Fixed-term employment without an objective reason (German: sachgrundlose Befristung) allows employers to limit an employment contract in time without needing a specific justification — governed by § 14 para. 2 of the Part-Time and Fixed-Term Employment Act (Teilzeit- und Befristungsgesetz, TzBfG). The fixed term may last a maximum of two years and may be extended up to three times within that period. Any prior employment relationship with the same employer generally rules out this type of fixed-term contract.
What Is Fixed-Term Employment Without an Objective Reason?
Definition and Legal Basis
A fixed-term contract without an objective reason is a form of limited-duration employment in which no specific justification for the time limit is required. According to § 14 para. 2 TzBfG, a calendar-based fixed-term employment contract is permissible without an objective reason for a period of up to two years.
Unlike fixed-term contracts with an objective reason — where a recognised ground such as covering parental leave or a project-based need must be demonstrated — the groundless variant requires only the statutory framework as its legitimation. This makes it the simpler option in practice, but also the one more prone to legal errors.
Fixed-Term Without Reason vs. Fixed-Term With Reason: A Comparison
Requirements and Limits
Maximum Duration: 2 Years
Pursuant to § 14 para. 2 sentence 1 TzBfG, the total duration of a fixed-term contract without objective reason may not exceed two years. What counts is the cumulative duration of all fixed-term contracts with the same employer — not the length of any individual contract.
Renewals: Up to Three Times
Within the two-year limit, the contract may be renewed up to three times. Importantly, each renewal must follow on directly from the preceding contract — even a short gap between contracts generally makes a new groundless fixed-term contract impermissible.
Written Form Requirement
§ 14 para. 4 TzBfG requires the fixed-term arrangement to be agreed in writing. This means:
- The fixed-term contract must be signed before work begins
- Handwritten signatures from both parties are required
- A purely digital signature is insufficient (no qualified electronic equivalent to a handwritten signature under § 126 of the German Civil Code, BGB)
If the written form requirement is not met, or if the contract is signed only after work has started, the fixed-term clause is void — the contract automatically becomes an open-ended employment relationship.
The Prior Employment Bar
The so-called prior employment bar (Vorbeschäftigungsverbot) is the most common source of error in practice. § 14 para. 2 sentence 2 TzBfG provides that a fixed-term contract without objective reason is impermissible if the employee has previously been employed by the same employer.
The Federal Labour Court (Bundesarbeitsgericht, BAG) ruled on 06 April 2011 (case ref. 7 AZR 716/09) that this bar applies without any time limit in principle — even if the prior employment was many years ago. However, the Federal Constitutional Court (Bundesverfassungsgericht, BVerfG) clarified in 2018 (case refs. 1 BvL 7/14, 1 BvR 3106/13) that courts may disregard a prior employment relationship if it lies very far in the past and does not create a renewed dependency. The exact threshold remains a matter of case-by-case interpretation.
Practical note: When in doubt, always check before entering into a groundless fixed-term contract whether any prior employment exists with the same employer — including internships, student worker arrangements or minor employment contracts.
Exceptions: When Do Different Rules Apply?
Collective Agreement Deviations
Under § 14 para. 2 sentence 3 TzBfG, a collective bargaining agreement (Tarifvertrag) may provide for different rules on the maximum duration and the number of renewals. In companies bound by such agreements, longer fixed-term periods or more renewals may therefore be permissible.
Newly Founded Companies (§ 14 para. 2a TzBfG)
Newly established companies benefit from an extended rule: within the first four years after founding, a fixed-term contract without objective reason is permissible for a total duration of up to four years. The number of renewals within this period is unrestricted.
Employees Aged 52 and Over (§ 14 para. 3 TzBfG)
§ 14 para. 3 TzBfG permits, under certain conditions, a groundless fixed-term contract of up to five years for older employees aged 52 and over. However, this provision has been significantly curtailed by a ruling of the European Court of Justice and its practical application is complex — specialist legal advice is strongly recommended in such cases.
What Happens if the Fixed-Term Clause Is Invalid?
If the fixed-term clause is void — for example because the written form requirement was not observed, the prior employment bar applies, or the two-year limit was exceeded — the employment relationship is deemed to have been entered into for an indefinite period pursuant to § 16 TzBfG.
In this case, employees may file an unfair dismissal claim for open-ended status (Entfristungsklage) with the labour court. The deadline for filing is three weeks after the agreed end date of the contract. If the deadline is missed, the fixed-term clause is retrospectively deemed valid.
For employers, an invalid fixed-term clause therefore means:
- The employment relationship continues on an open-ended basis
- Termination is only possible subject to the ordinary rules of dismissal protection
- Retrospective correction is not possible
Checklist: 5 Common Mistakes in Fixed-Term Contracts Without Objective Reason
- Written form error: Contract is agreed only verbally or signed after work has started → fixed-term clause is void
- Prior employment overlooked: Earlier employment (including internships or student jobs) with the same employer not checked → fixed-term arrangement impermissible
- Two-year limit exceeded: Total duration of all fixed-term contracts exceeds 24 months → fixed-term clause void from the point of excess
- More than three renewals: Even within the two-year limit, a fourth renewal is impermissible
- Gap between contracts: A short break between two fixed-term contracts → the renewal is treated as a new contract; full re-assessment required
Frequently Asked Questions
How long may a fixed-term contract without objective reason last?
A maximum of two years under § 14 para. 2 sentence 1 TzBfG. Within those two years, up to three renewals are permissible. The cumulative duration of all fixed-term contracts with the same employer must not exceed two years.
What is the prior employment bar and does it apply without a time limit?
The prior employment bar (§ 14 para. 2 sentence 2 TzBfG) provides that if an employment relationship with the same employer has previously existed, a groundless fixed-term contract is impermissible. The BAG ruled in 2011 that this bar applies in principle without any time limit. The BVerfG qualified this in 2018: if the prior employment lies very far in the past and does not create a renewed dependency, courts may disregard it. The precise threshold is shaped by case-by-case rulings.
What happens if the fixed-term clause is invalid?
The contract is automatically treated as open-ended (§ 16 TzBfG). Employees may file a claim for open-ended status at the labour court within three weeks of the agreed contract end date. Employers can then only terminate the employment relationship through ordinary or extraordinary dismissal.
Must the fixed-term arrangement be agreed in writing?
Yes — the written form requirement under § 14 para. 4 TzBfG is mandatory. The agreement must be in place with handwritten signatures from both parties before work begins. An email or digital document without a qualified electronic signature is not sufficient.
Can the employment relationship be terminated during a fixed-term contract?
A fixed-term employment relationship generally ends automatically on the agreed date — ordinary termination by notice is not possible unless expressly provided for in the contract or collective agreement (§ 15 para. 3 TzBfG). Extraordinary (summary) dismissal for good cause remains possible at any time.
What exceptions apply to the two-year limit?
Collective agreements may permit different durations (§ 14 para. 2 sentence 3 TzBfG). Newly founded companies may use groundless fixed-term contracts for up to four years within the first four years after establishment (§ 14 para. 2a TzBfG). A limited special rule exists for employees aged 52 and over, which should be assessed on a case-by-case basis with legal advice.
What is the difference between a fixed-term contract without and with an objective reason?
With a groundless fixed-term contract, no special reason is needed — but the two-year limit and the prior employment bar apply. With a fixed-term contract based on an objective reason, a recognised ground must exist (e.g. temporary staffing need, parental leave cover, probationary employment), but there is no statutory maximum duration and no prior employment bar.
Does the prior employment bar also apply to internships and student worker arrangements?
Generally yes. The BAG interprets the term "employment relationship" broadly. Internships, student worker arrangements and minor employment contracts with the same employer can all trigger the prior employment bar. When in doubt, legal review is advisable.
Conclusion
Fixed-term employment without an objective reason is a flexible workforce planning tool that requires no specific justification. The core rules are clear: a maximum total duration of two years, no more than three renewals, written form before the start of work, and no prior employment with the same employer. The prior employment bar and the written form requirement are particularly frequent sources of error in practice — an invalid fixed-term clause automatically results in an open-ended employment relationship.
HR professionals are advised to systematically check the employment history of all new hires before entering into groundless fixed-term contracts, and to ensure the contract is signed and in place before the first day of work.
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Sources
- Part-Time and Fixed-Term Employment Act (TzBfG) § 14. Federal Ministry of Justice, 2001 (continuously updated). https://www.gesetze-im-internet.de/tzbfg/__14.html
- Part-Time and Fixed-Term Employment Act (TzBfG) § 16. Federal Ministry of Justice, 2001. https://www.gesetze-im-internet.de/tzbfg/__16.html
- BAG, Judgment of 06 April 2011 – 7 AZR 716/09 (Prior Employment Bar). Federal Labour Court, 2011. https://www.bundesarbeitsgericht.de/entscheidung/7-azr-716-09/
- BVerfG, Judgment of 06 June 2018 – 1 BvL 7/14, 1 BvR 3106/13 (Constitutional compatibility of § 14 para. 2 TzBfG). Federal Constitutional Court, 2018. https://www.bundesverfassungsgericht.de/SharedDocs/Entscheidungen/DE/2018/06/ls20180606_1bvl000714.html
- IAB Brief Report: Fixed-Term Employment in Germany. Institute for Employment Research (IAB), 2023. https://www.iab.de
- Guide to Employment Law. Federal Ministry of Labour and Social Affairs (BMAS), 2024. https://www.bmas.de
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