Employment Law28.09.2020 Newsletter
Focus on Labor Law - 3rd quarter 2020
As the pandemic persists, it comes as no surprise that the virus and its effects on daily working life are not only keeping personnel departments and public administration on tenterhooks, but are also increasingly occupying the labor courts. Since a return to the norm in Germany is not foreseeable, these Corona-specific decisions will retain their relevance to the collaboration between the business parties for what currently looks like an unforeseeable time. Other decisions of the labor courts also require attention, however. In this "Labor Law Focus", we inform you of the most important recent judgements and provide you with the latest news on the currently popular topic of the "home office".
1.1 Central works council meetings as face-to-face meetings despite the risk of infection?
1.2 Shop agreement may not be made dependent on workforce quora
1.3 Employer representative does not have to speak German with the works council
1.8 No time recording using fingerprint scanners without consent
2. Legal developments - home office
3. 12th Labor Law Day at Oppenhoff & Partner on 12 November 2020
1. Current case law
1.1 Central works council meetings as face-to-face meetings despite the risk of infection?
In interim injunction proceedings, the Regional Labor Court [Landesarbeitsgericht - LAG] of Berlin-Brandenburg recently decided that a central works council could also be held as a face-to-face event during a pandemic. This should certainly be the case if secret ballots are to be held.
The employer forbade the central works council to hold face-to-face meetings, as the employer wanted to keep the number of employees present on site as low as possible because of the corona pandemic and thus to prevent the spread of SARS-CoV-2 virus to associated clinics. In the employer's view, a supra-regional meeting of works council members posed a considerable risk of infection, for which reason it referred the works council to the possibility of holding the meeting in the form of a video or telephone conference. The central works council, in contrast, was adamant about holding the meeting on site and argued that the statutory measures to prevent infection, in particular the restriction of contact, would be complied with during the event.
The LAG Berlin-Brandenburg decided in interim injunction proceedings on 25 August 2020 (docket No. 12 TaBVGa 1015/20) that the central works council meeting was allowed to take place as planned as a face-to-face event. It justified this first of all on the exclusive power of the works council chairman to determine the place of the meeting and, secondly, on the fact that it was not possible to hold a secret ballot video or telephone conference, although this would fundamentally be permissible pursuant to § 129 German Shop Constitution Act [Betriebsverfassungsgesetz - BetrVG] introduced in the context of the corona pandemic. The increased residual risk despite the expected observance of the rules of conduct did not entitle the employer to prohibit the meeting as a face-to-face meeting.
The adjudicating court left unanswered the question of whether regular works council meetings can also still be held as face-to-face events. However, the press release, which is all that is available to date, indicates that the central works council’s application for general permission to hold face-to-face meetings was rejected, as the matter needed to be evaluated in the specific individual case. This means that the employer should not have been completely denied of a right to intervene in justified individual cases.
1.2 Shop agreement may not be made dependent on workforce quora
The employer and the works council cannot make the validity of a shop agreement dependent on the consent of the employees concerned. This was decided by the German Federal Labor Court [Bundesarbeitsgericht - BAG] in a sensational decision dated 28 July 2020 (docket No. 1 ABR 4/19).
The employer and the works council had concluded a shop agreement on the variable remuneration of logistics employees. The effectiveness of the shop agreement was made dependent on at least 80% of the employees governed by it agreeing to the new regulation by individual contract and within a certain time period.
The works council subsequently wanted to have the validity of the shop agreement judicially clarified. The preliminary instances considered the regulation to be effective; the BAG, however, considered such "employee voting" to be inadmissible, as it contradicts the structural principles of the shop constitution: The works council is a representative of the workforce and acts in its own name by virtue of its office. It is neither bound by the instructions of the employees nor does its actions require their consent. With shop agreements, it structures the employment relationship independently of the will or knowledge of the parties to an employment contract.
The decision of the First Senate is a firm commitment to representative democracy. However, one must question why the BAG so categorically rejects such employee quorums. After all, in collective bargaining law, ballot votes and consent quotas are legally recognized. Furthermore, there can be a legal need for such voting, for in many areas of co-determination - such as the question of variable remuneration in this case - it may be necessary to secure certain regulations also at the individual contractual level. This is especially the case with provisions which worsen conditions, which might otherwise be countered by the labor law principle of most favorable provision. On the other hand, would it really be helpful if a works council were able to refer unreservedly to the workforce's reservation of consent? Perhaps the Erfurt judges’ intention was also to call the works council to account and thus to prevent it from shirking its responsibility in future in cases where uncomfortable decisions have to be reached, such as the conclusion of a compromise of interests and a social plan.
1.3 Employer representative does not have to speak German with the works council
The works council cannot demand that the employer communicates with it in German in talks. A translation must be guaranteed, however.
The works council of a German branch of a group based in Spain was of the opinion that its co-determination rights had been violated. Due to her initially very limited knowledge of German, the new branch manager regularly communicated in English, both in the presence of the works council and in talks with employees. The works council asserted a forbearance claim against this.
The employer pointed out that communicating exclusively in German was not always practicable due to the large number of nationalities and languages at the business. The works council's request restricted its entrepreneurial freedom, as this would mean that only German-speaking managers could be appointed. This discriminated against the branch manager on grounds of her origin. Full translations of talks in the presence of the works council were guaranteed.
The LAG Nuremberg (decision dated 18 June 2020 - 1 TaBV 33/19) decided to the detriment of the works council. A right of co-determination could at best exist under the aspect of an obstruction of the work of the works council or on grounds of the principle of a cooperation based on trust. However, the works council cannot demand that the employer or its representatives communicate with it exclusively in German if a translation is guaranteed and the works council understands all statements that have been made by the employer. The employer bears the risk of an inaccurate translation.
To the extent there are no employer's instructions on the use of a specific language at the business, the works council also cannot demand that the employer communicates with its employees exclusively in German. There is no violation of the right of co-determination under § 87 (1) No. 1 BetrVG.
Especially in German subsidiaries of foreign companies, this decision will counter a frequently encountered objection raised by works councils. However, employers should carefully consider the extent to which their insistence on English or other languages might trigger possible operational responses by the works council or even delays in the collaboration between the business parties.
1.4 No right of the works council to be provided with pay lists as soon as the employer has assumed the obligation to provide information pursuant to the EntgTranspG
The right to inspect and evaluate according to § 13 (2) sentence 1 of the EntgTranspG is bound to the works council's responsibility for answering individual requests for information according to the EntgTranspG. The BAG thus denies the works council a right of inspection and evaluation if the employer has legitimately committed to fulfilling the obligation to provide information.
Pursuant to § 14 (2) sentence 1 German Transparency in Wage Structures Act [Entgelttransparenzgesetz, "EntgTranspG”], the sued employer made use of its possibility to generally assume the obligation to provide information and thus to respond to individual requests. Although the suing works council was informed of this, it was of the opinion that it was obliged by law to enforce equal pay. For this reason, with a view to the works council's rights of inspection and evaluation under § 13 (2) EntgTranspG, the employer was indeed obliged to provide it with the gross pay lists.
The lower instances rejected the works council’s requests. The BAG also clearly rejected the works council's appeal (decision dated 28 July 2020 - 1 ABR 6/19). According to this, the works council has no right of inspection and evaluation at all if the employer has previously assumed the obligation to provide information. The BAG justified this in particular with the legislator’s intention to limit the rights of the works council to the answering of individual inquiries; if the employer assumes the fulfilment of this obligation, then the comprehensive and timely notification of incoming requests for information therefore suffices. This is also supported by the possibility contained in § 13 (2) sentence 2 EntTranspG of bundling several requests for information and dealing with them collectively.
On the whole, the BAG's decision is clearly oriented on the wording and the systematics of the law. At the same time, the BAG's decision rewards active employers by not recognizing any rights of the works councils whatsoever to inspect the information if employers assume responsibility for fulfilling the requests for information.
1.5 The statutory termination notice period for managing directors’ service agreements is determined according to § 621 BGB
In its decision of 11 June 2020 (docket No. 2 AZR - 374/19), the BAG expressly states for the first time that the termination of a managing director's service agreement is not governed by § 622 BGB, which applies to the statutory notice periods for employment relationships, but by the notice periods of § 621 BGB, which applies to service relationships.
The parties disputed, inter alia, the period of notice applicable to the termination of the claimant's managing director’s service agreement. The service agreement merely referred to the "statutory notice period". An annual salary was also agreed. The defendant terminated the service agreement on 28 February 2018 with effect as per 31 May 2018 and thus in observance of a notice period of 3 months. The suing external managing director objected to this on grounds that, pursuant to § 622 (2) BGB, an extended notice period applied due to her length of service with the company and that her service relationship could therefore first be terminated with effect as per 31 August 2018.
The BAG did not share this opinion, declaring instead § 621 (4) BGB to be applicable. According to this provision, a notice period of six weeks to the end of a calendar quarter applies in case of remuneration calculated on a quarterly basis or longer periods. In the opinion of the BAG, according to its clear wording, § 622 BGB only applies to the termination of employment relationships. The previously authoritative jurisprudence of the Federal Court of Justice [Bundesgerichtshof, “BGH"], according to which § 622 BGB applied to the dismissal of a managing director who was not simultaneously a majority shareholder, had only been pronounced in respect of the old version of § 622 BGB and specifically had not been integrated into the statutory provision by the legislator within the scope of the 1993 legislative reform. There was no room for an analogous application of § 622 BGB.
The BGH’s reaction to the ruling remains to be seen. It would be advisable, however, to pay special attention to the provisions on remuneration when concluding managing directors’ service agreements in the future, as the notice periods pursuant to § 621 BGB are largely determined by these provisions. Unless § 621 BGB is contracted out in the service agreement by another termination provision, the agreement of an annual salary, which is customary practice, thus results in a notice period of six weeks to the end of a calendar quarter. In contrast, the duration of the contractual relationship is irrelevant in case of terminations pursuant to § 621 BGB, which means that, even in the case of many years of service as a managing director, the agreement of a monthly remuneration means that the contractual relationship can be terminated on the 15th of a month to the end of the calendar month.
1.6 Employer's right to information on alternative employment in the case of a wage for default in acceptance
Following a dismissal, employees are obliged to seek new employment on grounds of social security regulations. The BAG has now decided for the first time that employees are also obliged to provide the employer with information about job offers of the Employment Agency and Job Center.
With its judgment of 27 May 2020 (docket No. 5 AZR 387/19), the BAG has abandoned its previous case law and for the first time recognized the employer’s claim to information from the employee in order to be able to demonstrate an employee’s malicious failure to seek alternative employment within the scope of the wage for default in acceptance. The background to the legal dispute was initially an unfair dismissal action that was won by the employee, following which the employee filed a lawsuit for payment of his wage for default in acceptance. The employer responded to the new legal action by arguing that the employee had maliciously failed to earn money elsewhere and sought by way of counterclaim information on the job offers that had been proposed to the employee by the Employment Agency and the Job Center.
The BAG granted the employer's request for information and justified this by stating that the employer needs a right to information in order to be able to successfully enforce the objections standardized in § 11 (2) German Unfair Dismissals Act [Kündigungsschutzgesetz, “KSchG”]. It bases the right to information on proposals made by the employment agency on good faith according to § 242 BGB. Thus, the BAG no longer adheres to the Ninth Senate's case law, according to which not even the failure to register with the employment agency as a jobseeker met the criterion of maliciously refraining from seeking alternative employment. The Erfurt judges justify this change of mind by citing the employee's obligation to register with the social security authorities (§§ 2 (5) 38 (1) German Social Code Book III [Drittes Sozialgesetzbuch, “SGB III”] at the end of the employment relationship.
From the employer's point of view, the change in case law is to be welcomed. Employers who have been unsuccessful in unfair dismissal proceedings now have a realistic chance of limiting the amount of wage to be paid for default in acceptance. Also in the context of settlement negotiations, the right to information could work in the employer’s favor.
1.7 No entitlement to the continued payment of remuneration for sick leave and public holidays during a period of continued employment during litigation
If an employee is successful in the first instance with his unfair dismissal action and request for continued employment and is employed further by the employer to avert enforcement during appeal proceedings until a legally binding decision has been reached on the complaint, he only receives compensation for the value of the work actually performed by him.
In the first instance, the employee had won the legal action against his dismissal by his employer and had enforced a general right to his continued employment. To avert enforcement, the employer had continued to employ him during the ongoing appeal proceedings, also beyond the original date of termination. There were public holidays and considerable periods of illness during this period of employment. In the course of the litigation, the parties agreed by way of settlement, inter alia, to terminate the employment relationship as per the original termination date. The employee subsequently claimed the continued payment of remuneration for his days of absence during his continued employment during the litigation.
The BAG established in its ruling dated 27 May 2020 (docket No. 5 AZR 247/19) that during so-called continued employment during litigation [“Prozessbeschäftigung”], there is no employee status within the meaning of the German Act on the Continued Payment of Remuneration [Entgeltfortzahlungsgesetz, “EFZG”]. The actual employment of an employee to avert enforcement of a general claim to continued employment does not create an employment contract between the parties, which is, however, indispensable for the status of employee. In this situation, the employer was only obliged to employ the employee, but not to conclude an employment contract. The employee, whose remuneration interests are sufficiently protected by the default in acceptance provision of § 615 BGB, must be aware at the time of performance that no contractual basis for his activities exists and that the usual regulations do not apply to his employment.
It is to be welcomed that the BAG's decision clarifies that, in cases of employment imposed upon the employer in the context of a litigation in order to avert enforcement, remuneration only has to be paid for work that is actually performed. Days of absence due to an incapacity to work or a public holiday therefore do not have to be remunerated, nor do days of absence due to leave. This may make monthly payroll accounting more difficult in a specific case, but for employees it is likely to significantly reduce the attractiveness of continued employment during litigation, which is usually undesirable from the employer's point of view.
1.8 No time recording using fingerprint scanners without consent
Digital time recording systems have long since replaced the old time clock. However, the introduction of such systems has to respect the boundaries of data protection. A system that works with fingerprint recognition is not allowed without the consent of the employees.
The LAG Berlin-Brandenburg ruled in its judgment of 4 June 2020 (docket No. 10 Sa 2130/19) that an employer may only use a time recording system which processes so-called minutiae (i.e. individual finger line branches) if either the employee's voluntary consent has been obtained or a collective agreement to this effect exists.
In the specific case, an employee took legal action to have two warnings removed from his personnel file. The employee had refused to use the newly introduced time recording system, which required employees to log on and off with their fingerprints. This involved comparing the fingerprint against the employee's data previously stored in the time recording terminal and processing so-called minutiae.
In the opinion of the LAG, such fingerprint control is not necessary. In the context of examining the reasonableness of the method, the objection that other time recording systems can be manipulated cannot justify the use of minutiae concerning biometric personal data. This is because one can fundamentally assume that the vast majority of employees act in conformity with the law. Only in the event of concrete evidence of significant abuses could time recording using biometric data be necessary in individual cases. Therefore, the use of the fingerprint scanner without the consent of the employee and without the existence of a collective agreement is illegal under data protection law. The employee’s refusal to use the system did not constitute a breach of duty, with the result that the warnings were to be removed from his personnel file.
Since, on grounds of the ECJ ruling of 14 May 2019 (C-55/18), employers will be obliged in future to set up an objective, reliable and accessible work recording system, this ruling is of great practical relevance and must be considered when concretely designing the system. If the use of a fingerprint scanner is desired, then the better option is to strive to obtain a shop agreement due to the revocability of consent.
2. Legal developments - home office
Home Office - MINIMAL, FUNCTIONAL or OPTIMAL?
The AR-CoV2 contains, among other things, more extensive occupational health and safety requirements for work from home offices, a practice applied by many companies at present. Employers are now called upon to draw the consequences.
The SARS-CoV-2 Occupational Health & Safety Regulation [SARS-CoV-2-Arbeitsschutzregel, “AR-CoV2”] published by the Federal Ministry of Labor and Social Affairs [Bundesministerium für Arbeit und Soziales, “BMAS”] on 20 August 2020 shows that the home office continues to be seen as an essential means to keep infection rates as low as possible. Most importantly, it clarifies that the home office is a form of mobile work and not telework: a teleworkplace is directly subject to the regulations of the German Workplace Ordinance [Arbeitsstättenverordnung] and must be set up by the employer in the same way as a company workplace. Further-reaching requirements for occupational health and safety in the home office and the employer's duty to instruct can also be derived from the AR-CoV2.
Also relevant in this context is the publication “Working from home – not only during the SARS-CoV-2 epidemic” ["Arbeiten im Homeoffice - nicht nur in der Zeit der SARS-CoV-2-Epidemie"] (FBVW-402) of the German Social Accident Insurance [Deutsche Gesetzliche Unfallversicherung, “DGUV”] of 20 August 2020. Here, concrete recommendations are given for workplaces, work equipment and the period of using the home office depending on the fittings and equipment. In line with the classification of the quality of mobile workplaces in hotels, home office workplaces are also assigned to the categories MINIMAL, FUNCTIONAL and OPTIMAL, depending on their specific fittings. From this, one can in turn deduce whether they are only suitable for working for a few hours, on a daily work basis or for permanent work in the home office.
Hence, the employer is obliged in all cases to provide occupational health and safety instructions to employees working in the home office, for the German Working Hours Act [Arbeitszeitgesetz, “ArbZG”] and the German Occupational Health and Safety Act [Arbeitsschutzgesetz, “ArbSchG”] also apply to home offices. Employees must be instructed, among other things, on working hours to be observed, breaks, the necessary documentation, an ergonomic workplace design and the use of work equipment.
Employees working from home are in turn obliged under §§ 15, 16 ArbSchG to support the employer in implementing the requirements and to notify the employer if the home office fails to meet the specifications. From this, the following conclusions can be drawn:
- If the employee notifies the employer that his home office does not permit permanent or only permits very limited hourly work under occupational health and safety aspects, the employee regularly has to work at the company workplace.
- However, if the company workplace is not equipped in accordance with the SARS-CoV-2 occupational health and safety regulations, the employee can ask the employer to provide him with the resources for a workplace that complies with occupational health and safety regulations. A refusal to work is inadmissible in this respect.
The consequences described above lead to a large number of follow-up questions of practical relevance. The most important step for companies is, first of all, the instruction of employees working in a home office.
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3. 12th Labor Law Day at Oppenhoff & Partner on 12 November 2020
As previously announced, this year's Labor Law Day will take place in the conference rooms of the Marriott Hotel, Johannisstraße 76-80, 50668 Cologne, Germany, in order to ensure compliance with the distance and hygiene rules.
In the morning, we will answer labor science and labor law questions concerning future-relevant forms of cooperation (“New Work”). In the afternoon, we will begin with the topic of structural change and will close the event with an overview of the most important innovations in labor court rulings and legislation.
We would be pleased to welcome you on this day for interesting lectures and lively discussions.
Anja Dombrowsky
PartnerAttorney
Bockenheimer Landstraße 2-4
60306 Frankfurt am Main
T +49 69 707968 184
M +49 151 1164 8694
Cornelia-Cristina Scupra
Junior PartnerAttorney
Bockenheimer Landstraße 2-4
60306 Frankfurt am Main
T +49 69 707968 215
M +49 152 533373 40
