Amendment and additions to employment contracts

Employment Contract Additional Agreement
Liz is Head of Legal at twinwin.
As an expert in employment law, Liz enjoys sharing valuable legal knowledge with HR professionals, enabling them to avoid costly legal mistakes. Her mission at twinwin is to make employment law easy for HR.

In an employment contract, employer and employee regulate what their cooperation should look like. The agreements they set out in the contract are legally binding. However, various circumstances can cause the employment relationship to change during the collaboration: The employer may want to rearrange working hours or vacation days, increase the salary, or an employee expresses a personal wish to switch from part-time to full-time. In such cases, the existing terms of the employment contract must be amended or new agreements must be made, which the employer can record in an amendment agreement to the employment contract and document in writing.

In addition, it may also happen that completely new, additional regulations are to be made for the employment relationship, for example if the employer wants to cover the employee's further education or training costs or if a company car is to be handed over. In such a case, an additional agreement to the employment contract may be concluded.

These amendment and additional agreements pose particular challenges for employers and HR departments. You must ensure that these changes and additions to the contract are legally effective and comply with legal and collective agreement provisions. In this article, we explain what HR must pay particular attention to when it comes to amendment and additional agreements to the employment contract, what use cases there are and where you can download a legally secure template for your HR work.

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Clarification: What is an amendment or additional agreement to an employment contract?

The terms additional agreement and amendment agreement are often used interchangeably, which is not harmful per se, as in individual cases it always depends on the actual content of the contract and their performance. However, experts regularly talk about a amendment agreement ( so-called addendum) if existing regulations are to be amended or supplemented. This is therefore a legal agreement that amends the original employment contract and is concluded between employee and employer. With an additional agreement, however, the parties often regulate completely new issues or topics in a separate document. This also helps to avoid unnecessarily overloading the original employment contract.

Sometimes the additional agreement is also used as collective term uses and includes the amendment agreement. For the sake of simplicity, we will also use the term in this sense below.

Accordingly, an additional agreement therefore gives the employer and the employee the opportunity to react to changing conditions, such as new working conditions, operational changes or even personal changes made by the employee, without having to draw up a completely new employment contract. With an additional agreement, the employer can in principle regulate all aspects of an existing employment relationship or supplement them with an agreement that goes beyond the original contract, provided that he does not violate applicable law.

Since this is an additional agreement which, as in the examples above, usually changes or supplements essential components of the original employment contract (section 2 Nachweisgesetz (NachwG)), it requires the consent by both parties, i.e. the employer and the employee.

In which cases does an additional agreement to the employment contract make sense?

Employment law is subject to the principle of freedom of contract. This means that employers and employees can make agreements at will, as long as they take into account applicable laws, applicable collective agreements and works' council agreements. Whether an additional agreement makes sense or is even necessary depends primarily on the wording in the employment contract. In principle, it can be assumed that the more detailed the agreed contractual terms between employer and employee are set out in the employment contract, the more an additional agreement to the employment contract is necessary in the event of additions or changes.

Example 1: Supplementary agreement for salary increases

If the employer wishes to adjust the amount of pay or other remuneration components such as special payments, he can regulate this — provided that these are minor changes such as a salary increase — by means of an additional agreement to the employment contract.

The amount of pay is an essential part of the employment contract: By signing the employment contract, the employee undertakes to perform the contractually agreed work and the employer to pay the agreed pay. For this reason, the employer can never make a salary adjustment without the employee's consent — even though the employee generally would not reject a salary increase.

The same applies if the employer wants to cancel a salary increase. To do so, he needs the employee's consent, as this step would change the agreed contract terms. It is therefore impossible for the employer to go it alone.

 

Example 2: New working time arrangements or changes in workload

New working time regulations, such as changes in the shift or flexitime systems can be agreed via an additional agreement to the employment contract. However, the employer must in particular take into account the regulations of the Working Hours Act.

An addition to the employment contract is also necessary if an employee's workload changes, for example because he wants to switch from full time to part time for personal reasons. The additional agreement must then also regulate other working conditions, such as wage adjustments or future vacation entitlement.

 

Example 3: Promotion

A promotion requires an amendment to the original employment contract and thus a written agreement on the employment contract, as the employee generally occupies a higher-value position and is paid higher in return.

 

Example 4: Transfer or change of job

A transfer happens when the employee changes jobs for at least one month, for example to another department or by moving the branch to another place of work, or if he takes on different tasks than before.

In principle, the employer can determine the place and content of the work on the basis of his right to issue instructions, provided that he does not violate employment or collective agreement provisions and takes into account the interests of the employee. If the original employment contract does not contain any regulations on transfers, a change of job usually requires an additional written agreement to the employment contract.

 

Example 5: Home office regulations

More and more employers are enabling their employees to perform their work from home, at least temporarily. In principle, however, the employee has no legal right to work from home. Conversely, even the employer cannot introduce home office unilaterally. There may be exceptions if, for example, the employment contract, the applicable collective agreement or the works agreement contain appropriate regulations. If this is not the case, employers and employees can agree home office regulations in writing in addition to the employment contract.

The additional agreement on working from home regulates mutual rights and obligations and should contain clear requirements for the employee who works from home like the scope the home office work including exceptions, working hours and availability, provisions on data protection and security or reimbursement of electricity or Internet costs.

 

Example 6: Costs of further education 

If the employer covers the costs of further education or training for an employee, he should — unless there is an employment contract provision — protect himself against early termination by the employee by means of an additional agreement. This means that the employer should agree in writing with the employee in advance of the qualification measure that the employee is obliged to repay the training costs if he leaves the company before a certain date.

However, according to case law, the agreement on the employee's repayment obligation, the so-called repayment clause, must meet important requirements in order to be valid:

  • Employees improve their career and/or earnings opportunities through continuing education or training.
  • The advantage that the employee receives as a result of continuing education and the duration of the commitment to the employer must be proportionate.
  • The agreement clearly defines the date until which the employee's repayment obligation exists.
  • The employee terminates the employment relationship prematurely or the employer terminates the employment relationship prematurely due to the fault of the employee (behavioral termination).
  • When drafting the content of repayment clauses, case law also requires a monthly reduction in the employee's reimbursement obligation as the length of service progresses.

In practice, repayment clauses are to be classified as the employer's general terms and conditions and must withstand scrutiny in accordance with Section 305 of the German Civil Code (BGB). This means that such clauses must not be hidden in the corners of the contract, must be formulated clearly and comprehensibly and must not unduly disadvantage the employee.

Good to know: The employer can also use a repayment agreement that sets out the employee's repayment obligation if they assume an employee's moving costs and want to protect themselves against early termination by the employee. In this case, too, it is important that the agreement meets the legal requirements for its admissibility. But please notel: This does not apply if be the move is required for operational or other company related reasons.

 

Example 7: Using a company car 

When handing over a company car to the employee, the employer can specify the exact terms of use in an additional agreement. In order to avoid disputes in this regard, the terms of use for private trips or the transfer of vehicles to third parties (e.g. relatives) should also be clearly defined.

 

Example 8: Payment of travel expenses 

According to section 670 BGB, the employer must reimburse the employee for the necessary expenses for a business trip. However, the employer is entitled to limit the costs of business trips in advance. It is therefore advisable to make individual arrangements for the payment of travel expenses in the employment contract or in an additional agreement.

For example, the employer can determine in an additional agreement up to what amount they will cover the costs of accommodation. This can be particularly useful for employees who travel regularly on business trips. They can also limit the reimbursement of costs for 2nd class rail travel or cheap class for air travel. Depending on the company, it may also be useful to conclude a written agreement on additional catering expenses, which determines up to what maximum amount the employer will reimburse the employee for the costs of catering, for example upon presentation of the catering receipt, an indication of the occasion and the name of the persons present at the business lunch.

 

Example 9: Private browsing at work 

The employer can decide for himself whether to allow or prohibit private use of the Internet at work, i.e. via the company laptop or the company mobile phone. A ban can certainly have advantages for the employer; for example, security risks may arise if the employee uses the official Internet privately.

In order to provide clarity and avoid disputes, the employer should conclude an additional agreement with the employee which regulates private browsing or the use of social media channels on the company's computer or smartphone. This gives the employer the opportunity to subject private use of the Internet to certain conditions, for example that breaks must be used for this purpose or that no files may be downloaded.

 

Example 10: Provision of work equipment 

The employer should also absolutely regulate the provision of work equipment, for example the provision of company laptops or hardware to certain employees, in an additional agreement to the employment contract. Here they can provide specific information about the type of work equipment, the condition and the intended use (purely for work or also private purposes) or also refer to the obligation to report damage.

By means of an additional agreement on the provision of work equipment, for example, in the event of a dispute, it can be determined which work equipment has been handed over to the employee and which must be returned.

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Requirements: When is an additional agreement to the employment contract valid?

The following requirements should be met so that HR can make a contract change or adjustment in a legally secure manner:

Employers and employees must agree to the agreement

The content of an employment contract can be changed. However, an amendment to the employment contract always requires the consent of both parties to take effect. The employer therefore needs the employee's consent in order to be able to make new agreements on the employment contract, as these are usually accompanied by an amendment to the original employment contract.

Important to know: The employer cannot therefore unilaterally enforce an amendment to the employment contract, they require the express consent of the employee in order for the additional agreement to become legally effective. However the epmloyee has the right to refuse to agree to an additional agreement to the employment contract. If the employer and employee are therefore unable to agree on the proposed contract amendment, the employer has the option of making a so-called contract amendment with a termination (amendment notice) in order to bring about the desired change to the employment contract The employer therefore gives notice of termination and combines this with the offer to continue the employment relationship under changed conditions. However, there are some legal pitfalls lurking here and it is urgently recommended to seek legal advice on a case-by-case basis in order to avoid subsequent legal disputes.

Additional agreements to the employment contract should be made in writing

Accordin to the Nachweisgesetz, all essential working conditions must be notified to the employee in writing (section 3 NachWG). The employment contract usually also states that subsequent changes must always be made in writing. But also to avoid subsequent misunderstandings or ambiguities, a written additional agreement to the employment contract is always useful from a legal point of view. A written agreement in which both parties have signed their agreement to the new regulations can be asserted in court by both the employer and the employee in the case of a possible dispute.

 

Additional agreements should be clearly formulated

Clear and precise wording is crucial to avoid misunderstandings on the part of employees and employers. The supplementary agreement should therefore be designed in such a way that it leaves no room for interpretation and ensures that both parties have a common understanding of the agreements reached. This also helps to minimize the risk of unexpected disputes or escalations from the outset, which often cost HR departments time and resources and can also put a strain on the relationship between employer and employee. It is therefore advisable to seek legal advice to ensure that the supplementary agreement is legally enforceable and has no unintended consequences.

 

Additional agreements must not violate applicable employment law 

An additional agreement must not violate applicable employment law. If so, the provisions of the original employment contract may remain in place, while the changes are deemed invalid. For example, if the employer wishes to re-regulate the notice periods by means of an additional agreement because the terms set out in the employment contract no longer correspond to current operational conditions, he must ensure that the new notice periods to be agreed are no shorter than the minimum periods set out in section 622 BGB. Otherwise, the additional agreement would be inadmissible (section 134 BGB).

 

Additional Agreement

Can I cancel an additional agreement?

In the course of cooperation, it may happen that an existing additional agreement is no longer useful or necessary — and the employer (or employee) wants to terminate it. However, whether an additional agreement to the employment contract can be terminated depends on the one hand on what regulations have been made in the agreement and on the other hand on the relevant statutory provisions.

In principle, however, an additional agreement to the employment contract cannot be cancelled (or even amended) unilaterally, i.e. without the consent of the other contracting party. However, if the additional agreement contains specific provisions on the right of termination or on a unilateral amendment option, these must be observed. Still, these regulations must not disproportionately affect the rights and interests of the employee.

Home office example: As already mentioned, home office regulations are often regulated by additional agreements. However, it is possible that the operational requirements change and the employer therefore wants to cancel an additional agreement. The Regional Labor Court Hamm (LAG Hamm) recently addressed the question of whether the termination of an additional agreement to the home office regulation is lawful (Judgement of 16.3.2023, Ref.: 18 Sa 832/22). With reference to previous case law of the Federal Labor Court, the Hamm LAG concluded that a so-called “partial termination, which concerns only individual components of the employment contract, was inadmissible in principle, as a unilateral amendment of contract terms cannot be made against the will of the contractual partner.” However, it may be admissible if the terminator has been granted the right to do so. In this case, the Hamm LAG therefore ruled that the termination of the additional agreement was effective because the possibility of partial termination was expressly provided for in the agreement and was therefore legally effective.

Whether an additional agreement can be terminated always depends on the individual case.

 

Free template for anadditional agreement to the employment contract 

It is no easy task for HR professionals to change essential components of an employment contract (e.g. adjustment of job description, position, vacation entitlement, remuneration). For this reason, many HR departments use a template for an additional agreement to the employment contract. After all, such a template can make daily HR work much easier.

When choosing a suitable template, however, make sure that it is suitable for the respective application and can also be adapted to individual needs. The TwinWin template for a change agreement contains exemplary wording that allows you to change various aspects of the employment relationship, such as vacation days, salary, working hours and more.

It is also important that the template takes into account the legal requirements when changing or supplementing employment contracts. As already mentioned, according to the Nachweisgesetz, all essential working conditions must be handed to the employee in writing: The TwinWin template takes this into account.

  • It also includes clear and precise wording that leaves no room for interpretation.
  • is designed and tested by employment law experts.
  • complies with legal requirements and is regularly reviewed and updated in accordance with current case law.

Twinwin provides you with an amendment agreement for employers in Germany free of charge as a download.

 

How to draw up an additional agreement to the employment contract

An additional agreement is suitable if the employer wants to update contract clauses from the employment contract. However, depending on the purpose, the employer may impose different requirements for drafting an additional agreement. However, before HR draws up an additional agreement, it should be clarified individually with the employee which exact changes or additions should be made. In a personal conversation with the employee, any questions or ambiguities can thus be clarified in advance and the risk of rejection can be minimized.

Irrespective of the various aspects of the employment relationship that may be supplemented or amended by an additional agreement, the agreement should contain the following information:

  1. Both parties to the contract must be named.
  2. The specific changes or additions to the original employment contract must be stated clearly and comprehensibly.
  3. The date of entry into force of the additional agreement must be stated.
  4. The place and date of the additional agreement must be specified.
  5. Both the employer (or a person authorized to sign) and the employee must sign the agreement by hand.

The additional agreement should be drawn up in duplicate so that both the employer and the employee have an original of the agreement.

Should you need assistance, you are welcome to contact the team at Twinwin. Twinwin also offers other legally secure and up-to-date templates for HR work in employment law with which you can avoid incorrect wording and minimize legal risks. All templates can be comprehensively configured and adapted to the specific application. In addition, the templates are regularly reviewed and updated by employment law experts. Starting at a fixed monthly price of 120€ (annual subscription), you have access to all legally compliant documents from our template pool.