Statutory Period of Notice for Service Contracts with Managing Directors: New Decision of the German Federal Labour Court of 11 June 2020

By Dr Angelika Baumhof and Cathrin Kirchbach, Jakoby Dr Baumhof

The Federal Labour Court (BAG) has ruled that in the absence of a contractual provision on the period of notice in service contracts with managing directors, the statutory provision of § 621 of the German Civil Code (BGB) applies. The decision is surprising, as the Federal Court of Justice (BGH) has so far assumed an analogous application of § 622 BGB (only applicable to employment contracts) in order to protect minor shareholding and third-party managing directors.

The BAG, on the other hand, does not consider the requirements for analogy to be given, as this would conflict with the case law of the BAG on employee-like persons, who are generally more economically dependent and therefore need more social protection than managing directors.

§ 621 BGB determines the notice period based on the periods for which the remuneration is calculated. If the remuneration is calculated on a monthly basis, the employment relationship can be terminated at the latest on the 15th of a month to the end of the month. If the remuneration is calculated based on longer periods, the employment relationship may be terminated with six weeks’ notice to the end of a calendar quarter. § 622 BGB, on the other hand, provides for a notice period of four weeks to the middle or end of a month, which applies to both parties. For the employer, this notice period is extended, with increasing length of service to up to seven months to the end of the month. § 622 BGB is therefore in the interest of managing directors.

Thus, in view of the divergent provisions of § 621 and § 622 BGB, it is now necessary to determine a notice period in employment contracts for managing directors. For existing contracts that only refer to the statutory notice periods, contractual clarifications or new provisions are now required.


Dr Angelika Baumhof

Dr Angelika Baumhof

GGI member firm
Jakoby Dr Baumhof Auditors Tax Consultants Lawyers
Auditing & Accounting, Tax, Law Firm, Advisory, Corporate Finance
Rothenburg o.d.T., Ebersberg, Germany
T: +49 9861 9405 0
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W: www.jakoby-baumhof.de

Jakoby Dr Baumhof – Auditors Tax Consultants Lawyers is a mid-size, interdisciplinary company located in the south of Germany, with offices in Rothenburg ob der Tauber, located in Northern Bavaria, and Ebersberg, near Munich.

Dr Angelika Baumhof specialises in corporate and commercial law and contractual civil law. She started her career as a judge at the District Court of Munich and as a prosecutor in Munich. Since 1996, she has been a Partner at Jakoby Dr Baumhof. Her main field of expertise is consulting, but she also practices litigation in all fields of commercial and private law.
Cathrin Kirchbach

Cathrin Kirchbach

GGI member firm
Jakoby Dr Baumhof Auditors Tax Consultants Lawyers
Auditing & Accounting, Tax, Law Firm, Advisory, Corporate Finance
Rothenburg o.d.T., Ebersberg, Germany
T: +49 9861 9405 0
E: This email address is being protected from spambots. You need JavaScript enabled to view it.
W: www.jakoby-baumhof.de

Cathrin Kirchbach is an attorney who specialises in individual and collective labour law, and also advises on social law. She speaks German and English.


Published: Employment Law Newsletter, No.10, Spring 2021 l Photo: Jan Schuler - stock.adobe.com

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