Implementation of the European Working Conditions Directive – Effects on contracts

In June 2019, the European Union adopted Directive 2019/1152 (“EU Directive”) on transparent and predictable working conditions. In order to achieve this objective, the Directive provides, inter alia, for the extension of the employer’s obligations to inform the employee about the essential contents of the employment relationship (“proof obligations”), which are already regulated in the Evidence Act (NachwG). The IMPLEMENTATION of the EU Directive must be carried out by the EU member states by 1 August 2022 at the latest.

A draft law on the implementation of the EU Directive in Germany is now available. In addition to amendments to the Part-Time and Fixed-Term Employment Act or the Industrial Code, the draft provides in particular for some amendments to the NachwG. Should these planned changes become law, this will have a considerable impact on the drafting of employment law contracts. Employment contracts concluded before 1 August 2022 must also be adapted to the new requirements if the employee so requests.

The obligations to provide evidence previously by the employer under the NachwG will be supplemented and extended in particular as follows:

if agreed, the duration of the probationary period,
the recording of agreed rest periods,
if agreed, the possibility of ordering overtime and its requirements, and
the procedure to be followed in the event of termination of the employment relationship between employer and employee, at least the written form requirement for dismissals, the time limits for termination of the employment relationship and the time limit for bringing an action for protection against dismissal.
If an employee carries out his or her work abroad for more than four consecutive weeks, the employer must inform about the country of assignment in addition to duration, currency, any additional remuneration benefits and return conditions. If the work abroad is a posting, additional information must be provided on the remuneration to which the employee is entitled in the country of assignment, as well as the link to the official information page of the country of assignment.
The amount and composition of the remuneration must be disclosed separately according to components – such as basic salary, overtime pay, allowances and special payments – with due date and type of payment.
Tightening of the periods for the fulfilment of obligations

Furthermore, the draft law provides for the differentiation of the period of provision of individual obligations to provide evidence. The employer must in the future hand over the information on some essential contractual conditions (such as the name and address of the contracting parties, the composition and amount of the remuneration as well as the agreed working hours) to the employee at the latest on the first day of the work performance. Information in the case of a fixed-term contract, part-time employment, and on the possibilities and requirements for ordering overtime must be handed over no later than the seventh day after the start of the employment relationship. As before, the employer must hand over further information at the latest one month after the agreed start of the employment relationship.

Fine for non-compliance

New and particularly noteworthy in practice is the provision on fines contained in the draft law. If the employer does not comply with his obligations to provide proof, not completely or belatedly, he may be threatened with a fine of up to 2,000.00 euros.

Result

It remains to be seen whether all the proposed amendments to the draft law will actually be implemented. In order to implement the EU Directive, however, the legislator must adapt the NachwG in any case. It will therefore be certain that employers will have to act after implementation. This applies in particular to the review and possible adaptation of model employment contracts. Employers are generally well-advised not to neglect the burden of proof, otherwise, the imposition of fines could threaten. Unfortunately, the draft law has missed a step towards more digitization. Under certain conditions, Article 3 of the EU Directive expressly provides for the possibility of providing information in electronic form. However, the draft law does not address this possibility. Proof in electronic form is therefore excluded. The fulfillment of the proof obligations remains possible only by adhering to the strict written form.

By Steffen Linden, MELCHERS, Germany, a Transatlantic Law International Affiliated Firm.

For further information or for any assistance please contact germany@transatlanticlaw.com

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