Validity of fixed-term employment contract and termination by time limit under the Part-Time and Fixed-Term Employment Act

The Federal Labour Court (BAG) reversed the lower courts' decisions and ruled in favor of the employee, declaring that the employment contract had not been terminated by the fixed-term clause effective October 5, 2006, thereby establishing the indefinite continuation of the employment relationship; the employer was ordered to bear the legal costs. The dispute concerned the validity of a time-limited employment contract and its subsequent termination at the end of the fixed term in December 2010, challenging whether the contractual limitation clause met the statutory requirements for a valid fixed-term agreement. The decisive legal basis rested on the interpretation of the German Part-Time and Fixed-Term Employment Act (Teilzeit- und Befristungsgesetz), specifically the requirements for a valid fixed-term clause, where the court determined that the termination based on the fixed-term provision was ineffective due to non-compliance with the necessary statutory conditions.