Career Tips: Does a permanent contract always remain permanent?

Unlike a fixed-term employment contract, a permanent contract does not contain a predetermined expiry date on which the employment relationship automatically ends. The term therefore extends purely theoretically to retirement. Such an agreement eliminates many concerns for employees. They no longer have to worry about an extension or looking for new jobs. In addition, the greater job security makes it possible to think more about topics such as building a house and starting a family. But is a permanent contract really a kind of guarantee that an employee can work for the company indefinitely? Or is the employer allowed to subsequently limit the employment relationship again to a fixed period of time?

Subsequent limitation possible, but not without reason

As Peter Meyer, specialist lawyer for labor law in Berlin and member of the executive committee of the labor law working group in the German Lawyers’ Association, explains to the news channel n-tv, a subsequent limitation of an employment contract is rare, but fundamentally possible. To clarify the facts, a look at the Part-time and Fixed-Term Act (TzBfG for short) must be thrown, as this contains corresponding regulations. Paragraph 14 of the TzBfG deals with the permissibility of the time limit and stipulates in the first paragraph that the time limit of an employment contract is permissible “if it is justified by an objective reason”. According to the law, such a reason can be a temporary operational need for work, a time limit following training or studies or employment to replace another employee. However, there are other possible reasons for a time limit.

As an example of a subsequent time limit, Meyer gives an employee at n-tv who is still in a probationary period and who is to replace another employee for a certain period of time due to absence (parental leave or sabbatical). If the employer is not sure whether he really wants to employ the employee for an unlimited period after the six-month trial period has expired, he can then use him as a representative for the absent employee, explains Meyer. For this, a new, fixed-term contract would only have to take the place of the previous, open-ended employment contract. Due to the temporary need for representation, the change is also objectively justified.

The conclusion of an amendment agreement

According to an article in the Economic Forum, in order for a permanent employment contract to be replaced by a fixed-term contract, the employer and the employee must mutually agree on an amendment. If this is not possible due to disputes between the two parties, the employer can still implement his plan by issuing a notice of termination. In this way, according to the Economic Forum, he can enforce an amendment to the employment contract, although the employee does not agree to a subsequent time limit. According to Haufe, many employees would initially prefer to accept a time limit so that they would at least not lose their job immediately if in doubt.

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