In early July 2026, the German Coalition Committee of the CDU/CSU (conservative political party union) and SPD (social democratic political party) announced a significant expansion of fixed-term employment without objective grounds (i.e., where the employer does not need to provide a reason for the limited contract). Under the proposal, employment relationships would be permitted for up to 48 months without objective justification for the limited employment, and may be extended up to six times. The proposal also contemplates a “renewed initial hiring by the same employer.” For employers, this would create greater flexibility. Several issues remain unresolved, however, including the continued application of the prior-employment prohibition, the treatment of existing fixed-term arrangements, and the temporal scope of the new rules.
Extension of Fixed-Term Employment Without Objective Grounds from Two to Four Years
Under Section 14(2) of the German Part-Time and Fixed-Term Employment Act (Teilzeit- und Befristungsgesetz – TzBfG), an employment agreement may currently, as a general rule, be entered into for a fixed term without objective grounds for a maximum of two years and may be extended no more than three times.
These limitations are set to be extended. According to the “Program for Growth and Employment,” employees hired on or before December 31, 2030 are to be subject to a maximum fixed-term duration of 48 months, with up to six extensions. However, no draft legislation...
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