Sample contract of employment Version: March 2015

Sample Contract of employment

Explanations are in italics

between

Company

Branch

Address

Town/city

Telephone number

hereinafter referred to as the Employer

Licence pursuant to 1 of the German Temporary Employment Act issued by the

Regional Office of the
Federal Employment Agency o n

and

Surname

Forename

Address

Place of residence

Telephone number

Date of birth

Place of birth

Nationality

hereinafter referred to as the

Employee

The Employer and the Employee hereby agree as follows.

The terms used in the present Agreement refer to both female and male employees. The decision
not to include gender specific formulations has been taken solely in the interests of greater clarity.

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 Sample contract of employment on the basis of the pay and conditions Version: March 2015 2
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1. Object of the Agreement

a) The Employee is employed for the following tasks:

Explanation: Particular characteristics of the activity to be performed and of skills and qualifications
required may be listed here if relevant.

b) As a service provider, the Employer supplies its clients with staff for the carrying out
of tasks within the scope of temporary employment. With effect from the start of the
contract of employment, the Employee commences employment as a temporary
worker for the Employer. The Employee will generally be deployed away from the
Employers company in changing areas of work at client companies and for
changing clients. The duration of individual temporary work postings is either for a
fixed term or until further notice and remains temporary at all times.
c) The Employer is entitled to deploy the Employee within the scope of contracts for
work or services and at the Employers company if required.
d) The Employer is also entitled to allocate the Employee to other tasks commensurate
with his skills and knowledge and if necessary to less qualified tasks whilst
continuing to pay the same remuneration ( 2.4 Framework Pay Agreement of the
Federal Employers Association of Human Resources Service Providers, [BAP]).
e) The Employee may be deployed at various locations of clients of the Employer. The
area of deployment is agreed as follows.
Whole of the area of the Federal Republic of Germany
Following area:
Following location:

*Please indicate by placing a cross as appropriate.

Explanation: In the cases of deployments abroad of longer than one months duration,
provisions must be separately agreed with regard to duration of deployment, currency in which
wages or salary is paid, additional cash benefits or benefits in kind and conditions governing
return to Germany ( 2 Paragraph 2 Law on notification of conditions governing an employment
relationship, [NachwG]).

2. Applicable Collective Wage Agreements

a) The present contract of employment is governed by the Framework Conditions

Agreement, the Rates of Remuneration Agreement and the Framework Pay
Agreement concluded between the Federal Employers Association of Human
Resources Service Providers (BAP) and the Collective Bargaining Association of
the German Confederation of Trade Unions (DGB) on 22 July 2003 and by any
supplementary, amending or replacement collective wage agreements as these
currently apply. Collective wage agreements regarding additional payments in
certain branches concluded with individual trade unions forming part of the
Collective Bargaining Association of the German Confederation of Trade Unions for
Temporary Employment are also deemed to be supplementary agreements within
the above meaning. Collective wage agreements are available for inspection on the
business premises.

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b) The collective wage agreements stated in Paragraph a) above concluded with the
respective trade union within the German Confederation of Trade Unions to which
the organisational area of the client establishment is subject in accordance with the
statutes of such a trade union, shall apply for the duration of the deployment. This
deployment-related provision shall continue to apply in the event of the dissolution
of the pay and conditions scheme, for example as a result of the withdrawal,
addition or discontinuation of a collective bargaining party or the conclusion of
individual amending and supplementary agreements.

At the request of the Employee, the Employer is required to provide written

notification before each deployment to a customer as to which collective wage
agreement applies on the basis of the reference provision agreed here and according
due consideration to the areas of responsibility of the trade unions within the German
Confederation of Trade Unions in accordance with the statutes of such trade unions.

Explanation: If the Employee is deployed in one branch only, then the relevant collective wage
agreements only can be stated at this point. For example, if the Employee is deployed in the
organisational area in which ver.di operates according to its statutes, the following formulation
may be used:

The present contract of employment is governed by the relevant collective wage

agreements concluded between the Federal Employers Association of Human Resources
Service Providers (BAP) and ver.di on 22 July 2003 to the extent that these agreements
are still in force and by any supplementary, amending or replacement collective wage
agreements as these currently apply.

c) In periods where the Employee is not deployed, the collective wage agreements
concluded between BAP and ver.di and any supplementary, amending or
replacement collective wage agreements shall apply in accordance with their
current status.

3. Right of direction/health and safety at work

a) The Employer is entitled to recall the Employee from his place of deployment at any
time and allocate him to another place of deployment.
b) Insofar as tasks are assigned to the Employee within the scope of the temporary
employment posting, the Employee shall be subject to the work directions of the
customer. This is without prejudice to the general right of direction of the Employer.
c) Insofar as the Employee is deployed as a temporary worker, he shall be under the
care and protection of the client establishment and covered by the provisions under
public law governing health and safety at work at such a company.
d) In appending his signature, the Employee confirms that he has received from the
Employer basic guidance in accident prevention measures and initial instructions in
health and safety at work. The Employee is required to comply with the accident
prevention regulations that apply in the client establishment. This particularly
includes the wearing of personal protective equipment. Prior to commencement of
work, the client establishment is required to notify the Employee of the accident
prevention regulations applicable to the company. The Employee shall help
instigate this if necessary. If the client establishment fails to provide such
notification, the Employee shall inform the Employer of this without delay and prior
to commencement of work.

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 Sample contract of employment on the basis of the pay and conditions Version: March 2015 4
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e) In the event that the customer requires the Employee to carry out tasks other than
those described in the notice of deployment, the Employee is required to notify the
Employer of such a circumstance without delay. The same applies in

circumstances where the client company refuses commencement of work by the

Employee or ends the work deployment prematurely.

4. Beginning, duration, probationary period and end of the contract of employment

a) The present contract of employment begins on . In the event of

unexplained absence on the first day of work, the present Agreement shall be
deemed not to have been constituted pursuant to 9.1 BAP Framework
Conditions Agreement.

The present Agreement is concluded for an unlimited period.*

The present Agreement is concluded for a fixed term pursuant to 14 Paragraph 2

of the Law on Part-Time Work and Temporary Employment Contracts (TzBfG) and
ends on .*

Explanation: According to the latest case law obtained by the BAP, a fixed-term contract of
employment may be issued without stating a material reason even if an Employee has been
previously employed, as long as the interruption between the contracts of employment was of
at least three years duration.

The present Agreement is concluded for a fixed term pursuant to 14 Paragraph

2a TzBfG (newly founded company) and ends on ______________.*

The present Agreement is concluded for a fixed term pursuant to 14 Paragraph 3

TzBfG (age limit) and ends on
.*

The present Agreement is concluded for a fixed term pursuant to 14 Paragraph 1

TzBfG and ends on .*
The reason for the fixed term is:

*Please indicate by placing a cross as appropriate.

If the contract of employment is concluded for a fixed term, it shall end upon expiry
of said fixed term without any requirement for notice of termination. The contract of
employment may also be terminated before the expiry of the fixed term upon giving
proper notice of termination.

b) The first months (Explanation: maximum of six months) of the

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contract of employment are designated as a probationary period. The provisions

contained in 9.3 BAP Framework Conditions Agreement apply to termination
during the probationary period. After this, notice of termination during the first three
months is one week. The statutory period of notice of two weeks applies thereafter
during the probationary period.

Notwithstanding Clause 3 above, a period of notice of one day shall apply during
the first two weeks in the case of new recruitments within the meaning of 9.3
Paragraph 3 BAP Framework Conditions Agreement.

Otherwise, the periods of notice stated in 622 Paragraphs 1 and 2 of German

Civil Code (BGB) shall apply to termination of the contract of employment by the
Employer or the Employee.

This shall be without prejudice to the right of both parties to extraordinary

termination for cause.

c) The contract of employment shall end without any requirement for notice of
termination upon the expiry of the month in which the Employee reaches the usual
age of retirement stipulated by statutory pension insurance or at the time when he
begins to receive an old-age pension regardless of the legal reason. The contract of
employment also ends without notice of termination upon the expiry of the month in
which the Employee receives from a pension insurance provider notice of an
unlimited pension because of reduced earning capacity and deployment of the
Employee as contractually agreed within the agreed scope of employment is no
longer possible. Prior to this, contract of employment may be terminated by either
party at any time upon giving proper notice of termination.

d) Notice of termination of the contract of employment must be given in writing.

Explanation: Notice of termination by fax or in electronic form is excluded.

e) In the case of notice of termination, the Employer is entitled to release the employee
from his work duties whilst continuing to pay remuneration. Any remaining annual
leave will be included in such a period of release from duties. The same shall apply
to any hours of credit that may be in a working time account. In the event of
redundancy, release from duties to run down the working time account is only
possible with the consent of the Employee.

Explanation: If irrevocable release from duties including remaining annual leave takes place,
such a circumstance should in every case be included in the letter of notice of termination. In
the case of release from duties including any remaining hours of credit, consideration should be
given to the fact that, in the event of a redundancy, such a release from duties requires the prior
consent of the Employee.

You are released from your work duties until expiry of the period of notice of termination.
This will include any remaining annual leave and hours of credit in your working time
account. We allocate you release from duties for the credit in the working time account in
the time from . t o . . We grant you irrevocable release from duties for the remaining
annual leave in the time from to .. .

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 Sample contract of employment on the basis of the pay and conditions Version: March 2015 6
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5. Working time, working time account

a) Regulation of the working time account takes place on the basis of 4 BAP
Framework Conditions Agreement.

In order to balance out the monthly deviations between the agreed working time of
the Employee (planned working time) and actual working time at the client
establishment, a working time account to record plus and minus hours will be set up
in accordance with 4.2 BAP Framework Conditions Agreement. Plus and minus
hours are the working hours that deviate from the individual regular monthly working
hours.

Insofar as nothing to the contrary is agreed below, management of the working time
account shall be governed by the provisions contained in the Framework Conditions
Agreement.

b) Within the meaning of 2 BAP Framework Conditions Agreement, individual regular

monthly working time is agreed to be hours.

c) Distribution of the weekly working time is guided by facts and circumstances at the
client establishment of the Employer. Within the scope of the agreed weekly
working time, the Employee shall perform his duties as the work situation
demands. The Employee is required to work on Saturdays, Sundays, public holidays
and at night if required.

d) The balancing of the working time account is governed by 4.5 BAP Framework
Conditions Agreement.

e) The Employee is required to perform overtime to a reasonable and legally

permissible extent within the meaning of 6 BAP Framework Conditions
Agreement.

f) The Employee is required to comply with the stipulations of the Working Hours Act.
The provisions contained within the Working Hours Act prohibit any exceeding of
the maximum permissible daily working time of 10 hours. The same provisions also
permit work on Sundays only in exceptional cases. The Employee is required to
notify the Employer or the branch signing his time sheets without delay if the client
establishment imposes working time of longer than 10 hours per day or work on
Sundays. Hours of overtime of this nature may only be worked with the express
approval of the Employer. Insofar as such approval is not in place, the Employee
may be refused recognition of the working hours for the impermissible additional
work carried out.

Explanation: Specific company features may be added here if necessary.

6. Remuneration

a) In accordance with the activities described above, the Employee is placed in

remuneration group pursuant to the BAP Framework Pay Agreement.

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Remuneration is currently euros gross per month for a regular

individual working time of hours per month. This corresponds to
remuneration of euros per hour.

The above remuneration is a fixed monthly income regardless of actual working

time performed. Actual working time performed is recorded in the working time
account.

b) The Employee receives supplementary payments pursuant to 7 BAP Framework

Conditions Agreement and 4 and 6 BAP Collective Pay Agreement.

c) The Employee is paid a holiday and Christmas bonus pursuant to 15 BAP

Framework Conditions Agreement.

d) The Employee also receives extra allowances above and beyond the collectively
agreed rates in the amount of euros per hour.

Extra allowances above and beyond the collectively agreed rates may be set off
against the collectively agreed rate pursuant to 4 BAP Collective Pay Agreement
and may further be set off if applicable against any supplementary payments
collectively agreed pursuant to 6 BAP Collective Pay Agreement. The same
applies in respect of minimum wage extra payments pursuant to the Employee
Secondment Act.

Extra allowances above and beyond the collectively agreed rates paid by the
Employer which represent remuneration for work carried out may be rescinded by
the Employer with a period of notice of one month to the end of the month for
business reasons or for reasons connected with the performance or conduct of the
Employee. The above reasons in particular include an emergency business situation
of the company, negative results from the department, failure to reach the EBIT
target for the year, a reduction in or failure to achieve expected development in
turnover or results, under-average performance by the Employee, an alteration to the
activity of the Employee or serious breaches of contract. The amount of any benefits
thus rescinded may not exceed 25% of the collectively agreed remuneration.

Explanation: According to more recent case law of Federal Labour Court (BAG), extra
allowances above and beyond the collectively agreed rates may only be rescinded in the event
of a material reason. These reasons must be described as precisely as possible in the
contractual clause.

e) Insofar as the Employer grants bonuses and/or special payments alongside the
extra allowances above and beyond the collectively agreed rates stated in d) above,
such bonuses and/or special payments shall be made as voluntary benefits to the
extent that they do not represent remuneration for work carried out. This does not
constitute any legal right on the part of the Employee to these benefits even if such
benefits are repeatedly granted.

f) Remuneration will be paid monthly in arrears in accordance with 13.1 BAP

Framework Conditions Agreement and will be transferred to an account to be
nominated by the Employee by the 15th banking day of the following month at the
latest.

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Bank
I BAN num ber
Account No.

g) The Employee is required to obtain certification for hours of work carried out on a
weekly/monthly basis on the time sheets provided by the client. Submission of
these time sheets is a prerequisite for payment of remuneration and should take
place weekly. Uncertified hours of work will not be recognised by the Employer. If
time sheets are submitted later than the 3rd working day of the following month for
reasons which are the responsibility of the Employee, payment of remuneration
shall take place together with payment for the month in which the time sheets were
submitted.

h) In accordance with 8 BAP Framework Conditions Agreement, the Employee has

a right to payment for travelling time and payment of overnight accommodation
costs by the Employer.

Explanation: A possible alternative formulation if relevant is: More details are contained
within the attached company regulations.

670 German Civil Code [BGB] otherwise applies to the reimbursement of repayable
expenses.

Explanation: If you intend to refund travel costs in addition to wages, this may be regulated in
the contract of employment or notice of deployment.

7. Pledging; assignment; garnishing; work documentation

The pledging and assignment of remuneration and travel cost claims are excluded.
The Employee is required to provide the Employer with the information necessary for
participation in the German electronic PAYE System (ELStAM Process). This
constitutes date of birth, tax identification number and submission of the necessary
documentation for the introductory period (2010 tax card or a replacement certificate for
2011, 2012 or 2013). Social security certification must also be submitted.
School pupils and students are required to submit a certificate of attendance.

8. Absence

a) In the event that the Employer is not, during the term of the contract of
employment, in a position to allocate a task within the meaning of Clause 1 above
of the present Agreement, this shall have no effect on the right of the Employee to
receive remuneration. The Employee shall have the right to payment of
remuneration if work does not take place due to a statutory public holiday. This is
without prejudice to 615 sentence 2 of German Civil Code (BGB). Such a right
shall not exist if the Employee is absent without explanation on the day preceding
or following the statutory public holiday.

b) If the Employee is unable to work because of illness, he shall notify the Employer
of such a circumstance without delay, by telephone if possible, and state the
reason for incapacity for work and the expected duration of such incapacity. The
same shall apply in the case of unexpected events such as rejection of the
Employee by the client client establishment or premature ending of the posting.

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c) If incapacity for work as a result of illness lasts for longer than three calendar days,
the Employee shall be required to submit a doctors certificate regarding the
incapacity for work and the expected duration of such incapacity no later than the
fourth day following commencement of incapacity for work. The Employer is
entitled to require submission of the doctors certificate after only one day of
incapacity for work. If incapacity for work continues for longer than stated on the
certificate, the Employee is required to submit a new doctors certificate. The
Employer shall be notified of recommencement of work as early as possible, and
no later than one day before such recommencement.

d) Remuneration in the case of incapacity for work as a result of illness is governed by

13.3 BAP Framework Conditions Agreement. Continued payment of
remuneration on statutory public holidays is governed by 2 Continued
Remuneration Law, [EFZG].

e) In the case of illness of the Employees own children, the Employee may be
released from work duties in accordance with the statutory stipulations. Continued
remuneration is excluded in such a circumstance.

9. Short-time working

Notwithstanding the provisions contained within 87 of the Works Constitution Act

(BetrVG), the Employer may announce short-time working if and to the extent to
which the statutory requirements for the granting of short-time working are
fulfilled. Two weeks notice shall be given.

10. Annual Leave

a) The Employee has a right to paid leave in each calendar year. Duration of leave is
based on the period of uninterrupted employment with the company. Right to paid
leave is governed by 11 BAP Framework Conditions Agreement. The current
provisions are as follows.

First year 24 working days

Second year 25 working days
Third year 26 working days
Fourth year 28 working days
From the fifth year 30 working days

b) If the employee leaves employment during the first six months of the contract of
employment, entitlement to leave is obtained pursuant to 3 and 5 Federal
Leave Act, BUrlG (1.67 days per month in the case of a 5-day week).

c) In the year in which he joins and leaves the company, the Employee has a leave
entitlement of as many twelfths of leave due as full months of employment.

If, in the year of joining the company, the Employee has fulfilled the statutory
waiting period of six months, he shall be entitled to one twelfth of annual leave for
each full month of the contract of employment and shall at least be entitled to
statutory minimum leave.

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If the Employee leaves the company in the second half of the calendar year having
fulfilled the statutory waiting period of six months, he shall be entitled to one twelfth
of annual leave for each full month of the contract of employment and shall at least
be entitled to statutory minimum leave.

d) Pay for leave is calculated on the basis of 13.3 BAP Framework Conditions
Agreement.

e) The Employee is required to provide a certificate of leave in the present calendar

year from his previous employer without delay.

f) Leave must be granted and taken in the present calendar year. Transfer of leave
to the next calendar year only takes place if justified by urgent operational reasons
or urgent reasons connected to the person of the Employee. In the case of such
transfer, leave must be granted and taken by 31 March of the following year.
Otherwise, the entitlement to leave shall lapse subject to the special regulation
contained in Clause g) below.

g) The entitlement to leave shall not lapse if the Employee is unable to work because
of illness until the end of the period in which leave may be transferred or until 15
months after the expiry of the year to which leave applies. Notwithstanding this,
leave is limited to the minimum leave entitlement. If in such a case leave can no
longer be granted in kind because of the end of the contract of employment,
payment will be made for such leave. Notwithstanding this, payment will only be
made to the extent of the minimum leave entitlement.

11. Safeguarding of interests and confidentiality

The Employee shall maintain secrecy vis--vis third parties with regard to operational
and business secrets of the Employer and of the Employers clients and in respect of
matters that the Employer or the client company has designated as confidential. This
shall continue to apply after the end of the contract of employment.

12. Secondary jobs

The Employee is required to notify the Employer of any secondary jobs. The Employer
may prohibit a secondary job if such a secondary job may negatively impact upon the
contractual duties of the Employee or other interests of the Employer.

13. Contractual penalty

a) The Employee commits to pay a contractual penalty in the amount of one

gross monthly salary if he ends the contract of employment prematurely
without complying with the deadline for notice of termination. If such a
circumstance occurs during the probationary period, the contractual penalty
shall be calculated pro rata on the basis of the duration of the period of notice
of termination to be complied with (formula: working days until the expiry of
the period of notice of termination to be complied with x daily working hours x
hourly wage). This does not apply in the event that the contract of
employment is deemed not to have been constituted pursuant to 9.1 of the
Framework Conditions Agreement. This is without prejudice to the right of
the Employer to assert a claim for further compensation.

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b) Outstanding or future wage claims may be set off against the contractual
penalty in compliance with provisions governing garnishing.

14. Assertion and exclusion of claims

Notwithstanding the deadlines for exclusion of claims contained within collective wage
agreements, the Parties agree the following as part of the contract of employment.

a) Claims arising from the contract of employment shall lapse if not asserted in writing
against the other contractual party within an exclusion deadline of three months after
falling due.

b) If the other party, in accordance with point 14 a), refuses the claims in writing either
partly or in whole, the claim or challenged portion of the claim shall be asserted in
court within a further exclusion deadline of three months following receipt of written
refusal.

Claims not asserted within these deadlines are excluded.

c) The forfeiture pursuant to Clause 14 points a) and b) are effective for all claims from
the working relationship arising before the end of this amendment agreement /
employment contract and for those claims that are in connection therewith. As far as
these claims are due and not yet expired when signing this amendment agreement /
employment contract, clause 14 letter a) sentence 1 shall apply, provided that all
such claims are made in writing to the other Party within a period of three months
after completion of this amendment agreement / employment contract.

d) These regulations on expiry of claims under paragraphs a) to c) shall not apply to an

employee's claims on minimum wage in accordance with MiLoG. As far as the
ordinances issued on the basis of the AEntG or universally applicable collective
agreements provisions contain their own deadline, they shall apply.
The rules on forfeiture of claims are valid according to para. 14 points a) to c) for any
other legally non-waivable claims, in particular but not exclusively, mandatory
collective claims, compelling claims of operating agreements and for claims of liability
for intent and for injury to life, body and health.

15. Other provisions

a) The Employee is required to notify the Employer in writing without delay of all
alterations in his personal circumstances (e.g. change of address) that are material to
the contract of employment. The address last stated is the authoritative address for all
necessary notifications made by the Employer.

b) The first place of work of the employee within the meaning of travel expenses tax
law is the operation of the employer on the site .... (Branch, address).

Explanation: If the operation site of the employer is not desired as the first place of work, but
rather one of the client s premises for tax purposes:
The first place of work of the employee within the meaning of travel expenses tax law is the
operation of the client on the site .... (Branch, address).

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c) In appending his signature to the present contract of employment, the Employee

confirms that he has received from the Employer a copy of the present Agreement, a
copy of the collective wage agreements listed in 2 above and a copy of the
information sheet issued by the licensing authority on the material contents of the
German Act Regulating the Commercial Provision of Temporary Employment, AG,
and has been notified of the opportunity to inspect the laws governing health and
safety at work displayed on the business premises.

Explanation: The provision of a copy of the collective wage agreement or a special display of
this agreement on the business premises is not absolutely necessary. In order to comply with
the requirements of the law, it is sufficient for the Employee to have the opportunity of
inspecting the collective wage agreement.

d) Side agreements and amendments to the present contract of employment shall not
be valid unless made in writing. The same shall apply in respect of the present
written form clause. This is without prejudice to the priority of individually agreed
terms pursuant to 305b German Civil Code (BGB).

e) In the event that one of the provisions contained within the present Agreement
should be or should become invalid, this shall be without prejudice to the validity of
the other provisions herein contained. The Parties commit to replacing such an
invalid provision with a provision that most closely reflects the original will of both
contractual parties.

16. Additional agreements

Explanation: If a fixed-term contract is being concluded, we recommend the inclusion of the

following clause in order to avoid any danger of incorrectly concluding a fixed-term contract
pursuant to 14 Paragraph 2 of the Law on Part-Time Work and Temporary Employment
Contracts (TzBfG): The Employee confirms that no contract of employment between him and the
Employer has existed in the last three years.

(Place), (date); (signatures)

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