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Basic rules for Employment in Germany

Employment in Germany is based upon a variety of labor and employment laws but is also strongly influenced by the social security system and the income tax system.

Principles of German Labor and Employment Law


There is no unified code of German labor and employment law. The major sources are federal statutes, collective bargaining agreements, works agreements and case law of the labor courts. Minimum labor and employment standards are laid down in separate acts on various labor and employment related issues. There are special labor courts with an independent jurisdiction in labor matters. They construe the labor and employment laws and they are responsible for the case law, which is of high importance in German labor and employment law. Some matters, especially strike regulation, are partly or even totally left to case law. The labor courts have also created lots of decisions dealing with the supervision of general terms and conditions of employment contracts. Since employees are considered
to be consumers, the labor courts very often declare certain provisions null and void in the light of consumer protection.

The following acts may be considered to be the most important statutes:
The Civil Code (Bürgerliches Gesetzbuch: BGB) defines the employment relationship. It also includes a few regulations on terminations and the transfer of businesses or business units. However, other employment law matters like the protection against unjust dismissals are treated in specific acts listed below.
The Works Constitution Act (Betriebsverfassungsgesetz: BetrVG) regulates the co-operation between employers and workers’ councils. It defines the rights of co-determination of workers’ councils and it includes regulations on proceedings before the conciliation committees and other labor law issues related to that.
The Act on Collective Bargaining Agreements (Tarifvertragsgesetz: TVG) deals with the vast and important labor law matter of collective bargaining agreements between unions and employers’ associations or single companies.


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