Signature ruling affects start-ups

According to a decision of the Labour Court of Berlin, 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 considered to be for an indefinite period. This was decided by the Labour Court of Berlin. The ruling is based on a case in which an employee and an employer had concluded a fixed-term employment contract - in this case as a mechatronics engineer - only with an electronic signature. A personal signature was not to be found on the contract. This is reported by the legal portal Juris.

The labor court has now decided that in any case this specific form of signature is not sufficient. An electronic signature would have required certification in accordance with an EU regulation from 2014 on electronic identification and trust services for electronic transactions in the internal market. However, such certification did not exist in the case. In addition, there is no possibility 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 contracts than for older companies. If a company is not yet four years old, it does not have to present a reason for limiting a contract to four years.