Bureaucracy Relief Act and its impact on labor law

Due to the constantly increasing demands on companies and public administration, the German ­Federal Government is planning to implement a new ­Bureaucracy Relief Act (“BEG IV”). For this ­purpose, the German Federal Ministry of Justice ­presented a framework paper for a further Bureaucracy Relief Act on 30 August 2023.

Background to the BEG IV

According to the framework paper, the German federal government is planning measures to reduce bureaucracy based on surveys of trade and professional associations and the areas identified by the federal ministries. The measures are intended to relieve burdens on the economy, citizens and government agencies.

The planned labor law measures are presented and ­evaluated below.

Effects of the BEG IV on labor law

Planned changes to employment contracts

Section 2 (1) no. 1 of the NachwG states that employers must record essential contractual conditions of the employment relationships in writing, sign the records and hand these over to employees. The amendments planned with the BEG IV are intended to integrate a provision into the NachwG which would remove the employer’s ­obligation to provide proof of the essential contractual terms if an employment contract was concluded in a ­statutory electronic form replacing the written form. The same will apply to contractual amendments concluded in electronic form in the case of amendments to essential contractual terms. The economic sectors and branches ­according to Section 2a (1) of the German Act to Combat Clandestine Employment (Schwarzarbeitsbekämpfungsgesetz) will be excluded from this provision.

Planned changes to employer references

According to Section 630 p. 3 of the German Civil Code (BGB), the electronic form is excluded for the issuance of an employer’s reference. According to the planned ­measure, Section 630 of the BGB will be amended to the effect that the electronic form will also to be permitted when issuing references.

Planned amendments to the German Working Hours Act and the German Youth Employment Protection Act

Employers are currently obliged by Section 16 (1) of the German Working Hours Act (“ArbzG”) to post or publish a complete copy of the ArbZG in German and in the ­current version for the company. Pursuant to Section 47 of the German Youth Employment Protection Act ­(“JArbschG”), employers who regularly employ at least one young person must publish a copy of the JArbSchG and the address of the competent supervisory authority in a suitable place in the company for inspection, or display it, and post a notice in a suitable place in the company about the beginning and end of the regular daily working time and the breaks for young people. These provisions will be adapted with the aim of ensuring that the relevant posting obligations are also met by employers if they make the required information available electronically via the information and communication technology commonly used in the company, or in the department (such as the intranet), provided that all employees have free access to the information.

Clarifications are also planned to the effect that documents or records in the administrative procedure that must be drawn up in writing under the German Youth Employment Protection Act (JArbSchG) may also be ­created or sent electronically.

Planned changes to the German Federal Parental Allowance and Parental Leave Act

The written form requirement in Section 15 (5), (7) of the German Federal Parental Allowance and Parental Leave Act (“Bundeselterngeld- und Elternzeitgesetz” or “BEEG”) for applications for a reduction of working hours and their rejection, as well as the assertion of the entitlement to ­parental leave, will be replaced by the text form.

Planned changes regarding written form requirements

In order to meet the requirements of digital legal trans­actions, it is also planned to establish the electronic form – where suitable – as the standard form in the German Civil Code. For this reason, the general form requirements of Sections 126 et seqq. BGB will be amended in such a way that the written form will only apply as a substitute form. However, it is not yet clear to what extent formal requirements under labor law will also be affected. The framework paper only states that the special ­circumstances of labor law will have to be considered.

Effects on the practice of labor law

The Framework Paper is a step in the right direction and attempts to reduce bureaucratic burdens with appropriate measures. Because there are a large number of formal ­obstacles, especially in labor law, the approach taken by the Framework Paper is welcome. With the partial waiver of the written form requirement and the planned changes to posting obligations, employers are already being ­relieved of some burdens. The amendment to the NachwG is also eagerly anticipated even though since it has been only recently changed.

In the legislative process of the reform of the NachwG, the regulation on the written form requirement of verification was subject to vigorous discussion. Under the current law, the electronic form is explicitly excluded, although Art. 3 of the Working Conditions Directive (EU) 2019/1152 (“AB-RL”) also provides for the possibility of electronically written proof. Despite this, the German legislator decided to retain the written form requirement in the NachwG in order to strengthen legal clarity and legal certainty for the benefit of the employees. On the other hand, this made it more difficult for employers to handle the practical ­aspects of employment contracts. This has particularly been the case since the Covid-19 pandemic, during which remote working became more and more attractive and personal meetings to conclude contracts between employers and employees sometimes did not even take place. In these cases in particular, text form or electronic form is more appropriate and practiced all over the world, except in Germany.

The intended amendment to the NachwG is therefore very welcome and will probably also be the amendment with the greatest positive impact on labor law practice. The ­additional measures planned to reduce bureaucracy in ­labor law should be regarded as minor. In addition, the waiver of the written form requirement in the BGB could also have some positive effects on labor law. It remains to be seen to what extent the “special circumstances of labor law” will be considered in the legislative process. The framework paper does not make any concrete statements in this regard and thus leaves room for discussion.