The current situation imposes many challenges on employers and employees alike. It also poses new questions on the co-operation process between employer and works council, and the latter's co-determination. While nobody is questioning that the works council's co-determination rights continue to apply, employers are often found wondering how best to consult the works council when regular operations are suspended. After all, business needs to continue, which can also mean that personnel measures such as terminations, onboarding, promotions, and other changes need to be carried out – all of which are subject to works council consultation. This is particularly important as notices of termination issued by an employer are invalid if the employer did not involve the works council properly.
1. Formal Requirements to Works Council Consultations
There are no formal requirements to works council consultations on personnel measures. The consultation process could therefore even be initiated via telephone. For reasons of documentation, however, written or textual consultations are recommendable. Employers should, therefore, either provide the chairman of the works council with a written consultation form, or send the form via email and request confirmation of receipt. The same applies vice versa: The works council can provide its statement to the respective measure via email.
2. Formal Requirements to Works Council Resolutions
a) Status Quo
While consultations on personnel measures are not subject to specific formal requirements, it has been questionable whether works council resolutions could be passed outside a formal meeting, e.g., per video, telephone, or virtual conference. Based on the current wording of the Works Constitution Act (Betriebsverfassungsgesetz – BetrVG), the prevailing opinion in legal literature tends to deny their validity, arguing that:
- the principle of non-publicity of meetings could be violated, as there is no guarantee that nobody unauthorized is secretly listening in;
- the statutory law requires that resolutions be passed by a majority of the votes of the present works council members; and
- the possibility to attend works council meetings via video has explicitly been granted to members of European works councils on seagoing vessels, showing that the legislator was aware of this option and nevertheless did not implement it for "regular" works councils and their members.
In reaction to the Covid-19 crisis, on 23 March 2020 the German Minister for Labour and Social Affairs, Mr Hubertus Heil, issued a declaration pursuant to which resolutions passed in video or telephone conferences or WebEx or Skype meetings are, in the eyes of the ministry, valid – at least during the current state of things. However, such a ministerial declaration would not have been binding for the courts. In addition, other commentators such as The German Lawyers' Association (Deutscher Anwaltsverein) voiced deviating opinions.
b) Changes Planned
Given the remaining uncertainty as to whether works councils would be able to adopt resolutions virtually, on 9 April 2020 the German government announced plans to temporarily amend the Works Constitution Act. Works councils shall be enabled to adopt resolutions via video and telephone conferences. The amendment is going be of temporary nature and shall apply until 31 December 2020. Similar amendments are planned for the Federal Act on Public Sector Staff Committees (Bundespersonalvertretungsgesetz) and shall apply until 31 March 2021. The main purpose of the new law is, on the one hand, to avoid physical meetings that naturally come with a high infection risk and, on the other hand, to preserve the capacity of staff representatives for effective co-determination and decision-making. In order to ensure that resolutions already adopted via video or telephone conference remain valid, the new law shall come into force with retroactive effect as of 1 March 2020.
3. Consequences of an Invalid Resolution and Recommendations for Employers
Even with the expected amendments, there is no guarantee that works council resolutions are always properly adopted. However, according to the case law of the German Federal Employment Court (Bundesarbeitsgericht), deficiencies that fall within the competence and responsibility of the works council generally do not affect the consultation process as such, even if the employer knows or can assume at the time of implementing individual personnel measures that the works council's handling of the matter was not faultless. The court further held that, for instance, the incorrect composition of the works council or the presence of the employer during the voting would not lead to the invalidity of a notice of termination issued afterwards.
Nevertheless, it is crucial that employers do not influence the works council's process. The decision on how the meeting is held and the resolution passed needs to remain with the works council's chairman. This is because, in deviation from the above-mentioned case law, the Federal Employment Court found that the invalidity of the works council's resolution can result in the invalidity of the later termination if the employer caused or influenced the error in the decision-making process by improper conduct.
4. Communication between Works Council and Employer
Irrespective of the individual measure at hand, it is advisable that employers and works councils agree on channels of communication that ensure one can reach the other even where regular operations cannot be upheld. As it remains unpredictable whether the legal and practical situation might change in mere days or hours, employers and works councils need to ensure that quick and pragmatic solutions can be found, and that the necessary means have been established to reach such results.
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This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.