In an increasingly digital world, processes in the world of work are also changing. Paper-based documents are increasingly giving way to digital solutions, and HR is particularly benefiting from this development. One of the most significant simplifications is the introduction of electronic signatures. From concluding employment contracts to managing employee documents - digital signatures save time and money and make the entire process more efficient.
But what about the legal validity of e-signatures in employment contracts? What formal requirements must employers and employees observe in order to be on the safe side legally? Can an employment contract be signed digitally?
In Germany, the principle of freedom of form applies to many legal transactions - and this also includes employment contracts. Freedom of form means that contracts can generally be concluded without a specific form. This means that a contract can be concluded both verbally and in writing, digitally or on paper. The decisive factor here is that both parties make a mutual declaration of intent, i.e. clearly express their desire to enter into the contract.
This principle offers great flexibility, especially in an increasingly digital working world. However, although freedom of form is an essential component of German contract law, there are also exceptions where the law prescribes a certain form as mandatory.
In contrast to the freedom of form, there are contracts for which the law in employment law expressly prescribes compliance with the written form. This means that the document must be formulated in writing and signed by hand (Section 126 BGB). This form is required in particular for fixed-term employment contracts, temporary employment contracts and the termination of an employment relationship (notices of termination, dissolution agreements).
The written form is intended both to protect the parties and to create clarity about the agreements made. However, an important exception is the possibility of replacing the written form with a qualified electronic signature (QES) (Section 126a BGB). However, this does not apply to all contracts: For example, electronic forms are excluded for notices of termination and termination agreements (Section 623 BGB). Here, attention should be paid to an explicit exclusion.
In principle, employment contracts in Germany are subject to the principle of freedom of form and it is therefore possible to conclude contracts both verbally and in writing or to sign them digitally. However, it is important to pay attention to what type of contract is involved (more on this below). This flexibility has many advantages: employers and employees can reach an agreement quickly and easily without having to go through time-consuming formal processes. In addition, contractual conditions can be individually designed and easily adapted, which is particularly advantageous in dynamic working environments. Dispensing with time-consuming written formalities also saves time and money.
The Evidence Act exists to minimize some of these uncertainties. It obliges employers to record the essential terms of the contract in writing and hand them over to the employee.
Although employment contracts in Germany can be legally concluded with electronic signatures, the Verification Act imposes additional requirements. Even if an employment contract has been signed digitally, the employer must provide the employee with a separate verification document that sets out all the key terms of the contract in writing.
However, it is important that the employer adheres to clear deadlines: Some information must be available on the first working day, others within one month at the latest.
The law thus ensures greater transparency and legal certainty, even if the actual employment contract was concluded informally. However, this also means additional work, especially if the employment contract was signed electronically.
On March 21, 2024, Federal Minister of Justice Marco Buschmann announced a reform of the Evidence Act, which is intended to further simplify bureaucracy. In future, it will be possible to submit proof of the essential contractual conditions in text form. This means that the employer can provide the relevant information digitally, provided the employee can save and print it out and the other party receives proof of transmission or receipt. However, there should also be exceptions here.
These developments show that the requirements for employment contracts and their obligation to provide evidence are increasingly adapting to digitalization, which could further simplify processes for companies.
Fixed-term employment contracts are subject to stricter formal requirements than permanent contracts. According to Section 14 (4) of the Part-Time and Fixed-Term Employment Act (TzBfG), such an employment contract must be concluded in writing. This means that the agreement on the fixed term must be in paper form and signed by hand. Alternatively, a qualified electronic signature (QES) can be used. However, other electronic signatures such as simple or advanced signatures are invalid, as are agreements.
Case study: On March 16, 2022, the Berlin-Brandenburg Regional Labour Court ruled on a fixed-term employment contract that was only sent by email with scanned signatures. The employee argued that the contract was invalid as it was not in writing. The court ruled in her favor, as a scanned signature does not meet the requirements of Section 126 of the German Civil Code (BGB), which stipulates a handwritten signature on paper or a qualified electronic signature. Without this formal requirement, the time limit of the contract is invalid, which means that the contract is deemed to be for an indefinite period.
Conclusion: The written form is mandatory for fixed-term employment contracts.
This ruling makes it clear that a written, handwritten signature or the use of a QES is mandatory for fixed-term employment contracts. If this formal requirement is not met, the fixed-term contract loses its validity and the contract is treated as indefinite.
A handwritten signature is also required by law when an employment relationship is terminated - for example by notice of termination or a termination agreement (Section 623 BGB), as well as when issuing employment references (Section 630 BGB, Section 109 GewO). These strict requirements are intended to avoid misunderstandings and protect both employers and employees by creating clear and verifiable contractual conditions.
Just because an employment contract has been signed correctly does not mean that the issue is closed. Employers are legally obliged to keep employment contracts even after the employment relationship has ended. The minimum retention period is 3 years, and even up to 10 years for tax or social security aspects. However, the form of storage also plays an important role.
Contract management does not end with the signature. Employers need to know when contracts expire and how to store them correctly. Contract management software not only helps to keep an eye on deadlines, but also to ensure that the right contracts are archived in the right form and for the required duration. It ensures that both physical and digitally signed contracts are stored in an audit-proof and GoBD-compliant manner. This ensures the legal integrity of employment contracts in the long term.
With ContractHero, you can not only store contracts clearly and comply with the prescribed retention periods, but also monitor important contract terms in good time. ContractHero also makes it easy to sign contracts with a qualified electronic signature (QES), which greatly simplifies the entire process of digitization and contract creation. This saves you time, reduces sources of error and keeps you legally on the safe side at all times.
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