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06-29-2022Article

Update Employment Law July 2022

BAG clarifies its case law on fixed-term employment without a material basis and prior employment of a very short duration

In its judgement of 15 December 2021 - 7 AZR 530/20, the Federal Labour Court (Bundesarbeitsgericht - BAG) further clarified its case law on fixed-term employment without object in the case of previous employment of a very short duration. Sec. 14 (2) sentence 2 Part-Time Temporary Employment Act (Teilzeitbefristungsgesetz, hereinafter TzBfG) declares a fixed-term employment relationship without object basis to be inadmissible if an employment relationship with the same employer existed before. In individual cases, however, a fixed term may be permissible if the prohibition is unreasonable. The ruling specifies in more detail when such unreasonableness exists. 

The proceedings concerned the admissibility of a fixed term in view of a temporary employment of the plaintiff over a period of eight weeks which had taken place 13 years previously. The central issue in the case was therefore the prohibition of a fixed term without a material basis pursuant to Sec. 14 (2) sentence 2 TzBfG in the case of a previous employment. 

The Federal Constitutional Court had ruled in its proceedings under the case numbers 1 BvL 7/14 and BvR 1375/14 on 06.06.2018 that the prohibition interferes significantly with the professional and contractual freedom of employees and employers protected by Article 12 consitutional law (Grundgesetz). It is true that the purpose of the standard is to protect the employee from chain fixed-term contracts taking advantage of his or her structural inferiority. Nevertheless, the job-seeker's interest in employment, even for a fixed term, and the employer's legitimate interest in flexibility must also be taken into account. For this reason, the application of the prohibition of fixed-term employment pursuant to Sec. 14 (2) sentence 2 TzBfG could be unreasonable in certain cases and the provision had to be interpreted in conformity with the constitution in this respect. Unreasonableness could, for example, exist in particular if (i) the previous employment had taken place a very long time ago, (ii) had been of a very different nature or (iii) had only been of a very short duration. Thus, previous employment as a student trainee or in the case of an interruption of the employment biography that goes hand in hand with a professional reorientation or training and further education would come into consideration. However, the groups of cases of unreasonableness do not have to be present cumulatively, but merely alternatively. 

Unfortunately, however, the Federal Constitutional Court did not define in more detail when a previous employment was "very long" in the past, of a "very different" nature or of a "very short duration". Rather, these terms all contain margins of appreciation.

The Schleswig-Holstein Regional Labour Court, as the lower court in the case decided by the BAG, found that the employment was not "very long", but at least long ago and was also of "very short" duration. The BAG also follows this assessment. It stated that a previous employment of more than six months can in any case not be regarded as "very short". In contrast, the BAG hints that a period of prior employment of three months could also be considered "very short". The BAG justifies this in particular by comparing it to Sec. 8 (1) no. 2 Social Security Code IV (Sozialgesetzbuch IV). According to this provision, employment of minor duration is deemed to exist if - among other things - it is limited to a maximum of three months or 70 days within a calendar year according to its nature. If the employment is marginal, this is also accompanied by a lower level of protection under social security law. On the basis of this assessment by the legislature, the lower court's assumption that the duration of eight weeks constituted a "very short" period of previous employment could not be objected to. 

Despite this determination that eight weeks can still be regarded as "very short", the BAG nevertheless clarifies that special circumstances of the individual case may still lead to an application of the prohibition of fixed-term employment pursuant to Sec. 14 (2) sentence 2 TzBfG. This could be assumed, for example, in the case of several, very short-term previous employments. 

Finally, the BAG also commented on the unreasonableness due to the period of time between the previous employment relationship and the conclusion of the employment contract without a fixed term. While the BAG did not consider nine years to be "very long" in its judgment of 12.6.2019 - 7 AZR 429/17, the BAG now seems to allow 13 years to be sufficient. After all, 13 years is more than a quarter of the working life. 

Conclusion

The ruling of the BAG brings more clarity with regard to the constitutional interpretation of the prohibition of fixed-term employment without object pursuant to Sec. 14 (2) sentence 2 TzBfG. At least in principle, it may now be assumed that a previous employment of only eight weeks is "very short" and does not prevent a fixed term. The content of this is to be agreed with. Otherwise, unreasonableness would de facto only exist in absolute extreme cases. Unfortunately, the BAG also reserves the right to decide otherwise in individual cases, insofar as special circumstances exist. Thus, there is no final legal clarity. The same also applies with regard to the criterion of "very long" previous employment. 

If an employer wishes to set a fixed term for an employment relationship without any objective reason, he should always have a legal examination carried out on a case-by-case basis as to whether this is legally possible against the background of the high requirements of the case law of the highest courts. 

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