Types of employment contracts in Germany

Like anywhere else in the world, you need to sign an employment contract (Arbeitsvertrag) before you can start working in Germany.

As soon as your employer -to be- finalizes the interview and selects you as their most suitable candidate for the position, they will hand over a work contract (Arbeitsvertrag) with you. It will cover all the details of the agreements of your employment contract.

Employment contract types in Germany

While unlimited or permanent employment contracts are the most common type of employment contracts in Germany, there are several other types of contracts that employers can offer to their employees. These alternative types of contracts provide more flexibility to employers and employees, depending on their specific needs and circumstances.

Permanent contract (unbefristeter Arbeitsvertrag)

Unbefristeter Arbeitsvertrag or a permanent contract is an unlimited contract that lasts as long as the employee can work in an organization. It usually starts by a six month long probationary period. The contract may only be terminated if you wish to resign or if the employer finds a valid and legal reason to fire you.

Limited or fixed term contract (befristeter Arbeitsvertrag)

These contracts are valid only for a limited period of time. Usually, these contracts are renewed on the completion of the term. However, if the employer chooses to end the contract after the completion of the period, there’s no chance to question back.

However, a fixed-term contract can only be renewed for three times and not exceed two years.

Minijob contracts

These contracts are for under-skilled part time workers who only get paid below the average salary level. Usually the people who take a minijob contract are paid a salary of up to €450 per month. The employer pays just some or none of the health insurance contribution in a minijob contract. These payments are subsidized by the government.

These contracts are usually popular among students looking for a working contract in Germany as well as expats who are under-skilled.

Additionally, you are not obliged to pay the income tax or social security contributions if you are on a mini job contract. However, you have the same employment rights as permanent employees, such as sick benefits and additional holiday pay.

Part-Time Contract (Teilzeitarbeitsvertrag):

A part-time contract is a contract of employment where the employee works fewer or half the hours than a full-time employee. This type of contract is often used to provide flexibility to employees who cannot work full-time.

Freelance contracts

A freelance contract is a contract where the employee is self-employed and provides services to the client on a project-by-project basis. Freelancers are not considered as employees and are responsible for their own taxes and insurance.

The two types of freelancer employment contracts that are popular In Germany are :

Work contract (Werkvertrag)

A work contract outlines a specific task the freelancer agrees with the client. It mainly focuses on the task rather than the period of time they work for that specific client. For instance, a software developer freelancer may enter a work contract with a client to fix specific bugs in a code. The freelancer then gets an agreed one time payment in exchange.

Services contracts (Dienstvertrag)

A freelancer may offer their service to a customer in exchange for a remuneration in these types of contracts. The contract may detail specific obligations during the period of the contract, period of the agreement and conditions for the contract termination. For instance, a freelance photographer offering his service to a model.

Finally, let it be any kinds of the contract mentiond above, while your employment contract will detail different areas of expectations from you, you may check it thoroughly to avoid any surprises. Below checklist may help you focus on a few very important aspects.

• Description on your role

• Your personal details

• Duration of the contract

• If you have a probation period

• Location of the employment

• Conditions for termination

• Remuneration

• Hours of working hours

• Bonuses

• Additional benefits such as valuable pay

• Perks at work such as free food, free travel and home office, etc.

• Annual holidays

• Pension scheme

• Travel expectations

• Any additional clauses

What is the probationary period in Germany?

In Germany, the probationary period in job contracts can vary depending on the type of job and the collective agreement or individual employment contract. However, the standard duration of a probationary period for most jobs is usually six months.

During this period, both the employer and employee have the right to terminate the contract with a shorter notice period than would be required for a regular employment contract. This allows both parties to assess whether the employment relationship is a good fit without a long-term commitment.

It's worth noting that the duration of the probationary period can be extended in certain cases, such as if the employee has been absent from work due to illness or if the employee takes parental leave. However, in general, the maximum duration of the probationary period allowed by law is usually six months.

What is the job security in Germany permanent job contracts?

Job security is a significant benefit of permanent job contracts in Germany. Permanent contracts are open-ended and provide employees with long-term job security as compared to fixed-term contracts or temporary agency work.

Once a permanent employment contract is signed, the employer can only terminate the contract in cases of serious misconduct, such as theft or fraud, or if there is a valid economic or behavioral reason for termination. In such cases, the employer must follow a strict legal process and provide the employee with notice and severance pay.

Moreover, permanent employment contracts provide employees with certain legal protections against discrimination and unfair treatment in the workplace. If an employee is subject to unfair treatment or discrimination, they can file a complaint with the relevant authorities or seek legal recourse through the courts.

Overall, permanent job contracts in Germany offer employees greater job security and legal protections compared to other types of employment contracts. However, it's worth noting that the job security provided by permanent contracts is not absolute, and employers can still terminate the contract in certain circumstances.

What are the working hours in Germany on part-time job contracts?

In Germany, part-time job contracts have specific regulations regarding working hours. Part-time employees are entitled to the same employment rights and benefits as full-time employees, but on a pro-rata basis.

According to the Part-Time and Fixed-Term Employment Act, employers must specify the exact number of working hours and the distribution of working time in the part-time employment contract. Employers must also ensure that part-time employees receive proportionate benefits such as vacation, sick leave, and other entitlements based on the number of hours worked.

Additionally, part-time employees in Germany are entitled to specific breaks and rest periods. For instance, employees are entitled to a minimum of 30 minutes of rest after six hours of continuous work. Employers are also required to provide part-time employees with adequate rest breaks during the working day.

Overall, the working hours for part-time job contracts in Germany are subject to specific regulations that ensure that employees receive fair treatment and benefits. Employers must comply with these regulations to avoid legal liabilities and ensure that their employees are satisfied with their working conditions.

Finally, the Part-time and Fixed-term Employment Act in Germany permits employees to reduce their working hours, subject to specific requirements. The act also allows for a fixed-term "bridge" period of part-time employment with the right to return to full-time work. The legislation aims to prevent discrimination against part-time workers.

The Caregiver Leave Act and Family Caregiver Leave Act allow employees to care for their relatives in need of nursing care at home for up to six months, while being partly or fully released from work.

All employees, regardless of their employment type, are entitled to the statutory guaranteed minimum standards. Employers and employees can also agree on more favorable working conditions through individual employment contracts or collective bargaining agreements.

Your Guide to Understanding Types of Employment Contracts in Germany: Frequently Asked Questions

How do I know what type of employment contract is right for me in Germany?

The type of employment contract that is right for you in Germany depends on your personal and professional circumstances. Consider factors such as job security, flexibility, benefits, and the nature of the work when choosing a contract type.

Can employment contracts in Germany be changed or modified?

What are the legal requirements for employment contracts in Germany?

Do I need a lawyer to help me with my employment contract in Germany?

Can I switch between different types of employment contracts in Germany?

Can I negotiate the terms of my employment contract in Germany?

Are there any restrictions on the use of fixed-term or temporary contracts in Germany?