Local Employment Contract Template for Germany

A German local employment contract is a legally binding agreement that establishes an employment relationship under German law. This document outlines the essential terms and conditions of employment as required by German labor legislation, including the Nachweisgesetz (Evidence Act). It covers crucial aspects such as position, remuneration, working hours, leave entitlements, and notice periods, while ensuring compliance with German employment protection laws, social security requirements, and data protection regulations. The contract serves as the primary reference document for both employer and employee regarding their rights, obligations, and working conditions within the German jurisdiction.

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What is a Local Employment Contract?

The Local Employment Contract is designed for use in establishing employment relationships within Germany, ensuring compliance with German labor law requirements and local business practices. This document is essential for any company hiring employees in Germany, whether it's a German entity or a foreign company with a German subsidiary. The contract incorporates mandatory provisions required by German legislation, including the Civil Code (BGB), Protection Against Dismissal Act (KSchG), and Working Hours Act (ArbZG). It provides a comprehensive framework covering essential employment terms, social benefits, and protective provisions characteristic of German employment relationships. The document is structured to meet the written form requirements of the German Evidence Act (Nachweisgesetz) while allowing for customization based on specific role requirements and company policies.

What sections should be included in a Local Employment Contract?

1. Parties: Identification of the employer and employee with full legal names and addresses

2. Background: Brief context of the employment relationship and contract purpose

3. Definitions: Key terms used throughout the contract

4. Position and Duties: Job title, role description, and primary responsibilities

5. Place of Work: Primary workplace location and any mobility requirements

6. Working Hours: Regular working hours, break times, and overtime provisions

7. Remuneration: Base salary, payment intervals, and method of payment

8. Annual Leave: Vacation entitlement and public holiday provisions

9. Sick Pay: Continued payment during illness and notification requirements

10. Notice Period: Notice requirements for termination by either party

11. Confidentiality: Obligations regarding company secrets and confidential information

12. Data Protection: GDPR compliance and handling of personal data

13. Governing Law: Confirmation of German law application and jurisdiction

What sections are optional to include in a Local Employment Contract?

1. Probationary Period: Terms of initial probation period - used for new employees

2. Bonus Arrangements: Variable compensation terms - used for eligible employees

3. Company Car: Vehicle provision terms - used when a company car is provided

4. Non-Competition: Post-employment competition restrictions - used for senior roles

5. Inventions and IP: Intellectual property provisions - used for technical/creative roles

6. Mobile Work: Home office or remote working provisions - used for hybrid/remote positions

7. Training Requirements: Mandatory training and development - used for regulated roles

8. Commission Structure: Sales commission terms - used for sales positions

What schedules should be included in a Local Employment Contract?

1. Job Description: Detailed description of role responsibilities and requirements

2. Bonus Scheme Rules: Detailed terms of variable compensation arrangements

3. Company Policies: Reference to key company policies and procedures

4. Benefits Overview: Summary of additional benefits and eligibility criteria

5. Data Privacy Notice: Detailed information about personal data processing

6. Code of Conduct: Company's behavioral expectations and ethical guidelines

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Germany

Publisher

Genie AI

Document Type

Employment Contract

Cost

Free to use

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