Chained fixed-term contracts: 10 fixed-term contracts in 15 years may also be permissible

In a recent ruling, the Federal Labor Court decided that 10 fixed-term contracts in 15 years can be permissible, ruling dated April 29, 2015, Ref: 7 AZR 310/13.
Courts repeatedly have to deal with the effectiveness of fixed-term contracts in employment contracts. If the fixed-term contract is ineffective, the employment relationship will continue for an indefinite period of time. The employer, who originally expected the employment relationship to end, must now find work for someone for whom the need for employment has completely disappeared or entice the employee with a severance payment in order to increase their willingness to end the employment relationship.

Many employers understandably try to close a staffing gap caused by maternity and/or parental leave, illness, etc. by employing representatives who then receive fixed-term employment contracts. The law explicitly provides for this case and allows fixed-term employment contracts to be concluded due to the temporary need for replacement. However, this becomes problematic when the respective employee's fixed-term employment contracts are lined up one after the other and when the maximum duration of two years and the number of contract extensions (a maximum of three times within two years) specified in Section 14 Paragraph 2 Sentence 1 TzBfG for the unfounded fixed-term contract are exceeded has been exceeded many times over. The employer would then have to demonstrate in court proceedings that special circumstances refute the assumption of design abuse. However, that emphasizes Federal Labor Court recently made a decision, judgment of April 29, 2015, Ref: 7 AZR 310/13, that the mere fact that the employer is forced to repeatedly or even permanently resort to fixed-term employment contracts does not constitute the existence of an abuse of law (in the specific case, several fixed-term employment contracts were concluded for a period of 15 years. The Federal Labor Court denied this in this case an abuse of law because the employer was able to present circumstances that exonerated him).
Employers should therefore make sure to document their specific representation needs in a comprehensible manner, should this be covered multiple times by the same employee, in order to be prepared “if the worst comes to the worst”.