There are two types of work contracts – fixed-term (temporary) contracts and permanent contracts. While the most common practice is to offer permanent contracts to employees, this increases the employer's liability. Although a fixed-term contract has its benefits, it is also bound by some key rules.
In this blog, we will review the basic rules of fixed-term contracts in Germany, France, and Denmark.
There are two different types of work contracts in Germany – fixed-term contracts with reasons (mit sachgrund) and fixed-term contracts without reasons (ohne sachgrund).
Fixed-term contracts with reason or "objective grounds" need to be justified by the employer before the contract is signed. Objective reasons include a temporary increase in workload or having to replace an employee who is temporarily absent from work (sick or maternity leave).
On the other hand, fixed-term employment contracts without objective justification are subject to stricter regulations. Employers need to be aware of the following impacts:
If the employee continues to work after the end of the fixed-term contract and the employer does not file it, the court may automatically reconsider the contract as indefinite;
If the candidate has previously worked for the same employer, it is not legal to offer them a fixed-term contract without cause.
In the case of reasonable fixed-term contracts, the law does not stipulate a maximum duration for such work contracts, since the purpose of the contract is to meet the temporary needs of the employer as long as the contract exists.
On the other hand, a fixed-term contract may not be renewed more than three times without cause, and the total period shall not exceed two years.
In accordance with German law, fixed-term employment contracts are automatically terminated on the following dates:
The end date proposed and agreed upon in the contract;
At the end of the second year of employment (Ohne Sachgrund contract);
When temporary needs in the objective field are met (MIT SACHGRUND contract).
Unless expressly stated in the contract, no notice period is required. However, make sure to keep track of when contracts expire to prevent work from being assigned to temporary employees whose contracts have ended.
In France, the use of fixed-term contracts is governed by law. In contrast to Germany, this type of work contract can only be used if there is an objective reason, which:
Replacement of employees on leave, temporary increase in business volume, seasonal employment (tourism, agriculture, etc.),
For the integration of vulnerable groups, the advanced cdd contrat à durée déterminée applies to workers over 57 years of age, to.
Get enough years to receive a full pension.
A fixed-term contract can be renewed twice for a maximum period of 18 months, unless otherwise specified in the collective agreement, if applicable.
When a fixed-term employment contract for a position expires, it can only be renewed if the waiting period is properly observed, which is determined by the length of the employment relationship. This is to prevent employers from still having to fill the same or identical position or offer a second fixed-term contract to the same employee.
This rule can only be ignored in certain cases listed in French labor law, for example, when the contract involves seasonal work or urgent work required for safety measures.
It is best to send a written notice by ** letter with the notice.
Either party may terminate the contract before the end of the contract unless it is still on probation and there is an amicable breakup, serious misconduct ("Gross Misconduct"), force majeure, or the employee finds alternative work under an unlimited contract.
There is a minimum requirement for the duration of the contract. If an employee who has been hired to replace him or her returns to work early, the employee may not be dismissed. In the event of dismissal, the employer is obliged to pay the fixed-term employee a bonus for unstable work at the end of the contract equivalent to 10% of the salary.
In Denmark, there is no legal limit on the maximum number of continuous fixed-term contracts. However, the Danish Federation of Salaried Employees and Civil Servants said that, as a rule, two consecutive renewals can be based on objective reasons.
More than 2 renewals are suspected of violating provisions such as the Salaried Employees Act, and the court may declare it invalid unless proven otherwise.
In practice, the standard is not the norm prescribed by law, and the maximum period is two consecutive years.
Fixed-term employment contracts are automatically terminated on the expiration date or upon completion of a specific task unless renewed. Both the employer and the employee can terminate the contract at any time by complying with any of the terms in the contract or following the same rules as an indefinite contract.
The contract must contain a termination clause and clearly state the duration of employment and the time of termination. The same goes for clauses that contain an early termination of the contract before a fixed date with a notice period. This is done to avoid doubts about the reason for the notice or termination.