CMS updates

New maximum hiring out period expires for some contractors
CMS
  • Employment & Benefits
  • Germany
  • 17 October 2018

In view of a statutory transition clause in the Temporary Employment Act, for some deployment agencies the 18-month maximum hiring out period will end shortly – for external employees deployed as of 1 April 2017, the expiry date could have been the end of September 2018. To avoid all possible risk of overstepping the maximum hiring out period, personnel services providers and companies using such providers are advised to determine precisely what they consider the expiration date to be.

Criminal penalties for tax fraud cannot apply to breach of trust allegations
CMS
  • White Collar Crime
  • Germany
  • 24 September 2018

According to the Federal Court of Justice's established case law, the penalty for tax evasion of more than €1 million should generally be imprisonment rather than a suspended sentence. However, the court recently ruled that these principles cannot apply to breach of trust allegations. The decision has significant implications for white collar crime and compliance.

Seizure of documents relating to internal investigations – legislative changes ahead?
CMS
  • White Collar Crime
  • Germany
  • 03 September 2018

A recent Federal Constitutional Court decision has clarified whether documents relating to internal investigations can be regarded as defence documents. Against the hope of companies and law firms, the court rejected the general prohibition on the seizure of such documents; however, it indicated that such a prohibition should always be determined on a case-by-case basis.

Selective distribution: legality of third-party platform bans confirmed
CMS
  • Competition & Antitrust
  • Germany
  • 26 July 2018

The Frankfurt Higher Regional Court recently implemented the European Court of Justice's (ECJ's) sailing instruction and decided in favour of the luxury cosmetics manufacturer Coty on third-party platform bans in selective distribution. The judgment comes after the ECJ – in an abstract manner – declared third-party platform bans in the selective distribution of luxury goods permissible under competition law.

Fixed-term employment contracts: three-year limit for prohibiting prior employment overturned
CMS
  • Employment & Benefits
  • Germany
  • 25 July 2018

The Federal Constitutional Court recently restricted the option of concluding fixed-term employment contracts without an objective reason with applicants who have previously worked for the employer. The court also recognised that an unlimited prohibition on prior employment can unreasonably restrict the option of fixed-term contracts without objective reason. This ruling has consequences for current fixed-term contracts and for future hiring practice.

Federal Court of Justice resolves dispute on limitation periods in cartel damages claims
CMS
  • Competition & Antitrust
  • Germany
  • 28 June 2018

Litigants may now seek cartel damages for a longer period as the Federal Court of Justice has affirmed the suspension of the statute of limitations for antitrust claims before 1 July 2005. The court's judgment creates legal certainty and increases Germany's attractiveness as a jurisdiction for plaintiffs in cartel damages cases. It is also a major setback for defendants in cases concerning cement, truck and sugar cartels (among others), which will face even bigger damages claims.

Federal Court of Justice rules on price comparison tool ban
CMS
  • Competition & Antitrust
  • Germany
  • 29 March 2018

The Federal Court of Justice recently held that absolute prohibitions to participate in online price comparison tools imposed on distributors in selective distribution systems amount to a hardcore restriction under Article 4c of the EU Block Exemption Regulation on Vertical Restraints. A closer look at the German decision reveals some doubts as to its compatibility with two European Court of Justice decisions.

Grand coalition's plans for labour law
CMS
  • Employment & Benefits
  • Germany
  • 14 March 2018

The Christian Democratic Union of Germany, the Christian Social Union in Bavaria and the Social Democratic Party of Germany recently concluded negotiations for a new grand coalition. The 177-page coalition agreement contains very specific proposals for changes to labour law, including with regard to the maximum duration of successive fixed-term employment contracts, substantial restrictions for fixed-term contracts and employees' entitlement to part-time work for a limited period.

Pay Transparency Act: information claims
CMS
  • Employment & Benefits
  • Germany
  • 21 February 2018

The Pay Transparency Act bundles together some regulations and requirements that had already been established and is intended to close the adjusted gender pay gap. That the act's practical relevance has proved limited thus far can be explained by the fact that it was not possible to assert the information claim until January 6 2018. Nevertheless, it should be kept in mind that the legal consequences of failings to provide information have yet to be clarified.

Court avoids decision on per se illegality of restrictions of competition by object
CMS
  • Competition & Antitrust
  • Germany
  • 15 February 2018

A recent Celle Regional Court decision on a clear resale price maintenance case has been heavily debated because the court held that restrictions of competition by object can be compatible with Article 101(1) of the Treaty on the Functioning of the European Union if they have no potentially significant effects on competition. The Federal Supreme Court has since overruled the decision, leaving it open as to whether the potential effects on competition must be considered in such cases.

Companies step up compliance while management support declines
CMS
  • White Collar Crime
  • Germany
  • 29 January 2018

German businesses have steadily expanded their compliance structures and internal training programmes and have never been in a better position than they are now. However, declining support for compliance issues among management is giving compliance officers cause for concern, and recent compliance scandals appear to indicate that further work is necessary to make management fully acknowledge the significance of compliance matters.

Act to Strengthen Company Pensions brings important changes for employers
CMS
  • Employment & Benefits
  • Germany
  • 17 January 2018

The Act to Strengthen Company Pensions has introduced pure defined contribution schemes for the first time. This means that employers will not promise specific or calculable retirement benefits, but merely undertake to pay specific contributions to an external pension provider. However, it remains to be seen whether the legislature has managed to strengthen and further spread company pension schemes as intended based on the act.

Compliance management system can lead to reduction in fines
CMS
  • White Collar Crime
  • Germany
  • 18 September 2017

The Federal Court of Justice recently decided for the first time that the establishment of a compliance management system designed to prevent breaches of the law can reduce fines in accordance with the Administrative Offences Act. The court pointed out that even the optimisation of a compliance management system following compliance breaches can lead to a reduction in fines and provided guidelines for the measures to be taken in such cases.

German corporate codetermination withstands ECJ scrutiny
CMS
  • Employment & Benefits
  • Germany
  • 23 August 2017

Since the Berlin Higher Regional Court referred the question to the European Court of Justice of whether it is compatible with EU law that only workers employed in Germany are eligible to participate in the election of workers' representatives on the supervisory board, Germany's legal sector has been eagerly awaiting an answer. The answer is now available and is likely to allow the legal sector to breathe a sigh of relief.

Reform of criminal law regarding proceeds of crime
CMS
  • White Collar Crime
  • Germany
  • 10 July 2017

The new Act to Reform Criminal Law on Proceeds of Crime aims to simplify existing rules regarding the confiscation of assets resulting from criminal offences. The reform negates the principle that confiscation is prohibited if and to the extent that an injured person has a civil claim against the offender for damage compensation or other corresponding legal rights which legally enable the injured person to deprive the offender of any proceeds resulting from the criminal offence.

Consultation procedure for collective redundancies
CMS
  • Employment & Benefits
  • Germany
  • 05 July 2017

In reorganisation scenarios, German employers must comply with a number of statutory regulations. If a reorganisation involves redundancies and if certain thresholds are exceeded in this respect, special attention must be paid to the regulations aimed at preventing collective redundancies. Any notice of dismissal given in violation of the regulations to prevent collective redundancies contained in Sections 17 and 18 of the Act on Protection Against Unfair Dismissal is invalid.

Ninth amendment of Act Against Restraints of Competition
CMS
  • Competition & Antitrust
  • Germany
  • 15 June 2017

The Federal Parliament recently adopted the ninth amendment to the Act Against Restraints of Competition. The agreed amendments take account of the ongoing digitalisation of the economy and also intend to close legal gaps in the liability for violations of competition law. However, one of the main aims of the proposed reform is to implement the EU Directive on Antitrust Damages Actions, increasing the efficiency of competition enforcement.

Germany-wide blacklist is coming
CMS
  • White Collar Crime
  • Germany
  • 15 May 2017

The Federal Cabinet recently adopted a draft law for the introduction of a so-called 'competition register'. The act will allow for the establishment of a Germany-wide register to record companies which have committed certain criminal and administrative offences. Its aim is to promote fair competition and replace the corruption registers introduced in many German states that deviate from each other with regard to essential issues.

Reform of temporary employment: requirements in practice
CMS
  • Employment & Benefits
  • Germany
  • 03 May 2017

Discussions concerning the reform of temporary employment planned by the coalition government characterised 2016. It was intended that the Employee Assignment Act, the Works Constitution Act and the Civil Code be readjusted in order to "align temporary work with its core function and prevent the abuse of structures with contracts for work and services". As the legislative process has since been completed, it is now clear that in 2017 the temporary employment industry will face substantial changes.

Joint venture between competitors – joint production: yes; joint commercialisation: no!
CMS
  • Competition & Antitrust
  • Germany
  • 13 April 2017

Following an anonymous complaint, the Federal Cartel Office (FCO) recently investigated a joint venture between two competitors. The FCO did not have to decide finally on the case, but it preliminarily concluded that the joint venture facilitated market coordination between the two parents. The FCO applied a presumption according to which both parents would take into account information from the joint venture when deciding on their own market conduct.

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