Germany

1. Impact of Covid-19 on remote working

The Federal Government has placed an official appeal to all employers to urge their employees to work from home. This appeal will continue as long as the overall numbers of infections do not decrease and until a vaccine is administered to a large majority of citizens.

In the meantime, the German Federal Labour Minister is taking steps to provide a legal framework for remote working. After a first draft bill providing for a legal entitlement of employees to work from home for 24 days per calendar year has been rejected, he has now submitted a revised draft bill. Contrary to the previous draft, employees shall now not be granted a statutory entitlement to remote working for a certain number of days but shall instead be granted a right to discuss the matter with the employer.

The draft provides for an obligation on the employer to discuss the start, duration, scope and distribution as well as the type of remote work with employees upon request with the aim of reaching a respective agreement.

If no agreement is reached, the employer will have to explain his rejection decision to the employee no later than two months after he received notification by the employee that he wishes to work on a mobile basis. In case the employer does not fulfil his obligation to explain his rejection decision or to discuss the matter at all, a legal fiction shall apply: the remote work notified by the employee shall be deemed to be fixed for the duration indicated, but for no longer than six months.

Irrespective of any legal obligation, German employers are starting to evaluate to what extent mobile work can save costs (e.g. rental costs for office space) and may increase the efficiency and well-being of employees.

2. Other impact of Covid-19

Covid-19 restrictions have caused great damage to the German economy. Until the end of June 2021, the government’s financial bridging aid (Überbrückungshilfen III) will aim to mitigate the consequences for companies, self-employed and particularly the hard-hit cultural, event and travel industries.

Further, the government has decided to extend the interim facilitated access to short-time work benefits until 31 December 2021. This applies to all employees whose entitlement to short-time work benefits arose until 31 March 2021. Full reimbursement of social security contributions during short-time work will however only be extended until 30 June 2021. From 01 July 2021 through 31 December 2021 only 50 per cent of social security contributions will be reimbursed by the government, if short-time work is commenced by 30 June 2021. For more details about the short-time work regulations see here.

The government has also extended the currently applicable suspension of the obligation to file for insolvency due to over-indebtedness until the end of January 2021. The same applies to the currently applicable exemption from the requirement of personal presence during works council meetings. The transitional permission to pass resolutions by means of virtual works council meetings has been extended until 30 June 2021.

See our dedicated feature on Covid-19 workforce and employment issues.

3. Life after Brexit

On 31 December 2020, the transitional period for the UK expired. In regard to employment terms, we expect major impacts on residence/work permits, social security and secondments.

EU and UK nationals and their family members who have resided legally in the other territory for five years, whether as students, employees or self-employed persons, are in principle entitled to continue their stay on a permanent basis. Since British nationals are considered third-country nationals after the UK left the EU, they must nevertheless submit an application for a residence permit in Germany. EU and UK citizens who wish to take up employment in the other country must meet the conditions currently applicable to third-country nationals in order to obtain a residence permit.

EU citizens and UK nationals subject to UK social security legislation at the end of the transitional period, as well as their family members, will continue to have access to UK social security benefits as before. This also applies to persons who are resident or ordinarily resident in an EU Member State at the end of the transitional period and who are subject to UK social security legislation. For British citizens residing in Germany, there are basically no changes to pension and health insurance. The treatment of UK nationals coming to EU countries after 31 December 2020 depends on the terms agreed under the new deal.

Furthermore, the EU Directive on the secondment of employees in the context of the provision of services will no longer apply to the UK. Consequently, the UK would not be obliged to apply the minimum EU standards to its entering EU secondees. Rather, at least secondments starting after the end of the transitional period will be governed by the national law of the country to which the employee is seconded.

4. Data protection driven employment law claims

In October 2020, Hamburg's data protection commissioner fined the fashion chain H&M of EUR 35 million for violating employee data protection rights - the highest fine ever imposed in Germany since the General Data Protection Regulation (GDPR) has been in force. Heavy fines were also imposed on Deutsche Wohnen (EUR 14.5 million) and the mobile communications provider 1&1 (EUR 9.5 million).

The fines imposed aim to deter companies from violating the privacy of their employees. Those fines demonstrate the importance of GDPR compliant data collection and processing. While we see companies already improving compliance with data protection, we expect these high fines to impose even more pressure on companies in 2021. Fines under the GDPR can amount to up to four per cent of a company's annual worldwide turnover.

5. Working time recording

As a consequence of the European Court of Justice’s ruling of 2019, according to which employers are required to record their employee’s working hours by means of an objective, reliable and accessible system, the German legislator was expected to implement a corresponding statutory obligation in 2020. However, no such law has been passed yet.

Nevertheless, some labour courts have already ruled as if that respective obligation already applies, even without respective national legislation in place. This jurisprudence hereby increases the pressure on the legislator to finally act in 2021.

The draft bill on mobile working (see point 1. above) provides for a first attempt to introduce an obligation to fully record working time for remote work. According to the draft bill submitted, employers are to ensure that the beginning, the end and the duration of the working hours of employees working from home is fully being recorded.