Termination of fixed-term employment contract: requirements, deadlines & tips

Termination of fixed-term employment contract: Younger employees and research staff in particular are often given fixed-term contracts. Such a contract expires automatically when the specified end date is reached, unless a legally valid notice of termination is given in advance. The cases in which it is possible to terminate a fixed-term employment contract and the special aspects that need to be taken into account are explained in the following article.

Brief explanation of the fixed-term employment contract

According to Section 3 (1) of the Part-Time and Fixed-Term Employment Act (TzBfG), it is possible to limit the duration of an employment contract. The time limit can be clearly defined by a date in the calendar or determined by the nature, purpose or quality of the work to be performed. According to Section 15 TzBfG, the employment relationship automatically expires on the specified date, provided the fixed term is legal. If the fixed term is not legal, the fixed-term contract is converted into a permanent employment relationship.

In practice, this means that normally no notice of termination is necessary because the employment relationship ends per se at the end of the period. However, there may be situations in which one party wishes to terminate the contractual relationship earlier, but this is only possible under certain strictly defined conditions.

Types of termination for a fixed-term employment contract

As a rule, a fixed-term employment contract is designed to run until the agreed end date is reached and does not normally provide for any regular termination options. Nevertheless, there are two types of termination of a fixed-term employment contract that can also apply here: extraordinary termination and ordinary termination.

Extraordinary termination of a fixed-term employment contract

Termination of a fixed-term employment contract without notice is possible under certain circumstances.

For example, it is possible for the employer to terminate the contract without notice if the employee commits a serious offence that makes it unreasonable to continue the employment relationship. Serious breaches of duty such as theft or violent insults by the employee could be grounds for this, although a prior warning is usually required.

The employee also has the right to extraordinary termination, for example if the employer repeatedly fails to pay the salary or grant leave.

Ordinary termination of a fixed-term employment contract

In general, ordinary termination is not possible for fixed-term employment contracts. The following are exceptions to this rule:

• For example, an employee with a contract term of more than five years has the option of terminating the employment relationship with six months’ notice.
• Insolvency of the employer: Ordinary termination could also be considered if the employer becomes insolvent. In this case, the insolvency administrator may give ordinary notice of termination, whereas the employee normally has no right of termination.
• Provision in the employment contract or collective agreement: Ordinary termination may also be permitted in exceptional cases if the employment contract or collective agreement contains corresponding clauses. It is essential that these clauses are clear and comprehensible, as otherwise they could be interpreted to the disadvantage of the employer or may be invalid.

If ordinary termination is authorised in the contract, the general protection against dismissal applies. This means that the employee can defend themselves against unjustified dismissal by means of an action for unfair dismissal, provided that the necessary criteria are met. In the event of a planned ordinary dismissal, the prescribed notice period must of course be observed.

Notice period for fixed-term employment contracts

As a rule, the notice period for fixed-term employment contracts is stipulated in the contract. As a minimum, the statutory notice periods must be observed. These are as follows:

Period of employment	notice period (to the end of the calendar month)
2 years	1 month to the end of the month
5 years	2 months to the end of the month
8 years	3 months to the end of the month
10 years	4 months to the end of the month
12 years	5 months to the end of the month
15 years	6 months to the end of the month

Conclusion

A fixed-term employment contract normally ends automatically when the fixed term has expired and there is no general protection against termination. Nevertheless, the fixed-term employment relationship can be terminated in certain cases, for example if there is a valid reason or if the contract expressly provides for an ordinary termination option including compliance with the notice periods.

Within the probationary period, the termination of a fixed-term contract is permitted without justification as long as it does not violate the principle of equal treatment. However, there are special situations, such as pregnancy or severe disability, in which even temporary contracts may be subject to extended protection against dismissal. It is therefore advisable to check your own contract carefully and to seek legal advice from a specialist employment lawyer in good time if you are unsure, in order to reduce the risks associated with a dismissal.