Signature ruling affects start-ups

According to a decision by the Berlin Labor Court, it is not sufficient if a fixed-term employment contract is only signed electronically.

If a fixed-term employment contract is to be concluded, this requires a handwritten signature according to the so-called Part-Time and Fixed-Term Employment Act. Otherwise it is deemed to be for an indefinite period. This was decided by the Berlin Labor Court. The ruling was based on a case in which an employee and an employer had only concluded a fixed-term employment contract - in this case as a mechatronics technician - with an electronic signature. There was no handwritten signature on the contract. This was reported by the legal portal Juris.

The labor court has now ruled that this specific form of signature is not sufficient. An electronic signature would have required certification in accordance with a 2014 EU regulation on electronic identification and trust services for electronic transactions in the internal market. However, there was no such certification in this case. In addition, there is no way to sign fixed-term contracts digitally.

The decision could affect many start-ups. The current regulations often make it easier for young companies to sign fixed-term employment contracts than older companies. If a company is less than four years old, it does not have to provide a reason to limit a contract to four years.