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.]](https://static.wixstatic.com/media/11062b_1c069d2648c8412eb9b42c984807afc0~mv2.jpg/v1/fill/w_980,h_653,al_c,q_85,usm_0.66_1.00_0.01,enc_avif,quality_auto/Job%20Interview.jpg)
[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:
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.
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
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.