Majority Opposes German Plan for Four-Year Temporary Hires as Court Rulings Complicate Labour Law

A government-backed package loosening the rules on temporary employment contracts in Germany faces broad public rejection. According to a YouGov survey, 54 percent of respondents oppose the reforms, with only 26 percent in favour. Trade union leaders have also voiced strong criticism—the heads of both the DGB and Verdi spoke out against widening the scope for fixed-term hiring without a specific reason.

Under the changes, which take effect on 1 January 2027, employers will be able to offer new hires fixed-term contracts of up to four years without providing a justification, double the previous two-year ceiling. The number of permissible extensions rises from three to six. These relaxed rules apply only to appointments made before 31 December 2030.

A key procedural shift: from 2027, written form for fixed-term agreements will no longer be mandatory—simple text form suffices. The reform also scraps the ban on rehiring former employees on fixed-term contracts, making it easier to bring back previous staff.

Despite these relaxations, labour law experts point to a persistent pitfall. Under current case law, a fixed-term contract signed late by either party is in most cases converted into an indefinite position. The reform does not address this risk, which remains one of the biggest traps for employers during onboarding.

The same legislative package introduces other employment-law adjustments. Companies may soon be allowed to require a medical certificate from the first day of sick leave. There is also discussion of easing termination rules for high earners. Legal advisers stress that efficient absence management is becoming increasingly critical.

Alongside the contract reform, the government is modernising cooperative law. Online general meetings will be permitted, and registration deadlines for cooperatives are shortened to 20 days. The shift from written to text form is a common thread in both areas.

Recent court rulings add further layers of complexity for employers:

• The Federal Labour Court (BAG) ruled that sending a dismissal by recorded delivery does not guarantee legally valid receipt. It continues to recommend hand-delivery in front of witnesses.
• On 16 July 2026, the Federal Court of Justice (BGH) decided that confirmation pages for online cancellations must not contain any information about alternative options, such as pausing a contract. This directly affects the design of cancellation buttons.
• The Hamm Regional Labour Court (LAG) stipulated that a qualified reference letter must be issued on company paper with a correct letterhead.
• Finally, the BAG held that if corporate targets are not communicated to an employee in time, a 100-percent achievement rate is presumed, triggering corresponding bonus entitlements.

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