Fixed-Term Contracts in Germany, France, and Denmark: Detailed Guide

There are two types of job contracts – a fixed-term (temporary) contract and a permanent contract. While the most common practice is to offer permanent contracts to employees, it increases the liability of the employer. Although having a fixed-term contract has its benefits, however, it is also subject to some crucial rules. 

In this blog, we are going to review the basic rules of fixed-term contracts in Germany, France and Denmark.

Fixed-Term Employment in Germany

There are two different types of job contracts in Germany – fixed-term contracts with reason (mit Sachgrund) and fixed-term contracts without reason (ohne Sachgrund).

Fixed-term contracts with reason or “objective grounds” need to be justified by the employer prior to signing the contract. Objective grounds include a temporary increase in the work volume or having to substitute for an employee who is temporarily absent (sick or on maternal leave). 

On the other hand, fixed-term employment contracts with no objective grounds are subject to stricter rules. Employers need to look out for several implications: 

• If the employee continues to work after the end of their fixed-term
  contract, and without the employer bringing it up, the court could
  automatically re-consider the contract as unlimited; 

• It is not legal to provide a candidate with a fixed-term contract without
  reason if they have previously worked for the same employer.

Length of job contract

When it comes to fixed-term contracts with reason, there is no maximum duration stipulated in law in regard to this type of job contract, as the point is to fulfill the temporary need of the employer for as long as it exists.

On the other hand, the consecutive renewal of fixed-term contracts without reason is limited to 3 times that cover a span of or not more than two years altogether.

Termination of German fixed-term contracts 

A fixed-term employment contract under German law ends automatically at:

• The end date proposed and agreed on in the contract; 
• At the end of the second year of employment (ohne Sachgrund – contracts);
• When the temporary need in the objective ground is fulfilled (mit Sachgrund
  – contracts).
  
  

No notice period is needed unless exclusively specified in the contract. However, make sure to keep track of when the contracts expire in order to prevent assigning work to a temporary employee whose contract has already ended.

Bonus read: DACH Region Total Cost of Employment: Germany, Switzerland, Austria.

Fixed-Term Employment in France

The use of fixed-term contracts in France is governed by law. In comparison to Germany, this type of job contract may only be used provided that there is an objective reason, among which:  

• Replacing an employee on leave,
• A temporary increase in business volumes,
• Seasonal employment (tourism, agriculture, etc.), 
• Integration of vulnerable individuals,
• Senior CDD – Contrat à durée déterminée– for workers over 57 in order
  to acquire a sufficient number of years to claim a full pension.

Length of France job contract 

A fixed-term contract may be renewed if explicitly stated by a clause in the contract, twice for a maximum period of 18 months, unless otherwise provided for in a collective agreement if applicable. 

When the fixed-term employment contract for a position expires, it can only be renewed with due observance of a waiting period, which is decided upon by taking into consideration the length of the employment relationship. This is in case the employer still needs to fill the same or identical position or offer a second fixed-term contract for the same employee.

There are only certain cases in which this rule can be disregarded, listed in the French labor code, for instance, when the contract is for a seasonal job or emergency work required for security measures.

Termination of a fixed-term contract 

It is preferable to send a written notification by registered post with a notice.  

Neither party may terminate it prior to its end unless still in a trial period and except in the event of an amicable separation, serious misconduct (“faute grave”), force majeure or if the employee finds alternative employment under an unlimited contract.

There are minimum requirements for the duration of the contract. An employee cannot be dismissed if the employee they have been hired to temporarily replace returns prematurely to work. Upon dismissal, employers are obliged to pay fixed-term employees an end-of-contract instability of work bonus amounting to 10% of the salary.

For additional information about employment in France, visit Employment Costs in Spain, Portugal, and France.

Fixed-Term Employment in Denmark

In Denmark, there is no legal limit for the maximum number of successive fixed-term contracts. However, The Confederation of Salaried Employees and Civil Servants in Denmark states that usually, 2 successive renewals can be based on objective reasons. 

More than 2 renewals pose suspicion of breaches of, for example, the Salaried Employees Act and could be declared null and void by the court unless proven otherwise.

The standard maximum duration in practice, but not by law, would be 2 consecutive years. 

Termination of Denmark's fixed-term contracts 

Unless renewed, fixed-term employment contracts terminate automatically on their expiry date or upon completion of the specific tasks. Both employer and employee can terminate the contract at any time due to observance of any clauses in the contract or following the same rules as in the case of an indefinite-term contract.

Provisions on termination must appear in the contract, and the period of employment and the time of termination of employment should be specified precisely. This is also the case for including a section on prematurely ending the contract before the fixed date with a notice period. It is done in order to avoid doubts about notice or reasons for termination.

More information

If you're interested in hiring European personnel, you should learn more about fixed-term contracts and employment in European countries, such as Germany, France, and Denmark.

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