Welcome to the West Thames HR Exchange Club

Meeting at Royal Holloway College

4th October 2000

Agenda

• Minutes of Last Meeting

• Update on Participants

• Round Robin

• Organisational Development

• Country Profile Discussion – Germany

• Any other business– Subjects for Employment Law Workshop

Germany

Employment Status

• There are recognised employment Statuses– Arbeiter (Worker)– Angestellte (White collar worker)

• Now both treated same

– Leitende Angestellte (Managers)– Geschaftsfuhrer (Managing Director)

• Treated differently in law

Forms of Contracts

• A written statement of the main terms of employment must be given to the employee within one month of the agreed start date of employment.

• Employment contracts must be in writing. The law presumes that it contains all the terms and conditions of the employment relationship as well as an adequate job description. It is up to the party claiming that there are additional clauses to prove that they exist.

• If the contract is for a salaried employee or manual worker it may well refer to any applicable collective agreement as the terms of that take precedence over the individual contract.

Probationary Periods

• Probationary periods are permitted under German Law. The law assumes that they will last for a "reasonable length of time" If the trial period is in an open-ended contract and neither party terminates the agreement during this trial

period the contract will automatically continue indefinitely.

• The duration and form of a trial period will be governed by collective agreements where applicable.

• There is additional protection for pregnant employees

during the trial period.

Employment Covenants

• Confidentiality– Employees must not disclose to third parties trade or

business secrets, either during employment or thereafter. Working for a competitor during the same employment period is also forbidden.

• Non-Compete Clause– Employees are not allowed to compete with their employer. -

- period of limitation not more than two yearsand restriction is reasonable. Employee is paid a sum to compensate for reduced earning power.

• Patents– Employment inventions are made during working time; free

inventions are all other inventions, including those for which the employee got the idea during his company's service.

Working Hours

• Working Time Directive applies, but Managers and Directors excluded

• Normal Hours 35 to 40, but 25% of agreements now 35 hours. Current average 37.5

• Sunday and Bank holiday working prohibited, but there are exceptions, but these must get at least 15 Sundays off

• No Exceptions for minors, pregnant women or nursing mothers

Public Holidays

• New Year's Day• Twelfth Night *• Good Friday• Easter Monday• May Day• Ascension Day• Whit Monday

• Corpus Christi*• Ascension of the

Virgin*• Day of German Unity• All Hallows Day• Repentence Day*• Christmas Day• Boxing Day

•* indicates holidays which are recognised in Local States.

•Generally many areas and companies also give Christmas Eve as public holiday.

Holidays

• Legal – 20 days on 5 day week after 6 months service

• Minors get more

• In practice 30 days is norm, 32 – 35 for managers

• Taken over two periods, one at least 12 days long

• Holiday can carry forward to March of next year, but no cash in lieu.

• Leavers given certificate of holidays taken to give to new employer

Time Off

• Personal Time Off – Personal Reasons – paid. Often extended by collective agreements

• Maternity & Parental Leave– Not last six before or eight after (exceptions!)– Three years, entitled to job back, can do part-

time work with no loss of benefits– Baby Feeding breaks – 2 x 30Mins

Time Off

• Training / Educational Leave– Apprentices– Others - 5 days for Vocational/Civic Training

• Works Council Duties– Training

• First term - 4 weeks• Subsequent terms – 3 weeks

– Duties• 12 hrs - 50 – 100 employees• 21 hrs - 151 – 300• Full time - 300 employees +

National Minimum Wage

• There isn’t one!

• But…..– Collective Agreements establish levels below

which market will not permit payment– Federal Minister can extend collective

agreements by regulation– 65% employees in private sector covered

Pay

• PAYE operates

• Compulsory Social Security deductions

• Collective Agreements establish tariff wage

• Illegal to pay less than 2/3rds

• No discrimination

• Bank transfers

• 13th Month

Contribution Computation Basis (CCB)

• State Maximum Eligible Basis for calculation of Benefits

• Linked to National Average Earnings (1999 DM102,000

• Full rate for Retirement,Death and disability

• 75% rate for Medical

Contributions

• Split equally between Ee and Er

• Combined rates– Retirement/Unemployment 25 – 27%– Health 15%– Disability 2%

Sick Pay

• Full rate for 6 weeks• Thereafter 80% of net pay for 78 weeks up

to CCB• Covers everybody up to Board level, but

they can apply to be covered• Higher paid can contribute more

voluntarily, but employers not required to contribute above CCB

Long Term Sickness

• Covered by State

• Benefits are by table according to care required

• Higher paid employees can cover via insurance

Medical

• Included with short term sickness• Hospital care covered – deductible for first 14

days• Consultants fees and drugs covered – small

prescription fee• Confinement fully paid• Maternity benefit of DM25 per day, but if net

earnings exceed employer funds difference• Funeral Grant

Equality and Discrimination

• Sex discrimination rules apply, although exceptions – heavy manual work, or modelling!!

• Disabled, more than 15 employees, 6% • DM200 per month per person• Must accommodate physical disabilities for

work and environment• No Sexual harrassment

Personal Details

• Strict laws on privacy of personal information

• Enquiries only into areas affecting work relationship

• Employees have right to read and comment• Pre employment medical difficult –

generally employ and use probationary period if problems

Retirement

• 65 for both sexes

• But up to 1999, women can retire at 60, increasing to 65 at 1 month per month

Pensions

• 3 Pillar principle applies:– State – 40 - 45% post retirement up to CCB– Employer – 20 – 25% up to CCB and 60%

thereafter– Employee – The rest!!!! (Can be insured)

Pensions

• Pension Promise – Book reserve– Sometimes insured

• Support Fund – Insured separately from company assets

• Direct Insurance – as it says!• Pensions Fund – Captive Insurance

Company, managed by employer – only for the very large company

Termination

• Notice periods– Specified by employment agreement– Employee four weeks to 15th or end of month– Until recently, 6weeks to end of quarter

Employers

• Service Notice Period• Trial Period 2 weeks• <2 years 4 weeks to 15th or month end• 2 - 5 years 1 month to calendar month end• 6 - 8 years 2 months to calendar month end• 9 - 10 years 3 months to calendar month end• 11 - 12 years 4 months to calendar month end• 13 - 15 years 5 months to calendar month end

• 16 - 20 years 6 months to calendar month end• >20 years 7 months to calendar month end

Unfair dismissal

• Over 18 + 6m service + 5 or more employees

• Must be for good reason and prove justifiable

• Employee has 3 weeks to appeal to Labout Court

• Reinstatement order most likely

Unfair dismissal

• Age Length of Service Months' salary compensation

• <50 years >15 years <12 months• <50 years <15 years <15 months• >55 years 20 or more years <18 months

Redundancy

• Consult Works Council• Notify Labour Department, with Works council comments• Labour Department can defer, for 2 months or refuse

permission• Employer can enforce but must

– Notify works council– Give Contractual Notice– Serve notice correctly – in writing, by hand and obtain receipt or

by hand to letterbox of last known address– Create Social Plan to deal with hardship– Consider alternatives

Redundancy Notification

• Number of employees in company Number of dismissals

• 20 - 59 >5• 60 - 499 >25 or 10% of

workforce• 500+ .30

Selection Criteria

• Agree with Works Council– Service– Age– Number of dependents– Disabilities– Discrimination– Avoidance – Transfers etc

References

• Employer may only enquire into items relevant to job

• Tend to use Trial Period to deal with problems