Civil Law vs. Common Law: Why German Employment Law Is Different

German employment law is codified, layered, and judge-developed in ways that surprise expats from common law countries. Here’s what’s actually different – and why it matters.

---

Two systems. Different starting points.

Common law countries, the UK, the US, Australia, Canada, Ireland, share a legal tradition built on precedent. Courts decide cases; those decisions become binding on future courts; law evolves through accumulated rulings. Your employment rights often live in that case law as much as in statute.

Germany is a civil law country. The rules are codified: written into statutes and codes, systematically structured, and applied by courts that interpret the text rather than build on prior decisions. The Bürgerliches Gesetzbuch (BGB, the Civil Code), the Kündigungsschutzgesetz (dismissal protection act), the Bundesurlaubsgesetz (leave act): dense, comprehensive codes that govern the details of employment relationships.

This creates a different kind of legal system, and some practical differences that matter if you’re navigating it.

Rights exist independently of your contract

In common law employment, the contract is central. What you negotiated is what you have (plus some statutory minimums). In Germany, large parts of your employment rights exist by operation of law, regardless of what your contract says or doesn’t say. Your employer cannot contract out of them, and you often can’t waive them in advance.

This cuts both ways. You have a right to a written reference regardless of what your contract says. Your holiday entitlement can’t fall below the statutory minimum. Your employer can’t dismiss you without a valid reason after six months, even if the contract says they can.

The role of courts is different

In common law systems, landmark court decisions, especially from appeal courts, set binding precedent that reshapes the law over time. In Germany, the Federal Labour Court (Bundesarbeitsgericht, BAG) issues influential decisions that lower courts follow in practice, but the formal system is different: courts interpret and apply the statutes rather than making law through precedent in the common law sense.

German courts are interpreting a written code. The statute is the primary reference. Case law clarifies and develops the code, but the starting point is always the text.

Labour courts are separate

Germany has a dedicated labour court system (Arbeitsgerichte), separate from the general civil courts. First instance is the local Arbeitsgericht. Appeals go to the Landesarbeitsgericht (regional), and further to the Bundesarbeitsgericht (federal). These courts deal only with employment matters.

Procedure is also different: the first hearing is a mandatory conciliation attempt (Gütetermin). Most cases settle at this stage. If not, a full evidentiary hearing follows.

Costs work differently

In first-instance labour court proceedings, each party pays their own legal costs, regardless of outcome. This is fundamentally different from most common law countries where the losing side pays. It lowers the financial risk of bringing a claim but also means winning doesn’t recover your lawyer’s fees.

From the second instance (appeal) onwards, normal cost rules apply and the losing side pays.

The contract isn’t the whole document

Your individual employment contract sits at the bottom of a hierarchy:

1. Statute (employment protection acts, minimum wage, leave law)
2. EU law and constitutional rights
3. Collective bargaining agreements (Tarifvertrag) – if applicable
4. Works agreements (Betriebsvereinbarung) – if a works council exists
5. Your individual contract
6. Custom and practice

Higher layers override lower ones where they conflict. Your contract may say something, but a collective agreement your employer is bound by may say something different, and the collective agreement wins.

FAQ

Do German courts ever look at how similar cases were decided elsewhere? They refer to prior German decisions for guidance, and increasingly to EU law and ECJ rulings. UK or US case law has no direct relevance.

My contract has a clause saying disputes will be governed by English law. Does that work? Probably not if you’re actually working in Germany. Mandatory German employment law protections generally can’t be contractually excluded.

Can I bring a claim in English? Court proceedings in Germany are in German. You’d need a lawyer to represent you. Initial consultations and advice can be in English.

Contact: