Key points at a glance
Under certain conditions, a fixed-term employment contract can automatically—or through legal action—become a permanent employment contract.
Typical reasons include: no fixed-term clause, or a formally defective fixed-term clause; exceeding the permissible fixed-term rules (e.g., duration or number of extensions); or continued employment after the fixed term has expired.
What is often decisive is: the written form of the fixed term and compliance with statutory or collectively agreed requirements. Only then is the fixed term valid.
- Difference between fixed-term and permanent employment contracts
- A simple digital signature, scans and the like are not sufficient
- Fixed term invalid because you worked longer
- A fixed term without objective reason is often invalid
- Multiple fixed terms in a row
- Is your employment contract invalidly fixed-term? Act quickly!
- Conclusion
- FAQ
1. Difference between fixed-term and permanent employment contracts
The “classic” permanent employment contract runs for an indefinite period. It does not even end when you reach the statutory retirement age. Rather, a termination or a termination agreement is required to end the employment contract.
Fixed-term employment contracts, by contrast, are limited in time from the outset:
- Either a fixed period is contractually agreed, limiting the duration of the employment contract to a specific date.
- Alternatively, the fixed term may be determined by the purpose of the contract.
Example: You are newly hired and your employment contract is limited to the time a colleague is on parental leave.
Fixed-term employment contracts therefore end automatically either when the agreed period expires or when the purpose of the fixed term ceases to apply. Early termination is not possible in most cases—neither by the employer nor by the employee.
2. A simple digital signature, scans and the like are not sufficient
Your employment contract is only fixed-term if you have agreed this in writing with your employer. The written form is only satisfied if
- you have both signed,
- the signature was made by hand on a sheet of paper, and
- both signatures appear on the same original document.
- Alternatively, you can use a qualified electronic signature, which requires a special certification procedure (not to be confused with a simple digital signature).
Simple digital signatures, emails, scans or even verbal agreements are not sufficient.
It is also important that you both must have signed before your first day of work. If you start working first and only then sign your fixed-term employment contract, you are generally employed on a permanent basis.
Strictly speaking, only the fixed-term agreement must be in writing or by qualified electronic signature. The rest of your employment contract could, for example, also be agreed verbally. Of course, that is not advisable for many reasons, and I advise against it.
3. Fixed term invalid because you worked longer
Some employers are not particularly strict about fixed terms. It can happen that you are asked to finish a project beyond the agreed duration or, for example, start a day earlier than agreed in the contract.
The consequences of such an overrun are far-reaching. You can sue in court to be employed on a permanent basis. Because as soon as you work even one day longer than your fixed-term contract provides, the fixed-term agreement is invalid. If the employer wants to prevent this, they must immediately (they generally have only a few days) object to the continued employment. In most cases, however, it is the employer’s own fault that you work beyond the agreed duration.
4. A fixed term without objective reason is often invalid
As a rule, the law permits a fixed term only if the employer has a good reason for the time limit. This is referred to as an objective reason. Classic cases are seasonal work, project work and maternity cover.
Without such an objective reason, a fixed term is only possible to a limited extent. These two rules are important:
- As a rule, a fixed term is possible for a maximum of two years.
- In addition, as a rule, the employer may no longer employ you on a fixed-term basis without objective reason if you have worked for them before (whether on a fixed-term or permanent basis).
Example: During your studies, you work for the company as a mini-jobber. After your studies, you start full-time. You sign an employment contract limited to two years. The employer cannot name an objective reason for the fixed term. This fixed term is invalid because you have previously worked for the employer. It does not matter that you were employed on a permanent basis at that time.
In these cases, you can demand permanent employment in court.
However, there are some exceptions to the two rules mentioned.
A fixed term may also be longer than two years if
- you conclude the fixed-term employment contract within the first four years after the company was founded. Then the fixed term without objective reason may be up to four years.
- you are 52 years old or older and were previously unemployed for four months, received transfer short-time work allowance, or participated in a publicly funded employment measure.
- the collective bargaining agreement applicable to you permits this.
You may be employed on a fixed-term basis without objective reason even though you have worked for the employer before if
- your previous employment was many years ago, or you worked for the employer only very briefly, or
- you move into employment without objective reason immediately after completing your training.
5. Multiple fixed terms in a row
The employer may not keep extending your employment contract on a fixed-term basis over and over again. If they have not stated an objective reason for the calendar-based fixed term, a maximum of three extensions are permitted (overall for a maximum duration of two years, see above). There are also exceptions to this, in which more extensions are possible:
- Your collective bargaining agreement allows multiple extensions.
- The company was founded less than four years ago.
- You are 52 years old or older and were previously unemployed for four months, received transfer short-time work allowance, or participated in a publicly funded employment measure.
If the employer has an objective reason for the fixed term, they may generally extend the contract as often as they like. However, each time they must be able to provide an objective reason again. Only once the threshold for abuse is reached are further extensions prohibited. In previous cases, the courts have assumed this where the employee has been employed only on a fixed-term basis for more than eight years or where five or more fixed terms were agreed. However, further indications must be added, such as the tasks always remaining the same.
Whether an abusive chain of fixed terms exists depends heavily on the individual case. If the employer extends the fixed term too often, you are entitled to permanent employment.
6. Is your employment contract invalidly fixed-term? Act quickly!
Has your employer limited your employment contract for a fixed term invalidly? Then you should act quickly! From the date on which your employment relationship should actually have ended, you have only three weeks. Within this period, you must file a so-called action for removal of the fixed term, which converts your employment relationship into a permanent one. Otherwise, your employment contract will end.
If you have worked beyond the agreed fixed-term end date, the three-week deadline to file a claim begins from the point at which your employer declares the employment relationship ended in writing.
I therefore recommend that you consult an employment law attorney as soon as possible. This is the only way to prepare a claim properly.
I will review your chances of success. Going to court is often worthwhile even if you do not want to continue working for the company. In many cases, at least an attractive severance payment can be negotiated in the course of a claim.
7. Conclusion
- If your fixed term is invalid, you have only three weeks to sue in court for a permanent position.
- The employer must comply with strict requirements if they want to limit your employment contract for a fixed term. If they make mistakes, you can generally enforce your permanent employment in court.
- The fixed term is only valid in writing with a personal signature or by qualified electronic signature. An agreement by email or digital signature also entitles you to a permanent employment contract.
- If you work even one day longer than agreed, the fixed term is also invalid. Your employer must immediately object to your continued employment if they still want to part ways.
- Without objective reason, the employer may generally employ you on a fixed-term basis for a maximum of two years. Longer periods are possible for young companies and older employees coming out of unemployment.
- If your fixed term is extended again and again, there may be a case of abuse. You should have your case reviewed.
8. FAQ
If the fixed term is formally invalid (e.g., without a written signature) or was substantively impermissible (e.g., exceeding the permissible fixed-term duration without objective reason).
If the employer does not expressly object, your employment relationship is deemed to continue on a permanent basis.
No, with a fixed term without objective reason, a maximum duration of two years is normally permitted. If this is exceeded, the contract is deemed permanent.
You can file an action for removal of the fixed term. It is worth obtaining legal advice early. There are often good chances of success.