Germany: Justifying Fixed-Term Employments by Temporary Demand of Work

In its judgment of 10 December 2024 (Case No. 10 SLa 230/24), the Regional Labour Court of Lower Saxony ruled that employers who justify a fixed term employment contract on the grounds of a ‘temporary additional demand’ must demonstrate and prove a clear connection between the additional demand for labour and the fixed-term employment. The court clarified the requirements for the substantiation and documentation of 'temporary additional demand' as a reason for the fixed term.

Requirements of a Fixed-Term contract

In Germany, fixed-term contracts can be justified by certain legally prescribed reasons.

Such objective reasons are specified in the Part-Time and Fixed-Term Contracts Act (Teilzeitbefristungsgesetz), one of them being "temporary additional demand", which means that the employer needs the additional labour only for a certain period of time. The judgment at hand deals with the aforementioned objective reason and its legal requirements. 

Initial situation: Temporary Additional demand due to Catching up on Courses to be Taught

In the underlying case, the defendant employer concluded a fixed-term employment contract with the plaintiff during the COVID-19 pandemic in order to cover a temporary additional demand for labour. The employer justified the additional demand with the need to make up for cancelled courses due to the pandemic. However, the plaintiff was not directly involved in making up the cancelled courses, but rather in long-term tasks such as conducting (regular) courses and examinations.

In the first instance, the Göttingen Labour Court ruled that the employer had not sufficiently demonstrated the necessary connection between the temporary additional demand and the fixed-term employment. The employer's appeal to the Lower Saxony Labour Court was unsuccessful.

Decision: The Burden of Proof lies with the Employer

The Lower Saxony Higher Labour Court clarified that the "temporary additional demand" pursuant to Section 14 (1) sentence 2 no. 1 Part-time and Fixed-Term Contracts Act does not require that the employee employed on a fixed-term contract is directly deployed in the area in which the additional demand has arisen. Rather, it is sufficient if there is a causal connection between the temporary increase in workload and the temporary employment. However, the employer must explain and prove how this connection arises in detail.

In the particular case, the defendant employer was unable to demonstrate in a comprehensible manner how the pandemic-related teaching deficits of 74 semester hours per week could have led to a temporary need for the plaintiff's labour through a redistribution of tasks or a change in the organisation of work. 

Requirements for temporary additional demand

The judgement clarifies the legal requirements for the fixed-term reason of "temporary additional demand". An employer may change its work organisation, redistribute tasks or assign additional work to other employees. However, the number of fixed-term employees must be within the range of the predicted additional demand and must not exceed it. The employer bears the full burden of proof for the causal connection between the predicted additional demand and the fixed-term employment.

In the specific case, the defendant failed to substantiate its plans to cover the additional demand caused by the pandemic. In particular, there was a lack of a comprehensible presentation of which tasks were taken on by which employees and how this led to a temporary demand.

Conclusion and Practical Advice

The judgement of the Regional Labour Court of Lower Saxony provides employers with guidance on how fixed-term employment contracts can be structured with legal certainty due to temporary additional demand. A reference to a general additional demand is not sufficient to justify a fixed-term contract. The employer must explain why the temporary employment of the employee is suitable to cover an additional demand that has arisen. This can be done by hiring the employee directly in the department where the additional demand has arisen, with appropriate documentation. However, if the employee is to be deployed in a department in which an additional demand has only arisen indirectly because the employees in this area were withdrawn to cushion the increased workload in another area, the employer should also keep a suitable record. It is advisable to include the circumstances of the temporary demand in the fixed-term contract with the employee, for example in the preamble, to avoid any doubt.

The ruling clarifies that temporary additional demand remains a relevant reason to justify a fixed-term contract - but only if the additional demand is substantiated and justified in a factually comprehensible manner.