No protection against discrimination due to mere fixed-term employment until the standard retirement age

Facts of the case

The employee has been employed by the company since 1 November 2018. Her employment relationship is limited in time until she reaches the standard retirement age. Since December 2022, she has been assigned to an observation group of the intelligence service, a particularly stressful and risky job. This group consists of employees and civil servants whose work is identical in content. The civil servants receive a hardship allowance, which the employee was not granted as a fixed-term employee.

In her claim to the labour court, she asserted that she was also entitled to this hardship allowance. She argued that she was being discriminated against because of the fixed term of her employment contract. The Berlin Labour Court dismissed the claim in the first instance. It stated that the principle of equal treatment under labour law did not apply in relation to civil servants. Furthermore, Directive 1999/70/EC of 28 June 1999 on fixed-term employment contracts did not apply either, as the employee was to be regarded as a permanent employee and not as a fixed-term employee in the strict sense. In the second instance, the appeal was also dismissed by the Berlin-Brandenburg Regional Labour Court.

The decision

The Federal Labour Court (BAG) rejected the appeal in its entirety, thereby confirming the two lower court decisions. The plaintiff was neither discriminated against within the meaning of Section 4 (2) of the German Part-Time and Fixed-Term Employment Act (TzBfG) nor violated under Article 20 of the Charter of Fundamental Rights of the European Union or Article 3 (1) of the German Basic Law by not being included in the scope of the hardship allowance. According to Section 4 (2) TzBfG, a fixed-term employee may not be treated less favourably than a comparable permanent employee on the basis of a fixed term, unless objective reasons justify different treatment. Although such different treatment exists here in the form of the non-granting of the hardship allowance, the protective purpose of the prohibition of discrimination under Section 4 (2) TzBfG does not apply in the case of a fixed-term contract until the date of retirement. The fundamentally increased need for protection of fixed-term employees is based on the fact that they often have a weaker negotiating position and are therefore particularly vulnerable to having their working conditions dictated by a superior contractual partner. However, a fixed-term contract until retirement is not in need of protection in a comparable way, as there is no reason to fear a similarly unequal negotiating situation. Although there is formally a fixed term, in reality such an employment relationship hardly differs from a permanent employment relationship . Such employment relationships can last for years or decades, so that the bargaining position of such employees is not weakened in a similar way or they are not similarly in need of protection.

Consequences for practice

The ruling now provides legal certainty for companies. Most employment contracts stipulate that the employment relationship is limited in time until the employee reaches the standard retirement age. It is now clear that such a time limit does not have any discriminatory consequences.

Companies can breathe a sigh of relief, as a different decision would have had far-reaching consequences. Since almost all employment contracts include a time limit until the standard retirement age, all affected employees could have invoked discrimination protection under part-time and fixed-term employment protection in cases of discrimination.

Practical tip

It can therefore still be recommended without reservation to include fixed terms up to the standard retirement age in employment contracts. Otherwise, a contract would not automatically end when the retirement age is reached and would theoretically have to continue until the death of the person concerned. Although it is still the norm for employees to "gladly" retire, if this is not the case in exceptional circumstances, the company must continue to employ them on a permanent basis. Although continuing employment after retirement is not always a disadvantage given the current situation on the labour market, it is nevertheless advantageous for companies to be able to decide flexibly whether or not they wish to agree on so-called "retiree employment" with the employees concerned.