Employment Law, Government & Legislation

Some German Employment Law facts

Here are five basic facts about German employment law, which are in fact not that much different from NZ Employment Law:


That employment relationships require an employment agreement, that certain parts are negotiable and others prescribed by statute and that termination has to be in writing is all familiar to NZ employers. As usual, the devil is in the details. For instance, in Germany, termination in writing means exactly that – by written letter. Email, fax etc is not sufficient. In NZ, the legislation does not specify whether the notice has to be in writing at all or how much notice has to be given. However, it is common to specify both in the employment agreement.

Whats more interesting are the quite substantive mandatory insurance entitlements and payments. Its no secret that employees in Germany enjoy very generous insurance protection and pension entitlements. Health insurance, including home care, unemployment and pension insurance are all provided for AND paid for by the employer alone or half by employee and employer. In comparison, NZ provides for compulsory ACC payments. ACC contributions are taxed with the employee’s paying around 1.5% as part of their income tax (PAYEE payments). Employers pay a levy directly to ACC, which is based on the number of employees and an injury-rating assessment. There is no pension or health insurance. The NZ pension is a uniform standard yearly pension to which every NZer is entitled from the age of 65. The health system is tax funded and entitles every NZer to free medical care (but prioritized based on medical necessity, The more minor, the longer the wait.)  And here’s another fun fact:  employer Kiwisaver contributions, designed to match those of the employee, are not on top of the salary, instead taken out of the salary.  So they are not employer contributions at all.  The parties can agree otherwise, but at law, the employer doesnt have to contribute anything in addition at all. Which is the complete opposite to the contributory schemes in Germany, where the employer matches the employee’s contributions out of their own pockets.

In a nutshell, if you want to play it safe, work in Germany. Retirement is definitely easier to achieve (and to enjoy) over there.