Preventive legal advice for companies
The goal of preventive legal advice is to exert influence on arrangements at an early stage, in order to avoid legal disputes later on as far as possible and/or to procure the best possible position for a potential dispute.
It is necessary to evaluate court rulings on employment law matters – that occasionally get out of hand – in accordance with the objectives of companies and to constructively use the leeways. The topics cover the three phases
recruitment of employees,
As far as other measures also provide for a preventive character, they have been integrated into the two fields “Employment Law in Practice” and “Employment Law in Strategic Decisions”.
Recruitment of Employees
Relevant aspects already occur at first contact, e.g.:
- What questions is the employer allowed to ask a job applicant?
- What consequences does an incorrect answer have?
- What circumstances must a job applicant reveal even unasked?
- Under what conditions does the company have to reimburse costs of a selection interview and to what extent?
- Under what conditions is a limitation in time possible?
- When does a respective agreement have to be entered into at the latest?
- How can a contract that is limited in time be extended?
- What must be observed in order to avoid an employment contract of unlimited duration?
Also the agreement on the right to terminate employment with due notice
can make sense since otherwise, for its duration, the time-limited contract can only be terminated in exceptional cases for good cause.
Employment contract – use of sample contracts / standard employment contracts:
Generally, companies use sample contracts or standard forms of employment contracts for multiple employees. Since the Law of Obligations Reform (2002), the permissibility of clauses in so-called form employment contracts has been subject to examination according to the law which applies to general terms and conditions.
The provisions, which used to be included in the General Terms and Conditions Act, were transferred to the German Civil Code (Buergerliches Gesetzbuch; sections 305 et seq.) by the Law of Obligations Reform. Judgments in this regard are being awaited eagerly. In particular, the courts will have to decide what legal consequences the use of an ineffective clause would have.
Wird die Klausel schlicht unwirksam sein, ohne dass eine geltungserhaltende Reduktion vorgenommen wird, d.h. ohne dass das Gericht der Klausel einen noch zulässigen Inhalt beimisst? Oder werden die Arbeitsgerichte doch wie vor der Schuldrechtsreform unzulässige Klauseln auf ein zulässiges Maß zurückführen?
Will the clause simply be ineffective, without being reduced to effective content, i. e. without the court ascribing content to it that is within the realms of permissibility? Or will the labor courts continue to reduce ineffective clauses to a permissible degree, as they used to prior to the Law of Obligations Reform?
This problem becomes evident e.g. in case of excessive liquidated damages. Will the entire clause on liquidated damages
be found invalid or will the court only reduce the amount to a permissible degree? For this reason, it is important for companies to check the effectiveness of provisions in their form employment contracts according to the new standards in sections 305 et seq. German Civil Code and to assess their risks.
This may have very different effects for the companies. Considering the relevance to the samples, individual examination is advisable.
- Which provisions are affected?
- How might the company be impacted hereby?
- What can be done as a precaution?
- Has the reason for a conduct-related notice of termination been proven by documents in a legally certain way?
- What particularities must be observed in conduct-related terminations?
Notices of termination given for conduct-related reasons are generally invalid without prior warning, provided that the employee’s performance and not the employer’s trust in the employee is concerned. Also the warnings must be prepared in a legally certain way (detailed description of the behavior for which the employer reproaches the employee, threat of legal consequences in case of repeated failure to comply with duties etc.).
In case of notices of terminations for business-related reasons careful preparation is also advisable:
- Has the managerial decision been made and proven by documents?
- How will the elimination of the job be explained?
- Which employees will be included into the circle of comparable/interchangeable employees?
Upon wording of the employment contracts the agenda can already be set for the circle of comparable employees:
- Is it of primary importance to the company to be able to flexibly deploy an employee?
- Shall the company be entitled to assign to the employee a variety of tasks that deviate from the usual, if necessary even at a different location?
- Is this of primary importance even if the circle of comparable employees increases thereby and, consequently, the employee will have more opportunities to challenge the validity of a possible later business-related termination?
- Or is it important to the company - at the expense of flexibility - to be “well armed” for later notices of termination by keeping the circle of comparable employees as small as possible?
Please find further information, also about person-related notices of termination, under Employment Law in Practice, Notices of Termination
The works council
should also be properly informed
in order to prevent the opportunity for possible later action for protection against dismissal.
Investing into preventive legal advice does not only offer safety but also helps - as far as possible - avoid potentially considerable costs in later disputes.