13.12.2023 Newsletter
Focus on Labor Law – 4th Quarter 2023
In our last issue of this year's Focus on Labour Law you will find the usual overview of the most important labour court decisions of recent months, the minimum wage that will apply from 1 January 2024 and the social security calculation parameters that will apply next year.
In addition, numerous new laws are planned for the coming year: the shop constitution norms on works council remuneration are to be clarified and will thus ensure greater legal clarity. The Federal Ministry of Labour and Social Affairs (Bundesministerium für Arbeit und Soziales, BMAS) is also planning the entry into force of a new Federal Act on Compliance with Collective Agreements (Bundestariftreuegesetz, BTTG) at the beginning of 2024. The aim is to ensure that public contracts are awarded by the federal government in compliance with a representative collective agreement for the sector. Violations can trigger contractual penalties, subcontractor liability and exclusion from the award procedure. As always, labour law remains an exciting topic!
We wish you and your families a relaxing festive season and all the best for 2024!
1. New case law
1.1 Protection against dismissal for GmbH managing directors in the event of a transfer of business?
1.2 On-call work - duration of weekly working hours
1.4 Reimbursement of further training costs
1.5 No right of co-determination when banning the use of smartphones
1.7 News regarding the delivery of letters of termination
1.8 Compensation for the unauthorised use of image material of a former employee
1.9 Room for manoeuvre when deciding on (provisional) continued employment
1.10 No ban from premises for works council members - even if suspected of a criminal offence
2. Legal developments
2.1 Draft of a second law amending the Shop Constitution Act with regard to works council remuneration
2.2 Social security calculation parameters 2024
2.3 Fourth Minimum Wage Adjustment Ordinance
1. New case law
1.1 Protection against dismissal for GmbH managing directors in the event of a transfer of business?
In a transfer of business, the employment relationship of a managing director can also be transferred to the acquirer - if it constitutes an employment relationship. The executive position is not transferred, however; at best, the former managing director has a claim to employment with the activities performed by him as managing director on the basis of his employment contract (German Federal Labour Court [Bundesarbeitsgericht, BAG] of 20 July 2023 - 6 AZR 228/22).
In the underlying case, the former managing director of a limited liability company (Gesellschaft mit beschränkter Haftung, GmbH) filed took legal action. He had been employed by a logistics service provider as a commercial employee since 2000. In 2013, he had been appointed managing director, however without the parties having concluded a separate service agreement. Following the opening of provisional insolvency proceedings in 2019, the business operations were continued by a subsidiary of the group of companies. The insolvency administrator dismissed the managing director at the beginning of 2020 for operational reasons, whereupon he resigned from his position as managing director with immediate effect the following day.
The action brought by the former managing director against his dismissal was initially upheld by the Labour Court (Arbeitsgericht, ArbG) of Rheine. The Regional Labour Court (Landesarbeitsgericht, LAG) of Hamm subsequently dismissed the action in its entirety. The Federal Labour Court (BAG) has now overturned the judgement of the LAG and referred the case back to the LAG for a new decision. The BAG initially confirmed that managing directors could not invoke protection against dismissal under the German Unfair Dismissal Act (Kündigungsschutzgesetz, KSchG) on the basis of Section 14 (1) No. 1 KSchG. This also applies if the managing director is employed on the basis of an employment contract. The decisive factor is the executive position of the person concerned at the time of receipt of the notice of dismissal. In this respect, it is of no consequence that the plaintiff resigned from his position as managing director after receiving the notice of dismissal. The dismissal therefore did not require any social justification pursuant to Section 1 (2) KSchG.
However, the BAG then ruled in favour of protection against dismissal pursuant to Section 613a (4) of the German Civil Code (Bürgerliches Gesetzbuch, BGB) due to the transfer of business. According to this, a dismissal for operational reasons due to a transfer of business is invalid. Contrary to the opinion of the LAG, the BAG ruled that Section 613a BGB also applies to executive bodies of legal entities - if the executive position is based on an employment contract. With regard to the legal relationships of managing directors, a strict distinction must be made between the position on the executive body and the underlying contractual employment relationship. For the transfer of business, this means that only the rights and obligations arising from the employment relationship - but not the position on the executive body - are transferred to the acquirer. However, the LAG must now examine whether a transfer of business according to Section 613a BGB actually took place.
In practice, this means that more attention than ever must be paid to the structure of the employment relationship with a managing director. Especially in the context of transactions - where a change of management is not uncommon - a negligently drafted contract can have its consequences.
Dr. Alexander Willemsen
1.2 On-call work - duration of weekly working hours
If an employer and employee agree on on-call work without specifying the duration of the weekly working time, a working time of 20 hours is deemed to have been agreed pursuant to the statutory regulation. According to the BAG in its ruling of 18 October 2023 - 5 AZR 22/23, a deviating interpretation is only possible in exceptional cases.
The plaintiff had been working for the defendant as an "on-call employee" since 2009. The employment contract did not contain any provisions regarding the duration of her weekly working hours. The defendant called on the plaintiff to work for a varied number of hours according to demand. Following a decrease in the volume of her hours from 2020 compared to the previous year, the plaintiff claimed that the defendant had called on her work services for an average of 103.2 hours per month in the years 2017 to 2019. This was now the working time that was owed and to be remunerated by the defendant. To the extent the defendant had not called on her work services in this scope from 2020 onwards, the plaintiff demanded an additional payment due to default of acceptance.
The BAG only awarded the plaintiff a wage for default of acceptance insofar as the volume of work she was called upon to render fell below 20 hours in individual weeks, dismissing the claim in all other respects. Had the parties agreed that the employee was to work according to the workload that arose, they should have stipulated a specific duration of weekly working hours in the employment contract in accordance with Section 12 (1) sentence 2 of the German Part-Time and Fixed-Term Employment Act (Teilzeit- und Befristungsgesetz, TzBfG). Failing to do so, Section 12 (1) sentence 3 TzBfG closes this loophole by assuming the agreement of a working week of 20 hours by force of law. Only in exceptional cases can a deviating duration of weekly working hours be assumed by way of a supplementary interpretation of the contract. This applies in cases in which the fiction of Section 12 (1) sentence 3 TzBfG is inappropriate in the specific employment relationship. In addition, there must be objective evidence to the effect that the parties would have made a different provision and agreed a higher or lower duration of weekly working hours if they had been aware of the omission when concluding the contract. If the initial contractual omission of the duration of the weekly working hours at the start of the employment relationship is closed by the statutory fiction of Section 12 (1) sentence 3 TzBfG, the parties could subsequently expressly or impliedly agree on a different duration of the weekly working hours. However, insufficient for such agreement is the employer’s conduct regarding its requests for on-call work during a specific period that lies long after the start of the employment relationship and that has been chosen seemingly arbitrarily. According to the BAG, conduct concerning requests for on-call work does not have the value of a legal declaration.
On-call work is an alternative working time model. The advantage for companies is the ability to flexibly request on-call working hours at times of fluctuating workloads. On the other hand, strict legal limits must be observed. In addition to the duration of weekly working hours, these include, for example, the duration of the daily work shift or a four-day notice period. Companies should take the BAG decision as an opportunity to carefully review existing and future employment contracts in which on-call work has been agreed. Furthermore, Section 2 (1) No. 9 of the German Act on the Notification of Conditions Governing an Employment Relationship (Nachweisgesetz, NachwG) and the co-determination rights of an existing works council pursuant to Section 87 (1) No. 2 of the German Shop Constitution Act (Betriebsverfassungsgesetz, BetrVG) must be observed when organising on-call work.
Dr. Johannes Kaesbach
1.3 Recruitment commissions – invalidity of reimbursement clauses in the event of a termination by the employee
The BAG (judgement of 20 June 2023 - 1 AZR 265/11) fundamentally rejects reimbursement clauses in case of recruitment commissions. In contrast to repayment clauses for training and further education costs, the employee does not receive an equivalent benefit for the impairment of their freedom of choice of employment. However, the BAG mentions contractual alternatives with which the employer can encourage its employees to remain loyal to the company for longer.
The parties concluded an employment contract with effect from 1 May 2021, which was concluded through the mediation of a head-hunter. For this service, the defendant employer paid a commission to the head-hunter. In the employment contract, the plaintiff undertook to reimburse this commission to the defendant if the employment relationship ended before the cut-off date of 30 June 2022 for reasons "attributable to the employee". Following the plaintiff’s termination of the employment relationship during the probationary period, the defendant retained part of the remuneration and the agreed catering allowance.
In agreement with the lower courts, the BAG awarded the plaintiff a payment claim, as the reimbursement clause unreasonably disadvantaged the plaintiff pursuant to Section 307 (1) sentence 1 BGB and was therefore invalid. Binding the plaintiff to the reimbursement obligation without differentiating according to the reason for leaving created severe pressure to remain, which interfered with the employee's freedom of choice of employment guaranteed under Article 12 (1) of the German Constitution (Grundgesetz, GG). This was also not outweighed by the defendant's interest in worthwhile recruitment expenditure. In the context of the employment relationship, the employer typically bears the risk that its investments will pay off. This assessment is not altered by the fact that the plaintiff had already changed employers 21 times in 24 years. The defendant had knowingly accepted this fact when it concluded the contract. In addition, the employee - and this is the main difference to the BAG's case law on repayment clauses with regard to training and further education costs (judgement of 1 March 2022 - 9 AZR 260/21) - does not receive an equivalent benefit for the restriction of their freedom of choice of employment.
The BAG has thus put a definitive stop to reimbursement clauses for recruitment commissions. However, the BAG itself points out contractual alternatives that companies can use to encourage employees to stay with them for longer. This can be achieved in particular through a mutual (cf. Sections 622 (5) sentence 3, (6) BGB) extension of the ordinary notice period, whereby, according to the LAG Saxony (judgement of 19 January 2016 - 3 Sa 406/15), a notice period of up to one year is permissible. Compliance with the extended notice period can be secured by agreeing on a contractual penalty in the event that the employment relationship is terminated in breach of contract. However, when drafting the contractual penalty clause, care must be taken to ensure that only culpable breaches of contractual obligations by the employee trigger the payment of a contractual penalty. If the wording is too broad, e.g. also covers terminations due to illness on the part of the employee, this renders the clause invalid as a whole.
Marko Vraetz
1.4 Reimbursement of further training costs
Individual contractual agreements according to which an employee must contribute to the costs of vocational training financed by the employer if they do not complete the further training are generally permissible. They do not generally unreasonably penalise the employee. The repayment obligation may not be linked solely to the employee’s repeated failure to take the desired examination without any consideration of the underlying reasons. To be excluded from the repayment obligation in all events are practically relevant case constellations in which the reasons for not taking the examination do not lie within the employee's sphere of responsibility. The dismissal of an employee for which the employer is (partly) responsible is not such a rare and remote event in working life that it does not require separate mention (BAG of 25 April 2023 - 9 AZR 187/22).
The defendant was employed by the plaintiff as an accountant for six years. The parties concluded a further training contract for the period from 1 August 2017 to 31 March 2019, the subject of which was the defendant's qualification as a tax consultant. The defendant did not attend the scheduled examinations and terminated the employment relationship on 30 June 2020. The defendant then claimed repayment of the further training costs before the ArbG Lingen on the basis of the repayment clause in the training contract. The court ordered the defendant to pay. The LAG Lower Saxony dismissed the defendant's appeal.
The BAG did not agree with the reasoning of the lower courts. The corresponding repayment clause in the training contract did not stand up to an examination of its content pursuant to Section 307 (1) sentence 1 BGB and was therefore invalid as a whole. Repayment obligations of this kind are likely to exert pressure on the employee to remain in the existing employment relationship and thus restrict their fundamental right to a free choice of employment. In this respect, the BAG was of the opinion that, by linking the repayment clause to the defendant’s repeated failure to take the examination, the defendant had been unreasonably disadvantaged, as the required distinction had not been sufficiently made as to the reasons for the failure to take the examination. This was not altered by the fact that the repayment obligation was excluded for some case constellations by a hardship provision. This did not include all practically relevant cases, in particular it did not include constellations in which the reasons for not taking the examination were not within the defendant’s sphere of responsibility. For the assessment of the validity of the repayment clause, it is irrelevant for which reasons the defendant did not take the examination. The inclusion of form clauses with inappropriate content is already disapproved by Sections 305 et seq. BGB, not only their inappropriate use in the specific case.
The decision follows on seamlessly from the previous case law of the BAG, in particular the judgement of 1 March 2022 - 9 AZR 260/21. The BAG stated that exceptions to repayment obligations do not allow any conclusions to be drawn about other circumstances that are not explicitly regulated. In particular, terminations by employees for which the employer is jointly responsible should therefore be exempt from a repayment obligation. Ultimately, it must lie in the employee’s own hands to avoid a repayment obligation by remaining loyal to the company. Once again, it is clear that utmost care is required when formulating repayment clauses.
Lisa Striegler
1.5 No right of co-determination when banning the use of smartphones
The ubiquitous presence of smartphones and the permanent availability of their users are increasingly prompting employers to prohibit the private use of smartphones at the workplace. In this context, the existence of a right of co-determination of the works council pursuant to Section 87 (1) No. 1 BetrVG has been controversial for quite some time. In its landmark decision of 17 October 2023, the BAG put an end to this protracted dispute and ruled that employers can prohibit the private use of smartphones at the workplace without obtaining the consent of the works council (BAG, decision of 17 October 2023 - 1 ABR 24/22).
In a manufacturing company in the automotive supply industry, the defendant employer issued "Rules on the use of private mobile phones during working hours" by way of an employee information notice, which contained a ban on the use of mobile phones at the workplace. In addition, labour law consequences extending as far as immediate dismissals were announced in the event of a violation. The works council demanded that the employer withdrew the measure immediately and refrained from any further bans, citing a co-determination requirement. The employer refused.
The BAG confirmed the decision of the lower court (see LAG Lower Saxony, decision of 13 October 2022 - 3 TaBV 24/22). There was no right of co-determination pursuant to Section 87 (1) No. 1 BetrVG. In this case, the employer's instruction affected the work behaviour of the employees. Employees who used their mobile phone privately were indisputably unable to perform their work. Insofar, their work behaviour was at least predominantly affected. This does not contradict the decision regarding the ban on listening to the radio at work (BAG, decision of 14 January 1986 - 1 ABR 75/8). According to the predominant purpose of the regulation, listening to the radio affects the organisational behaviour of employees and the work can nevertheless still be performed, which means that the work obligation is not necessarily being violated. Furthermore, listening to the radio can affect the operational organisation because it disturbs employees acoustically. Private mobile phone use, on the other hand, fundamentally does not disrupt the operational organisation, which is why it does not affect the work cooperation between employees.
The BAG's decision, which is currently only available as a press release, is of major practical relevance. It reveals the small but significant distinction in terms of its impact between work behaviour that is not subject to co-determination and organisational behaviour in the company that is subject to co-determination. At the same time, it also outlines the limits of the works council's right of co-determination. It demonstrates that employers can unilaterally impose a usage ban without involving the works council if the work performance of the employees suffers as a result of such use. However, the BAG's landmark decision only relates to the question of whether the works council has a right of co-determination when imposing a ban on smartphone use at the workplace. Irrespective of this, however, the question remains as to whether the ban on smartphone use at the workplace can be upheld against employees under the employment contract. This question primarily depends on whether the employer's instruction in the specific case is exercised with reasonable discretion.
Cornelia-Cristina Scupra
1.6 Consequences of the acquirer's remuneration structure on continuing final-salary related pension commitments
In the course of a transfer of business, pension commitments are transferred to the acquirer in the form they were promised. In a decision dated 9 May 2023 - 3 AZR 174/2, the BAG consolidated its case law according to which final salary-related pension commitments are not fixed or definitively stipulated by a transfer of business. Depending on the remuneration structure on the acquiring party’s side, this can have far-reaching consequences.
The plaintiff had been employed by the legal predecessors of the defendant since 1988 and by the defendant since 2017 following a transfer of business. One of the legal predecessors had granted the plaintiff - long before the transfer of business - a company pension commitment. The monthly retirement pension was to be determined on the basis of the "last monthly gross salary received" without accounting for bonuses or allowances. The plaintiff received - again before the transfer of the business - a promise of a 13th monthly pension as a "Christmas bonus". Following the reduction of the plaintiff's gross annual basic salary from thirteen to twelve gross monthly basic salaries and also an increase in 2011 through the conversion of a bonus component that was not considered pensionable, the plaintiff's employment relationship was transferred to the defendant by way of a transfer of business.
The defendant integrated the employees into its existing remuneration structure, which did not provide for a 13th monthly salary or bonuses. The parties concluded a new employment contract which provided for an increased gross monthly basic salary to compensate for the loss of remuneration components. The defendant granted the plaintiff a monthly retirement pension that was reduced in proportion to the gross monthly basic remuneration before and after the transfer of the business, against which the plaintiff successfully took legal action. The BAG awarded him a higher monthly retirement pension on the basis of 13 monthly pensions.
According to the BAG, the final salary-related pension commitment was to be interpreted in such a way that the amount of the monthly retirement pension was to be calculated based on the gross monthly basic remuneration granted immediately before he began drawing the pension. The completed transfer of the business led to no other result, as the pension commitment - as promised in terms of content – had transferred to the acquirer of the business and the business had not been transferred in insolvency. The transfer of the business did not trigger any fixation of the final salary-related benefits at the time of the transfer of the business. An exceptional deviation from this principle could only come into consideration if the final salary-related calculation bases had been tailored so specifically to the transferor that they had no counterpart at the business acquirer. The calculation of the monthly retirement pension on the basis of thirteen monthly pensions was based directly on the fact that the plaintiff had received an independent pension commitment for a "Christmas bonus" before the transfer of the business, which had been transferred to the defendant.
The decision illustrates how carefully one must check the consequences of a harmonisation of remuneration structures on the acquiring party’s side and any undesirable interactions between transferred pension commitments in the event of a restructuring or transaction-related transfer of business. Otherwise, there is a risk of additional financial claims from the employees affected by the business transfer after their retirement.
Moritz Coché
1.7 News regarding the delivery of letters of termination
If a letter of termination is sent by registered mail delivered to the addressee’s letterbox (“Einwurf-Einschreiben”), prima facie evidence speaks in favour of the actual receipt of the letter by the recipient. If the employer transmits the registered letter delivered to the addressee’s letterbox via Deutsche Post AG (as opposed to via another mailing service provider), delivery on the same day is even assumed. This is because the employee still has the opportunity to gain knowledge of the notice of termination on the day it is posted, according to the LAG Nuremberg (judgement of 15 January 2023 - 5 Sa 1/23).
The plaintiff was employed by the defendant as a dentist. The parties had agreed on a quarterly notice period in the employment contract. By letter dated 28 September 2021, the defendant terminated the employment relationship with the plaintiff with effect from 31 December 2021. The letter of termination was sent to the plaintiff on 30 September 2021 according to the proof of delivery of Deutsche Post AG.
At first instance, the plaintiff sought a declaration to the effect that her employment relationship did not end on 31 December 2021, but only on 31 March 2022. The ArbG Nuremberg dismissed the claim. It held that the defendant had complied with the notice period for termination on 31 December 2021 with the letter of termination. The LAG Nuremberg confirmed this legal opinion on appeal. The letter of termination had been received by the plaintiff on 30 September 2021. In order for an ordinary dismissal to be effective, it must be received by the employee (see Section 130 (1) sentence 1 BGB). The employer fundamentally has to represent and prove receipt of the letter of termination. If a letter of termination is sent by registered mail delivered to the addressee’s letterbox and the sender submits proof of posting and the reproduction of the delivery receipt with the signature of the deliverer, prima facie evidence speaks in favour of the actual receipt of the letter by the recipient. If the delivery is made by an employee of Deutsche Post AG as opposed to another mailing service provider, it can generally be assumed that the employee delivers the post during his assigned working hours. According to the general opinion of the public, it is to be expected that domestic letterboxes are generally emptied immediately after the end of normal postal delivery times, i.e. on the same day.
The LAG's assessment is in line with the case law of the BAG. What is surprising and "new" is the LAG's assessment that, in case of delivery by Deutsche Post AG, receipt can also be effected on the same day. The LAG allowed an appeal on points of law to the BAG due to the fundamental importance of this legal issue. A final decision, which is expected in mid-2024, is eagerly awaited. Employers should continue to send letters of termination by registered mail delivered to the addressee’s letterbox. They would also be well advised to use Deutsche Post AG for the delivery - and not other mailing service providers. However, until a final decision is reached by the BAG, employers should not rely on the fact that the letter will always be received on the same day and should therefore endeavour to deliver it one or two days before the relevant date in order to be on the safe side.
Fatoumata Kaba
1.8 Compensation for the unauthorised use of image material of a former employee
After termination of the employment relationship, employers are obliged to delete images of the departing employee that were taken during the employment relationship. Further use of the material for commercial purposes without consent constitutes a significant violation of personal rights and may oblige the employer to pay damages in the amount of EUR 10,000 (LAG Baden-Württemberg of 27 July 2023 - 3 Sa 33/22).
The plaintiff asserted, among other things, a damage claim due to the continued use of photo and video recordings after the termination of his employment relationship. Until April 2019, the plaintiff had been employed by the defendant, a company in the advertising technology industry, where he led training courses on foiling, among other things. During the employment relationship, the defendant had taken numerous photos of the plaintiff - with his consent - and made an approximately four-minute promotional video showing the plaintiff as a training manager in the defendant's company. The defendant then used this video to advertise the training courses conducted by the plaintiff on the internet. After the plaintiff left the company, the defendant initially continued to use the photos and videos without obtaining his consent. The plaintiff subsequently repeatedly asked the defendant to delete the image material. The defendant did not fully comply until February 2020, thus almost nine months after the plaintiff’s departure.
The ArbG Pforzheim initially awarded the plaintiff a damage claim in the amount of EUR 3,000. The plaintiff appealed against this. In the opinion of the LAG Baden-Württemberg, the defendant is obliged to pay damages for the continued use of the image material without the plaintiff’s consent after the plaintiff’s departure from the company pursuant to Art. 82 (1) GDPR. The consent to the publication of the image material, which the plaintiff had given whilst still in the employment relationship, did not extend beyond the time of its termination. The defendant was therefore obliged to delete the material pursuant to Art. 17 (1) GDPR and did not fulfil this obligation, despite repeated requests, with the result that the plaintiff's personal rights had been substantially infringed. As far as the amount of compensation was concerned, the fact that the defendant had used the image material to pursue its own commercial interests had to be taken into particular consideration. In such cases, the amount of compensation should have a genuine inhibiting effect. Against this background, the LAG Baden-Württemberg came to the conclusion that the plaintiff should in fact be paid significantly higher monetary compensation, namely in the amount of EUR 10,000.
The decision shows that the "right to be forgotten", a known concept from the GDPR, is also of considerable relevance in the employment relationship. Employers should therefore ensure that they have clear rules on the handling of image material and the scope of its use. This applies in particular if the image material is used for advertising purposes. In case of doubt, image material of a departing employee should be deleted after termination of the employment relationship. Alternatively, the employee's consent can be obtained for its further use. In the latter case, however, please note that the employee can revoke such consent at any time pursuant to Art. 7 (3) sentence 1 GDPR.
Marina Lindner
1.9 Room for manoeuvre when deciding on (provisional) continued employment
Almost all companies face this situation at some point: an employee's unfair dismissal action has been successful before the labour court and with it their simultaneous application for continued employment "on unchanged terms" until the ongoing legal dispute has been legally concluded. Due to the peculiarities of labour court procedural rules, even before the judgement becomes legally binding, the employee can directly enforce this claim to continued employment against the company by means of compulsory enforcement measures, even if the company contests the first-instance judgement and lodges an appeal. The employee’s (provisional) return to the old job often causes difficulties for more than a few companies. However, in such a situation, companies can also utilise tactical room for manoeuvre.
According to his employment contract, the plaintiff was employed as a senior physician in a psychiatry clinic and worked as such in the clinic's psychiatric outpatient clinic. The clinic terminated his employment relationship without notice, alleging serious treatment errors. The labour court ruled that the dismissal was invalid and ordered the employer, at the plaintiff's corresponding request, to continue to employ him as a senior physician in the psychiatric outpatient clinic under unchanged conditions until the legally binding conclusion of the unfair dismissal proceedings. The employer appealed against the judgement. During the ongoing appeal proceedings, the employer assigned the plaintiff work as a senior physician in the psychiatric day clinic it also operated, which was located four kilometres away from the main clinic. The plaintiff, however, sought to enforce the non-final judgement of the labour court and demanded his continued employment as a senior physician in the psychiatric outpatient clinic. The employer objected to this and applied for discontinuation of the compulsory enforcement measure, as it had complied with the plaintiff's (provisional) claim to continued employment by assigning him the other job.
The LAG Hamm confirmed this view (decision of 15 May 2023 - 18 Sa 1195/22). A judgement on (provisional) continued employment under unchanged conditions does not restrict the employer's fundamental right to issue instructions under the employment contract if the decision makes reference to the employment contract and this allows the assignment of a different activity. In particular, the judgement could not prevent the subsequent assignment of a different job content in accordance with the contract, even if it stipulated employment with specific content. Rather, the subject of the court decision only represents an excerpt of the employee's contractual employment entitlement, which the employer can further specify with instructions.
The LAG Hamm thus follows the case law of the BAG, which rejects a restriction of the (provisional) right to continued employment to the content described in a judgement and continues to allow companies to exercise their right of direction even in ongoing dismissal protection proceedings. In practice, this gives employers a degree of room for manoeuvre that should not be underestimated, especially if the plaintiff's willingness to conduct negotiations on the termination of the employment relationship is to be encouraged. This is because, in most cases, the specific employment contract will probably permit the assignment of activities of different degrees of attractiveness.
Kathrin Vossen
1.10 No ban from premises for works council members - even if suspected of a criminal offence
Conflicts with the works council are a part of everyday life in companies and are to be tolerated within the framework of a trusting cooperation. But what happens if a works council member commits a criminal offence and the employer wants to protect itself from further offences? According to the LAG Hesse (decision of 28 August 2023 - 16 TaBVGa 97/23), works council members can only be banned from the premises in the event of serious breaches of duty and a prior application to the court for a temporary ban on the exercise of their office.
After a works council meeting, the chairman of the works council wanted to hand in some documents to the HR department and have their receipt documented. As no one was present in the HR department that day to stamp the documents, the works council chairman simply stamped the documents himself and slipped them under a door. The employer then filed a criminal complaint for falsification of documents, initiated proceedings at the ArbG Frankfurt am Main to exclude the works council chairman from the works council and banned him from the premises. The works council and its chairman took legal action against the ban by way of an urgent appeal.
The LAG Hesse followed the decision of the court of first instance and granted the application for the works council chairman’s unhindered access to the employer's building. The ban from the premises violated Section 78 sentence 1 BetrVG, according to which members of the works council may not be disturbed or hindered in the performance of their duties. The works council chairman had been unlawfully prevented from exercising his office by being banned from the premises. If an employer wishes to prevent a member of the works council from accessing the company and continuing to carry out his work and perform his duties, the only option is to file an application to the labour court to exclude the works council member pursuant to Section 23 (1) BetrVG. However, the works council member would remain in office until the legally binding conclusion of such proceedings and would therefore also be entitled to unhindered access to the company. The employer may not pre-empt a court decision by issuing a ban from the premises. The LAG Hesse clarifies that the employer's domiciliary rights are inherently restricted by the exercise of the works council office.
The decision highlights the dilemma for employers in the event of serious breaches of duty by works council members. Employers cannot - as can be the case with other employees - immediately "create facts" by imposing a ban from the premises. Instead, they are required to first apply to the competent labour court for a temporary ban on the exercise of office. Only if a comprehensive consideration of the opposing interests comes to the conclusion that the safeguarding of peace at the workplace, the interests of the employer or the rights of other employees take precedence over the right to the undisturbed exercise of office can the works council member be removed from office and denied access to the company. It has thus become almost impossible to ban works council members from the premises and should also be carefully considered against the background of an unlawful criminal obstruction of works council activities pursuant to Section 119 (1) No. 2 BetrVG.
Alexandra Groth
1.11 No right of the works council to refuse consent if non-co-determined personnel questionnaires are used in a job interview
The co-determination rights of the works council in connection with the hiring and transfer of employees pursuant to Section 99 BetrVG are particularly important, as the works council can delay or even prevent the implementation of individual personnel measures. In its decision dated 2 August 2023 - 12 TaBV 46/22, the LAG Düsseldorf has now ruled that a violation of Section 94 BetrVG does not necessarily result in the works council's right to refuse consent pursuant to Section 99 (2) BetrVG.
In the case in question, the company advertised a position internally for which four employees applied. During the interviews, which were conducted by two employees, one of them used interview forms to take handwritten notes. After the interviews were completed, a new interview form was filled out digitally, summarising all of the employees' impressions of the applicants. These sheets listed points for individual criteria (e.g. self-presentation, motivation, technical questions), which resulted in a maximum total score of 50. The interview forms also contained further explanations of the individual applicants. The subsequently selected applicant was the only one to achieve the maximum number of points. The works council had not given its consent to the company’s use of the interview forms.
The works council denied the employer the requested consent to the transfer of the selected applicant due to an allegedly insufficient notification. The consent was replaced in the proceedings before the ArbG Düsseldorf pursuant to Section 99 (4) BetrVG. The LAG Düsseldorf shared the opinion of the ArbG and stated that the use of non-co-determined personnel questionnaires within the meaning of Section 94 BetrVG when filling job vacancies does not establish a right of the works council to refuse consent pursuant to Section 99 (2) No. 1 BetrVG. The company had fulfilled its duty to inform by providing the works council with all submitted application documents, information about the prospective job, a justification of the selection decision made and the interview forms completed by the employees following the interviews. Handwritten notes made during the interview, as mere reminders, had no conclusive significance for the selection decision and therefore did not have to be submitted. The LAG also rejected the works council's opinion that the right to refuse consent already arose from the fact that the personnel questionnaires had been used in violation of Section 94 BetrVG. This norm is not a prohibitive law within the meaning of Section 99 (2) No. 1 BetrVG, as its purpose is not to ensure that the personnel measure (here: transfer) does not take place if it is violated. Rather, the sole aim of the norm is to ensure that only questions in which the employer has a legitimate interest are asked.
The judgement follows on seamlessly from the BAG's previous case law on Section 95 BetrVG, according to which the works council also has no right to refuse consent if this is violated. For employers, this is a reassuring signal that not all violations of norms of the BetrVG lead to a right to refuse consent or to the invalidity of the individual personnel measure. Nevertheless, companies should take the co-determination rights of the works council seriously in the interests of maintaining a trusting collaboration with the works council.
Anja Dombrowsky
2. Legal developments
2.1 Draft of a second law amending the Shop Constitution Act with regard to works council remuneration
As is well-known, the judgement of the Federal Court of Justice of 10 January 2023 on the question of a breach of trust due to excessive works council remuneration has led to considerable legal uncertainty in practice. Several companies - including VW itself - have already preventively reduced the remuneration of works council members in order to avoid accusations of a breach of trust. According to press reports, some companies have also been confronted with anonymous complaints and corresponding investigations by the public prosecutor's office.
Against this background, Federal Minister Hubertus Heil has appointed a three-member commission chaired by Prof. Dr. Rainer Schlegel, President of the Federal Social Court, and the members Ms. Ingrid Schmidt, former President of the Federal Labour Court, and Prof. Dr. Gregor Thüsing, Director of the Institute for Labour Law and Social Security Law at the University of Bonn. This commission "Legal Certainty in Works Council Remuneration" was tasked with submitting proposals to the BMAS on a statutory regulation in the Shop Constitution Act that would create legal certainty for determining the remuneration of works councils.
The result is a draft of a second law amending the Shop Constitution Act in which the federal government fully adopts the commission's proposals. The content of the draft law is as follows:
The following sentences are to be added to Section 37 (4): "The determination of comparable employees pursuant to sentence 1 shall be based on the date of assumption of the works council office, unless there is an objective reason for a later redetermination. The employer and the works council may regulate a procedure for determining comparable employees in a shop agreement. The specification of comparability in such shop agreement can only be reviewed for gross errors; the same applies to the determination of comparable persons, provided that this is mutually agreed between the employer and the works council and documented in text form."
The following sentence is to be added to Section 78: "There is no preferential or detrimental treatment with regard to the remuneration paid if the member of a representative body referred to in sentence 1 fulfils the operational requirements and criteria necessary for being granted the remuneration and the determination is not based on an error of judgement."
The draft law is limited to a partial codification of the BAG's previous case law. The BAG has already ruled that the employer and works council are permitted to enter into shop agreements that specify Section 37 (4) BetrVG (BAG, judgement of 18 January 2017, docket No. 7 AZR 205/15). However, such regulations must remain within the framework of the legal requirements. The statutory amendment is intended to motivate the employer and works council to determine the comparability of employees transparently in advance. The limits set by case law remain unaffected by the statutory additions. Furthermore, the draft law serves to clarify that the question of the level of remuneration of works council members is governed not only by Section 37 (4) BetrVG in the form of minimum remuneration, but also by Section 78 BetrVG.
Isabel Hexel
2.2 Social security calculation parameters 2024
The Social Security Calculation Parameters Ordinance 2024 (Sozialversicherungsrechengrößen-Verordnung 2024) comes into force on 1 January 2024. Below, we provide an overview of the most important calculation parameters for 2024:
Contribution assessment ceiling for pension insurance
From 1 January 2024, the contribution assessment ceiling for general pension insurance will rise to € 7,550 per month (2023: € 7,300/month) or € 90,600 per year. The contribution assessment ceiling (East) will rise to € 7,450 per month (2023: € 7,100/month) or € 89,400 per year.
Contribution assessment ceiling for health insurance
The standardised nationwide contribution assessment ceiling for statutory health insurance contributions for 2024 will rise to € 62,100 per year (2022: € 59,850) or € 5,175 per month (2022: € 4,987.50).
Annual earnings limit for health insurance
The compulsory insurance limit for statutory health insurance (annual earnings limit), which is also uniform throughout Germany, will rise to € 69,300 from January 2024 (2023: € 66,600).
Reference value
The reference value, which represents the average salary in Germany from the calendar year before last, is important, for example, for determining the minimum contribution assessment bases for voluntary members of statutory health insurance or for calculating the contributions of self-employed persons subject to compulsory insurance in the statutory pension insurance. The provisional average salary for 2024 in the pension insurance is € 45,358. The reference value for social insurance in 2024 will rise to € 3,535 per month (West) and EUR 3,465 per month (East).
Cornelia-Cristina Scupra
2.3 Fourth Minimum Wage Adjustment Ordinance
According to the concept of the Minimum Wage Act (Mindestlohngesetz, MiLoG), the adjustment of the general statutory minimum wage is decided every two years by an independent commission of the collective bargaining partners, which is made up of representatives of the employers' associations and the trade unions and is also advised by academics. The federal government can only implement the minimum wage commission's proposal unchanged and cannot independently set a different level.
Accordingly, the statutory minimum wage will now initially be raised to € 12.41 gross per hour on 1 January 2024 and will rise to € 12.82 gross per hour in a further step on 1 January 2025.
The Fourth Minimum Wage Adjustment Ordinance will enter into force on 1 January 2024 and implements the resolution of the minimum wage commission of 26 June 2023 in a legally binding manner.
Isabel Hexel
2.4 The clock is ticking: deadlines for introducing a whistleblower protection system end on 17 December 2023
Last chance to fully implement a whistleblower protection system - two important deadlines expire in December. Companies with more than 250 employees that have not yet set up a reporting office will have to reckon with fines of up to € 20,000 from 1 December 2023. For small companies with 50 to 249 employees, on the other hand, the grace period for setting up an internal reporting office expires on 17 December.
Since the Whistleblower Protection Act (Hinweisgeberschutzgesetz, HinSchG) came into force on 3 June 2023, companies with more than 250 employees have been obliged to set up an internal reporting office. All persons can report information to this office concerning violations that have come to their knowledge in connection with their professional activities. The reporting office therefore has to be just as accessible to third-party companies, tradespeople or suppliers as it is to the company's own employees.
While many companies have implemented this quickly, some are relying on the fact that the corresponding fine regulations will only come into force later. This grace period now ends on 1 December 2023 and companies face fines of € 20,000 in accordance with Section 40 HinSchG. It is therefore high time to review the implementation and, if necessary, rectify any loopholes.
Companies with 50 to 249 employees were initially exempt from the short-term entry into force of the regulations. The requirements will only apply to them from 17 December 2023. Nevertheless, small companies should try and set up the system as quickly as possible, as such smaller companies will already face fines as of the day they come into force.
Below 50 regular employees, no whistleblower protection system needs to be established. However, this limit requires some attention: it is calculated by headcount as opposed to level of employment. Part-time employees therefore count in the same way as full-time employees. Besides employees, vocational trainees, home workers, persons similar to employees, people with disabilities, civil servants, judges and soldiers are also included. The employment of at least 50 employees "as a rule" means that the count is not based on any fixed point in time. Instead, the regular number of employees is determined on the basis of a review of the previous personnel situation and an assessment of future developments. Companies that are close to this limit should carefully check whether they are exempted from the Whistleblower Protection Act.
If an internal reporting system does not yet exist, it must be set up as quickly as possible in a legally compliant manner. Should you require any assistance with this, please feel free to contact us.
Isabel Hexel
