German employment contracts – validity of exclusion clauses

It is common practice in standard form German employment contracts to have a mutual clause that excludes claims by either party if they have not been declared by written notice within a stated time. These clauses often require the notice to be made in a specified hard copy format with a handwritten signature.

Under a new rule, applying only to contracts entered into after October 1st, 2016, this type of exclusion clause will be invalid if it requires a more stringent form of notice than the basic text requirement for any notices under the contract. For these purposes email or fax without a handwritten signature would be sufficient.

If the exclusion clause is declared invalid for the above reason, the standard 3 year claims limitation applies.

This rule does not apply to exclusion clauses in collective bargaining agreements.

Employers should ensure that employment contracts entered into after October 1st, comply with the new rule. Also, employers should be careful when amending existing contracts in case the change inadvertently creates a new contract that would be caught by the new rule.