top of page

Germany’s labor laws provide a clear framework for fixed-term employment contracts, known as Befristeter Arbeitsvertrag. These contracts allow employers to hire employees for a specific period or project while adhering to strict legal guidelines. Here’s everything you need to know about fixed-term contracts in Germany.


What is a Fixed-Term Employment Contract?


A fixed-term contract is an agreement between an employer and an employee that specifies a defined period of employment. Once the term ends, the employment relationship automatically terminates unless it is explicitly extended or converted into a permanent contract (Unbefristeter Arbeitsvertrag).


Legal Framework


Fixed-term contracts in Germany are regulated by the Part-Time and Fixed-Term Employment Act (TzBfG). This law ensures that fixed-term workers are treated fairly and prevents the misuse of temporary contracts.

[Image description: A women is sat at a table with a stack of documents and is holding a pen. She is wearing a blazer, has mid length brown hair and is smiling at the person opposite.]

[Image description: A women is sat at a table with a stack of documents and is holding a pen. She is wearing a blazer, has mid length brown hair and is smiling at the person opposite.]

When Can Employers Use Fixed-Term Contracts?


There are two types of fixed-term contracts in Germany:


  1. Objective Justification Required

Employers must have a valid reason for the time limit. Common justifications include:

  • Covering for an employee on parental or sick leave.

  • Temporary increase in workload (e.g., seasonal peaks).

  • Project-based work with a defined timeline.

  • Testing an employee’s suitability for a specific role.


  1. Without Objective Justification

Employers can offer a fixed-term contract without justification, but there are limitations:

  • Maximum duration: 2 years.

  • Renewal: The contract can be renewed up to 3 times within this period.


Note: Start-up companies (under 4 years old) can offer fixed-term contracts without justification for up to 4 years.

Key Features of Fixed-Term Contracts


  1. Written Form Requirement

  • A fixed-term contract must be in writing. Verbal agreements are not legally enforceable under German law.


2. Maximum Duration

  • Without justification: 2 years (3 renewals).

  • With justification: No strict time limit but must align with the specific reason for the contract.


3. Termination During the Term

  • Unless explicitly stated in the contract, fixed-term contracts typically cannot be terminated before the agreed end date. However, mutual agreement or serious misconduct may allow early termination.


4. Conversion to Permanent Employment

  • If a fixed-term contract continues after its expiration date without renewal or a new agreement, it automatically converts into a permanent contract.


5. Non-Discrimination

  • Employees on fixed-term contracts have the same rights as permanent employees, including pay, benefits, and protection against workplace discrimination.


Advantages and Disadvantages


For Employers

  • Advantages: Flexibility for short-term needs, no obligation to retain employees beyond the term.

  • Disadvantages: Limited use without justification, administrative burden for renewals.


For Employees

  • Advantages: Opportunity to gain experience, potential pathway to permanent employment.

  • Disadvantages: Lack of job security, limited long-term benefits.


Best Practices for Employers

  • Be Transparent: Clearly outline the contract’s duration, role expectations, and any renewal possibilities.

  • Stay Compliant: Ensure you follow the legal requirements under the TzBfG, especially regarding justifications and renewals.

  • Avoid Misuse: Overusing fixed-term contracts can lead to legal disputes and penalties.


Final Thoughts


Fixed-term contracts are a valuable tool for managing temporary workforce needs in Germany, but they come with strict rules. By understanding and adhering to these guidelines, employers can effectively use these contracts while maintaining fairness and compliance.


If you’re an employee offered a fixed-term contract, knowing your rights ensures you can make informed decisions about your role and future.

More articles we think you'll enjoy . . .

Sexual Harassment as a Female Disabled Entrepreneur

Lucy Cohen Empowering Female Founders at the Tramshed Tech Dinner

Do I need to speak the same language as my employees

Getting the Best Out of Your Global Workforce

Boosting Employee Engagement in New Jersey

HR in Germany

Boosting Employee Engagement in Guam

Boosting Employee Engagement in Oregon

Understanding Collective Agreements in Denmark

Creating Effective Employee Guidelines for Small Businesses

Understanding Collective Bargaining Agreements in the Netherlands

Understanding Florida’s At-Will Employment Contracts

Fixed-Term Employment Contracts in Germany: What Employers and Employees Need to Know

Sophie Mason

January 2025

bottom of page