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					       Welcome to the
West Thames HR Exchange Club
   Meeting at Royal Holloway College
            4th October 2000
                   Agenda
•   Minutes of Last Meeting
•   Update on Participants
•   Round Robin
•   Organisational Development
•   Country Profile Discussion – Germany
•   Any other business
    – Subjects for Employment Law Workshop
Germany
          Employment Status
• There are recognised employment Statuses
  – Arbeiter (Worker)
  – Angestellte (White collar worker)
     • Now both treated same
  – Leitende Angestellte (Managers)
  – Geschaftsfuhrer (Managing Director)
     • Treated differently in law
            Forms of Contracts

•   A written statement of the main terms of employment must be
    given to the employee within one month of the agreed start date of
    employment.

•   Employment contracts must be in writing. The law presumes that
    it contains all the terms and conditions of the employment
    relationship as well as an adequate job description. It is up to the
    party claiming that there are additional clauses to prove that they
    exist.

•   If the contract is for a salaried employee or manual worker it may
    well refer to any applicable collective agreement as the terms of
    that take precedence over the individual contract.
        Probationary Periods
• Probationary periods are permitted under German Law.
  The law assumes that they will last for a "reasonable length
  of time" If the trial period is in an open-ended contract and
  neither party terminates the agreement during this trial
  period the contract will automatically continue indefinitely.

• The duration and form of a trial period will be governed by
  collective agreements where applicable.

• There is additional protection for pregnant employees
  during the trial period.
    Employment Covenants
• Confidentiality
   – Employees must not disclose to third parties trade or
     business secrets, either during employment or thereafter.
     Working for a competitor during the same employment
     period is also forbidden.
• Non-Compete Clause
   – Employees are not allowed to compete with their employer. -
     - period of limitation not more than two yearsand restriction
     is reasonable. Employee is paid a sum to compensate for
     reduced earning power.
• Patents
   – Employment inventions are made during working time; free
     inventions are all other inventions, including those for which
     the employee got the idea during his company's service.
               Working Hours
• Working Time Directive applies, but Managers and
  Directors excluded
• Normal Hours 35 to 40, but 25% of agreements now 35
  hours. Current average 37.5
• Sunday and Bank holiday working prohibited, but there are
  exceptions, but these must get at least 15 Sundays off
• No Exceptions for minors, pregnant women or nursing
  mothers
                       Public Holidays
•   New Year's Day                           • Corpus Christi*
•   Twelfth Night *                          • Ascension of the
•   Good Friday                                Virgin*
•   Easter Monday                            • Day of German Unity
                                             • All Hallows Day
•   May Day                                  • Repentence Day*
•   Ascension Day                            • Christmas Day
•   Whit Monday                              • Boxing Day

    •* indicates holidays which are recognised in Local States.

    •Generally many areas and companies also give Christmas Eve as public holiday.
                      Holidays
• Legal – 20 days on 5 day week after 6 months service
• Minors get more
• In practice 30 days is norm, 32 – 35 for managers
• Taken over two periods, one at least 12 days long
• Holiday can carry forward to March of next year, but no
  cash in lieu.
• Leavers given certificate of holidays taken to give to new
  employer
                  Time Off
• Personal Time Off – Personal Reasons –
  paid. Often extended by collective
  agreements
• Maternity & Parental Leave
  – Not last six before or eight after (exceptions!)
  – Three years, entitled to job back, can do part-
    time work with no loss of benefits
  – Baby Feeding breaks – 2 x 30Mins
                       Time Off
• Training / Educational Leave
   – Apprentices
   – Others - 5 days for Vocational/Civic Training
• Works Council Duties
  – Training
      • First term - 4 weeks
      • Subsequent terms – 3 weeks
   – Duties
      • 12 hrs - 50 – 100 employees
      • 21 hrs - 151 – 300
      • Full time - 300 employees +
     National Minimum Wage
• There isn’t one!
• But…..
  – Collective Agreements establish levels below
    which market will not permit payment
  – Federal Minister can extend collective
    agreements by regulation
  – 65% employees in private sector covered
                      Pay
•   PAYE operates
•   Compulsory Social Security deductions
•   Collective Agreements establish tariff wage
•   Illegal to pay less than 2/3rds
•   No discrimination
•   Bank transfers
•   13th Month
Contribution Computation Basis
            (CCB)
• State Maximum Eligible Basis for
  calculation of Benefits
• Linked to National Average Earnings (1999
  DM102,000
• Full rate for Retirement,Death and disability
• 75% rate for Medical
             Contributions
• Split equally between Ee and Er
• Combined rates
  – Retirement/Unemployment 25 – 27%
  – Health 15%
  – Disability 2%
                Sick Pay
• Full rate for 6 weeks
• Thereafter 80% of net pay for 78 weeks up
  to CCB
• Covers everybody up to Board level, but
  they can apply to be covered
• Higher paid can contribute more
  voluntarily, but employers not required to
  contribute above CCB
         Long Term Sickness
• Covered by State
• Benefits are by table according to care
  required
• Higher paid employees can cover via
  insurance
                    Medical
• Included with short term sickness
• Hospital care covered – deductible for first 14
  days
• Consultants fees and drugs covered – small
  prescription fee
• Confinement fully paid
• Maternity benefit of DM25 per day, but if net
  earnings exceed employer funds difference
• Funeral Grant
   Equality and Discrimination
• Sex discrimination rules apply, although
  exceptions – heavy manual work, or
  modelling!!
• Disabled, more than 15 employees, 6%
• DM200 per month per person
• Must accommodate physical disabilities for
  work and environment
• No Sexual harrassment
           Personal Details
• Strict laws on privacy of personal
  information
• Enquiries only into areas affecting work
  relationship
• Employees have right to read and comment
• Pre employment medical difficult –
  generally employ and use probationary
  period if problems
               Retirement
• 65 for both sexes
• But up to 1999, women can retire at 60,
  increasing to 65 at 1 month per month
                  Pensions
• 3 Pillar principle applies:
  – State – 40 - 45% post retirement up to CCB
  – Employer – 20 – 25% up to CCB and 60%
    thereafter
  – Employee – The rest!!!! (Can be insured)
                Pensions
• Pension Promise – Book reserve
  – Sometimes insured
• Support Fund – Insured separately from
  company assets
• Direct Insurance – as it says!
• Pensions Fund – Captive Insurance
  Company, managed by employer – only for
  the very large company
               Termination
• Notice periods
  – Specified by employment agreement
  – Employee four weeks to 15th or end of month
  – Until recently, 6weeks to end of quarter
                    Employers
•   Service         Notice Period
•   Trial Period    2 weeks
•   <2 years        4 weeks to 15th or month end
•   2 - 5 years     1 month to calendar month end
•   6 - 8 years     2 months to calendar month end
•   9 - 10 years    3 months to calendar month end
•   11 - 12 years   4 months to calendar month end
•   13 - 15 years   5 months to calendar month end
•   16 - 20 years   6 months to calendar month end
•   >20 years       7 months to calendar month end
           Unfair dismissal
• Over 18 + 6m service + 5 or more
  employees
• Must be for good reason and prove
  justifiable
• Employee has 3 weeks to appeal to Labout
  Court
• Reinstatement order most likely
                    Unfair dismissal

•   Age         Length of Service   Months' salary compensation
•   <50 years   >15 years           <12 months
•   <50 years   <15 years           <15 months
•   >55 years   20 or more years    <18 months
                      Redundancy
• Consult Works Council
• Notify Labour Department, with Works council comments
• Labour Department can defer, for 2 months or refuse
  permission
• Employer can enforce but must
   – Notify works council
   – Give Contractual Notice
   – Serve notice correctly – in writing, by hand and obtain receipt or
     by hand to letterbox of last known address
   – Create Social Plan to deal with hardship
   – Consider alternatives
         Redundancy Notification

• Number of employees in company Number of dismissals
• 20 - 59                        >5
• 60 - 499                       >25 or 10% of workforce

• 500+                            .30
             Selection Criteria
• Agree with Works Council
  –   Service
  –   Age
  –   Number of dependents
  –   Disabilities
  –   Discrimination
  –   Avoidance – Transfers etc
               References
• Employer may only enquire into items
  relevant to job
• Tend to use Trial Period to deal with
  problems

				
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