How is the German Evidence Act changing employment contracts?

Author: Stephanie Simon-Sommer, lawyer

Until now, employees have had to be given their terms and conditions of employment in writing, meaning on paper. The German government intends to change this by updating the German Evidence Act (NachwG). We spoke to lawyer Stephanie Simon-Sommer about the consequences.

The governing coalition wants to change how employment contracts are documented under the German Evidence Act. What exactly is planned?

The planned amendment aims to replace the written-form requirement for documenting the essential terms and conditions of employment under the German Evidence Act with text form. This means that employers would no longer be required to print these terms physically on paper, sign them and hand them over. As things currently stand, an electronic format such as a simple electronic signature or even an email would be sufficient in future.

What specific benefits would this change bring for employers and employees?

Employers could save considerable time and resources because the physical exchange of documents would no longer be necessary. This simplifies processes, especially at a time of remote working and acute skills shortages. Many companies still have employment contracts signed exclusively by hand to avoid having to produce separate documentation, and thus add a further step to the recruitment process, in order to meet the requirements of the German Evidence Act. This costs them valuable time and, in the worst case, even their preferred candidate.

The planned legislative changes would allow employees to receive their employment contracts, and at the same time the documentation required by the German Evidence Act, more quickly and easily and to save them electronically straight away. Employers could therefore send their contract offers immediately after a candidate accepts and would not subsequently have to arrange for a separate second version of the employment contract to be signed by hand or provide separately documented terms bearing a handwritten signature in order to comply with the German Evidence Act. In particular, this would make the deadlines set out in the Act much easier to meet. It would also inherently reduce the risk of fines.

This change could encourage more comprehensive digitalisation of work processes. Simplifying documentation can make processes more efficient and enable even broader use of advanced technologies such as document generators for fully automated contract creation and documentation.

Are there concerns about the planned change to the German Evidence Act?

The precise design remains to be seen. Current plans require companies to provide evidence of transmission and receipt. Employers will therefore have to ensure that documents can be saved on a durable medium.

Any concerns about the evidential value of electronic documents could be addressed by establishing automated processes, for example with the aid of document generators. This could ensure reliable documentation that is treated in the same way as physically signed documents even in the event of a dispute.

The reformed German Evidence Act makes fully automated contract creation easier — benefit from the efficiency of suitable software solutions

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