Court rulings and changes in law in 2025 render old employment agreements invalid
Your old contracts and templates are probably outdated due to recent changes in law and jurisdiction. Several clauses could be invalid. Therefore, you should check your old employment agreements and their templates changing them as follows:
Easement for form of employment agreements
Here is the (only) good news: Since this year signing an employment agreement by hand is only required in exceptional cases. Due to efforts for digitalisation most employment contracts can be agreed in text form, e.g. via email, without having to print them out. Exceptions apply to industries under the Act to Combat Undeclared Work and Unlawful Employment (Schwarzarbeitergesetz), contracts containing post-contractual non-compete obligations and time-restricted contracts. The latter however does not include employment contracts that only end automatically when the employee reaches retirement age - contracts containing this typical limit no longer have to be hand-signed.
Impediments due to law and jurisdiction
This only easement is contrasted with several new impediments and restrictions:
New requirements under the Law of Proof of Substantial Conditions Applicable to the Employment Relationship (Nachweisegsetz).
Since 2025 the Nachweisgesetz requires to always specify the place of work, even if it is up to the discretion of the employee, e.g. in remote work. Additionally, the employee has to be notified in detail of his option to file suit against a termination by the employer.
Annually new minimum wage
If the (average) hourly compensation including over-time falls below 12.82€ per hour, you need to change the compensation to this new minimum wage from 2025 on. In 2026 the minimum wage increases to 13.90€ per hour, in 2027 to 14.60€.
Adequate garden leave clause
A ruling by the higher labour court of Lower Saxony of 22th of May 2025 (file no. 5 SLa 249/25) relates to the garden leave clauses, typically in the term and termination section: According to it an employer may only mandate garden leave after weighing their interests with the employee’s in the individual case. If the employer’s interests do not outweigh the employee’s or if the employment agreement clause does not contain such a restriction, mandating the garden leave was invalid and the employee may have damage claims. Damages may especially occur if the employee misses out on benefits in money due to the garden leave, e.g. using his company car.
Limiting confidentiality clauses
Another ruling by the federal labour court (file no. 8 AZR 172/23) limited typical confidentiality clauses. According to the ruling, an employee may again only be obligated to confidentiality after weighing the opposing interests because the employee may depending on the circumstances have a legitimate, predominant interest in disclosing certain confidential information. In the clause this has to be clarified and certain employer interests such as obligations towards third parties or business secrets should be named, defined and qualified with examples. Furthermore, the court forbids endless post-contractual confidentiality obligations. The post-contractual obligation has to be barred for an adequate time, e.g. for 3 years after the end of the contract, if this corresponds to the circumstances and information in question.
We check your employment contracts & keep you up to date
As you see, you need to keep up to date in labour law and in particular your employment templates. We gladly help you to check your employment agreements and templates for validity and update them for you. We are happy to notify you here and in our newsletter of any relevant news regarding labour court jurisdiction and law.
Published on 07.09.2025