On June 6, 2018, the Federal Constitutional Court (BVerfG) overturned the three-year rule of the Federal Labour Court (BAG) on the prohibition of pre-employment for fixed-term contracts without objective grounds.
Many fixed-term contracts are therefore likely to be invalid.

According to Section 14 Para.
2 TzBfG if an employment relationship already existed with the employer.
A fixed limit that an unfounded fixed term is possible again once three years have passed is unconstitutional.
This was decided by the Federal Constitutional Court in its ruling (Ref.: 1 BvL 7/14).

Fixed-term contracts without a fixed term must be an exception

Fixed-term employment relationships without objective grounds should be the exception.
The “normal employment relationship” should be full-time and permanent.
This guiding principle of employment policy is certainly not uncontroversial, but is the basis of the provision in Section 14 Para.
2 TzBfG as a legislative objective.

If there are no special reasons that justify a fixed term, a fixed-term employment contract may only be concluded for a maximum period of 24 months (currently still).
In order to prevent abuse, an unfounded fixed term is excluded in accordance with Section 14 Para.
2 sentence 2 TzBfG, a fixed-term contract without objective grounds is excluded if “an […] employment relationship has already existed with the same employer. ”

Time limitation was previously possible again after three years

This is intended to prevent chain time limits, i.e. the succession of new employment relationships.
On a strict reading, this means that a fixed term without objective grounds is no longer possible if an employment relationship has ever existed before.
To date, the BAG has consistently held that this regulation goes too far.
There is no longer a risk of chain limitation if three years have passed since the last employment relationship.

BVerfG: Three-year time limit rule inadmissible

The BVerfG now saw things differently.
The judges in Karlsruhe have declared the three-year rule unconstitutional.
The ban on previous employment was appropriate in order to achieve the goal of preventing fixed-term contracts.
With its judicial interpretation of the law, the BAG ignored the clearly recognizable will of the legislator and replaced it with its own regulatory model.

BAG went too far in the opinion of the BVerfG

That’s what the BAG does all the time – some people will now be thinking.
In this case, however, the BAG overshot the mark, at least in the opinion of the BVerfG.
The BVerfG at least conceded to the BAG that the ban on prior employment could not apply if there was no risk of a chain of fixed-term contracts.
This could be the case if the previous employment relationship dates back a very long time, was of a completely different nature or was of a very short duration.

One example of this is working students who initially work for another employer for a few years after completing their studies and then return to the company where they worked as working students.
However, the BAG is not entitled to set three years as a fixed limit.

Case-by-case assessment required

It will now be up to the labor courts to implement the BVerfG’s approach.
It must be determined which circumstances ultimately lead to the risk of a chain limitation no longer existing in individual cases.
This is accompanied by considerable uncertainty.

This could have unpleasant consequences for employers who have previously relied on the three-year rule.
There is a risk that the fixed term is not permissible.
It will then have to be well argued in court why the previous employment relationship should no longer be taken into account in this specific individual case.

Reason for joy for many employees – Incorrect fixed-term contract leads to permanent employment relationship

Employees can be happy.
An incorrect fixed term ultimately results in an open-ended employment relationship.
They do not have to do anything initially.
However, if the fixed-term employment relationship expires, they must file a complaint within three weeks of the end of the employment relationship.
If the employer no longer wishes to employ the employee for an indefinite period, the chances of a severance payment are not bad.