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Update Employment Law March 2021

Previous employment pursuant to s 14 (2) sentence 2 German Act on Part-Time Work and Fixed-Term Employment Contracts (TzBfG) - Disruption of employment history

Federal Labor Court, September 16, 2020 - 7 AZR 552/19

In a new ruling, the Federal Labor Court (Bundesarbeitsgericht - BAG) provided assistance on the constitutional interpretation of the prohibition of previous employment pursuant to s 14 (2) sentence 2 TzBfG.

After successfully completing his studies in the field of technical facility equipment, the plaintiff worked for the defendant from 2008 to 2010 as a clerk (Sachbearbeiter) in the state-run company Sächsisches Immobilien- und Baumanagement (SIB). He was employed in the “operating technology“ group of the planning and construction management department. After the end of this employment, the plaintiff completed a further course of studies, graduating with a degree in business administration (Verwaltungs-Betriebswirt). The focus of his studies was on business administration and legal knowledge. He then worked as a technical facility manager in the private sector. About five years after his employment at the SIB, the plaintiff concluded a fixed-term employment contract without objective grounds with the defendant as a specialist (Referent) in the operational safety department at the Saxony State Directorate. His responsibilities included the enforcement of occupational safety legislation and the supervision of certain facilities requiring monitoring.

Court decision

The BAG ruled that the fixed-term employment contract was invalid due to a violation of the prohibition of previous employment. 

According to the Federal Constitutional Court (BVerfG), this prohibition must be interpreted in accordance with the constitution. If it is unbearable for the parties to accept the prohibition, it is not applicable and a new fixed term without objective grounds is possible. According to the BVerfG, such unbearableness is to be assumed in particular if a previous employment “dates back a very long time, was of a completely different nature or was of a very short duration”. In the present case, the previous employment was neither in the distant past nor of very short duration. 

The BAG also rejected the claim that it was a completely different type of activity. Not every training and further education necessarily means that the application of the prohibition of previous employment is unbearable. Rather, the decisive factor is whether the training and continuing education enables the employee to perform certain tasks. This does not necessarily have to be equivalent to a professional reorientation involving an activity in another industry, but it does have to give the employee's employment biography a completely different direction. 

In the present case, the BAG did not consider the activity to be of a completely different nature, although the position as a specialist, unlike the position as a clerk, also included at least 50 percent of supervisory duties. However, this was not significant enough to be considered a completely different type of activity.

The degree in “business administration“ that had been acquired in the meantime did not lead to a disruption of the employment history either. With reference to the job description and a previous employer's reference, the BAG explained that the plaintiff had already possessed the skills and professional qualifications required for the work as a specialist due to his technical studies before taking up his first job with the defendant. He had not only recently acquired this knowledge through his degree in “business administration“. According to the job description, the business studies had not been required for the position as a specialist.

Consequently, not every training or further education leads to the prohibition of previous employment being unbearable. The further training must lead to a disruption of the employment history, which is not to be understood in terms of time, but in terms of content. This was not the case here.

Practical consequences

The handling of fixed-term employment contracts after prior employment with the same employer will continue to be fraught with uncertainty, not only with regard to the question of whether objective grounds will indeed be deemed relevant. In case of doubt, employers should be more restrictive in their use of fixed-term employment contracts without objective grounds. 

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