News on the German Evidence Act: Paving the way for the digital employment contract (update)

At a glance

Update: 21 October 2024

• On 18 October 2024, the Federal Council approved the Bureaucracy Relief Act IV. Please refer to our news item. 

Update: 30 September 2024

• On 26 September 2024, the Bundestag adopted the Federal government's draft for the Fourth Bureaucracy Relief Act.
• The German government's draft provides for significant changes to the German Evidence Act.
• It adopted the wording of the drafting assistance on the form of the terms of employment. According to the draft, employers will be able to provide the essential contractual terms in text form instead of in writing.
• Next, the government draft will be forwarded to the Bundesrat for its opinion. After the government has responded, it will be forwarded to the parliament for discussion.
  
  
• On 19 June 2024, the Federal Cabinet adopted a drafting assistance to supplement the government draft for the Fourth Bureaucracy Relief Act (BEG IV).
• The drafting assistance includes, ie, changes to the German Evidence Act.
• According to the drafting assistance, employers will in future also be able to provide key terms of their employment contracts as well as age limit agreements in text form, ie by email.

At its cabinet meeting on 19 June 2024, the Federal Cabinet adopted a drafting assistance submitted by the federal Minister of Justice to supplement the government draft for the BEG IV. The BEG IV includes, among other things, amendments to the Evidence Act. According to the drafting assistance, employers will in future also be able to provide key terms of their employment contracts as well as age limit agreements in text form, ie by email.

The main changes are as follows:

Digital employment contract

• The proof of the essential contractual conditions of the employment relationship can also be drawn up in text form and transmitted electronically. 
• The text form (Section 126b German Civil Code) also includes e-mails. An electronically qualified signature (Section 126a German Civil Code) is not required.
• The prerequisite is that the digital employment contract is accessible to the employee and can be saved and printed out.
• The employer must ask the employee to provide proof of receipt with the transmission.
• If employees expressly request written proof of their employment conditions, employers must send the information on paper.
• Any changes to the terms and conditions of employment may also be made in text form.
• The formal simplifications do not apply to employees who work in an economic sector or branch of industry that is particularly at risk of undeclared work and illegal employment (Section 2a (1) of the Illegal Employment Act). In this case, it remains mandatory to provide proof in paper form.

Age-limit agreements

Further changes concern agreements on the termination of the employment relationship upon reaching the statutory retirement age. To date, an agreement in an employment contract according to which the employment relationship ends upon reaching the standard retirement age in the statutory pension insurance scheme, must be in writing (Section 14 (4) of the Part-Time and Fixed-Term Employment Act). Employers will be allowed to make this agreement in text form in future. For other forms of fixed-term contracts the written form requirement remains in place.

Amendment to the Temporary Employment Act 

Furthermore, the proposed wording provides for an amendment to the Temporary Employment Act. According to this, the text form is to be sufficient for the transfer agreement between the lender and the hirer.

Conclusion and outlook

With the drafting assistance, the federal government is proposing an amendment to the previous draft bill of BEG IV, which does not yet include a text form. In terms of content, the drafting aid implements the amendments to the Evidence Act announced by the federal Minister of Justice.

The changes are to be welcomed. They represent enormous simplifications for employers and at the same time do not dispense with employee protection. It is to be hoped that the Evidence Act will come into force with the changes announced in the proposed wording once the legislative process has been finalised.