Changes due the new Act on notification of conditions governing an employment relationship

The amendment to the Act on notification of conditions governing an employment relationship (hereinafter Act) was made to implement the EU Directive on Transparent and Reliable Employment Conditions. The aim of this directive is to promote transparent and predictable employment while ensuring the adaptability of the labor market.

I. Legal situation to date

So far, employers were obliged to put the following essential contractual terms in writing and had to hand the document over to the employee within one month. This did not apply to employees hired on a temporary basis for a maximum of one month.

• Name and address of the contracting parties
• Date of the beginning of the employment relationship
• Duration of the employment relationship in the event of a fixed term
• Work location
• Name or description of the activity
• Composition and amount of remuneration
• Working time
• Duration of the annual recreational leave
• Notice periods
• General reference to collective agreements, works agreements and service agreements applicable to the employment relationship.

If the employer did not comply with this obligation, the employee could demand a record of the essential contractual terms from the employer that met the requirements of the Act. In individual cases, the employee could be entitled to damages if he or she suffered direct financial loss as a result of the employer’s breach of duty. So far, an employer’s violation of the Act was not punishable by a fine.

II. New legal situation

As of August 1st, 2022, the scope of the Act includes all employees. The exception for employees hired on a temporary basis will no longer apply.

Employers are required to put the following terms in writing in addition to the above metioned ones:

• End date of the employment relationship
• If applicable, free choice of the place of work by the employee
• If agreed, the duration of the probationary period
• The composition and amount of remuneration, including overtime pay, bonuses, allowances, premiums and special payments, as well as other components of remuneration, each of which shall be stated separately, further to their due date and method of payment
• The agreed working time, agreed rest breaks and rest periods and, in the case of agreed shift work, the shift system, the shift rhythm and the conditions for shift changes
• If agreed, the possibility of ordering overtime and its conditions.
• Any entitlement to continuing education provided by the employer
• If the employer promises the employee a company pension through a pension provider, the name and address of this pension provider; the obligation to provide evidence does not apply if the pension provider is obliged to provide this information.
• The procedure to be followed by the employer and the employee when terminating the employment relationship, at least the written form requirement and the time limits for terminating the employment relationship, as well as the time limit for bringing an action for protection against unfair dismissal; Section 7 of the Act on Protection against Unfair Dismissal shall also apply in the event that the time limit for bringing an action for protection against unfair dismissal is not properly demonstrated.

The previously applicable deadlines will be shortened.

For employment contracts entered into on or after August 1st, 2022, the employer shall provide the employee with the following information in writing,

at the latest on the first working day

• Name and address of the contracting parties
• Compensation and its composition
• Working time

within seven days

• Time of the beginning of the employment relationship
• Duration of any agreed probationary period
• If agreed, the possibility of ordering overtime and its conditions.
• In the case of work on call pursuant to Section 12 of the Part-Time and Fixed-Term Employment Act: work to be performed according to the workload, the minimum number of hours to be paid, the time frame specified for the performance of work, the period within which the employer must notify the location of the working hours in advance.

All further terms according to the Act are to be provided to the employee in writing no later than one month after the agreed start of the employment relationship.

The terms specified in the Act are usually part of the employment contract, however this is not mandatory. It is also possible to provide the employee with an appropriate document (information sheet, etc.) regarding the terms.

Employees who were already employed before August 1st, 2022 have the right to request their employer to inform them about the essential contractual and working terms. Essential contractual terms must be provided to the employee in writing within seven days, all other terms need to be provided within one month. An amendment or supplement to the employment contract is not mandatory for this purpose. Here, too, the notification can be made by means of an information sheet.

A strict written form requirement applies to the documentation of the terms specified in the Act. This means, for employment contracts, that they must be printed out, signed by both parties personally and handed over or sent by mail to each party.

If the terms are part of the employment contract, a digital signature, as is already common practice in many companies, is not sufficient. The electronic form (qualified electronic signature) is also excluded. The same applies if the documentation is provided by means of an information sheet. The information sheet must be signed in original by the employer and handed over to the employee. The receipt of the original document must be acknowledged by the employee, as this is the only way to prove that the written form has been observed.

Furthermore, starting August 1st, 2022, a violation of the Act, will be punishable by fine up to € 2,000 per violation.

Employees are therefore urgently advised to provide the relevant information in full and in due form and time.

III. To-Dos for the Employer

Employment contract templates used from August 1st, 2022 shall be supplemented with the above-mentioned additional terms. A information sheet in written form (“wet ink”) should then be prepared and handed over to the employee if employment contracts are only concluded in text form or in electronic form. The receipt of the information sheet should be acknowledged by the employee for evidence purposes.

For employees who were already employed prior to August 1st, 2022, an appropriate information sheet should be prepared to allow for timely written notification.

In addition, if significant working conditions change during operation, the employer is obliged to inform the workforce in writing on the day of the change.

Compliance with the written form requirement must be ensured in all cases.