The Erfurt Labor Court has declared an invalid fixed-term contract with its ruling of July 8, 2026 (Ref. 4 Ca 75/26). A branch office manager at the Federal Commissioner for the Stasi Records (BStU) sued against the fixed-term limitation of her employment contract — and won. The court held that the employment relationship did not end due to the fixed term on December 31, 2025, but continues as a permanent employment relationship. In addition, the defendant was ordered to continue employing the plaintiff until a final, legally binding decision is reached.
Invalid Fixed-Term Contract: The Ruling at a Glance
The plaintiff had been employed as a branch office manager by the defendant since January 22, 2018 — initially on a fixed-term basis until January 21, 2022. An amendment agreement extended the fixed term until January 21, 2023, and a further amendment agreement dated December 7/15, 2022 extended it until December 31, 2025. The plaintiff argued that the latest extension was invalid because no objective reason for the fixed term existed. The defendant relied on the collective bargaining provision in Section 32(1) TVöD-Bund and claimed that a fixed term without an objective reason was permissible.
The Labor Court sided with the plaintiff. It determined that the employment relationship was not terminated by the fixed term but continues indefinitely. The defendant must continue employing the plaintiff as branch office manager until a final, legally binding decision. Leave to appeal was granted, so the judgment is not yet final. For practice, the ruling means: Even in the public sector, fixed-term contracts are not automatically valid simply because they rest on a collective bargaining basis.
What Does “Leadership on a Time-Limited Basis” Mean in the Public Sector?
In the public sector, leadership positions can be filled for a limited period only — known as “leadership on a time-limited basis” (Führung auf Zeit). This typically affects management roles such as department heads, division heads, or branch office managers. The idea: leaders should be reviewed regularly and not automatically remain in their positions permanently. For this reason, the employment contract is often fixed-term from the outset or the fixed term is linked to the duration of the leadership assignment.
However, even with “leadership on a time-limited basis,” the fixed-term employment rules of the Part-Time and Fixed-Term Employment Act (TzBfG) must be observed. A fixed term is valid only if it is justified by an objective reason (Section 14(1) TzBfG) or the requirements for a fixed term without an objective reason are met (Section 14(2) TzBfG). In the public sector, a fixed term without an objective reason can also be expanded by collective agreement — for example, through Section 32 TVöD-Bund. Yet even these collective bargaining provisions have limits. They must not result in employees being kept in fixed-term employment relationships permanently without an objective reason being apparent.
Why the Fixed Term Had No Legal Basis Here
In this specific case, the plaintiff had already received several extensions of her fixed term. The latest extension until the end of 2025 was apparently intended to seamlessly follow the previous fixed term. The Labor Court found no valid fixed term without an objective reason here. Although Section 14(2) sentence 3 TzBfG in conjunction with Section 32(1) TVöD-Bund permits a fixed term without an objective reason — but only under certain conditions. The total duration of the fixed term must not be disproportionately long, and it must be a genuine “leadership on a time-limited basis” justified by the nature of the task.
The court took the view that the mere designation as “leadership on a time-limited basis” in the job advertisement is insufficient to justify a fixed term. Rather, the fixed term must be supported by a concrete objective reason in the individual case. That was lacking here, in the court’s assessment. The invalid fixed-term contract could not be upheld on an objective reason. The judgment shows: Employers cannot simply rely on a collective bargaining opening clause if the actual circumstances do not justify a fixed term.
Your Rights in a Fixed-Term Dispute
If a fixed term is invalid, this has far-reaching consequences. The employment relationship is then deemed to have been concluded for an indefinite period. The employee therefore has a claim to continued employment beyond the original fixed-term end date. Moreover, as in the case at hand, they can demand — as the plaintiff did — to be actually employed until a final, legally binding decision. This claim arises from Section 15(5) TzBfG and general labor law principles.
Concretely, this means: You do not have to watch passively as your employment relationship expires. You can have a court determine that the fixed term is invalid. While the proceedings are pending, a continued employment claim generally exists. In addition, you are entitled to remuneration for the period during which you were not employed, provided the fixed term was invalid and you were willing to work.
Note: An invalid fixed-term contract does not automatically lead to a severance payment. Unlike a dismissal, the issue here is the continuation of the employment relationship. If you want to keep working, you should act quickly and file a claim. Information on severance payment options can be found in our severance payment guide.
How to Challenge a Fixed Term: Lawsuit and Deadlines
If you suspect your fixed term is invalid, you must file a lawsuit with the Labor Court within three weeks of receiving the written fixed-term declaration. This deadline derives from Section 17 TzBfG. If you miss the deadline, the fixed term is deemed valid — you lose your claim to permanent continued employment. The period begins upon receipt of the letter in which the employer declares or extends the fixed term.
The lawsuit must be directed against the employer and contain the request to determine that the employment relationship was not terminated by the fixed term. It is advisable to engage a certified specialist lawyer for employment law who can assess the prospects of success and file the lawsuit on time. In the event of success, the employer bears the court costs. If you are unsure whether a lawsuit is worthwhile, litigation funding can help — RechtStark, as a litigation funder, examines whether the financing of your proceedings can be assumed.
Further information on the course of an unfair dismissal claim — which also applies to fixed-term disputes — can be found in our guide to unfair dismissal claims. We have also prepared the basics on fixed terms without an objective reason for you.
Conclusion: What Public Sector Employees Should Keep in Mind
The Erfurt Labor Court ruling is an important signal for all public sector employees hired on a time-limited basis. A fixed term is not automatically valid just because it rests on a collective bargaining basis. What matters is whether an objective reason exists in the individual case or the requirements for a fixed term without an objective reason are actually met.
If you suspect an invalid fixed-term contract, you must absolutely observe the three-week deadline and file a lawsuit in time. Seek legal advice early to realistically assess your chances. If you have the invalidity of the fixed term determined, your employment relationship can be secured permanently — exercise your rights.
Note: This article is for general information purposes only and does not replace individual legal advice. For a free initial assessment of whether litigation funding may be an option for your case, you can contact RechtStark.