Invalidity of the Fixed-Term Reason "Replacement" in Case of Foreseeable Incapacity of the Substitute*

If it is already clear when the contract is concluded that the substitute* will not be able to perform the work owed by him/her for the entire duration of the fixed-term employment contract due to incapacity to work and the employer is aware of this, the objective reason for the replacement may be pretextual and the fixed term may be invalid.

Facts of the case

The employee was employed as a parcel deliverer on the basis of a fixed-term employment contract until 30 April 2022. Shortly before this fixed-term contract expired, on 23 April 2022, the employee informed the responsible branch manager that he was in hospital due to an umbilical hernia, needed an operation and would therefore be absent for the time being. On 25 April 2022, the employee sent the employer his certificate of incapacity for work up to and including 8 May 2022; the parties then concluded a fixed-term employment contract from 1 to 28 May 2022. The reason for the fixed-term contract was "replacement due to temporary absence" of four other parcel delivery staff of the employer who were on holiday during the fixed-term period. Ultimately, the employee was unable to work throughout this period and submitted corresponding follow-up certificates.

The decision

The Federal Labour Court ruled that a fixed-term agreement is invalid due to "substitution" if the employer already knew when the contract was concluded that the substitute would be unable to work for the entire duration of the contract.  However, the company may rely on the information provided in a properly issued certificate of incapacity for work. In the specific case, the BAG therefore considered the time limit to be effective, as the employer could not foresee the complete incapacity to work of the substitute.

Consequences for practice

Although the BAG's decision is hardly surprising, it admonishes the employer to carefully and conscientiously examine the specific individual case. If a fixed term without objective grounds is inadmissible and there is also no effective reason for the fixed term, the employment contract is deemed to have been concluded for an indefinite period.

Practical tip

If the company wishes to employ an employee on a fixed-term basis, it should therefore always ensure that there is an objective reason for the fixed term or that a fixed term without objective reason is permissible; the fixed-term agreement must also be signed by both parties in order to be valid.