BAG ruling: Probationary period in fixed-term contracts - no more rigid limits

In its ruling of October 30, 2025 (case no. 2 AZR 160/24), the Federal Labor Court (BAG) threw the previously frequently used rule of thumb for probationary periods in fixed-term employment contracts overboard. A fixed percentage of the fixed-term duration is no longer permissible. What does this mean for employers and employees?

Why this judgment is relevant

To date, many courts and employers have used a guideline for fixed-term employment relationships: Probationary periods were allowed to be approximately a quarter of the contract duration. This „25 percent rule“ was widely regarded as practically sensible and legally justifiable.

The BAG has now made it clear that such a general rule of thumb does not do justice to the legal situation under the Part-Time and Fixed-Term Employment Act (TzBfG) and the applicable Directive (EU) 2019/1152. Instead of rigid percentages, a differentiated, case-by-case approach is required in future.

The ruling thus brings new flexibility - but also new uncertainty in the structuring of fixed-term contracts.

What the BAG decided

• The BAG emphasized that there is no fixed rule for the duration of a probationary period for fixed-term contracts. Instead, it must be examined on a case-by-case basis whether the probationary period is „proportionate“. Both the expected total duration of the fixed-term contract and the type of activity are decisive in this regard.
• In the case decided, a contract with a 12-month fixed term and a 4-month probationary period had been agreed. The BAG accepted the four-month probationary period - because the employer had submitted a detailed induction plan that provided for induction over several phases and covered a total of around 16 weeks. The BAG therefore considered the agreed probationary period to be reasonable.
• This means that the previously widespread fixed rule of „maximum 25 % of the fixed term“ has been dropped as a binding guideline. Longer probationary periods are now also possible in principle - provided the circumstances of the individual case justify them.

Which criteria will be decisive in the future

For a probationary period to be effective within the meaning of the BAG, the following factors should be meaningfully interrelated:

• Duration of the time limit: In the case of very short fixed-term contracts, a long probationary period is likely to be problematic. In the case of medium or longer fixed-term contracts, a longer probationary period may be justified.
• Type and complexity of the activity: The more demanding the tasks and the more extensive the induction, the more justification there is for a longer probationary period.
• Training plan and actual effort: Documented phases of induction, training courses and comprehensive induction documents can serve as evidence that a longer probationary period is appropriate.

What happens if the probationary period is too long?

A disproportionately long probationary period is effectively null and void. The consequences:

• The short notice period agreed in the contract during the probationary period does not apply.
• However, a properly formulated notice of termination remains possible - with the regular statutory or contractual notice periods. The BAG has clarified that an inadmissible probationary period does not automatically affect the entire right of termination.
• The statutory waiting period for general protection against dismissal (Section 1 (1) of the Dismissal Protection Act - KSchG) is not shortened by an ineffective probationary period. In other words, employees retain their scope of protection.

Practical tips for employers and employees

For employers

• Be careful when drawing up fixed-term employment contracts: A longer probationary period may be permissible - but it should be well justified. A specific induction plan, documented training or structured induction by phase can help.
• Avoid reflexively agreeing a standardized probationary period (e.g. four or six months). Instead, the duration and activity should be chosen carefully.
• Make sure that - if a termination option is provided for despite the fixed term - the contract clearly regulates ordinary termination after the probationary period.

For employees

• A long probationary period is not automatically invalid - but it is worth checking. If in doubt, it is worth checking whether the agreed probationary period is in relation to the fixed-term contract and the job.
• If notice of termination is given during the probationary period, it may be deemed to be a regular termination with a longer notice period if the probationary period is disproportionate.
• Keep in mind that the general protection against dismissal also applies in the event of an ineffective probationary period.

Conclusion

With its ruling of October 30, 2025, the Federal Labor Court has introduced more flexibility into the design of probationary periods for fixed-term employment contracts - and at the same time more responsibility and planning for employers. There is no longer a rigid „25 percent rule“; what is permissible is what is proportionate in the individual case. For employees, this means that long probationary periods are permissible, but not automatically unassailable. Clear documentation of induction requirements - and transparent communication between employer and employee - is recommended for reliable contract drafting.