Probationary Periods in Fixed-Term Employment Contracts: Federal Labour Court Creates Room for Manoeuvre (2 AZR 160/24)

With its decision of 30 October 2025 (2 AZR 160/24), the Federal Labour Court (Bundesarbeitsgericht, BAG) provides new clarity for fixed-term employment relationships. At its core, the question was whether a dismissal within a four-month probationary period in a one-year fixed-term contract was valid. The BAG held that the employment relationship had been lawfully terminated, since the probationary period clause complied with the statutory requirements.

Under § 15(3) of the German Part-Time and Fixed-Term Employment Act (TzBfG), the probationary period must be in reasonable proportion to the total duration and the nature of the work. However, the judges made clear that this "proportion" is not determined by rigid standard values such as the often-cited 25 % limit. The statute provides neither an absolute maximum duration nor fixed relative limits for fixed-term contracts. Instead, § 15(3) TzBfG deliberately opens up room for the contracting parties to shape their agreement.

The necessary proportionality test always requires an individual assessment of the specific circumstances of the case. In doing so, the interests of both the employer and the employee must be weighed against each other. The court emphasised that a sufficient trial phase is in the mutual interest and must not be too short.

An important point of the judgment also concerns the relationship between the probationary period and the statutory waiting period (Wartezeit) under the German Protection Against Dismissal Act (KSchG). The BAG made clear that a shortened probationary period does not automatically lead to a shortening of the six-month waiting period. Since the two institutions pursue different purposes, the statutory waiting period remains unaffected by the length of the probationary period. The dismissal in the present case therefore required no social justification within the meaning of the KSchG. The BAG thus considerably strengthens legal certainty for entrepreneurs in structuring fixed-term contracts.

Entrepreneurs should therefore make use of the statutory room for manoeuvre and justify the length of the probationary period individually according to the nature of the work, without being constrained by rigid quotas.