The German government recently adopted a formulation aid for the Bureaucracy Relief Act, which paves the way for digital employment contracts in Germany. Christoph Stresing from the Startup Association emphasises the advantages of this innovation: “Digitising instead of printing.” This change makes it possible to conclude open-ended employment contracts purely digitally and eliminates the previous need for paper or qualified electronic proof. According to the German Economic Institute, around 11 million employment contracts are concluded in Germany every year; the digitalisation of contract forms significantly reduces the administrative workload. This development supports start-ups in particular and promotes the competitiveness of the German economy.
The Startup Association welcomes the formulation aid for the Bureaucracy Relief Act (BEG) IV adopted by the German government. “The digital employment contract is coming to Germany. Digitising instead of printing. This saves time and effort for both employers and employees,” says Christoph Stresing, Managing Director of the Startup Association. The new regulations make it possible to conclude open-ended employment contracts in text form, i.e. purely digitally. Additional proof in paper form or by means of a qualified electronic signature is no longer required.
“This is an important step for the German economy. The changes will make everyday life noticeably easier, especially for start-ups that work digitally. No more tedious piles of files, no more cumbersome signatures on paper and no more expensive correspondence,” continues Stresing.
The potential relief is huge: according to the German Economic Institute, an average of 11 million employment contracts have been concluded in Germany every year over the last five years. “The abolition of the written form requirement for proof of essential contractual terms of employment contracts will further reduce the administrative burden. In future, text form will generally be sufficient for this proof,” explains Stresing. Proof of material contractual terms and conditions is required by law – until now, this was a paper requirement.
“The path to agreement was characterised by controversy. In the original government draft, which was passed in mid-March, the Federal Cabinet was not yet able to agree on the changes. It is therefore all the more important that the proponents of digital progress have now been able to prevail over analogue doubters,” says Stresing.
Digitalisation offers opportunities to speed up processes and reduce the administrative burden. “Even if the digital employment contract is still excluded for fixed-term employment contracts, with the exception of fixed-term contracts due to the standard age, and does not apply to all sectors, the changes will make the German labour market a little more attractive and thus strengthen the competitiveness of the German economy. Nevertheless, we must not let up on digitalisation as a whole,” concludes Stresing.
