Michael Brems

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On December 7, 2021, the Social Democrats (SPD), the Greens (BÜNDNIS 90/DIE GRÜNEN) and the Free Democrats (FDP) concluded the coalition agreement for the 20th legislative period of the German Parliament (2021 until 2025), in which they announced, inter alia, their intention to amend the German corporate co-determination law and to extend the scope of application of the German One-Third Participation Act (Drittelbeteiligungsgesetz).
Continue Reading German Plans to Extend the Scope of Corporate Co-Determination Rights for Employees

On December 7, 2021, the Social Democrats (SPD), the Greens (BÜNDNIS 90/DIE GRÜNEN) and the Free Democrats (FDP) concluded the coalition agreement for the 20th legislative period of the German Parliament (2021 until 2025), in which they announced, inter alia, their intention to implement changes to corporate co-determination law to prevent the current practice seeking to avoid the applicability of corporate co-determination rights for employees by changing the company’s legal form into an SE (Societas Europaea).
Continue Reading German Reform Plans regarding Corporate Co-Determination for an SE

With effect as from January 1, 2023, the German Supply Chain Act dated July 16, 2021 (Gesetz über die unternehmerischen Sorgfaltspflichten in Lieferketten – Lieferkettensorgfaltspflichtengesetz) will enter into force.

Undertakings of a particular size shall take responsibility for, and implement diligence standards with respect to, human rights-related and environmental risks in supply chains.  An undertaking which is subject to the German Supply Chain Act, but not in compliance with the requirements stipulated thereunder, may face significant sanctions.
Continue Reading Germany Strengthens Corporate Social Responsibility in Supply Chains

On June 18, 2021, the German Works Council Modernization Act (Betriebsrätemodernisierungsgesetz) entered into force.  This legislation aims at supporting and facilitating the establishment of new works councils in Germany.  In order to achieve this purpose, the new law improves, inter alia, protection against dismissal of employees who are initiating the establishment of a works council, and simplifies works council elections by expanding the possibilities for a simplified election procedure.
Continue Reading Germany Changes the Legal Framework to Increase the Number of Works Councils

On January 1, 2019, the German Act on the Strengthening of Company Pensions (Betriebsrentenstärkungsgesetz) leading to an amendment of the German Company Pensions Act (Betriebsrentengesetz), including its provisions regarding deferred compensation (Entgeltumwandlung), entered fully into force.

Deferred Compensation

Under the German Company Pensions Act, each employee is generally entitled to request from the employer that a certain part of the employee’s gross salary (up to an amount equal to 4% of the social security contribution ceiling (Beitragsbemessungsgrenze), i.e., currently EUR 3,216 per year) is used as deferred compensation for company pension purposes.  According to the newly implemented changes, employers are now obliged to provide their employees with an employer-paid top-up to the employees’ contributions to the deferred compensation. 
Continue Reading Changes to Deferred Compensation in Germany

On January 1, 2019, the “Act on Further Development of Part-Time Employment Law” (Gesetz zur Weiterentwicklung des Teilzeitrechts) entered into force in Germany.

The new legislation implements considerable changes to the German Part-Time and Fixed-Term Employment Act (Teilzeit- und Befristungsgesetz ) and introduces (i) an entitlement to work part-time on a temporary basis, coupled with (ii) an entitlement to return to full-time employment (so-called “Bridge Part-Time Work” (Brückenteilzeit)).
Continue Reading “Bridge Part-Time Work” in Germany

The German Government published a draft legislation which would facilitate the dismissal of so-called “risk takers” in the German financial sector.  This is one of various measures by which the German Government intends to address upcoming Brexit challenges and to increase the attractiveness of Germany as business location for financial institutions currently based in the UK.

Current Legal Situation

German employees are benefitting from extensive protection against dismissal.  Under German labor law, the termination of an employment relationship requires a valid justification (e.g., redundancy or misconduct) for which the German labor courts have set high standards.  Therefore, the affected employee is often in a good position to challenge the validity of the termination and claim the continuation of the employment relationship before court.Continue Reading German Government Plans to Reduce Dismissal Protection for “Risk Takers” in the Financial Sector