Germany is a federal republic made up of 16 states (Länder). Employment legislation is primarily a federal matter, though the laws of individual states are important in several areas, such as educational leave and public holidays.

The Basic Law (Grundgesetz), or constitution, sets out a number of principles relevant to employment law, such as non-discrimination and equality, and freedom of association and collective bargaining. In some areas of law, legislation is consolidated into a single code, and several of these are relevant to employment — notably the Civil Code (Bürgerliches Gesetzbuch, BGB), which governs employment contracts, and the Social Security Code (Sozialgesetzbuch), which deals with matters including sickness benefits. However, employment legislation itself is not codified in this way but takes the form of numerous individual statutes (often influenced by EU law). The case law of the specialist labour courts plays a significant role in interpreting employment legislation.

Pay and conditions for a majority of German employees are set directly or indirectly by collective agreements, which are signed mainly at industry level. In some areas, employment legislation allows collective agreements to deviate from statutory provisions. Other important sources of law are “works agreements” signed at establishment level by employers and works councils, and individual employment contracts. In employments covered by a collective agreement, individual employers and employees cannot agree terms and conditions that are less advantageous to employees than those stipulated in the collective agreement, unless the collective agreement permits this.

This topic refers to employment law in the private sector only.

Temporary COVID-19 Crisis Measures (as at 20 May 2020)

During the COVID-19 pandemic, the German Government has taken a number of temporary measures affecting employment law. The main instrument to prevent crisis-related job losses has been expanded use of an existing state-subsidised short-time working scheme, while employees prevented from working for reasons such as quarantine or needing to look after children whose schools are closed have been entitled to partially paid leave (also publicly subsidised). Until the end of June 2020, the Government has relaxed, for specified essential industries, normal rules on maximum working hours, minimum rest periods and work on Sundays and public holidays (see Working Time, Rest and Holidays). Employers are required to observe special COVID-19 health and safety standards for the duration of the crisis.

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