Kiran

A common but less addressed issue for the expatriates is the coming to terms with the differences in the legal systems between their mother country and the German legal system. It is always important to familiarise yourself with the regulatory arrangement of the country you reside in. It is always useful to understand the type of contracts you might enter in from renting apartments to selling cars or regarding the differences relating to German employment law, workplace rights and Labor Law that have a direct effect on the your rights in full or part time employment.

The German Legal System provides a safeguard to ensure the objectivity in contract agreements and investigations.

Basic Rights

The German Constitution is referred as the Basic Law for the Federal Republic of Germany (Grundgesetz für die Bundesrepublik Deutschland ) which implements the separation of powers and binds the executive and judiciary powers by law and justice.

Contract Structures

In Germany, you might not find contracts with detailed information that puts everything on the paper you sign. Instead, the specifics are broadly covered by the German Laws. This is a way to control the unfair and unlawful exploitation of both parties bound by the contract.

House/Apartment Rental Agreements

The contract agreements can be temporary, fixed term or indefinite. They would usually be concise without details on lease dealing, notice periods or renovation requirements as these would be covered by the German Legal System.

And, because of no specific rules regarding the form of the rental agreement, an indefinite rental agreement (“unbefristeter Mietvertrag”) is the most common type of rental agreement used in Germany. It can be simply agreed upon orally which could be problematic in the long run.

It is therefore recommended for expatriates to have an open conversation about leasing and conditions with the owner and demand a written agreement based on discussions in case of no written agreement being provided with at least:

• Names and addresses of both parties,
• Start date and length of the lease agreement
• Amount of rent and utility expenses
• Terms of payment
• Description of the rented premises (e.g. number of rooms, parking space, garden etc.).

Indefinite Rental Agreement

Any rental contract that is agreed upon orally or for a period of more than a year is assumed to be indefinite.

Termination of contract by the landlord can be by either providing legitimate reasons, for example, non-compliance with the terms and conditions of the contract by the tenant, or if the landlord needs the property for himself or his family. This is known as ordinary termination of contract (“ordentliche Kündigung”) or by giving a good reason to do so such as improper use of property by the tenant or unpaid rent for more than 2 months. This is known as extraordinary termination of contract (“außerordentliche Kündigung”).

Both of these types of termination should be given with appropriate period of advanced notice and as a written statement, noting the specific reasons for terminating the contract.

If the tenant wishes to terminate the contract, he must send written notice to the landlord with a three-month period of advanced notice.  For ordinary termination of the contract (“ordentliche Kündigung”), the tenant is not required to give reasons.

But, in exceptional circumstances such as dangerous living conditions or unavailable property, the tenant has the right to terminate the contract without the 3-months advanced notice with clearly specifying the reasons for termination in a written statement that is given to the landlord.

It is important to note that only the person(s) bound by the contract have the right to terminate it. If there are several landlords or tenants, the termination notice must be signed by all landlords and addressed to all tenants or vice versa.

Fixed Term Contracts

This is the less popular version of rent agreements in Germany (except for student rooms, furnished rooms, or rooms used for a temporary period).

A fixed-term leasing agreement is only be signed, if the owner wishes to either use the property for himself after the end of the contract (“Eigenbedarf”), has to make substantial changes to the property or lease the premises for professional purposes which makes renewing the contract impossible.

A fixed-term rental agreement cannot be terminated before the end of its term, except under extraordinary circumstances. It may still be possible from the landlord’s side but includes an advance notice.

There is no obligation to renew the fixed-term contract, but 4 months before the end of the contract, the tenant is entitled to request an indication from the landlord about whether the lease agreement will still be terminated at the previously agreed upon date and the landlord should get back to the tenant within 1 month following this request. If there is no valid reason for terminating the contract, the tenant is entitled to request the extension of the contract.

Contracts of Employment

Under the Documentary Evidence Act (“Nachweisgesetz”), an employer is required to lay down the terms and conditions of the employment relationship no later than one month after the commencement of the employment relationship and shall at least contain the following information:

• Name and address of the parties to the contract
• Date of the commencement of employment
• For term based employment – the duration of the employment relationship
• Place of work or an indication of transfers to different locations
• Description of the job
• The compensation breakup and the Salary due date
• Holiday entitlement
• Working hours
• Notice perios for the termination of the employment relationship
• Reference to labour agreements, company or service agreements being applicable to the employment relationship.

German Laws such as the Minimum Wage Act (€9.35 gross per hour since 1 January 2020), the Federal Vacation Act (20 vacation days per year for a five-day working week) etc. set the minimum terms and conditions for employment in Germany.

The other important employment laws of the German Legal System include:

• The Civil Code.
• The General Equal Treatment Act.
• The Part-Time and Limited Term Employment Act.
• The Continuation of Remuneration Act.
• The Minimum Wage Act.
• The Protection Against Unfair Dismissal Act.
• The Minimum Vacation Act for Employees.
• The Works Constitution Act.
• The Hours of Employment Act.
• The Maternity Protection Act.
• The Federal Parental Benefit and Parental Leave Act.
• The Labour Court Act.
• The Act Regulating the Commercial Leasing of Employees.
• The Act on Documenting Essential Applicable Conditions for Employment Relationships.

The notice periods are set forth in the German Civil Code (“Bürgerliches Gesetzbuch”) which represent the statutory minimum for dismissals and apply if the contract does not provide for any specific notice periods. These are proportionally dependent on the years of employment and range from one to four months.

In case of litigation between the parties of an employment relationship the following courts or tribunals have jurisdiction to hear employment-related complaints.

• The labour courts:  one professional judge and two honorary judges
• The higher regional courts: one professional judge and two honorary judges
• The federal labour court: three professional judges and two honorary judges

Attorneys

There are numerous private Law Firms specializing in the advising of Expatriates residing in Germany. Even if knowing your rights and legal entitlements is covered navigating through the intricacies of the German legal system can be a hugely stressful and complex task. That is why, it is wise to have a legal representation unless a case is minor or the charges are undisputed.

The right to be represented by counsel is carefully protected under German law. In some cases, German law even mandates the provision of counsel even if someone doesn’t wish for it.

Clarity regarding fees is highly important thus you should immediately discuss the costs of possible legal actions, or of filing a lawsuit or complaint (legal fees, attorney fees, court fees etc.) before the relevant Court of Justice.

If the accused in criminal cases is acquitted, the court generally pays the attorney’s fees.

In case of litigation processes it is advisable to discuss the relevant deadlines, such as the crucial 3 weeks deadline after delivery of the termination notice in case of employment.

In a German trial, the judge and not the defense lawyer or the prosecutor, obtains the testimony of the witnesses. After the judge is finished, the prosecutor and the defense counsel are permitted to question witnesses.

Courts and Judges

The judicial system in Germany is established and governed by the Basic Law of the Federal Republic of Germany. The establishment is particularly of two types:

German Ordinary Courts

The German ordinary courts usually rule in criminal and civil matters such as marriage and family disputes and other non-contentious cases

The ordinary courts in Germany are organized as:

• Local courts (Amtsgerichte)
• Regional courts (Landgerichte)
• Higher regional courts (Oberlandesgerichte)
• The Federal Court of Justice (Bundesgerichtshof).  

Local and regional courts serve as the first instance courts, while the Higher Regional courts and the Federal Court are appeal courts. The District Court is the one that hears cases in which the dispute has a value of over 5,000 euros.

German Specialized Courts

The German specialized courts are divided into:

• Administrative courts: dealing with wrongful administrative acts that can refer to how the government has treated citizens.
• Labor law courts: cases involving employment disputes, collective bargaining agreements or workers compensation claims.
• Financial courts: these specialize in tax-related litigation, for example, disputes between taxpayers and the tax authorities.
• Family Courts: deal with family and marriage matters, child custody or child-parent matters as well as adoption and alimony rights.
• Probate Courts: they issue inheritance certificates as well as handle matters concerning the enforcement of wills and other inheritance issues.
• The Federal Patent Court: this court hears cases involving trademarks, patents and generally intellectual property cases.

The Federal Constitutional Court (Bundesverfassungsgericht) is the highest court in the German judicial system. It rules in constitutional matters and has contributed to the development of the Federal Republic of Germany.

It is important to note that there is no jury trial in Germany as Article 92 of the Basic Law states that “the judicial power shall be vested in the judges” therefore the judges take the active role in court proceedings.