Termination of fixed-term contract: rules, notice periods, tips

Fixed-term employment contracts are common in Germany, and many employees work on a temporary basis for years. Problems often start when employers want to end the contract early or when the time limit itself is not valid. Our article explains when the termination of a fixed-term contract is legal under the Part-Time and Fixed-Term Employment Act (TzBfG). We also look at how employees can defend themselves against unlawful time limits and unfair dismissals.

Ending a fixed-term contract

German law recognises two types of fixed-term contracts:

• Fixed-term by date: ends automatically on a specified date.
• Fixed-term by purpose: ends once the agreed purpose has been achieved (e.g. return from parental leave).¹

Strict legal requirements for a fixed-term contract

A fixed term is only valid if certain requirements are met. In principle, there must be an objective reason – such as a temporary additional workload or the need to cover a maternity or parental leave. Also, a fixed-term employment contract for a new hire can be agreed upon without an objective reason if the total duration does not exceed two years and only a limited number of renewals are used.²
Furthermore, a fixed-term contract must be made in writing before work starts. If the written form is missing, the fixed term is usually invalid. The content of the fixed-term agreement can be agreed electronically. However, a mere verbal side agreement is not enough for a valid fixed-term.

Common reasons why fixed-term contracts are invalid

In practice, disputes often arise because employers do not fully comply with the legal requirements for fixed-term contracts. Employees frequently assume that a contract is automatically valid simply because it contains an end date. This is not always the case.

A fixed-term contract may be invalid for various reasons. Common examples include:

• The written contract was signed only after the employee had already started working.
• The employer cannot prove a valid objective reason for the fixed term.
• The contract was extended incorrectly.
• The employee previously worked for the same employer, and a fixed term without an objective reason was used again.
• The formal requirements of the Part-Time and Fixed-Term Employment Act (TzBfG) were not followed.

If a court finds that the fixed term is invalid, the employment relationship is generally treated as permanent from the beginning. This can provide employees with significant protection against dismissal and may considerably improve their negotiating position.

What happens if the legal requirements are not met?

Practical Tip: Check for Previous Employment
Many employees do not know that previous employment with the same employer can affect the validity of a fixed-term contract. If you worked for the employer before, even years ago, the fixed term should be reviewed carefully. In some situations, an invalid fixed term can result in a permanent employment relationship.

If the fixed term is legally invalid, the contract does not just end automatically. Instead, the employment is treated as open-ended from the beginning:

• In this situation, the employer can usually terminate the contract only in line with the normal rules for permanent employees and in respect of the protection against dismissal.
• If the fixed term is invalid solely because the written form is missing, courts allow ordinary termination even before the originally agreed-upon end date. In practice, this gives the employer and the employee an earlier exit option, but at the same time, the employee can rely on all normal protection rules for the termination of a permanent employment contract.

Early termination of fixed-term contract

As fixed-term employment contracts are set up to end automatically, the parties normally do not need an ordinary notice to bring them to an end. Still, situations arise where one party tries to end a temporary contract early. The law distinguishes between extraordinary termination for cause and ordinary termination based on a clear contractual or collective agreement clause.

Extraordinary termination for cause

An extraordinary or summary termination of a fixed-term contract is possible in principle. It follows the general rules for termination for cause and requires a good reason that makes it unreasonable for the terminating party to continue the employment, even until the end of the ordinary notice period. Typical examples are serious breaches of duty. Examples include criminal offences against the employer, colleagues, or customers, or other massive breaches of trust. 

An extraordinary termination for operational reasons is usually not possible in a fixed-term contract. The employer consciously took on the risk of employing the person for the full term. Only in rare and extreme cases, this might be possible. We have not found any court decisions confirming such exemptions in the case law. On the other hand, an extraordinary termination for personal misconduct is clearly possible. This includes serious breaches of contract after a valid warning. For example, repeated unexcused absences, violent attacks, or grave insults, depending on the overall circumstances.

Case example: termination of a fixed-term contract after unauthorized leave

A fixed-term employee can file a claim with the labor court against an extraordinary termination. The claim must be filed within three weeks after receiving the termination letter. If the claim succeeds, the employment continues until the agreed end of the fixed term. If it fails, the employment ends when the summary termination is received.

Ordinary termination in a fixed-term contract

An ordinary termination during a fixed-term employment relationship is only possible in narrow circumstances. As a rule, it requires a clear term in the employment contract, allowing an ordinary termination before the fixed term expires. This clause must be unambiguous and should specify who may give notice and under which conditions.

If a fixed-term employment contract is concluded for more than five years, the TzBfG grants the employee an additional termination right. In other words, there is a right to end the contract after five years of service. The employee may terminate the contract with a notice period of six months.

In the event of the employer’s insolvency, a fixed-term employment contract can be terminated ordinarily by the insolvency administrator. The statutory notice period is three months. However, if shorter contractual or collective notice periods apply, the administrator may use those.
If a right of ordinary termination exists, any notice is subject to all rules on protection against unfair dismissal. This means that employees can bring a claim for protection against dismissal. That is, if they consider the ordinary termination of a fixed-term contract to be unjustified. And also want to keep the job or negotiate a better exit solution.

Notice periods for fixed-term contracts

If a right of notice has been agreed in a fixed-term contract, the agreed notice period usually applies. Many contracts refer to statutory notice periods or collective agreements. In that case, those rules govern the exact length of notice.

If no contractual or collective rules at all are in place (a rare exception), statutory notice periods apply by default. Depending on the total agreed length of the fixed term, the following guidelines are used in practice:

Contract duration	Possible notice period
Up to 2 years	1 month
2–5 years	2 months
More than 5 years	6 months (special employee right)

Special: Probation periods in fixed-term contracts

If the contract includes a “probation” with the possibility of termination, it can be ended with a statutory notice period. This is usually two weeks, unless the contract provides a different, longer period. Since 1 August 2022, a new regulation required that any probationary period in a fixed-term contract must be proportionate to the contract’s duration and the type of work, but the law gives no concrete number. Courts and scholars therefore worked with a rule of thumb: no more than 25% of the fixed term (e.g., three months in a 12-month contract) – a limit the Federal Labor Court expressly rejected on 30 October 2025.³

Practical Tip: Do Not Wait Until the Contract Ends
Many employees seek legal advice only after their fixed-term contract has expired. By then, important deadlines may already be running. If you suspect that your fixed term may be invalid, it is usually better to review the situation before the employment relationship ends.

Claim to remove the time limit

If an employee wants to argue that a fixed-term employment contract is invalid, he must file a lawsuit (Entfristungsklage). Such a lawsuit must be filed within three weeks after the agreed end date of the fixed-term contract.⁵

Deadlines apply

The three-week period starts when the calendar-based term expires, or when the purpose of a fixed term is fulfilled. Or when the employee receives the employer’s written notice stating that the contract will end after the purpose is fulfilled.

What evidence should employees collect?

Employees who want to challenge a fixed-term contract should gather all documents relating to the employment relationship as early as possible.

Useful evidence may include:

• The original employment contract.
• All extension agreements.
• Job advertisements.
• Email correspondence concerning the fixed term.
• Internal announcements.
• Evidence showing that the alleged temporary workload never existed.
• Documents proving previous employment with the same employer.

The outcome of a lawsuit often depends on the available documentation. Employees should therefore keep copies of all relevant documents throughout the employment relationship.

What happens after filing a claim?

After the lawsuit has been filed, the labor court usually schedules an initial conciliation hearing. During this hearing, the parties attempt to settle.

If no agreement is reached, the court examines whether the fixed term was legally valid. The employer must often explain the reason for the fixed term and provide supporting evidence.

If the court finds that the fixed term is invalid, the employment relationship is generally treated as permanent from the beginning. The employee then benefits from the legal protections available to permanent employees.

Professional help recommended

If you suspect that your fixed term is invalid, do not wait until the contract ends. Collect all extension agreements and seek legal advice early. Missing the three-week deadline can permanently destroy your claim.

Frequently asked questions (FAQ)

1. Section 15 Part-Time and Fixed-Term Employment Act ↩︎
2. Section 14 Part-Time and Fixed-Term Employment Act ↩︎
3. Federal Labour Court 30.10.2025 (Az. 2 AZR 160/24) ↩︎
4. Federal Labour Court 30.10.2025 (Az. 2 AZR 160/24) ↩︎
5. Section 17 Part-Time and Fixed-Term Employment Act ↩︎