1. Formal requirements
Before we look at the content, it is worth knowing that employment contracts in Germany generally have no required form. This means they can be concluded orally or in writing. A written contract is always advisable, though. It avoids misunderstandings and protects you in case of a dispute.
2. Mandatory details
An employment contract should contain the following mandatory details:
- Names and addresses of the parties: Of both the employer and the employee.
- Start of employment: The exact date on which work begins.
- Place of work: Where the work is carried out. If the place of work changes, this should also be stated.
- Job description: A precise description of the tasks and responsibilities.
- Working hours: The regular weekly working hours and, where relevant, rules on overtime.
- Pay: The salary or hourly wage and any other pay (for example bonuses or allowances).
- Holiday: The employee's annual holiday entitlement.
- Notice periods: The periods within which either side can terminate the employment.
- Reference to applicable collective agreements, works agreements or service agreements: If any exist and apply.
3. Optional clauses
Besides the mandatory details, further optional clauses can help to set clear rules for the employment relationship:
- Probation period: Length and conditions of the probation period.
- Confidentiality: Agreements on keeping company matters confidential.
- Secondary employment: Rules on permitted or prohibited side jobs.
- Training: Agreements on training measures and who covers the costs.
- Non-compete clause: Rules on non-competition during and after employment.
- Extended holiday agreements: Reduction during parental leave. Payment in lieu of holiday entitlements above the statutory minimum when the employee leaves.
4. Signature and conclusion
In principle, a legally valid employment contract does not need to be in writing. In theory it can also be concluded orally or implicitly. A written contract is still helpful as evidence and is therefore strongly recommended. Make sure both parties date and sign the contract. It is a good idea to prepare two copies so that each party receives one. If the employer does not comply with these rules, this is an administrative offence that can be fined up to €2,000.
Conclusion
A carefully drafted employment contract is essential for a smooth working relationship. It creates clarity and protects both employer and employee. Make sure it contains all the key elements and is tailored to the needs of both parties.
