Employment: Trends & Developments

The labour and employment sector has once again seen many changes – both in terms of the initiatives of the legislator as well as changes in the way the sector works.

One important change has been the implementation of the Law on Protection of Business Secrets (Gesetz zum Schutz von Geschäftsgeheimnissen – GeschGehG).

The economic relevance of business secrets is very high. No company can afford to forego reasonable measures to protect its know-how, special market knowledge and its customer and sales data. For technology-intensive companies, business secrets often have a value equivalent to or even exceeding that of a patent portfolio. Having an entire law to regulate this does it far greater justice than the previous fragmented regulations. Since the law is based on an EU directive, other member states are obliged to pass similar legislation with equivalent protection. This makes it easier for companies to exchange sensitive information across borders. In the event of a dispute regarding business secrets, the new protective measures available to the courts are of particular value. Up to now in Germany, protection in this respect did not come close to being adequate.

At the same time, however, the Law on Business Secrets requires new organisational measures to be taken by companies:

• in future, information will only be deemed a business secret if reasonable measures to keep it confidential, in view of the circumstances, have been put in place. These may be in the form of contractual, organisational or technological measures. The key to finding measures that are tenable in each company’s case will be to first evaluate and categorise its know-how, in order to focus the measures on information that is really worth protecting. There should also be a more targeted focus on the effectiveness of confidentiality agreements. Likewise, labour law and data protection must be observed, especially with regard to monitoring employees;
• compliance departments will need to become increasingly focused on the protection of business secrets. Whereas liability for breach of confidentiality was previously mainlylimited to a few cases under the criminal code, a breach of obligations regarding business secrets can in future be subject to a high liability risk even in cases of slight negligence. For this reason, companies should take great care to ensure that no third-party know-how comes into the company in any way that might be illegal, for instance, through a new employee or in the course of a joint venture; and
• companies will have to wait and see what effect the whistle-blower limitations will have on business secrecy. The limitations do not agree in all aspects with the EU directive regarding whistle-blowing, which is also soon to be enacted. Companies are recommended to keep a close eye on case-law development in this area, particularly with regard to the organisation of internal systems to handle whistle-blowers.

Conclusion

The new Law on Business Secrets does greater justice to the economic and competitive relevance of business secrets and places more value on their protection. For a company to enjoy the rights of this new protection, however, it is important for it to take suitable measures towards this end in its contracts, its organisation and its technology, and to direct these measures in a more targeted and strategic way than it has previously done.

Another major cornerstone of the German employment market has been the introduction of a new law making it easier to employ foreigners.

New immigration rules will come into force in March 2020 to facilitate and accelerate the immigration process of a qualified and skilled workforce. With these new rules the German government wants to encourage qualified specialists to come and work in Germany. The new law defines what kind of workforce will be considered ‘qualified’ and will therefore have easier access to the German labour market. University graduates and people with a vocational qualification, where the university degree and vocational education are comparable to German standards, will be considered ‘qualified’. For such immigrants, the so-called priority check by the German employment agency will be eliminated (§39 AufenthG rev). The same privilege will apply for IT and communication specialists with five years of work experience within the last seven years (§6 BeschVO rev).

Under the current law, the employment agency will still need to verify that no German or EU national is available on the labour market to fill the respective position.

To improve and accelerate the administrative process for qualified migrants, a special ‘accelerated skilled worker procedure’ will be introduced. In such a case, the German employer and the immigration authority will work closely together to make the immigration process as smooth as possible (§81a AufenthG rev). This also includes the process with the respective German diplomatic missions, where foreigners normally have to apply for their visa before entering Germany. The employer can provide the necessary documents to the agency and will be a person of contact within Germany for the authorities. The diplomatic missions are also supposed to schedule appointments for qualified workers more quickly than they have done so far.

Residence titles for the qualified workforce as defined by the law will now be granted for four years, unless the duration of the employment contract is granted for a shorter period of time. The employer in Germany will have to verify whether the foreigner has a residence permit, retain it for the duration of the employment, and notify the immigration office about the termination within four weeks after the end of the employment.
Finally, there is also a trend in Germany towards more agile collaboration concepts, where traditional hierarchies become less important while tasks are given to groups/teams of employees who are mainly self-organised. This trend is hindered, if not contradicted, however, by the protective labour and employment laws that derive mainly from the 1960s and 1970s aiming to protect employees from the dominant employer hierarchy. One of the current ‘battlegrounds’ of this inconsistency between law and reality is the monitoring and payment of time worked.

On the one hand, employees prefer to work whenever and wherever it suits them best – as their work requires more and more creativity and as they try to combine demanding jobs with a fulfilling family life. On the other hand, the Working Hours Legislation demands that they have a rest of 11 hours between the end of work on a given day and the commencement of work on the following day. Furthermore, employers refrain from monitoring employee working hours – as they are interested in the work results only, leaving the work organisation to the employees themselves. Now, the courts demand that the employers should actually (micro-) monitor each and every working hour of their employees. The German government has announced that it will start a new legal initiative in this regard – having an eye on both modern work environments, as well as the protection of employee rights. It will be interesting to see what comes out of this.

_{First published by Chambers & Partners.}