Temporary employment contracts without objective reasons – Prohibition in cases of “previous employment”: 22 years is a “very long” time

If an employee is reemployed by the same employer 22 years after the termination of the original working relationship, the prohibition in § 14 (2) second sentence of the Part-time and Fixed-Term Employment Act (Teilzeit- und Befristungsgesetz, TzBfG) against subsequent temporary employment contracts without an objective reason in the case of previous employment will not generally apply if the provision is implemented in a manner consistent with constitutional law. This was decided by the Federal Labour Court (Bundesarbeitsgericht, BAG) on 21 August 2019 (Case No. 7 AZR 452/17).

Facts of the case

The employee worked for the Federal Employment Agency between October 1991 and November 1992 as an assistant processor for child benefits. In October 2014, the employee was again employed by the Agency, this time as a temporary telephone service consultant in the service centre. The temporary employment contract (without an objective reason for the temporary nature) originally ended on 30 June 2015 but was extended until 30 June 2016. The employee sought a declaratory judgment that her employment relationship was not effectively terminated on 30 June 2016 because the contract had a fixed term. In her view, as she had worked for the same agency previously, the employment contract could not be a temporary one without an objective reason for the fixed term.

The judgment

The BAG took a different view. The fixed term of the employment agreement was effective without an objective reason. While a temporary employment agreement would be inadmissible under § 14 (2) second sentence of the TzBfG if the agreement is set to terminate on a specific date, there is no objective reason for the fixed term and there was a previous employment relationship with the same employee, this provision must be interpreted in line with constitutional law in accordance with the judgment of the Federal Constitutional Court (Bundesverfassungsgericht, BVerfG) of 6 June 2018 (1 BvL 7/14, 1 BvR 1375/14). Accordingly, the prohibition against fixed-term contracts without specific grounds for the fixed term will be unreasonable, if there is no danger of the employee being exploited due to their structurally inferior position and forced to agree to a chain of fixed-term employment contracts. The prohibition against fixed-term contracts could also be unreasonable if the previous employment occurred a very long time ago. This was the case here because the employee had worked for the same employer 22 years before the later employment contract. There were no special circumstances that would demand the application of the prohibition again fixed-term employment agreements without a specific reason.

Consequences for practice

At the start of this year, the BAG already had the opportunity to substantiate the legal guidelines established by the BVerfG on the timing of the previous employment: in two judgments of 23 January 2019 (7 AZR 733/16 and 7 AZR 161/15, see the March 2019 BEITEN BURKHARDT Labour Law Newsletter, page 13), the BAG held that it is reasonable to apply the prohibition against fixed-term contracts without operational reasons for the fixed term when the previous employment occurred only eight years previously. Such a period could not be considered a very long time. The BAG has also held that a period of approximately 15 years is also not a very long time in this respect (see judgment of 17 April 2019 in Case No. 7 AZR 323/17). The new judgment offers further guidance for assessing whether the previous employment was a very long time ago. At least a period of 22 years could be too long for it to be reasonable on the employer to prohibit the use of a fixed-term contract due to the previous employment connection. Based on the new judgment of the BAG, it is possible to establish a rough framework for the criterion of when the previous employment is considered a very long time ago. However, even after this judgment, it is still not possible to say where the reasonableness line for employers should be drawn. As the BAG stressed in its previous judgments, this needs to be assessed in each case.

Practical tip

The unreasonableness of the fixed-term prohibition under $ 14 (2) second sentence of TzBfG is subject to strict requirements. If you are looking to conclude a temporary contract without an objective reason for the fixed term, you should ensure that the applicant was not previously employed within your organisation – you could use a questionnaire to clarify this point. Otherwise, there is a risk that the later fixed-term employment relationship will become an open-ended one.

If you have any questions related to this topic, please feel free to contact Johannes Schäfer (Lawyer).