There are a number of articles in the Süddeutsche Zeitung (in German) on references. German job references are written in a sort of code, a secret language known to those who write them and those who receive them. You can buy books about it. The employee can sue for a better reference, but not insist on the best.

§ 630 of the German Civil Code gives a right to a reference. Here’s the original with Simon Goren’s translation:

Pflicht zur Zeugniserteilung. Bei der Beendigung eines dauernden Dienstverhältnisses kann der Verpflichtete von dem anderen Teile ein schriftliches Zeugnis über das Dienstverhältnis und dessen Dauer fordern. Das Zeugnis ist auf Verlangen auf die Leistungen und die Führung im Dienste zu erstrecken. Die Erteilung des Zeugnisses in elektronischer Form ist ausgeschlossen.
(The last sentence is post-Goren)

Duty to give a testimonial. On the termination of an ongoing employment relationship the employee may demand from the other party a written testimonial as to the employment relationship and its duration. The testimonial shall, on demand, contain a statement as to his performance and conduct at work.

I have twice been asked to translate such a reference into English, and both times I had doubts. In both cases the clients changed their minds. Now I think I would translate them literally, but first tell the client (as I did then) to consider the problems that might arise. Who is the translation for? Should I put a footnote indicating ‘this would be better if the word “always” was there’?

Interview with Andreas Mauritz, a lawyer who has written a book about references.

The closing wording is important: if there have been no problems: the employer writes that he very much regrets the employee is leaving, thanks the employee for the work done and wishes the employee all the best for the future. – If this wording is missing, something must be wrong.

The words ‘reliable’ (zuverlässig) and ‘honest’ (ehrlich) must be there.

Expressions like ‘He was popular (Er war beliebt) and ‘He was always held in great regard’ (Er wurde stets sehr geschätzt) are ambiguous (Was he sociable, or was his work top-notch? Was he helpful or a spineless idiot?) For an executive, this would be lethal: he mustn’t be popular, but fair.

Here’s a list of ‘grades’:

His/her conduct towards superiors, colleagues , subordinates and customers …
… was always exemplary (very good conduct, grade 1)
… was exemplary (good, grade 2)
… was always irreproachable / correct (grade 2- – vollbefriedigend, a grade usually only used for law students)
… was irreproachable /correct (grade 3)
… was without fault (grade 4, pass)
… gave no occasion for complaint (grade 5, fail)
… Nothing negative has been learnt of her/him (grade 6, very poor)

There is also a long list of terms with explanations of their meaning.

e.g ‘The atmosphere at work was improved as a result of his sociability’ (Durch seine Geselligkeit wurde das Betriebsklima verbessert) means he sometimes drank alcohol on the job.
And an article introducing the topic.