Employment Law31.12.2019 Newsletter

Codetermined without knowing it (III) – temporary workers also to be counted

This week the II. Civil Senate of the Federal Court of Justice [Bundesgerichtshof, BGH] responsible for legal disputes arising in the field of corporate law published a decision specifying the requirements for temporary workers to be counted in determining the threshold for the constitution of a co-determined supervisory board under the German Codetermination Act [Mitbestimmungsgesetz, MitbestG]. According to the court a job-related assessment must be carried out, taking into account the number of jobs which the company regularly staffs with temporary workers over a period of more than six months within a year (BGH, June 25, 2019 – Case No. II ZB 21/18).

Background: Pursuant to provisions of the German Codetermination Act [Mitbestimmungsgesetz, MitbestG], a corporation has to establish a supervisory board where half of its members are elected by the employees if the corporation itself or its subsidiaries employ more than 2,000 employees in Germany. For a long time, in particular the higher courts in Germany had taken the view that the number of temporary workers should not be taken into account in this calculation at all. This changed with the amendment of the German Temporary Employment Act [Arbeitnehmerüberlassungsgesetz, AÜG] passed in 2017, according to which temporary workers have to be counted if the duration of employment exceeds six months.

Since then, the question of how to determine this minimum employment period has been highly controversial. According to the prevailing opinion (to date), it had to be determined by taking into account whether the individual temporary worker – in fact or prognostic – would be employed for more than six months in the company, so-called employee-related perspective [arbeitnehmerbezogene Perspektive]. The Federal Court of Justice [Bundesgerichtshof, BGH] now rejects this view and holds that the minimum duration of employment is to be determined in relation to the job [arbeitsplatzbezogene Perspektive].

Therefore, it is not decisive whether the individual temporary worker has been or will be employed by the respective company for more than six months within a year, but rather of how many jobs in the company are regularly staffed by temporary workers over a period of more than six months. It is also irrelevant at which specific workplace the temporary workers are deployed during this period. The decisive factor is actually whether temporary workers are employed in certain positions on a stable basis in such a manner that their workplace is just as formative for the permanent size of the company as a permanent job.

Companies using temporary workers should review their structure in light of the recent decision of the Federal Court of Justice [Bundesgerichtshof, BGH]. This is the only way to assess with certainty whether a company is (or will be) subject to codetermination (in future).

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Dr. Harald Gesell

Dr. Harald Gesell

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