The new law of evidence: Back to the Stone Age?

Why are the Evidence Act and some other laws changing?

Everything you need to know about the new evidence law: What is changing, why, in what time frame and with what consequences for HR processes?

The planned changes are based on the EU Directive on transparent and predictable working conditions, which are now being implemented in national law. However, the German legislator overstepped the mark when implementing it, in particular when revising the Evidence Act through the required written form. What is criticized is not only the fact that the increased written form requirement catapults us back to the digital Middle Ages, but also that there is apparently no sense of work processes and mutual interests. This step could be described as unrealistic and impracticable, as the associated additional administrative effort also does not take into account the interests of many employees who enjoy the digital personnel file if they can work flexibly and independently of location since the Covid-19 pandemic at the latest.

The aim of the underlying EU Directive is to improve the security of employment relationships in times of demographic development and digitization. However, Article 3 of the Directive explicitly allows information to be provided in electronic form. The required written form requirement therefore appears all the more diffuse.

The biggest changes can be found in the Evidence Act, which are currently hotly debated and cause cold sweats because they occur on August 01, 2022 come into force and have immense effects on everyday HR life. There are also amendments to the Part-Time Fixture Act, the Trade Code, the Vocational Training, Temporary Employment and Posting Act.

What has been required so far?

Until now, the Evidence Act has had more of a protective and evidentiary function and required employers to inform employees of the most important contract conditions (including name, place and time of work, remuneration, vacation, notice periods) within one month of the start of the employment relationship. Since most employment relationships are based on a concluded contract - whether signed electronically or in writing - the requirements of the law had already been met when the employment contract was concluded or had time to do so one month after the start of work. Even if you failed to do so, there were no consequences, as violations by the employer were also not sanctioned.

What is changing as a result of the new Evidence Act?

The new evidence law requires more information than before and requires that these be done within certain time limits at the latest”to be put down in writing, to sign the minutes and hand it over to employees.” Die Electronic form is therefore not sufficient.
What the employer's obligation to provide evidence must cover in terms of content and within which deadlines (new regulations are fat marked):

On the first day of work:
- Name and address of the contracting parties
- remuneration, including composition, amount, Compensation of overtime, surcharges, bonuses, special payments, other remuneration components as well as due date and method of payment
- working time, Breaks and rest time and shift system (if agreed)

Within seven days of starting work:
- Start of employment
- In the case of a time limit: end date or duration
- place of work or free choice of place of work by employees
- Job description
- Duration of trial period
- when working on call: Information in accordance with § 12 TzBfG
- Order of overtime and its requirements

One month after the start of work:
- Duration of vacation
- Entitlement to training provided (if agreed)
- Information about the pension provider in the case of a company pension scheme
- notice periods, the procedure to be followed in the event of termination, form, time limits, action for protection against dismissal
- Reference to collective agreements, works or service agreements (where applicable)

In future, employers who do not comply with the legal obligation to provide proof, wrongly or otherwise deficiently may be subject to a Fines of up to 2,000.00 EUR be imposed.
‍
Although there seems to be hardly any other issue in German employment law than evidence law, the implementation of the EU Directive has also led to further legal changes: Part-time and Fixed-Term Employment Act (TzBfG) amended, which now requires the length of the probationary period for fixed-term employment contracts to be proportionate.

‍What are the consequences for employment contracts and processes?

The amendments to the Evidence Act have far-reaching consequences and will necessarily lead to an adjustment of processes with regard to employment contracts and the recording of essential working conditions. Since the employer is obliged to provide employees with extensive information about the employment relationship in writing The question of the validity of an electronically concluded employment contract is.

In principle, employment contracts can still be signed electronically, provided that none of the exceptions listed below apply and provided that the information fulfilling the obligation to provide proof is provided to employees in writing.

This is because the written form requirement required by the Evidence Act does not directly affect the employment contracts themselves, but only the information specified in the Evidence Act. Since this information is usually contained directly in the employment contract, this provision probably means in practice that either all employment contracts are only concluded in writing or that they are concluded digitally and then once again hand over the required information in writing in accordance with the Evidence Act.

This results in two options for employment contracts from 01.08.2022:

• Written - i.e. signed by hand - employment contract with all necessary information
• Electronically signed employment contract (unless there is an exception, see below) and written document as a transcript with all necessary information‍

‍Exceptions:

For some contracts, clauses and documents, the written form (i.e. signed by hand) is mandatory, which means that an electronic form is still excluded. This includes the following documents:

• Fixed-term employment contract
• retirement age clause, if included in the employment contract
• Competition clause, if included in the employment contract
• termination
• termination agreement
• Work reference

How should old contracts be dealt with?

The new regulations also apply to employment relationships that existed before the amendment to the Evidence Act. Employees can require their employer to provide written documentation of their essential working conditions, which must be handed over within a week or a month - depending on the information.

If significant working conditions change during the current employment relationship, the employer remains obliged to inform the employee in writing on the day of the change.

What exactly needs to be done?‍

A to-do list for HR:

• Status quo: Check current contract templates and old contracts for completeness
• Adjust contract templates: Enter newly required minimum information
• Prepare minutes in accordance with the Evidence Act: Samples should be available for old contracts in order to be able to respond quickly to inquiries
• Adapting internal processes: Reevaluating HR workflows in order to be able to implement the new requirements efficiently
• If applicable Issue powers of attorney: For certain processes, the necessary signatures with powers of attorney can be provided reliably on site.
• Keep an eye on the legal situation: Following the entry into force of the Act and initial case law, it can be assumed that legal risks and practical handling of the new regulations will become more specific

‍

FAQ

1. Why was the Evidence Act amended?

The amendments to the Evidence Act are based on EU Directive 2019/1152 on transparent and predictable working conditions. Specifically, this serves to protect workers and essentially states that every employee has the right to healthy, safe and dignified working conditions and the associated rights to vacation, limitation of maximum working hours, rest periods, access to social protection and continuing education, and much more.

2. What is the meaning and purpose of the Evidence Act?

The Evidence Act serves to protect workers, which should be transparently explained about the essential working conditions.

3. Which employment relationships does the Evidence Act apply to?

According to § 1 Evidence Act, the same applies to all employees, working students and interns who are considered employees in accordance with Section 22 (1) of the Minimum Wage Act.
On freelancers, on the other hand, the regulations of the Evidence Act are not applicable.

4. Are fixed-term employment contracts also included?

Yes In addition, the legislator has amended Section 1 p. 1 of the Evidence Act to the effect that temporary workers who are hired for a maximum of one month are now also covered by the scope of the standard. In the case of fixed-term employment contracts, the foreseeable duration or end date must now also be mentioned. In addition, the probationary period for fixed-term employment contracts must from now on be commensurate with the fixed-term period. In addition, the new Evidence Act now obliges employers to provide fixed-term employees who express a request for a permanent employment relationship with a reasoned answer in writing within one month.

5. In brief: What has changed?

Both the scope of the obligation to provide evidence has changed, as has the form and consequences of violations: The content changes are numerous, for a complete list, see question 14, the proof must be provided in writing and failure to comply may result in an administrative offense and fine of 2,000.00 EUR.

6. Is a digitally signed employment contract now invalid?

No, employment contracts can in principle still be digitally signed. (Attention: Exception for time limits and certain clauses with written form requirement!) However, if the written proof requirement is not met by other means, for example by handing over a handsigned copy containing all essential working conditions, there is a risk of a fine. However, this does not affect the validity of the contract.

7. Who is entitled to sign such a record?

Anyone who acts as an authorized representative for employers can sign. Internal processes must be adjusted accordingly and specific powers of attorney (e.g. for HR, other managing directors) issued.
This is also practical and recommended for processes other than the conclusion of contracts, such as terminations and termination agreements, which must always be signed in writing and an electronic signature is not valid in order to terminate employment relationships within the deadline.

8. How many copies of the employment contract should be signed?

‍If the proof requirement is fulfilled in the form of a written employment contract, 2 copies should be signed, one for the employee and one for the employer.

9. What is the situation with a managing director who is regularly absent from home or is based abroad, for example?‍

Here, it is important to establish internal processes in order to remain able to act as a company. Such processes are always company-dependent. It is possible to authorize selected HR employees to sign employment contracts or the relevant minutes on site.

10. When should the employment contract be signed?‍

If the obligation to provide evidence is fulfilled in the form of a written employment contract, this should be submitted to the employee no later than the first working day.

11. Is there a specific order to follow when signing the employment contract? Who should sign first?‍

The law does not provide any information on this; the specific procedure must therefore be established on the basis of internal processes. From a practical point of view, it makes sense as a company to sign the relevant documents first so that they can be accepted as a binding offer by the respective employee with the countersignature. This is how the contract is concluded.

12. Should employees or employers not be there: What should be considered when sending the employment contract or the record by post?‍

When sending by post, it must be considered in particular that the employer can prove that the employee has received all essential contract terms in writing (whether in the form of an employment contract or a record). A good process should therefore also be established in terms of time.

13. Can the employment contract be signed digitally first and then in writing?‍

In principle, this is possible provided that the employment contract is not limited in time or contains other clauses that are subject to the written form requirement.

14. What new content features are there?

In addition to the existing information requirements, the following essential contractual conditions must now also be proven in writing: Compensation of overtime, supplements, bonuses, special payments, other remuneration components as well as the due date and type of payment, breaks and rest time and shift system (if agreed). In the case of a time limit: end date or duration.
Free choice of place of work (if agreed), duration of the probationary period, order of overtime and its requirement, right to training provided (if agreed), information about the pension provider in the case of occupational pension provision and the procedure to be followed in the event of termination, as well as the form and time limits of the dismissal protection action.

15. What deadlines must be observed and when must employees receive the information?

Employees must have certain information on the first day of work, others on the seventh calendar day after the agreed start of the employment relationship and further information no later than one month after the agreed start of the employment relationship. In practice, it will regularly be a good idea to hand over all information on the first working day in the form of a transcript or employment contract.

16. How should old contracts be dealt with, i.e. employment contracts that were concluded before August 1, 2022?

If the employment relationship already existed before August 1, 2022, the minutes containing the information in accordance with Section 2 paragraph 1 sentence 2 numbers 1 to 10 NachWG must be handed over to the employees only at their request no later than the seventh day after receipt of the request by the employer; the record containing the remaining information in accordance with Section 2 paragraph 1 sentence 2 NachWG must be handed over no later than one month after receipt of the request.

In Section 5 NachWG, the Act relies on the “Exist” of the employment relationship before August 1, 2022. Problematic This is whether the conclusion of the contract or the actual start of work is to be considered. Even among experts, there is still no agreement on this. According to prevailing opinion, an employment relationship is created through the conclusion of a contract. According to this opinion, employees whose contract was signed before August 1, 2022, would not have to be provided with a transcript without their request. If you want to be on the safe side, you should focus on taking up work. This means that even employment contracts concluded before August 1, 2022 but only beginning afterwards would be included in the amendments to the Evidence Act, so that at least one record must be handed over on the first working day, provided that this is on August 1, 2022 or later. It remains to be seen how the courts will comment on the issue in the future.

With regard to changes to old contracts, see question 37.

17. Should amendment agreements now also be signed manually?‍

In short, yes. If essential contract conditions are changed, these must also be handed over to the employee in writing.‍

18. What options are there to implement these changes in a legally compliant manner?

It will regularly be a good idea to conclude the employment contract in writing, i.e. to sign it manually, in order to immediately meet the requirements of the Evidence Act. In certain cases, particularly in the case of remote companies without a central office or with a large geographical distance, it could be a good idea to first digitally sign the employment contract and then fulfill the requirements of the Evidence Act in another form: Be it in the form of a separate record of all essential contract conditions or by subsequent written signing of the employment contract.

Attention: The latter approach is not recommended for fixed-term employment contracts and contracts with certain clauses (non-competition clause, retirement age clause, for example), as written form is regularly required by law.

19. What is the risk of violations of the Evidence Act?

Anyone who violates the Evidence Act is committing an administrative offense. Fines of 2,000.00 EUR per infringement are to be expected. There is a regular violation of the Evidence Act if the employer does not provide the essential information at all, late or otherwise deficient.

20. What is the difference between a record and a contract?

A record is a document that the employer hands over to the employee in order to meet the requirements of the Evidence Act. All contract information listed in the Evidence Act must be listed in this document.
An employment contract is an agreement that must be signed by both parties. The record, on the other hand, is a unilateral statement by the employer and serves to provide the employee with all relevant information about the employment relationship.

21. If we decide to digitally sign the employment contract and provide the employee with an additional supporting document: Do we have to adapt the contract to the new regulations and also create a supporting document, right?

No, not necessarily. If the obligations under the Evidence Act are met by a record, the employment contract itself does not have to contain all necessary information under the Evidence Act.

22. We would first like to sign the contract digitally and then hand over the written agreement by post or in person on site. Is that possible? Can a contract be used as a transcript?

As long as the document is in writing, i.e. signed by hand and contains all necessary information in accordance with the Evidence Act, this is an option.

23. Does the minutes have to be adapted individually to the agreements with an employee or is a general record sufficient?

The record must be congruent with the employment contract between the employee and the employer. Therefore, each record must be individualized with the respective employee in accordance with the provisions of the respective employment contract. A general record is not sufficient.

24. What does “written form” mean? Does a contract or minutes have to be signed by both parties or is the employer's signature sufficient?

The “written form” is a formal requirement according to which a signature must be made by hand with “moist ink” (Section 126 BGB). A digital signature is not enough.

While contracts are signed by both parties, according to the wording of the Act, a signature is sufficient when writing, as it is a unilateral declaration by the employers. The signatory must be authorized to sign, which means that any internal processes must be adjusted accordingly and specific powers of attorney (e.g. for HR, other managing directors) must be granted. However, it is crucial that the employer can prove that the employee has received the minutes. A confirmation of receipt is therefore advisable.

25. Can the employment contract also be signed digitally first and then manually?

In principle, this is possible if the employment contract is not fixed-term or contains other clauses that are subject to the written form requirement (e.g. fixed-term contracts). In addition, the contract must then contain all information required by the Evidence Act.

26. Is the record as formal as a contract or less formal?

The main difference between a contract and a transcript is that the contract is an agreement between two or more parties. The record is a document that contains information that the employer provides to the employee.

Twinwin now provides a template for a transcript for members: Simply request it from the template pool in your member area and check for yourself what it looks like ;-)

27. If an employee has digitally signed the contract on July 12, 2022 and he/she starts working on August 1, 2022 - do we have to have him/her sign by hand again?

Here, too, there is the question of when the Evidence Act is based on: see question 16. If the provisions of the Evidence Act apply to the employee, all necessary information must be provided to him/her. This can be done through an employment contract or a transcript. Insofar as the employment contract contains all information, it can also be signed by the employer by hand and handed over to the employee on the first working day. If all essential contractual conditions are handed over in writing by means of the employment contract, the minutes may be waived.

28. How can we record working hours if we want to be as flexible as possible?

According to Section 2 Paragraph 1 S. 2 No. 8 of the Evidence Act, the agreed working hours as well as breaks and rest periods (and, if agreed, the shift system) must be specified.
Trust-based working hours or flexible working hours can be implemented in accordance with the law, but it is crucial that mandatory working time regulations are complied with even within such a framework (e.g. maximum working time, prohibition of work on Sundays and public holidays, minimum rest periods, special regulations on night work).

29. How should we deal with overtime if we don't record it?

Overtime is a complex and risky issue. According to the Evidence Act, the employee must be informed about “overtime compensation” and “where agreed, the possibility of ordering overtime and its requirements” (Section 2 (1) S.1 No. 7, 10 NachWG). This information must not only be made available to the employee in order to comply with the new evidence law, it also provides legal certainty, clarity and predictability for the employer. It can therefore be useful to clarify the procedure even if the employer does not want to work overtime.

Small reminder: In accordance with paragraph 16 paragraph 2 of the Working Hours Act must Overtime is recorded. Violations can be severely punished.

30. Pay: What specifically needs to be recorded? (health prevention, massage/yoga, voluntary special payments, BVG)

According to Section 2 (1) S.2 No. 7 of the Evidence Act, the employee must be notified of “the composition and amount of remuneration.” Insofar as benefits are granted to the employee which are to be assessed as components of remuneration, these must be included. However, this point has not yet been fully clarified and is likely to be discussed in future case law or in essays. In any case, the due date and method of payment of the remuneration must also be stated. If in doubt, you should play it safe for now.

31. What if certain categories do not apply, e.g. company pension plans? Do we have to mention that there are no regulations for this or can we simply omit them?

If one of the details listed in the Act does not apply to the employment relationship, this can — according to current knowledge — be omitted and does not have to be stated in the negative.

32. Occupational pension scheme: What information do we have to provide? It is also required that this is only necessary if the pension provider is not itself obliged to provide the information. How is this to be dealt with?

In the case of occupational pension schemes, name and address of the provider, unless the provider himself is obliged to provide information.
Whether the provider is obliged to do so or not varies from case to case. To be on the safe side, it is advisable to include all relevant information in the certificate. For further information, you could contact the respective healthcare provider.

33. Does a job description have to be included in the minutes?

Yes, the job description or a short job title is required (Section 2 (1) (2) No. 5 Evidence Act).

34. What about additional documents that are part of the employment relationship, such as NDA, IT policies, confidentiality agreements, etc.?

If these documents do not contain any information required under the Evidence Act, they do not have to be mentioned in the minutes.

35. If we use a platform like XYZ for the material costs subsidy, do we have to record this in the minutes?

The composition, due date and method of payment must be stated in the remuneration. If the employer provides a subsidy for material costs, this part of the remuneration and the above information must be provided to the employee.

36. What about contract changes? Is the manual signature sufficient for a contract change that indicates the change (e.g. salary), or do we also have to update the minutes?

If changes are made to the main terms of the contract, these must be submitted to the employee in writing. This can be done by means of a handwritten signed amendment agreement or a new transcript which simply reflects the amended conditions.

37. For example, if we create a salary increase for an existing contract (before August 1, 2022), do we have to create a completely new contract with the new regulations instead?

If significant contract components specified in § 2 NachWG are amended in existing employment relationships, proof of the changed conditions must be provided. This must be handed over in writing at the latest on the date of entry into force of the change without a request from the employee.
A transcript of all Information in accordance with § 2 NachWG must only be provided at the request of the employee.

38. Do all important employment conditions always have to be up to date in ONE document?

The law does not require that the information in one document will be provided. From a procedural point of view, each company must decide for itself what works best for it (e.g. everything in a transcript that is simply updated and re-issued when changes are made, or employment contracts + changes in writing...).

39. Who would investigate this? Can an employee make a claim or will a state institution intervene here?

Responsibility results from Sections 36, 37 Administrative Offenses Act and is the responsibility of the federal states. It is not yet known how the checks are carried out in practice. Several scenarios are possible (e.g. during audits, complaints from employees...)

40. So it is not mandatory to amend the existing contracts that were concluded before August 1, 2022?

That's right. Employment contracts that existed before August 1, 2022 do not have to be amended. With regard to the question of whether an employment relationship exists from the signing of the contract or from the start of work, see question 16.