Germany’s Labour Overhaul Draws Fire as 54% of Public Reject Four-Year Fixed-Term Contracts

A majority of Germans oppose a sweeping labour market reform that would allow employers to hire staff on fixed-term contracts for up to four years without giving a reason, a YouGov survey has found. Fifty-four percent of respondents said they were against the planned changes, while only 26 percent supported them. The package, agreed by the coalition committee in early July, targets several areas of employment law and is set to take full effect from 2027.

The centrepiece of the reform is a doubling of the maximum duration for fixed-term contracts without an objective justification – from two years to four years (48 months). Within that period, employers may extend the contract up to six times. Previously the limit was three extensions. The new rules apply to all new hires until 31 December 2030. Additionally, the government is loosening the “prior-employment ban” that previously restricted rehiring former staff on a fixed-term basis.

Another change eases the administrative burden on companies: from 2027, written employment contracts can be concluded in simple text form rather than requiring a formal signature. This is intended to facilitate digital processing.

Labour unions have reacted with sharp criticism. DGB chief Yasmin Fahimi and Verdi chairman Frank Werneke both rejected the expansion of fixed-term employment, warning that it would increase precarious working conditions and weaken workers’ rights. The public mood appears to back their concerns.

High earners face different rules. Employees who earn more than roughly 180,000 euros per year will become easier to dismiss from 2027. Under the new rules, an employer can terminate the contract by paying a tax-privileged severance payment without needing to provide an operational reason.

Starting in January 2027, employees will be required to submit a medical certificate from the first day of illness. The option of a telephone sick note will be abolished entirely. To combat abuse, the coalition is also toughening penalties for issuing false medical certificates. At the same time, the statutory minimum wage is set to rise to 14.60 euros in January 2027, and the threshold for mini-jobs (low-paid part-time work) will increase to 633 euros.

Doctors’ representatives have warned that the mandatory sick-note rule will overwhelm practices. The National Association of Statutory Health Insurance Physicians estimates up to 30 million additional practice visits each year as a result.

While the legislation is still going through parliament, the courts have been clarifying employer obligations. In spring 2026, the Federal Labour Court ruled that digital scan systems used by postal services do not constitute valid proof of receipt for invitations to an occupational reintegration management process. If an employer cannot prove the invitation was received, a dismissal based on illness becomes invalid.

Earlier, in January, the same court held that dismissals during the probationary period are void if the workplace representative for severely disabled employees was not properly involved. A mere acknowledgment stamp is insufficient – employers must wait for the statutory one-week response period to elapse.

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