(Almost) one month down the road with Germany’s Anti-Digital Law in place

Andreas Kluth published a widely reflected article in Bloomberg and Washington Post discussing Germany’s mental state of mind and its readiness for the digital era. He was taking a trip into the fine print of a new German law governing employment contracts.  

Namirial is one of the world's leading e-signature solution providers with a focus on compliance to pan-European regulations and directives. Hence, we are addressed very often these days for detailed consulting due to this "anti-digital law". We have had and have many conversations on what the law is about and its consequences for using e-signatures for the use case of employment contracts.

Spoiler: The answer is .. It depends.

... Depends for example on the type of employment contract and its contents. And yes, there have been an increasing number of “signature fails” recently, following implementations in which the circumstances of the use case have not been fully considered.   

It comes to a surprise for many - especially from outside the EU - that in principle, Germany "is allowed" to make its agreement processes (much) more complicated than others in the EU - see EU Regulation 910/2014 eIDAS Art. 2 (3): "This Regulation shall not affect national law or Union law relating to the conclusion and validity of contracts or other legal or procedural formalities." And, yes ... Germany is making use of this option ... 

The Act on Evidence of Working Conditions (Nachweisgesetz, NachwG) is such a national law outlining which information is considered as essential to be provided to the employee. Based on its Art. 2 (1) sentence 3 the act was and is excluding the electronic form. The most recent amendment of this law, now in force since August 1, 2022, was due to the required transposition of EU Directive 2019/1152 on transparent and reliable working conditions into national law.

Theoretically, Germany would have been able to drop this exclusion and also drop the requirement for written form based on the EU Directive. Practically, the German government decided to impose a penalty of 2,000 Euro in each case of a form infringement and announced to enforce it. Details of the actual enforcement are yet a bit unclear... Germany is, as far as we are aware, the only country not enabling an electronic form. 

In the reporting on the amendment of the Verification Act in the media and in many social media postings, there was often no differentiation between the employment contract and the information of working conditions. In many cases, the impression was created that in Germany, employment contracts could no longer be signed electronically. For example, on June 23, 2022, the Frankfurter Allgemeine Zeitung ran an exaggerated headline: "Digitization forbidden under penalty" 

However, the Federal Ministry of Labor also is quoted in several media (e.g. Tagesspiegel August 12, 2022 (+€) - article of Ina Bierfreund )  "... that freedom of form still applies to the conclusion of employment contracts. Only the information on the working conditions must be provided signed on paper." Many HR organizations already handle that information in "side letters". For those who don’t they are now having a need to act if they want to run their processes digitally.  

Moreover we have been seen a bunch of cases where fixed-term employment contracts, such as contracts for the supply of temporary workers, have not been issued in appropriate form and cases end in front of court, confirming that these kind of agreements are requiring a qualified electronic signature (QES), otherwise they are not in accordance with Section 12 (1) sentence 1 of the German Personnel Leasing Act (Arbeitnehmerüberlassungsgesetz, AÜG). See a detailed German language news posting on using E-Signature in HR. 

This matter is touching on one of the areas of expertise of Namirial as Qualified Trust Service Provider (QTSP) under EU Regulation 910/2014: Provisioning qualified electronic certificates to generate qualified electronic signatures (QES). According to Art. 25 (3) of EU Regulation 910/2014 electronic identities and trust services eIDAS, these certificates can be obtained not only from German trust service providers. Thanks to the EU Regulation, all qualified signatures generated by certificates from accredited providers in the EU and the EEA meet the requirement for written form in Germany. One of the leading European providers on which many companies in the HR sector in Germany rely is Namirial.

For all those having either the need or desire to integrate Qualified Electronic Signatures into their processes and looking for smoothest possible integration into HR solutions - also based on "least painful" and highly cost-effective identification processes: Feel free to reach out for some more details about the Sign(ature) of the Times in HR in 2022 and how to make simplicity meeting compliance.

#Nachweisgesetz #Arbeitsbedingungenrichtlinie