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28 March 20243 minute read

Update on the Evidence Act: Government parties agree on digital employment contracts

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On 21 March 2024, the Federal Government agreed on amendments to the Evidence Act (Nachweisgesetz (NachwG)). In future, the NachwG is to stipulate that employment contracts can also be concluded in text form in addition to the traditional written form. This would mean the digital employment contract would become reality. Shortly before this, on 13 March 2024, the German government had adopted the government draft for the Bureaucracy Relief Act (Bürokratieentlastungsgesetz (BEG IV)), which also contains amendments to the NachwG. The amendments to the NachwG announced by the Federal Government on 21 March 2024 are now to be retroactively integrated into this government draft.

The amended government draft has not yet been published. So far, the planned changes can be inferred from a letter from the Federal Minister of Justice, Marco Buschmann, to the associations affected by the new regulation.

The letter states: ‘In concrete terms, the Evidence Act will in future allow evidence of the essential contractual terms to be presented in text form, provided that the document is accessible to employees, can be saved and printed and the employer receives proof of transmission or receipt. This clarifies that the transmission of the proof in text form fully fulfils the requirements of the German Proof of Employment Act. The employer only has to provide written proof if the employees request it. For employees who work in an economic sector or branch of industry pursuant to Section 2a (1) of the Act to Combat Clandestine Employment shall the written form be retained for the provision of proof.’

In line with this announcement, employers in Germany may conclude digital employment contracts that do not require any further written evidence to fulfil the requirements of the NachwG once the legislative process has been completed. Emails also fall under the text form (in accordance with Section 126b German Civil Code (BGB)). An electronically qualified signature (in accordance with Section 126a BGB) is not required.

The revision of the strict written form requirement is of enormous importance for employers: digital employment contracts, which are essential for globally operating companies as well as for local companies with employees working remotely, can be concluded without the bureaucratic burden of additional written proof and without the fear of fines under the NachwG The envisaged proof of transmission and receipt is intended to ensure, in the interests of employers, that proof of the conclusion of the contractual documents can be provided in the event of a dispute.

What will happen next? The current government draft of BEG IV dated 13 March 2024 will now be amended in accordance with the above-mentioned changes and then forwarded to the Bundesrat for a statement. It will then be forwarded to and discussed in the Bundestag. It remains to be seen in what form the NachwG will enter into force once the legislative process has been completed. We will keep you posted.