01.04.2022 Newsletter

Focus on Labor Law – 1st Quarter 2022

www.oppenhoff.eu/en/news-detail/focus-on-labor-law-1st-quarter-2022

The nationwide home office obligation triggered by the corona pandemic expired in March 2022. Since then, voices are increasingly calling for employees to receive a legal claim to work from home. In 2020, the government in power at the time considered a claim to at least 24 home office days per year per employee. The considerations of the current “traffic light” coalition are leaning towards giving the employee a significantly weakened “claim to discuss" the matter with his employer. We will of course also keep you informed about such developments. In addition, with the exception of certain institutions, the company “3G” rule (vaccinated, convalesced or tested) expired on 19 March 2022. In the absence of a basis for intervention under data protection law, it is therefore no longer permissible to make access to the company dependent on proof of vaccination or convalescence. The data stored in this context has to be irrevocably deleted. With this first Labour Law Focus of 2022, we would also like to inform you about other relevant developments in labour law jurisprudence and legislation. 

With this first Labour Law Focus of 2022, we would also like to inform you about other relevant developments in labour law jurisprudence and legislation. 

 

1. New case law - individual labour law 

1.1 Fair negotiation requirement in case of termination agreements

1.2 News regarding the compensation claim under Sec. 15 (2) AGG

1.3 No compulsory company integration management

1.4 Caution in case of compliance investigations: attribution of knowledge of the compliance manager not authorised to terminate the contract 

1.5 Structuring options for collective agreements on employer contributions to deferred remuneration in company pension plans

2. New case law - collective labour law

2.1 Maximum severance payment amount in the social plan and premium for waiving legal action 

2.2 Mass dismissal proceedings - BAG submits question on transmission obligation to the ECJ 

2.3 Co-determination of the works council in the event of continued employment after reaching the standard retirement age

2.4 Employers are entitled to inspect election documents

2.5 No right to withhold consent in the event of a personnel guideline in contempt of co-determination rights 

3. New legislation

3.1 Federal Cabinet has approved minimum wage increase

3.2 Employment of Ukrainian citizens and other refugees from Ukrainian territory

1. New case law - individual labour law 

1.1 Fair negotiation requirement in case of termination agreements 

When an employer makes the conclusion of an agreement terminating the employment relationship [“Aufhebungsvertrag”] dependent on the immediate acceptance of its offer, this alone does not constitute a (pre-) contractual breach of duty that would trigger damages. This also applies if the employee has no time to either consider the termination or seek legal advice. Whether or not the fair negotiation requirement is violated depends on the overall circumstances of the negotiation situation in the individual case, according to the German Federal Labour Court [Bundesarbeitsgericht - BAG] dated 24 February 2022 - 6 AZR 333/21. 

The parties disputed the continuation of their employment relationship after having concluded a termination agreement. The defendant asked the claimant to come to its office for a talk on 22 November 2019, without giving prior notice of the reason for this talk. The defendant's subsequent legal representative was also present. The defendant accused the claimant of having unjustifiably changed and reduced purchase prices for goods in the EDP in the past in order to suggest a higher sales profit. The lawyer then handed the claimant a termination agreement, stating that she could only accept it immediately. After a ten-minute break in the meeting, during which the three persons present sat in silence at the table, the claimant signed the termination agreement drafted by the defendant. On 29 November 2019, the claimant challenged the termination agreement on grounds of an unlawful threat.

In her legal action, the claimant asserted, among other things, the continuation of her employment relationship. The defendant had threatened to dismiss her without notice and file criminal charges if she did not sign the termination agreement. It did not grant her request for more time to consider and to obtain legal advice. By doing so, the defendant had violated the requirement of fair negotiation.

The BAG did not share this view. The threat was not unlawful, as the defendant could well have considered an extraordinary termination and criminal charges. According to the standards developed by the BAG in an earlier decision (cf. judgement of 7 February 2019 - 6 AZR 75/18), no unfair negotiation on the part of the defendant could be established. It had not violated the claimant's freedom of decision by presenting her with the termination agreement for her immediate acceptance in accordance with Sec. 147 (1) of the German Civil Code [Bürgerliches Gesetzbuch - BGB] and by requiring her to decide immediately. The requirement of fair negotiation does not oblige the employer to create a negotiating situation that is especially pleasant for the employee. Rather, its purpose is to ensure a minimum degree of fairness in the run-up to the conclusion of the contract. It would only constitute a violation if a situation of psychological pressure had been created or exploited, which would have made it considerably more difficult or even impossible for the employee to make a free and considered decision. 

Conclusion: a violation of the requirement of fair negotiation exists only in extreme cases. Effectively, it is a "prohibition of unfair negotiation". The damage claim in the form of so-called in rem restitution pursuant to Secs. 311 (2) No. 1 in conjunction with 241 (2) BGB therefore only leads to the continuation of the employment relationship in exceptional cases on grounds of an invalid termination agreement. Nevertheless, it might be advisable for employers to give employees some time for consideration, even this just means being able to “sleep on it”.

Johannes Peter Kaesbach

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1.2 News regarding the compensation claim under Sec. 15 (2) AGG

Since the German General Equal Treatment Act [Allgemeines Gleichbehandlungsgesetz - AGG] came into force, the labour courts have regularly had to deal with compensation claims under Sec. 15 (2) AGG. Even if, in light of the abundance of case law, one might have thought that pretty much everything has been said on this by now, the BAG has "topped this" with its ruling of 25 November 2021 - 8 AZR 313/20.

In November 2017, the sued Saxony county council published a job advert via the job exchange of the German Federal Employment Agency [Bundesagentur für Arbeit]. According to the advert, the vacant position was for a "Head of Legal and Municipal Office (Lawyer)". The job advert stated, among other things, that the scope of responsibility of the position included the management of the Legal and Municipal Office, which had approximately 20 employees at the time. The applicant was also expected to have a university degree, which was described in more detail in the advert, as well as several years of appropriate work experience.

The claimant, who is disabled to a degree of 50, applied unsuccessfully for the advertised position in November 2017, stating the fact of his severe disability. He had the required degree, but not the required work experience. The sued county council already did not invite him for an interview. The claimant asserted a compensation claim under Sec. 15 (2) AGG, first out of court and then in court. In the course of the compensation proceedings, the claimant especially objected to the fact that the vacant job had not been reported to the relevant employment agency, in contravention of the requirements of Sec. 165 sentence 1 German Social Code Book IX [Sozialgesetzbuch IX - SGB IX]. 

Unlike in the previous instances, the BAG awarded the claimant compensation pursuant to Sec. 15 (2) AGG. The sued county council had failed, contrary to Sec. 165 sentence 1 SGB IX, to notify the relevant employment agency of the advertised position that could be filled by severely disabled persons. The publication of the job advert via the job exchange of the Federal Employment Agency did not constitute a notification within the meaning of Sec. 165 sentence 1 SGB IX. The fact that the notification had been omitted led to the presumption that the Claimant had been discriminated against in the selection/appointment process on grounds of his severe disability.

In light of the previous case law, it comes as no surprise that public employers cannot fulfil their notification obligation under Sec. 165 sentence 1 SGB IX through a publication on the employment agency's job exchange. This is because the purpose of the direct notification within the meaning of Sec. 165 sentence 1 SGB IX is to enable the employment agencies to place severely disabled employees with potential employers. Public employers are therefore advised to review and, if necessary, change their notification practices to the employment agencies pursuant to Sec. 165 sentence 1 SGB IX.

The following was surprising, however: the lower courts had proceeded on the basis that the claimant did not fulfil the formal requirements of the job advert because he had only had one year of work experience and was therefore obviously unsuitable for the advertised position. In the case of obvious unsuitability, an invitation to a job interview is superfluous. However, the ruling of the BAG, which is only available in the form of a press release to date, gives the impression that obviously unsuitable applicants could nevertheless have a compensation claim simply on grounds of a formal error. If the written reasons for the judgement confirm this impression, this would constitute a further tightening of AGG case law.

Daniel Gorks

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1.3 No compulsory company integration management 

The BAG's latest decision on company integration management [betriebliches Eingliederungsmanagement - BEM] only looks positive at first glance: the employer cannot be forced by the employee to carry out company integration management measures. At second glance, however, it becomes clear why it is rarely a good idea for the employer not to conduct a BEM.

The employee was repeatedly incapacitated for work for lengthy periods, most recently from 1 January 2019 to 25 August 2019. At the beginning of August 2019, the employee, who had the same status as a severely disabled person, demanded that the employer conduct a BEM. After the rejection of this measure, the employee sued the employer for the initiation and implementation of a BEM. He was of the opinion that Sec. 167 (2) SGB IX directly entitled him to a BEM.

Both the Regional Labour Court [Landesarbeitsgericht - LAG] of Nuremberg and the Federal Labour Court [Bundesarbeitsgericht - BAG] dismissed the action (BAG dated 7 September 2021 - 9 AZR 571/20). In its decision, the BAG clarified that Sec. 167 (2) SGB IX does not give the individual employee a claim to the initiation and implementation of a BEM, even if (as in this case) the incapacity to work had undoubtedly lasted more than 6 weeks. The wording of Sec. 167 (2) SGB IX expressly grants the works council and the representative body for severely disabled employees certain rights in connection with a BEM, but not the individual employee. Sec. 167 (2) SGB IX also does not give rise to an enforceable individual claim to the implementation of the UN Convention on the Rights of Persons with Disabilities ("UN CRPD"). This requires that the Federal Republic of Germany, as a party to the Convention, takes appropriate measures to protect persons with disabilities. Sec. 167 (2) sentence 1 SGB IX puts the burden of initiation upon the employer for implementing a BEM. Hence, the employer is obliged to represent and prove the objective uselessness of a BEM in order to justify a dismissal (due to illness) in unfair dismissal proceedings. This is a sufficiently effective protective measure within the meaning of the UN CRPD.

Even if it is not blatantly obvious, this decision impressively emphasizes the importance of a BEM, especially for an employer wishing to end the employment relationship with an employee who has been off sick for a lengthy period. If the employer does not conduct a BEM, the BAG consistently requires the employer to represent and prove the objective uselessness of a BEM. This means that the employer not only has to consider all conceivable alternative employment options or those already put forward by the employee in the unfair dismissal proceedings, but it must also state in detail why a BEM could not under any circumstances have contributed to maintaining the employment relationship or the possibility of employment. In practice, employers regularly fail at this hurdle and a dismissal on grounds of illness is unsuccessful. Employers who are considering terminating an employment relationship should therefore definitely offer a (proper) BEM on their own initiative. 
However, it is not yet clear whether the wording of Sec. 167 (2) SGB IX will remain in its current form, i.e. without an individually enforceable claim on the part of the employee. The coalition agreement of the "traffic light" government speaks of the "nationwide binding character" of the BEM. The legislator could possibly achieve this goal in the current legislative period by explicitly stipulating an enforceable legal claim of employees in Sec. 167 (2) SGB IX. 

Kathrin Vossen

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1.4 Caution in case of compliance investigations: attribution of knowledge of the compliance manager not authorised to terminate the contract 

In its ruling of 3 November 2021 - 10 Sa 7/21, the LAG Baden-Württemberg ruled that in the case of compliance investigations, the management must ensure that it is informed promptly about the status of the investigations. Otherwise, negligent ignorance resulting from organisational negligence leads to the attribution of knowledge to the person who held a prominent position and was entrusted with the clarification of the facts, in this case the Head of Legal & Compliance.

The defendant disputed with the claimant, who most recently worked as a sales manager, over the validity of an extraordinary termination and investigation costs asserted by way of a counter-claim. The claimant, who enjoyed special protection against dismissal, was accused of the unauthorised disclosure of classified documents of the German Armed Forces that were relevant under procurement law. Indications of possible misconduct were received by the defendant’s compliance department in July 2018, upon which internal investigations were commenced, an external law firm was retained to conduct an investigation in October 2018, an IT forensic assessment in December 2018 as well as a data inspection from April to June 2019. The management initially received an interim report in September 2019, upon which it dismissed the claimant without notice within two weeks.

The defendant appealed against the first-instance judgement granting the claim. The appeal was unsuccessful, as the preclusion period under Sec. 626 (2) BGB had expired. Even though the Head of Compliance himself was not entitled to terminate the contract, his knowledge of the status of the investigations was attributable to the management on grounds of organisational negligence. This was the case because the management had not made sure that it was continuously informed about the status of the investigations. In addition, the Head of Compliance held a prominent position and was actually and legally in a position to clarify the facts relevant to the decision regarding a dismissal. The defendant was also unable to plead investigations by the public prosecutor's office, as the defendant itself had initiated internal investigations. Successive terminations had been possible from the end of the discovery process in June 2019 without jeopardising further investigations. The investigation costs asserted by way of a counter-claim had not been sufficiently individualised with respect to the claimant or presented on the basis of concrete investigative steps.

The decision is of high practical relevance. Especially in case of internal investigations, the question that regularly arises is when the two-week notice period for declaring a termination is set in motion. Persons authorised to give notice cannot simply "turn a deaf ear and a blind eye", but must - in order to avoid an attribution of knowledge - organisationally "ensure" that they are promptly informed of the results of investigations. Also in cases where investigations are being conducted against a large number of employees, employers should not wait until all investigations have been completed; rather, each allegation needs to be considered individually. Investigation costs can only be reimbursed if the employer is able to present an individualised list of the expenses and their necessity in relation to the specific employee (fundamentally, BAG dated 20 April 2021 - 8 AZR 276/20). 

Isabel Hexel

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1.5 Structuring options for collective agreements on employer contributions to deferred remuneration in company pension plans

If employees convert parts of their gross pay into a company pension plan, employers have been obliged since 1 January 2018 to subsidise this deferred remuneration by means of the saved social security contributions. This applies since 1 January 2022 irrespective of the date on which the deferred remuneration agreement was concluded. The obligation to pay a contribution can also be waived to the employee’s detriment by collective agreement.

In two judgements dated 8 March 2022, the BAG ruled that the entitlement to an employer's contribution may be excluded by way of a collective agreement concluded before 1 January 2018 (judgement dated 8 March 2022 - 3 AZR 361/21; judgement dated 8 March 2022 - 3 AZR 362/21).

In each of the underlying proceedings, the parties disputed the employer's obligation to subsidise deferred remuneration in the years 2019 and 2020. According to the available press release (No. 11/22), the BAG has confirmed the rulings of the lower courts, which dismissed the actions. The deferred remuneration was based on an association-wide collective bargaining agreement dated 2008. This allows the two suing employees to defer remuneration up to the maximum limit under tax and social security law and standardises the basic pension amount granted by the employer per calendar year. The association-wide collective bargaining agreement applies directly and mandatorily to one claimant by virtue of bilateral collective bargaining agreements, and to the other claimant by way of reference in an in-house collective bargaining agreement dated 2019.

In the opinion of the BAG, the provisions of the 2008 association-wide collective bargaining agreement on deferred remuneration could certainly preclude claims to employer contributions for the years 2019 and 2020. In terms of content, the exclusion is consistent with the statutory transitional provision in Sec. 26a of the German Occupational Pensions Act [Betriebsrentengesetz - BetrAVG]. Following clarification by the BAG to the effect that collective bargaining agreements are collective-law remuneration deferral agreements pursuant to Sec. 26a BetrVG, this applies. Accordingly, a statutory contribution obligation of the employer only arises as of 1 January 2022 if the deferred remuneration agreements - as is the case here - were concluded before 1 January 2019.

In practical terms, it is clear from the decisions that employers should review existing deferred remuneration agreements, even if they were concluded in the distant past, with regard to the statutory contribution obligation that now exists. When doing so, they always need to consider and regulate the ability to offset the voluntary employer contributions in order to avoid unpleasant surprises in the future.

Moritz Coché

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2. New case law - collective labour law

2.1 Maximum severance payment amount in the social plan and premium for waiving legal action

In the context of social plan negotiations, companies are regularly keen to agree on a premium for having employees waive protection against dismissal in addition to the severance payment in the social plan. At the same time, against the background of limited financial resources, a maximum amount of disbursable severance pay is usually specified in the social plan. A combination of these regulations is permissible, but should be carefully thought through in the context of their implementation, as the present decision of the BAG makes clear (BAG dated 7 December 2021 - 1 AZR 562/20).

In the proceedings at issue, the defendant concluded a social plan with the works council in the context of a planned business closure. The plan provided for a severance pay claim for dismissed employees according to the formula "term of service with the company x gross monthly income x factor", whereby the factor varied depending on the age of the employees. The severance payment was limited to a maximum amount of EUR 75,000 per employee. In a separate shop agreement, the parties agreed to increase the employees’ severance pay claim if they did not bring legal action for protection against dismissal. The dismissed claimant, who had not filed an action for protection against dismissal, received severance pay under the social plan of EUR 75,000.

In his action, the claimant claims, among other things, that he is entitled to payment of a premium for waiving his right to take legal action as well as a higher severance payment under the social plan. The regulation of the maximum amount in the social plan did not apply to the premium for waiving legal action and was invalid in other respects. It discriminated against him on grounds of his age.

Whilst the lower courts rejected the claims, the BAG ruled that the claimant was entitled to payment of the premium for waiving legal action. The maximum amount regulation in the social plan did not apply to the premium for waiving legal action under the shop agreement. In addition to the wording and the overall context of the regulations, the BAG also bases its reasoning on the purpose pursued by the premium for waiving legal action: an incentive for waiving the right to take legal action is only created if it is also definitely financially beneficial for the employee.

In contrast, the BAG denied the claimant's assertion of a higher severance payment under the social plan. The maximum amount regulation does not violate the principle of equal treatment under shop constitution law (Sec. 75 (1) German Shop Constitution [Betriebsverfassungsgesetz - BetrVG]). It is true that the method of calculating the severance payment under the social plan could result in a particularly high severance payment for certain age groups, which would then be "cut off" by the maximum amount. However, the maximum amount regulation serves the purpose of a just distribution against the background of limited social plan funds. The distribution was also appropriate in the present case, and thus the unequal treatment objectively justified.

On the positive side, the BAG's decision strengthens the structuring flexibility of the parties when concluding social plan severance payments. However, the BAG's extensive comments on the interpretation of the relevant provisions make it clear that the circumstances in the individual case are decisive. For example, a maximum amount regulation is only effective one can ensure in the individual case that the maximum severance payment to be made substantially mitigates the disadvantages arising from the loss of the job and that a fair distribution of the social plan volume is actually achieved. 

Jennifer Bold

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2.2 Mass dismissal proceedings - BAG submits question on transmission obligation to the ECJ

The mass dismissal notification process is an obstacle course for the employer: if it makes mistakes here, then in most cases this will result in the invalidity of all of the dismissals concerned. The BAG has now referred to the ECJ the question of whether the failure to notify the Federal Employment Agency at a particularly early stage (and merely as a preparatory measure) also leads to the invalidity of the dismissals concerned.

The BAG (decision dated 27 January 2022 - 6 AZR 155/21 (A)) had to decide on an insolvency case in which the employer had resolved to completely discontinue business operations as of 30 April 2020. Negotiations were subsequently initiated with the works council on the conclusion of a compromise of interests and social plan, as all of the 195 employees still working at the business were to be laid off. The employer combined the consultation procedure required under Sec. 17 (2) German Unfair Dismissals Act [Kündigungsschutzgesetz - KSchG] with the procedure for the compromise of interests. Contrary to Sec. 17 (3) sentence 1 KSchG, however, no copy of the notification initiating the consultation procedure and addressed to the works council pursuant to Sec. 17 (2) KSchG was sent to the competent employment agency. However, a mass dismissal notice was filed in due time - i.e. before the first notice of termination was issued. The claimant asserted that the termination was invalid. In his view, this followed from the fact that the employer had not forwarded the notification of the initiation of the consultation procedure addressed to the works council to the competent employment agency in contravention of Sec. 17 (3) sentence 1 KSchG.

As a preliminary question in the assessment of the validity of the termination, the 6th Senate of the BAG had to examine whether the mass dismissal notification procedure, including the consultation procedure, had been validly concluded. It did not see itself in a position to answer the question on its own authority, deeming it necessary to refer the matter to the ECJ in the context of a request for a preliminary ruling. Since the statutory regulations on the mass dismissal notification procedure pursuant to Sec. 17 et seq. KSchG are significantly influenced by European law, in particular by the so-called Mass Dismissal Directive 98/59/EC and the ECJ is the authoritative instance for the interpretation of European law, the step taken by the BAG is correct. However, it also shows that the BAG does not rule out the possibility that a termination might be invalid solely on grounds that the employer has forgotten to forward a copy of the notification of the works council to the employment agency when initiating the - internal and merely preparatory - consultation procedure.

The ECJ's decision is now eagerly awaited. However, it is not expected until next year at the earliest. Until then, employers are well advised to send a letter pursuant to Sec. 17 (2) KSchG with the information relevant to the consultation procedure to the employment agency as a precautionary measure.

Dr. Alexander Willemsen

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2.3 Co-determination of the works council in the event of continued employment after reaching the standard retirement age

The continued employment of an employee beyond the standard retirement age is subject to co-determination. The BAG’s decision comes as no surprise. The provision of Sec. 41 sentence 3 of the German Social Code Book VI [Sozialgesetzbuch VI - SGB VI], introduced into the SGB VI in 2014, on the possibility of postponing retirement by mutual agreement cannot lead to any other assessment. The innovative sounding decision is ultimately just old wine in new bottles, but should nevertheless not be neglected in practice, as important employees could otherwise be threatened with employment bans.

The employer disputed with the works council as to whether the continued employment of an employee beyond the regular retirement age requires the consent of the works council pursuant to Sec. 99 (1) BetrVG. The employment relationship with the employee was supposed to end on the basis of the collective agreement when the employee reached standard retirement age. However, the parties to the employment contract prevented this by postponing the date of the end of the employment relationship in accordance with Sec. 41 sentence 3 SGB VI. The employer informed the works council about this continued employment, but failed to ask for its consent, against which the works council took legal action.

The BAG affirmed the works council’s claim and found that the continued employment of an employee beyond an age limit applicable to the employment relationship constitutes a recruitment subject to co-determination pursuant to Sec. 99 (1) BetrVG (ruling dated 27 January 2022 - 7 ABR 22/20). The decisive factor was that the employment relationship would have ended without the so-called postponement agreement when the age limit had been reached, even if there had been no temporal cut-off. The jurisdictional basis for the work’s council’s involvement is therefore the actual continued employment of the employee beyond the intended end of the employment relationship and not the extension of the employment contract. In the opinion of the Erfurt judges, the renewed involvement of the works council in accordance with Sec. 99 (1) BetrVG is required, even if the works council had given its consent to the permanent employment or employment for an indefinite period at the time of the original recruitment.

The ruling of the BAG is in line with previous case law (cf. decision of 18 July 1978 - 1 ABR 79/75) and comes as no surprise, since the works council’s involvement is not only required at the initial recruitment of employees pursuant to Sec. 99 (1) BetrVG. Because of the initial involvement, this is quickly forgotten in practice, but is consistent from the labour law point of view: employment beyond an expiring fixed term is employment for which the works council has not yet given its consent. Logically, the postponement agreement in accordance with Sec. 41 sentence 3 SGB VI is no exception. Employers should take the ruling as an opportunity to review internal processes to also ensure the works council's involvement in the event of continued employment after the expiry of a fixed term. If it fails to do this (properly), the works council can take legal action to have a fine imposed upon the employer. This may also result in an employment ban for the employee in question. In practice, however, employment that is continued on the basis of a postponement agreement regularly concluded for a fixed period is likely to have already expired before the court reaches a legally binding decision in a legal dispute initiated by the works council. As a rule, this deprives the court proceedings of the claim basis.

Alexandra Groth

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2.4 Employers are entitled to inspect election documents

In principle, employers have a right to inspect the election documents in order to check the validity of the works council election, without having to demonstrate a particular legal interest in this and also independently of any election contestation or nullity proceedings. In view of the regular works council elections that are currently being held, employers should make use this right if they have doubts about the legality of the works council election.

In the case decided by the LAG Berlin-Brandenburg (decision of 5 August 2021 - 6 BVGa 7163/21), the employer had requested full access to the election files for the works council election of 17 June 2021, which had been contested by the employer, and alternatively full access to the postal voting documents.

In contrast to the lower court, the LAG Berlin-Brandenburg found that a legitimate interest on the part of the employer was not a prerequisite for a right of access. Pursuant to Sec. 19 of the Election Regulations [Wahlordnung], the works council must retain the election files after its election until the end of its term of office. This obligation to retain documents enable a determination of the contents of the election files even after the works council election has been completed, so that the correctness of the works council election can be checked. This right of access is not only open to the works council, which has to retain the election files and whose members are therefore able to access them at any time without further ado. Rather, the purpose of the obligation to retain documents is the legitimate interest of all parties for whom the validity of the works council election is of importance in having access to the election files. This at least means those persons and bodies who are entitled to contest the works council election pursuant to Sec. 19 (2) sentence 1 BetrVG.

The employer’s right of inspection is not granted without restriction due to the secrecy of the ballot, which is also guaranteed for the election of the works council pursuant to Sec. 14 (1) BetrVG. For components of the election files from which conclusions can be drawn as to the voting behaviour of individual employees, however, their inspection is only permissible if this is necessary to verify the correctness of the election. However, it was sufficient for the LAG Berlin-Brandenburg to hear the employer's argument that the inspection of these documents was necessary to examine of any flaws in the election procedure, which the employer still can and must present in the contestation proceedings.

Employers therefore do not have to conduct election contestation proceedings "randomly" based on rumours and assumptions. Rather, they have the opportunity to check the correctness of the election in both a positive and negative sense and, if necessary, to present in the election contestation proceedings any errors they have found - on an equal footing with the works council as the opponent of the election contestation proceedings, which itself has unrestricted access to the election documents.

Anja Dombrowsky

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2.5 No right to withhold consent in the event of a personnel guideline in contempt of co-determination rights

The use of a selection guideline that contravenes co-determination rights does not lead to an invalid individual personnel measure. The works council has no right to refuse its consent in this respect. The LAG Cologne decided this for the first time in its judgement of 19 November 2021 - 9 TaBV 15/21, contrary to the prevailing legal opinion.

In the case underlying the decision of the LAG Cologne, the parties disputed the consent of the works council to the hiring of the head of an ambulance station.

The employer, an operator of several ambulance stations, selected an external applicant from among several applicants to fill the vacant position of a paramedic with a management function based on an "assessment matrix" that had been drawn up by the employer without the involvement of the works council. According to the matrix, the external candidate received more points than an internal candidate, who was also the chairman of the works council. The works council then refused to approve the new recruitment, arguing that the assessment matrix had been drawn up without co-determination and was therefore invalid.

Like the court of first instance, the appellate court also did not consider there to be any grounds for a right to refuse consent under Sec. 99 BetrVG. In particular, the use of a selection guideline in contempt of co-determination rights does not establish a right of the works council to refuse consent pursuant to Sec. 99 BetrVG.

The LAG Cologne’s decision can be welcomed from the employer's point of view. The decision of the LAG Cologne - that a selection guideline contravening co-determination rights pursuant to Sec. 95 BetrVG in itself does not justify a right of the works council to refuse consent pursuant to Sec. 99 (2) No. 2 BetrVG - was contrary to the prevailing legal opinion in the literature and in the case law of the courts. Several years ago, namely, the LAG Hamm already ruled that a works council could base its refusal to give consent on a violation of the individual personnel measure against a selection guideline pursuant to Sec. 95 BetrVG (LAG Hamm, decision dated 21 November 2008 - 13 TaBV 84/08). The appeal on points of law against the decision of the LAG Cologne is pending before the BAG.

In practice, employers are advised to make a strict distinction between a selection guideline that was established without any participation of the works council whatsoever, and the individual personnel measure as such. A selection guideline in violation of co-determination rights cannot give the works council cause to refuse consent pursuant to Sec. 99 (2) No. 2 BetrVG; the individual personnel measure remains valid in case of a selection guideline contravening co-determination rights, even without the works council's consent. This does not mean, however, that the works council is denied any legal protection whatsoever in case of a selection guideline in contempt of co-determination rights. Due to the violation of the right of co-determination conferred by Sec. 95 (1) BetrVG, the works council may assert a general claim for injunctive relief against the employer with regard to any further use of the selection guideline that contravenes co-determination rights, in order to thus invalidate the selection guideline. However, this should not prevent the individual personnel measure in respect of which the works council originally wanted to withhold its consent. It retains its validity. The BAG’s decision on what legal interpretation it wishes to follow is therefore eagerly awaited.

Cornelia-Cristina Scupra

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3. New legislation

3.1 Federal Cabinet has approved minimum wage increase

On 23 February 2022, the Federal Cabinet passed the Act on Increasing the Protection Provided by the Statutory Minimum Wage and on Changes in the Area of Marginal Employment ("Minimum Wage Increase Act") [Gesetz zur Erhöhung des Schutzes durch den gesetzlichen Mindestlohn und zu Änderungen im Bereich der geringfügigen Beschäftigung – “Mindestlohnerhöhungsgesetz”]. The intended changes to the Minimum Wage Act, the German Social Code Book III [Sozialgesetzbuch III - SGB III] and other laws are summarised here. If the laws are implemented, this will also involve considerable work for employers. 

Legal intervention in the minimum wage

In the coalition agreement of the governing parties dated 24 November 2021, the parties agreed to increase the statutory minimum wage to EUR 12.00 gross per hour. It has currently been EUR 9.82 gross per hour since 1 January 2022. As of 1 July 2022, it is being increased to EUR 10.45 gross per hour.

The Federal Cabinet decided on 23 February 2022 to increase the statutory minimum wage as of 1 October 2022 to EUR 12.00 gross. The Minimum Wage Commission [Mindestlohnkommission] will subsequently decide anew on any future adjustments. It will make its next adjustment decision by 30 June 2023, effective from 1 January 2024.

With the draft law, the thresholds applicable to exemptions from the documentation requirements under Secs. 16 and 17 of the German Minimum Wage Act [Mindestlohngesetz - MiLoG] in Sec. 1 of the documentation requirements of the Minimum Wage Documentation Requirements Ordinance [Mindestlohndokumentationspflichten-Verordnung - MiLoDokV] are consequently also being raised. 

Changes for mini-jobs and employees in the transitional employment sector

In addition, the marginal earnings threshold are being raised from the current EUR 450 to EUR 520 per month. The new regulation is based on a working week of ten hours at minimum wage conditions.

The maximum limit for employees in the transitional employment sector (so-called "midi-jobbers") is being raised from EUR 1,300 per month to EUR 1,600. This aims to create an incentive for marginally employed persons to extend their working hours beyond a mini-job. In addition, midi-jobbers are to receive further relief.

The draft law adopted by the Cabinet will also no longer provide for rigid thresholds in the future, including instead a flexible "marginal earnings threshold" based on a weekly working time of ten hours at minimum wage conditions. This means that increases in the minimum wage can also increase the additional earnings threshold whilst maintaining the agreed working hours.

The draft bill - somewhat surprisingly - still provided for a far-reaching obligation to document working hours: Sec. 17 MiLoG was supposed to be amended to require that employees' work performance be recorded electronically and in a tamper-proof manner. The Federal Cabinet did not include this amendment in the law that has now been passed. 

Practical effects

The changes in minimum wage and the introduction of the marginal earnings threshold that is to apply in future mean that companies need to swiftly address their contracts and contract conversions for mini-jobbers and employees in the transitional employment sector. They should ensure that an adjustment of remuneration in the case of employment contracts concluded for a fixed term without material reason does not take place together with an extension of the fixed contract term. Otherwise, according to BAG case law, there is a risk of the contract losing the limitation of its term.

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3.2 Employment of Ukrainian citizens and other refugees from Ukrainian territory

Since the beginning of the war in Ukraine, hundreds of thousands have left the country. There is immense support of those affected by private individuals and companies with donations in kind and money. Additionally, many companies are also considering offering refugees work. Especially companies that had employees in Ukraine often want to continue employing them directly in Germany. Below, we are summarising the key regulations governing the employment of refugees here.

Right of residence

Based on Article 5 of Council Directive 2001/55/EC of 20 July 2001, the EU adopted on 4 March 2022 the Council Implementing Decision (EU) 2022/382 establishing the existence of a mass influx of displaced persons from Ukraine and introducing temporary protection. It was published on the same day.

This resolution is the basis for the applicability of Sec. 24 of the German Residence Act [Aufenthaltsgesetz - AufenthG], which contains the regulations on granting residence for temporary protection. Refugees apply for asylum, which then leads to a residence title. This simultaneously includes their systematic identification (Sec. 16 German Asylum Act [Asylgesetz - AsylG]).

On 7 March 2022, the Federal Ministry of the Interior [Bundesinnenministerium - BMI] issued a Ukraine Residence Transitional Ordinance [Ukraine-Aufenthalts-Übergangsverordnung - Ukraine-Aufenth-ÜV]. The Ordinance, which was published on 8 March 2022, provides for a temporary exemption until 23 May 2022 from the residence title requirement for persons entering Germany on grounds of the war in Ukraine.

Access to the labour market

In general, the employment of non-EU foreigners is permitted if they have a residence title that explicitly states that they are permitted to work ("Arbeitserlaubnis").

Due to the legal requirements under Sec. 24 (6) AufenthG, refugees per se are only permitted self-employment, but not employment within the scope of an employment relationship. However, the immigration office can permit such employment. Sec. 31 of the German Employment Ordinance [Beschäftigungsverordnung - BeschV] stipulates that a foreigner does not require the approval of the Federal Employment Agency to take up employment if he has been or will be granted a residence title in accordance with Chapter 2, Sec. 5 AufenthG, which includes Sec. 24 AufenthG.

Accordingly, employment of Ukrainian refugees who have applied for asylum is always approved along with this. The approval may be subject to conditions. 

Supplementary notes

Some parties argue that, in view of the above-mentioned temporary exemption from the requirement of a residence title, employment within the scope of an employment relationship is possible even without a prior asylum application. We can clearly advise against this. If employers wish to employ refugees, they should therefore have applied for asylum in order to obtain a residence title.

The residence permit definitely needs to be checked as to any ancillary provisions.

There are no special regulations for the employment of refugees that allow, for example, a lower wage level compared to other employees in the company. Insofar, the regulations of the German Equal Treatment Act [Allgemeines Gleichbehandlungsgesetz - AGG] and the MiLoG in particular must be observed. 

Jörn Kuhn

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Jörn Kuhn

Jörn Kuhn

PartnerAttorneySpecialized Attorney for Employment Law

Konrad-Adenauer-Ufer 23
50668 Cologne
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Dr. Alexander Willemsen

Dr. Alexander Willemsen

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Isabel Hexel

Isabel Hexel

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Alexandra Groth

Alexandra Groth

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Konrad-Adenauer-Ufer 23
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