In a ruling dated June 1, 2022(Case No.7 AZR 151/21), the Federal Labor Court decided that the activity as a manager or in a managerial function does not constitute a reason for a fixed term based on the specific nature of the work performance (Section 14 (1) No. 4 TzBfG). In particular, the employee's prominent position or the resulting powers do not give rise to a justified interest of the employer in a fixed term. This applies even if extensive freedom to issue instructions was lived in the relevant employment relationship.
In the proceedings, the parties disputed the validity of a fixed-term contract. The plaintiff worked for the defendant (a hospital organized under public law) as director of a cross-campus center for radiology and diagnostics on the basis of a fixed-term employment contract. He worked largely without instructions and in a prominent position. He brought an action for a limited term against an expiring limited term pursuant to § 17 TzBfG. The labor court had dismissed the action. The plaintiff employee's appeal against this was successful.
The defendant's appeal was unsuccessful. In the view of the Federal Labor Court, the fixed term was invalid. In particular, a fixed term was not justifiedby the factual reason of the specific nature of the work performance pursuant to Sec. 14 (1) No. 4 TzBfG. It is true that the law does not specify what is to be understood by the specific nature of the work performance. However, not every such peculiarity is suitable to justify a fixed term. A fixed term is only possible if the work performance has special features which give rise to a justified interest of the parties, in particular of the employer, to conclude only a fixed-term contract instead of an open-ended contract. These special circumstances must outweigh the employee's interest in establishing a continuing obligation. In the view of the Federal Labor Court, neither freedom to issue instructions nor a particularly prominent position of an employee is sufficient for this. In particular, the mere fact that a person is a senior employee within the meaning of Section 14 (2) of the German Unfair Dismissals Act (KSchG ) is not sufficient to justify such a legitimate interest.
This decision is no surprise and fits in with the previous case law of the Federal Labor Court. For employers who want to install a certain dynamic through competition in top management positions by means of fixed-term contracts, the familiar guidelines therefore remain in place. It continues to be a tight corset within which employers are allowed to operate within the framework of fixed-term employment contracts with a material reason pursuant to Section 14 (1) TzBfG.