Employment law for foreigners: These were the most important rulings of 2025

2025 saw further significant changes in expat law (employment law for foreigners) . What was considered standard practice yesterday regarding vacation pay or how communication with unions was regulated is now subject to entirely new considerations. As 2025 draws to a close, it leaves behind a trail of groundbreaking decisions that have fundamentally altered the relationship between employers and employees. Those who don't pay close attention now risk costly repercussions in the coming year, as the courts have made crucial adjustments over the past twelve months.

The new era of equal pay and transparency

A bombshell reverberated through the courtrooms this year, quite rightly securing the top spot in the current relevance rankings of legal experts. The Federal Labor Court, under file number 8 AZR 300/24, issued a ruling on equal pay that goes far beyond mere payroll accounting. For us lawyers and for you as business owners, this means an even stricter interpretation of the principle of equal pay . It is no longer sufficient to justify salary differences with vague negotiating skills. The burden of proof has increased, making a comprehensive and objective structuring of your compensation systems absolutely essential. Those who are asleep at the wheel here are opening the floodgates to protracted compensation claims.

Vacation, stocks and digital access methods

But it wasn't just salaries that were adjusted. The perennial issue of vacation pay and the legal classification of managers were also key topics for the highest court. The developments in the area of collective bargaining rights are particularly interesting. The ruling on unions' digital access marks the definitive arrival of the 21st century in works constitution law . The physical factory gates are no longer the only boundary to consider; the digital realm is now officially part of the union's sphere of activity. At the same time, we have seen the forfeiture of stock options upon leaving a company reassessed, which necessitates a revision of existing clauses, especially for startups and executive contracts.

Formal errors with fatal consequences: mass layoffs and sick leave.

A look at the European level shows that the European Court of Justice (ECJ) continues to significantly influence German labor law. The procedures for mass redundancy notifications illustrate once again how formalistic and error-prone large-scale dismissal processes remain. A minor error in the notification to the employment agency can derail an entire restructuring project. Furthermore, the fact that the courts are now taking a stricter approach to sick leave certificates issued without direct contact with a doctor, as ruled by the Hamm Regional Labor Court, sends an important signal against the misuse of digital sick notes. It restores the evidentiary value of sick leave certificates to a solid foundation and protects employers from unjustified continued wage payments.

A practical conclusion

In summary, 2025 was not a year of calm, but rather one of clarification. We see a clear trend toward greater transparency, increased digitalization, and the consistent enforcement of employee rights , which are, however, accompanied by clear requirements for verifiable documentation – for example, regarding sick leave. For employers, this means the following for the coming year: Review your contract templates, digitize your compliance processes, and ensure that your compensation structures would withstand judicial scrutiny. Labor law remains dynamic, and we are well advised to keep pace.