Directive on transparent working conditions

As of August 1, 2022, employers must comply with new requirements for employment relationships and employment contracts.

In summer 2019, the EU adopted the Working Conditions Directive and gave the member states until July 31, 2022 to transpose the regulations into national law. Shortly before the deadline, the Bundestag and Bundesrat passed the transposition law, which imposes a number of new obligations on employers from August 1, 2022. These include

• the extension of the employer's obligation to inform the employee about the essential aspects of the employment relationship (so-called obligation to provide evidence), which is already provided for in the Evidence Directive, and

• Minimum requirements for working conditions with regard to the maximum duration of a probationary period, multiple employment, minimum predictability of work, requests for a transition to another form of work and mandatory training.

In particular, the changes to the law on proof of employment are quite something, as they provide for significantly more extensive written explanations for employees about the conditions of the employment relationship. Violations can lead to a fine of up to 2,000 euros. This fine is incurred for each employment relationship in which the requirements were not complied with and can therefore reach an enormous amount for many affected employees.

The good news is that the changes only have direct consequences for employment relationships that begin on or after August 1, 2022. For such new contracts, the employer has different deadlines to inform the employee in writing about the mandatory information. Even if only some information has to be provided on the first day, while there is a week or longer for others, it makes sense to summarize all the information in the employment contract right away.

In the case of existing employment relationships, the employer only has to fulfill the extended information obligations at the request of the employee. If the employee requests a written record of their essential working conditions, the employer must provide this to the employee in writing, unless the information is already contained in an existing written employment contract or this refers to a specific collective agreement containing this information.

The law stipulates that the employee must be informed in writing. This means that the terms and conditions of employment must not only be printed out on paper, but must also be signed by the employer in person. A written employment contract usually fulfills this requirement. This is another reason why it is advisable to set out the terms and conditions of employment in writing in the employment contract.

Only a specialist employment lawyer can provide a definitive answer as to whether an employment contract or minutes meet all the requirements of the new law. However, the minutes of the terms and conditions of employment must now contain information on the following points in particular:

• Extended information on the Termination procedure. In addition to the written form requirement and the notice period, this also includes the deadline for filing an action for unfair dismissal.

• Separate disclosure of the amount, composition, due date and type of payment of the Remuneration including remuneration for overtime, bonuses, allowances, premiums and special payments as well as other components of remuneration.

• If the employer has a company pension scheme the name and address of this pension provider. This obligation to provide evidence does not apply if the pension provider is obliged to provide this information.

• Agreed Working time, rest breaks and rest periods and, in the case of agreed shift work, the shift system, the shift rhythm and requirements for shift changes.

• If agreed, the possibility of arranging Overtime and their requirements.

• An entitlement to benefits provided by the employer Further training.

• A generalized reference to the Collective agreements, works and service agreementswhich are applicable to the employment relationship.