As of 1 August 2022, employers in Germany must provide employees with additional information on the terms and conditions of employment. In case of non-compliance, there is a risk of administrative fines of up to EUR 2,000 per violation.
In June 2022, the German government passed changes to the Notification Act that will enter into force on 1 August 2022 and will require action from employers in Germany. Background of the amendments to the already existing Notification Act is the implementation of the European Directive on Transparent and Predictable Working Conditions (EU 2019/1152) into national law.
Important Consequences for Employers
The changes mean that employees need to be provided with additional information on essential terms and conditions of employment. The German legislator decided to apply a written form requirement for this notification and thus decided against the possibility of digitalization. This means that the information on the essential conditions of employment must be wet signed by the employer.
Although the Notification Act is not new for employers, it has not been of great significance in practice to date, not only because of the lack of consequence so far, but also because of the comparatively low requirements that were typically met by standard employment contracts.
In detail, employers are required to provide employees with the following additional information:
- The end date for fixed-term employment contracts;
- The possibility for employees to freely choose their respective place of work, if this is agreed;
- The duration of the probationary period, if this is agreed;
- The remuneration of overtime as well as the employers right to request overtime and the respective legal requirements;
- Any additional allowances, bonuses, one-time payments and other remuneration components;
- The due date for all payments and the form in which payments are made;
- The agreed working time, rest breaks and rest periods and, if shift work has been agreed, the shift system and conditions for shift changes;
- Details of on-call work, if this is agreed;
- Any entitlement to training provided by the employer;
- Name and address of the pension provider of the company pension scheme, if applicable.
- The procedure to be followed by the employer and the employee when terminating the employment relationship: this must include at least the written form requirement, notice periods and the time limit of three weeks for bringing an action for unfair dismissal.
In principle, employers have the choice between providing employees with the required information either in the employment contract or in a separate notification letter. The Notification Act does not stipulate that the information must be included in the employment contract. Which solution will prevail in practice will be determined in the future and is likely to depend in particular on the individual agreements and the respective company’s preferences.
The additional information needs to be provided to employees whose employment commences on or after August 1, 2022. For existing employment relationships, employers need to provide the additional information upon request of the individual employees. In both cases, rather short time limits apply for the provision of the information. Therefore, it is recommendable that employers take action now in order to be prepared when the changes to the Notification Act come into force.
A violation of the new Notification Act can result in an administrative fine of up to EUR 2,000 per incident.
Please contact the authors or any other Reed Smith employment lawyer if you would like further information or assistance. We are certainly happy to assist with a review of the template employment contract currently in use or to prepare a notification letter tailored to the specific situation in your company.