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LAG Hamm: Fixed-term employment contract due to extra work must be properly justified

May 2018

A temporary need for manpower can constitute an objective reason justifying a fixed-term employment contract, but this temporary need has to be properly justified.

It is even possible to have several consecutive fixed-term employment contracts if there is an objective reason justifying this. One example of an objective reason justifying a fixed term is if the employer only has a temporary need for extra manpower. Having said that, the employer has to properly make the case that this need is only temporary. We at the commercial law firm GRP Rainer Rechtsanwälte note that it must be possible to anticipate with sufficient certainty that there will be no further need for the extra manpower in question once the contract governing the temporary employment relationship has come to an end. A ruling of the Landesarbeitsgericht (LAG) Hamm [Regional Labour Court of Hamm] from July 6, 2017 shows that a fixed term may be invalid in the absence of this kind of prognosis (Az.: 17 Sa 172/17).

In the instant case, a university had concluded a fixed-term employment contract with an employee for a period of around two years due to an increased amount of student counselling work resulting from double the number of school leavers, with this increased workload not expected to continue after the expiry of the contract. The relevant employee assumed responsibility for other tasks in addition to student counselling, particularly in relation to study coordination.

She later applied to have her employment contract extended for an indefinite period of time, which the university rejected. She subsequently lodged a claim shortly before the fixed-term employment contract expired requesting that it be found that her employment relationship would not come to an end on account of the fixed term. The competent labour court ruled in her favour, and the claim was also successful before the LAG Hamm.

The LAG held that a fixed term in response to a temporary need for manpower presupposes that it be expected with sufficient certainty at the time of the contract’s conclusion that there will be no permanent need for this extra manpower after the contract has expired. The employer must present a prognosis to this end supported by concrete evidence. The Court found that this prognosis represents a component of the objective reason justifying the fixed term. On the other hand, it ruled that general uncertainty regarding a possible future job opportunity does not justify applying a fixed term. The university was found to have failed to demonstrate this, particularly as the employee had taken on other responsibilities as well.

All employment contracts, and not simply those with a fixed term, should always be prepared thoroughly and in detail. Employers can turn to lawyers who are experienced in the field of employment law.

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