LAG Rheinland-Pfalz: Applying fixed terms to employment contracts based on objective grounds

Employment contracts can be limited for a period of two years. An additional fixed term needs to be justified based on objective grounds. This also applies in the context of professional sports.

GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, ldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: Employment law (http://www.grprainer.com/en/legal-advice/employment-law.html) stipulates that it is possible to apply a fixed term to an employment contract. However, this limitation is not allowed to exceed 24 months without an objective reason. Longer fixed terms need to be justified based on objective grounds.

This equally applies to professional sports as well as in the case of "normal" employment contexts. Having said that, a professional football player"s legal action to continue the employment relationship with his club almost unhinged the world of professional football. The former goalkeeper had a fixed-term employment contract with his club that was then extended again by a further two years. The former professional player filed a legal action with the Arbeitsgericht Mainz (Labour Court of Mainz) to have the employment relationship continued after he became marginalized following an injury and the club allowed his contract to expire. His claim was successful.

The Court ruled that applying an additional fixed term to the employment contract was only possible if based on objective grounds. The Arbeitsgericht Mainz did not consider this to be the case here and granted the claim. The Landesarbeitsgericht Rheinland-Pfalz (Regional Labour Court of Rhineland-Palatinate) has since overturned this ruling. The LAG held in its judgment of February 17, 2016 that applying a fixed term to an employment contract between a football club in Germany"s premier league (1. Bundesliga) and a licenced player is permissible if it is justified with reference to an objective reason. The Court stated that an objective reason could be said to exist if the unique nature of the work justifies the fixed term. This was said to be the case for licenced players (4 Sa 202/15). Due to the fundamental significance of the case, the LAG has granted leave to appeal to the Bundesarbeitsgericht (Federal Labour Court).

Although this is an extreme example, it nevertheless demonstrates that there are several pitfalls when it comes to applying fixed terms to employment contracts. These can ultimately result in the fixed term being ineffective and give rise to a permanent employment contract. Examples of objective grounds for applying a fixed term to an employment contract include temporary need or sick leave. It is also possible for the objective reason to relate to the employee himself.

In order to avoid legal disputes, employment contracts - whether they be fixed or permanent - ought to be prepared from the outset in a way that ensures that they are watertight. Lawyers who are experienced in the field of employment law can see to this.

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