Germany: Comprehensive changes in labour law due to the COVID-19 crisis

By Karina Bischoff, Dr. Kathrin Kruse, Marnie Plehn, Dr. Artur-Konrad Wypych, Julia Gottinger, Dr. Catharina Klumpp


A number of changes in the field of labour law have been implemented in response to the COVID-19 pandemic: video conferencing is finding its way in German labour courts, parental benefits have been adjusted, short-time work benefits have been increased, and supplementary income to short-time work is now available for all professions.

In Germany, a COVID-19-related amendment to the Labour Court Act has been passed. While the draft originally provided for extensive possibilities for courts to hold oral hearings without the physical presence of all parties involved, the law states that the court should only grant the request to participate in the proceedings by video call ex officio. The exclusion of the public in particular has caused harsh criticism, and what could have been a digital revolution of the labour court procedure, is now, at first glance, only an extension of the existing possibilities. Nevertheless, it does contain an important change - where the decision regarding allowing participation via video call was previously at the discretion of the court, the introduction of a predetermined rule on allowing participation via video call now leads to a shift in the rule-exception relationship.  Whilst the amendment is only in place until 31 December 2020 and is linked to the existence of a national epidemic situation, this is an important step towards digital labour jurisdiction.

The planned extension of the period for filing an action for the protection against dismissal (from three to five weeks) has been dropped.  

The same legislative package also includes an increase in short-time work compensation. For those employees who are on short-time work for at least 50 percent, the amount will rise to 70 percent from the fourth month of short-time. Employees with children will also receive an additional seven percent. From the seventh month of short-time work, the short-time work allowance will increase to 80 percent (or 87 percent for households with children). The law also extends the additional income opportunities for short-time workers, and from 1 May 2020, such individuals will be allowed to earn up to the full amount of their previous monthly income. Finally, the restriction to system-relevant occupations will be lifted. These regulations apply until the end of the year.

Changes have also been made to the parental allowance in order to prevent disadvantages arising in relation to COVID-19. Whilst parents in system-relevant professions are urgently needed at their workplace and are having to work more than planned, other employees are on leave of absence or short-time work and may fear that their reduced income will affect the receipt of parental allowance. Three main areas of regulation are therefore affected:

  • Parents in system-relevant occupations can postpone their parental allowance months, and have the possibility to take them even after their child has reached the age of 14 months. Any postponed months must be taken no later than 30 June 2021.
  • The additional benefit for mothers and fathers who both work part-time (partnership bonus) does not have to be repaid, or will not apply if parents work more or less than originally planned due to the COVID-19 pandemic.
  • Months in which a lower income was earned due to the COVID-19 pandemic should be excluded from the calculation of parental allowance. In addition, income replacement benefits such as short-time work compensation will not reduce the amount of parental allowance. These changes apply to the period from 1 March to 31 December 2020.

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