Germany to Boost Works Council Rights Amid the Pandemic

Orrick - Employment Law and Litigation

The Federal Cabinet has introduced a draft bill to make it easier for employees to establish and elect works councils and to facilitate the works councils’ work in an increasingly digitalized work environment, the “Betriebsrätemodernisierungsgesetz“.

Less Red Tape and More Protection

The draft bill intends to facilitate the establishment of works councils, in particular in smaller companies and to strengthen the protection of the employees involved. To justify the need of the draft bill, the Federal Cabinet relies on statistics according to which only 9 % of the operations in western Germany with works council capacity have elected a works council. Employers shall be hindered to prevent the election of a works council in a more effective manner than before.

  • The requirements for the simplified election procedure (currently max. 50 employees in the operation) shall be facilitated and the simplified election procedure shall apply in operations with max. 100 employees.
  • The number of support signatures required for election proposals shall be reduced and the challenging of works council elections due to errors in the electoral list shall be restricted.
  • Employees who intend to establish a works council, so called “initiators”, shall be protected more effectively against dismissal during the establishment. So far, protection against dismissal has been provided for the first three people who invite for elections, in future there shall be six people. In addition, special protection against dismissal shall even apply for employees who document their intention to establish a works council in a notarized declaration and undertake corresponding preparatory actions.

Works Councils, AI and Digitalization

The draft bill boosts the works councils’ rights of co-determination in the use of artificial intelligence (AI) and in the implementation of mobile work in companies and thereby takes into account the increasing digitalization of the world of work through AI.

  • The co-determination rights of the works council in the design of the working environment and work processes shall also apply if AI is to be used at the company. It is also made clear that the rights of the works council when planning work processes and determining guidelines for personnel selection shall also apply if the company relies on the use of AI. If the works council has to assess the introduction or use of AI in order to carry out its duties under the Works Constitution Act, it shall be entitled to involve an expert in this area. This will lead to an additional financial burden for the employer.
  • Works councils are given a right of co-determination in the design and implementation of mobile work in the company.
  • In future, works council work should be possible in a legally secure manner using modern means of communication, even outside the COVID-19 pandemic. Works councils should therefore be free to decide on their own whether to use video and telephone conferences when holding works council meetings, while respecting the primacy of face-to-face meetings. If a quarter of the works council members object, a face-to-face meeting must be held. Lastly, face to face meeting remain the rule.
  • It shall be possible to conclude shop agreements, reconciliation of interests and social compensation plans with a qualified electronic signature. The same shall apply for the decision of the conciliation board. However, a qualified electronic signature under German law has strict requirements which is why electronic signatures often do not sufficiently observe the requirements set by law.
  • The draft bill clarifies that the employer is the data controller in the sense of the General Data Protection Regulation even if the works council processes data. The works council and the employer are obliged to support each other in complying with the provisions of data protection laws.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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