proportion of them are open to challenge. The most common sources of error relate to both fixed-term contracts without objective grounds and those based on objective grounds.
Error in the case of a fixed-term contract without valid grounds
The most common mistakes: exceeding the two-year limit, more than three extensions within the two-year period, changes to the terms of the contract upon extension (which is legally considered a new contract rather than an extension), failure to put the contract in writing before work begins, and an overlooked previous employment relationship with the same employer. Even a placement via a recruitment agency with a subsequent employer can be considered prior employment.
Successive fixed-term contracts and abuse of rights
Even where fixed-term contracts based on objective grounds are formally correct, a succession of consecutive fixed-term contracts may constitute an abuse of rights. According to the case law of the Federal Labour Court (BAG), an abuse of law is indicated where the total duration exceeds eight years or where there are 13 or more consecutive contracts. In such cases, the employer must demonstrate special circumstances justifying the continued use of fixed-term contracts. If the employer fails to do so, the employment relationship is treated as permanent.
Action to set aside a time limit – Procedure and prospects of success
An action to convert a fixed-term contract into a permanent one is the legal means by which you can seek a court ruling that the fixed-term contract is invalid. If the action is successful, your employment relationship will be treated as permanent – with all the rights of a permanent employee.
Procedure for bringing an action to remove a time limit
The claim is filed with the Augsburg Labour Court. As a rule, a conciliation hearing is held first, at which an attempt is made to reach an amicable settlement – often an agreement is reached on continued employment or a severance payment. If no agreement is reached, a hearing before the court follows, resulting in a judgement. Each party bears its own costs in the first instance (Section 12a of the Labour Court Act), regardless of the outcome.
Continued employment or severance pay
If your claim to convert a fixed-term contract into a permanent one is successful, you are entitled to continued employment on the same terms as before. In practice, however, many employers offer a severance payment instead, in order to terminate the employment relationship nonetheless. The amount is based on the usual factors used to calculate severance payments. Even if continued employment is not your aim, bringing a claim to convert a fixed-term contract into a permanent one can be a powerful lever for securing a fair severance payment.
Frequently asked questions about fixed-term employment contracts
Further information on employment law
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This information does not constitute legal advice in individual cases.
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