German and UK employment law: spot the difference
There are many reasons why people would choose to move to Europe, and in particular Germany, for a development in their career. But it might not be as simple as just learning the language, you will also have to know the differences in employment law.
When it comes to employment law, you might believe there is little difference between working in the UK and Germany. After all, both are part of the EU. However, there are significant differences.
The first thing to bear in mind is that Germany’s employment laws apply to all foreign nationals working in the country, regardless of where their company is based. UK citizens do not need a work permit (although they need to officially register as residents). Those from outside the EU need a residence title before starting work.
All German employees are required to have an employment contract setting out remuneration, start date and other basic details. Ideally this should in writing and translated into German in the event of any dispute being brought before a court. Typically, an employment contract will be for an unlimited time, but limited contracts are permissible if, for instance, a project will be completed within a certain time frame. The maximum length of a limited contract is two years.
In contrast to the UK and some other industrialized countries, Germany’s social security system is financed collectively via a process of redistribution. Generally, all employees are required to contribute to the system, which covers health insurance, home care and nursing insurance, pension insurance and unemployment insurance. An employee’s share of contributions amounts to approximately 21% of their gross salary and is matched, roughly, by their employer.
Levels of pay are determined by individual employment contracts. Unlike the UK, there is no statutory minimum wage in Germany although some sectors have agreed on a minimum wage system, for example, the construction industry.
Approximately 30% of German workers belong to a trade union and collective workplace agreements are common in sectors including the automotive, chemical and banking industries, as well as the public service.
German employees normally work 35–40 hours over a five-day week. Under the law, the working day can be no longer than eight hours but up to ten hours is permissible if the average daily working time over a six-month period does not exceed eight hours.
The law generally prohibits working on Sundays and public holidays.
Holiday pay: Employees are entitled to a minimum four weeks’ paid holiday each year but many employers offer more.
Sick pay: Full salary is paid for up to six weeks per illness and in certain circumstances up to 12 weeks.
Maternity pay: Maternity leave must start at least six weeks prior to a baby’s due date and mothers are not allowed to return to work until at least eight weeks after the birth. Maternity allowance is paid during this period out of the statutory health insurance fund and supplemented by the employer. Women cannot be made redundant while they are pregnant or during the first four months after giving birth.
Parental leave: Mothers and fathers are entitled to three years’ unpaid parental leave, which they can share.
As in the UK, Germany has strict laws governing the termination of employment in order to protect employees from unfair dismissal.
Dismissal: Immediate dismissal is only possible in extraordinary circumstances, for example, in the event of serious misconduct. Generally, an employer must give notice in writing (not by email or fax) and employees are entitled to between four weeks’ and seven months’ notice, depending on how long they have worked for the organization. Individual employment contracts may specify a longer period than set out in law.
Redundancy: In England workers can be chosen for redundancy based on measurable factors including performance targets, punctuality and attendance record. In Germany employers must consider social factors such as age, disability and how many dependents an employee has.
Workers being made redundant are entitled to at least four weeks’ notice (rising to more than 17 weeks if they have worked for the organization for 10 years). Severance pay amounts to between 2.2 weeks’ pay (for 1 year service) to 21.7 weeks pay (for 10 weeks’ service).
German employment law is widely regarded as complex and some analysts advise taking out legal protection insurance to cover legal costs in the event of a dispute. If a dispute ends up in court, employees may have to pay for their own legal representation regardless of which party wins.