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"Monthly Dose" Employment Law: 03/2024

Selected current judgements

In the third edition of 2024, our Monthly Dose Employment Law on current case law deals with the judgements (1) of the Federal Labour Court (Bundesarbeitsgericht, BAG) of 23 August 2023 (5 AZR 349/22) on employee's duty to get novice on services assigned to him by the employer during his free time, (2) of the BAG of 17 October 2023 (1 ABR 24/22) on the works council's right of co-determination on employer’s ordering of ban on private mobile phone use during working hours, (3) of the Schleswig-Holstein Regional Labour Court (LAG) of 6 July 2023 (5 Sa 185 öD/22) on the payment of wage tax and social security contributions as a special fulfilment objection by the employer, (4) of the LAG Cologne of 11 July 2023 (4 Sa 359/23) on the offsetting of credit hours on working time accounts by the employer and (5) of the European Court of Justice (ECJ) of 28 November 2023 (C-148/22) on the prohibition of wearing religious signs at the workplace in public administration.

1. Messages via text message concerning working hours must also be taken note of by employees in their free time (BAG judgement of 23 August 2023, 5 AZR 349/22)

In its judgement of 23 August 2023, the Federal Labour Court (BAG) had the opportunity to answer the legal question of whether an employee must also inform himself about the duties assigned to him during his free time.

In the underlying case, the parties disputed the crediting of working hours to the plaintiff employee's working time account, which the defendant employer had deducted because he had not turned up for his scheduled shifts. The plaintiff is employed by the defendant as an emergency paramedic. The defendant operates rescue centres in five districts in Schleswig-Holstein. A works agreement applicable to the employment relationship (BV Arbeitszeitgrundsätze) provides that employees can be assigned to so-called "jumping shifts" with a notice period of at least four days in advance, stating the working hours. If the working hours cannot yet be specified, the employee is assigned to day, late or night shifts, which must be specified by 8 p.m. of the previous day at the latest. If no specific assignment is made, the employee must report to his regular watch the next day. At the time in question (during the coronavirus period), a telephone report was sufficient. The defendant administered the working hours of the employees via an hourly account specified in the works agreement, on which overtime can also be accumulated.

In the initial planning, the plaintiff was assigned to a standby shift on 8 April 2021. He was off work on 7 April 2021. The defendant sent the plaintiff a SMS on 7 April 2021 - after previous unsuccessful attempts to contact him by telephone on the same day - informing him of the start of his shift on 8 April 2021 at 6.00 am., which had been scheduled in the meantime. The plaintiff did not respond to this text message; he did not contact the defendant until 7.30 am on 8 April 2021 and enquired about the place of work. In the meantime, the shift scheduled for the plaintiff was filled by a colleague from the on-call duty, so that the plaintiff's work performance was no longer required for the specific day. The defendant also deducted 11 hours from the plaintiff's working time account for the shift he did not start on 8 April 2021 and issued the plaintiff with a warning in view of his failure to start work at the start of the split shift.

A similar situation occurred in September 2021. The plaintiff was scheduled in the initial planning for a stand-in shift on 15 September 2021 and the defendant informed the plaintiff of the start of his shift (6.00 am) in a text message sent to the plaintiff on the non-working day of 14 September 2021. The plaintiff contacted the defendant by telephone at 7.30 a.m. on 15 September 2021 to enquire about his shift. The defendant scheduled him for a shift, but he arrived 1.93 hours later than originally planned. The defendant also deducted this time from the plaintiff's time account and issued the plaintiff with a warning for failing to perform his work during the aforementioned period.

The plaintiff filed a complaint against this and demanded that the deducted working time be credited back to his working time account and that the warning be removed from his personnel file.

The BAG dismissed the claim. It was reasonable to expect the employee to take note of the duty roster in his free time. The plaintiff was therefore not entitled to have the working time for the two periods in dispute credited back to his working time account, as he had not properly offered his work performance in each case and the defendant was therefore not in default of acceptance with regard to the employer's respective telephone offer to provide his work performance.

The employee must offer the work performance as it is to be performed, i.e. at the right place, at the right time and in the right manner in accordance with the contractual agreements or their concretisation by virtue of instructions pursuant to Section 106 sentence 1 of the German Trade Act (Gewerbeordnung, GewO) (Section 294 of the German Civil Code (Bürgerliches Gesetzbuch, BGB)). A literal offer is (only) sufficient if the employer has declared that it will not accept the service or is not obliged to employ the employee to an extent that exceeds the actual utilisation (Section 295 BGB). In the case in dispute, the defendant had not declared that it would not accept the work performance during the periods in dispute; in this respect, the plaintiff should have actually offered his work performance. He had not done this at the right place and at the right time, as in this case a telephone notification was not sufficient. In accordance with the defendant's instructions, he should have arrived at the assigned watch at 6 a.m. and offered to work there.

The working hours had been effectively specified by the defendant in accordance with the works agreement. The plaintiff was bound by this instruction from the employer. The plaintiff could not rely on the fact that he had no knowledge of the defendant's instruction. According to Section 241 (2) BGB, each party is obliged to take into account the respective rights, legal interests and interests of the other party. This also includes creating the preconditions for the feasibility of the contract. The obligation arising from the works agreement to take note of the working hours is such a secondary obligation. The plaintiff could also be reasonably expected to fulfil this obligation in his free time. In this respect, making it possible to take note of the specific working hours does not include being available to the employer without interruption during the relevant non-working time. It is sufficient for the employee to be aware of the specific organisation of working hours at the relevant time (in this case from 8.00 pm) for a manageable period of time.

This is not associated with an unauthorised restriction of free time, as taking note of the SMS is associated with a small amount of time that is not to be regarded as working time. There was no conflict with the provisions of the German Working Time Act (Arbeitszeitgesetz) and Art. 2 No. 1 of Directive 2003/88/EC (which defines working time as the time during which the employee works, is at the employer's disposal and carries out his work or duties). In the case in dispute, the secondary obligation to take note of the concretisation of the duty does not significantly impair the plaintiff's ability to freely organise his free time. The plaintiff is free to choose the point in time at which he takes note of the instruction. The actual moment of taking note of the text message is so insignificant in terms of time that it cannot be assumed that the use of free time is significantly impaired in this respect either.
Based on the aforementioned reasoning, the BAG also denied the claim asserted by the plaintiff for removal of the warning from the personnel file. The plaintiff had breached his contractual obligations by not complying with the instruction.

Consequences for practice

The BAG's decision is convincing both in terms of its result and its reasoning. For practical purposes, it helpfully clarifies the distinction between activities which, due to their considerable interference with the employee's free time, include working time that is subject to remuneration (e.g. on-call duty) and duties that are not subject to remuneration but only interfere slightly with the employee's free time. Employers can use this in particular - as in the present case - for short-term coordination of the place of work and/or the working hours on the relevant working days, as long as the employee can carry out the coordination autonomously in his free time.

2. No right of co-determination of the works council in the event of a ban on private mobile phone use during working hours (BAG decision of 17.10.2023, 1 ABR 24/22)

In its decision of 17 October 2023, the BAG had the opportunity to clarify that the works council has no right of co-determination pursuant to Section 87 (1) no. 1 of the German Works Constitution Act (Betriebsverfassungsgesetz, BetrVG) in the event of a general ban on private mobile phone use during working hours imposed by the employer.

In the case underlying the decision, the employer and the works council disputed on the existence of the works council's right of co-determination after the employer imposed a general ban on mobile phone use during working hours. The employer manufactures brake and fuel systems for vehicles. During operational waiting times (e.g. due to machine conversions or outstanding incoming goods), there are occasional idle times which many employees use to deal with private matters on their mobile phones. In an employee information notice dated 18 November 2021, which was posted in the company, the employer pointed out that "any use of mobile phones/smartphones for private purposes during working hours is not permitted", with violations being subject to consequences under labour law up to and including extraordinary termination without notice.

The works council felt that this unilateral order by the employer violated its right of co-determination pursuant to Section 87 (1) No. 1 BetrVG and, after several unsuccessful out-of-court requests, initiated resolution proceedings with the application to order the employer to refrain from banning the private use of mobile phones during working hours.

The BAG rejected the application. It did so on the grounds that the employer's ban on the use of mobile phones and smartphones for private purposes during working hours was not covered by the right of co-determination pursuant to Section 87 (1) no. 1 BetrVG. The employee's orderly behaviour covered by this right of co-determination is (only) affected if the employer's measure is aimed at shaping collective cooperation or ensuring and maintaining the prescribed order of the company. The involvement of the works council is intended to ensure that the employees are involved on an equal footing in the organisation of company coexistence. However, measures regulating work behaviour, i.e. measures that directly demand or specify work obligations, are not subject to co-determination. If the measure in question has an impact on both work and orderly behaviour, the predominant regulatory purpose is decisive.

In this case, the BAG recognised that although the employer's ban on the private use of mobile phones during working hours also affects the orderly behaviour of employees, it is primarily aimed at controlling work behaviour, as it is intended to ensure that employees can work quickly and with concentration by preventing distractions of a private nature. It is irrelevant that the ban also covers periods in which work is interrupted for operational reasons. The employer is also entitled to the right to issue instructions during this time in accordance with Section 106 GewO.

The BAG also clarifies that a possible unlawfulness of the employer's instruction neither establishes a right of co-determination of the works council pursuant to Section 87 (1) No. 1 BetrVG nor renders the instruction null and void. In the absence of a statutory duty of the employer to act in the interests of occupational health and safety, there is also no right of co-determination of the works council pursuant to Section 87 (1) No. 7 BetrVG.

Consequences for practice

The BAG's decision is in line with its established case law with regard to the distinction between regulatory behaviour subject to co-determination and directive behaviour not subject to co-determination for the purpose of specifying work performance. It is helpful in practice in that employers can autonomously prohibit such private mobile phone use during working hours - which from an empirical point of view is still not uncommon - by the works council if and because they can demonstrate that the mobile phone use is directly related to the specific work to be performed by the employee.

3. Payment of wage tax and social security contributions as a special fulfilment objection by the employer even in the event of a dispute about employee status (LAG Schleswig-Holstein judgement of 07.07.2023, 5 Sa 185 öD/22)

In its judgement of 6 July 2023, the Schleswig-Holstein Regional Labour Court (LAG) confirmed the case law of the BAG (judgement of 30 April 2008, 5 AZR 725/07) on the special objection to the payment of wage tax and social security contributions also in the event that there is a dispute about the status of an employee as an employee. In this case, the employer can also withhold and pay taxes and social security contributions with fulfilment effect in relation to the employee's claim to remuneration, provided that it is not clearly recognisable for the employer at the time of payment that an obligation to pay does not actually exist.

In the case at issue, the plaintiff employee worked as a geriatric nurse in a nursing home of the defendant employer on the basis of a "service contract". The defendant, which had initially employed the plaintiff as a freelancer, subsequently doubted the correctness of this decision and therefore initially withheld 40% of the agreed remuneration. The plaintiff was of the opinion that he had not provided his services to the defendant as an employee, but as a self-employed person, and claimed outstanding remuneration payments of EUR 15,787 for the service period from 17 December 2020 to 30 December 2020.

After the action was filed, the German Federal Pension Insurance (Deutsche Rentenversicherung Bund) determined during a social security audit that the claimant was working for the defendant in an employment relationship subject to social security contributions. The financial authority also categorised the employment as an employment relationship in a subsequent external wage tax audit. In the course of the legal dispute, the defendant then paid wage tax and social security contributions as well as solidarity surcharge for the plaintiff and paid the remaining amount of EUR 2,527.25 to the plaintiff.

The Labour Court (ArbG) of Kiel dismissed the action in a judgement dated 2 September 2022 (6 Ca 245 öD c/22) on the grounds that the plaintiff's claim to remuneration had been fulfilled by the payment of social security contributions and wage tax (special objection to the withholding and payment of wage tax and social security contributions). The plaintiff appealed against the decision and argued that he had not been employed by the defendant subject to social security contributions. The labour courts were not bound by the assessments of the social security and income tax audits. Furthermore, the plaintiff considered it an abuse of law for the defendant to refer to employment subject to social security contributions, although it had concluded an employment contract with the plaintiff and must therefore have assumed that the plaintiff was not working as an employee.

The LAG Schleswig-Holstein dismissed the plaintiff's appeal.

The plaintiff's remuneration claims had been fulfilled in full by the defendant in accordance with Section 362 of the German Civil Code (BGB). Insofar as the defendant had withheld part of the remuneration and paid it as social security contributions and wage tax, the special defence of performance of the withholding and payment of wage tax and social security contributions applied, as both the wage tax and the employee contributions to social security were to be paid from the employee's assets (Section 38 (2) of the Income Tax Act (Einkommenssteuergesetz, EStG) and Section 28e (1) sentence 2 in conjunction with Section 28g of the Forth Book of German Social Security Code (Sozialgesetzbuch IV, SGB IV) and the employer is obliged to withhold and pay these contributions. Therefore, the employer fulfils its payment obligation towards the employee with the transfer. This special fulfilment objection also applies if it is disputed whether there is an employment relationship at all.

Only in cases in which it is clearly recognisable to the employer at the time of the transfer that there is no obligation to make the transfer can the employer not invoke the special objection to fulfilment. In the present case, however, this was not the case, as the defendant was entitled to rely on the correctness of the notifications from the social insurance institutions and the tax office, as these were in any case not obviously incorrect. Furthermore, the employee must raise objections to the correctness of the contributions paid by way of legal remedies under social and tax law; the labour courts are not authorised to carry out a corresponding review.

It was also not an abuse of law for the defendant to invoke the defence of compliance by paying the employee's social security contributions and wage tax, as the payment was not made of the defendant's own free will and not for its economic benefit, but on the basis of a request by the relevant authorities and the defendant was threatened with criminal liability if it failed to comply.

Consequences for practice

The judgement of the LAG Schleswig-Holstein sensitises employers who have doubts about the correct legal status classification of a freelancer during and shortly after the conclusion of a service or work contract to withhold and pay wage tax and social security contributions with fulfilment effect. Employers must note in such a procedure that subsequent withholding is only possible within the limits of Section 28g S. 3 and 4 SGB IV. According to this, an omitted deduction may only be made up for the next three wage or salary payments; beyond this, only if the deduction was omitted through no fault of the employer. This makes it clear that employers should have their tax, social security and labour law status checked or initiate a status determination procedure with the DRV Bund at an early stage, if possible before the start of employment, if there are uncertainties regarding the status as an employee or self-employed person, not only because of potential criminal law risks.

4. Offsetting of credit hours in working time accounts not lawful without the employee's consent (LAG Cologne judgement of 11 July 2023, 4 Sa 359/23)

In its judgement of 11 July 2023, the Cologne Higher Labour Court dealt with the question of whether an employer is entitled to offset the time accounts held for the employee against each other without the employee's consent.

In the case underlying the decision, the plaintiff has been working as a control centre dispatcher at the defendant, an airport fire brigade whose employees work 24-hour shifts, since 1 April 2015. The calculation and recording of working hours in different working time accounts is governed, among other things, by the "Company Agreement 01/2013 on the organisation of working hours for the fire brigade and medical personnel of Flughafen K/B GmbH" (BV Arbeitszeit). According to this agreement, the defendant maintains a debit account, an hourly account, a lifetime working time account, a public holiday account and an annual debit account for the employment relationships of its employees. At the beginning of the calendar year, the 120 shifts owed annually by each employee are shown in the debit account as a minus, which must be reduced over the course of the calendar year. The shifts are distributed among the employees by the employer, whereby requests for time off and swaps can be honoured after approval. Training and day shifts are not posted to the debit accounts but are recorded in the hours account. Credits from this hours account can be transferred to the lifetime working time account to enable employees to retire early.

Section 4 (5) BV Arbeitszeit BV states: "If 16 hours are accumulated in the hours account, these can be deducted as a shift from the debit account or transferred to the lifetime working time account." Any credit balances on the hours account were offset against outstanding time debts on the debit account at the end of the year since BV Arbeitszeit came into force on 1 January 2013.

From the turn of the year 2015/2016, the defendant transferred missing planned shifts from the plaintiff's hours account to his planned account almost annually at the turn of the year, thus offsetting a total of 1,776 hours against each other. At peak times, up to 560 hours (turn of the year 2020/2021) were rebooked for the plaintiff. The defendant did not obtain authorisation for the offsetting at any time.

The plaintiff is of the opinion that the defendant was not authorised to rebook and offset without his consent. In particular, the defendant should have allowed him to actually complete his 120 planned shifts. If the defendant does not offer to work the shifts, it is in default of acceptance. In addition, the defendant had given less consideration to employees with high hourly accounts when organising the shifts.

The defendant is of the opinion that the plaintiff's consent was not required. The possibility of offsetting time credits in the hourly account against the time credits in the debit account was based on the company regulations.

After the Cologne Labour Court dismissed the action, the plaintiff's appeal was partially successful. The Cologne Labour Court took the view that the defendant could not unilaterally offset the time credits in the working time accounts without consent. A provision in a works agreement that would authorise the employer to unilaterally offset between the hours account and the debit account is invalid. Such unilateral offsetting would unlawfully transfer the employer's operational risk to the workforce. The defendant would thus be authorised without further ado to no longer deploy employees who are able and willing to work. This would mean that the loss of work - i.e. the realisation of the operational risk - would have no financial consequences for the defendant. It would only have to pay for the hours that the employee had worked in the past. However, according to Section 615 BGB, the employer must remunerate work stoppages for operational reasons by paying the agreed salary. Even if the provision of Section 615 BGB can be waived in principle, the employer cannot generally shift the remuneration risk to the employee. However, this is what the defendant did in the present case.

According to the interpretation of Section 4 (5) BV Arbeitszeit, it is obvious that the employee may decide whether the hours are to be offset or not, as this decision has a direct impact on his financial situation. In the event of offsetting, the employee receives time off but no pay. If no offsetting was carried out, the employee would still have to work all 120 shifts per year, even though his hours account had a credit balance.

The Chamber also found that the rebooking of a significant number of hours at the end of the year was not a generally recognised or common practice. In the years up to 2020, the number of hours rebooked was only up to 176 hours per year. At the turn of the year 2020/2021, however, 560 hours were charged to the plaintiff.

Consequences for the practice

The decision of the Cologne Higher Labour Court clarifies that employers cannot simply offset hours credited to working time accounts without the employee's consent. In particular, the unauthorised transfer or offsetting practice is inadmissible if this results in a shift of the operational risk from the employer to the employee. Employers who unilaterally carry out transfers or offsetting between working time accounts in their business practice should therefore carefully check whether this procedure leads to such a transfer of risk, which subsequently leads to an ineffective offsetting of working time credits. From the employer's point of view, this could, in the worst case, lead to employees accumulating large working time credits, which the employer might have to settle in monetary terms.

5. A ban on wearing religious symbols in the workplace may be lawful in public administration in order to create a neutral working environment (ECJ judgement of 28 November 2023, C-148/22)

In its judgement of 28 November 2023 (C-148/22), the European Court of Justice (ECJ) ruled on the reference for a preliminary judgement from the Labour Court of Liège (Belgium) on the interpretation of Art. 2 (2) (a) and (b) of Directive 2000/78/EC (Framework Directive on Equal Treatment), the ECJ ruled that an internal rule of a local authority imposing a general and indiscriminate ban on the wearing of visible signs in the workplace that reveal, inter alia, philosophical or religious beliefs can be justified by the fact that the local authority wishes to create a completely neutral administrative environment, taking into account its specific context, provided that this rule is appropriate, necessary and proportionate in relation to that context and taking into account the various rights and interests concerned.

In the facts underlying the ECJ's decision, the plaintiff, who was employed as an office manager for the municipality of Ans (Belgium) with a minimum of contact with citizens, had requested to be allowed to wear a Muslim religious headscarf at work. The municipal college rejected this request and provisionally prohibited the plaintiff from wearing the headscarf as a sign of religious identification until a general regulation was issued. A short time later, the municipal council of the municipality of Ans amended the municipality's labour regulations and introduced an obligation of "exclusive neutrality", which prohibits all employees of the municipality, regardless of whether they have contact with citizens or not, from wearing visible religious or ideological identification at the workplace.

The plaintiff then brought an action before the Liège Labour Court for a declaration that the decisions of the municipality and the amendment to the work regulations discriminated against her on the grounds of her religion and violated her freedom of religion.

The Labour Court ruled in favour of the plaintiff for the period up to the amendment of the work regulations, but stayed the proceedings and, with regard to the amendment of the work regulations, asked the ECJ for a preliminary judgement on whether Article 2 (2) (a) and (b) of Directive 2000/78/EU must be interpreted as allowing the public administration to create a completely neutral working environment and, consequently, to prohibit all staff from wearing identifying signs of certain beliefs, regardless of whether there is direct contact with citizens.

The ECJ answered the question by stating that an internal rule established by a public employer which prohibits the visible wearing of any sign of religious or philosophical beliefs in the workplace may constitute a difference of treatment indirectly based on religion or belief within the meaning of that provision if it is established that the apparently neutral obligation contained in that rule actually results in persons of a particular religion or belief being placed at a particular disadvantage. However, such unequal treatment does not necessarily lead to discrimination if it is objectively justified by a legitimate aim and the means of achieving this aim are suitable, necessary and proportionate. Such an objective goal can be the neutrality of the public service. The Member States of the European Union, including their lower levels of administration, have a margin of appreciation in the organisation of the neutrality of the public service which they wish to promote in the workplace. However, this objective must actually be pursued in a harmonised and systematic manner, which means that the corresponding regulations must be applied generally and indiscriminately to all staff and be limited to what is absolutely necessary. It is up to the national courts to determine whether this is the case in each individual case.

Consequences for practice

With this judgement, the ECJ ruled for the first time that public employers can also prohibit their employees from wearing religious or ideological symbols in the workplace if the specific regulations are designed in such a way that they apply to all symbols, indiscriminately and generally to all staff and are limited to what is absolutely necessary.

From the perspective of German labour court case law, however, caution is required when implementing this ECJ judgement in company practice: The BAG is stricter in its case law in that it sets higher requirements for the justification of indirect discrimination against affected employees in accordance with Sections 1, 7 and 8 of the German General Equal Treatment Act (Allgemeines Gleichbehandlungsgesetz, AGG) and, in the specific balancing of interests between the employee's interest in the relevant exercise of religious belief and the interest of the state institution in compliance with the religion-related neutrality requirement, attaches such great weight to freedom of belief that the employer should only be able to enforce the neutrality requirement without restriction if there is a specific risk to public neutrality (cf. most recently, for example, the judgement of the BAG of 27 August 2020, 8 AZR 62/19, on the constitutional interpretation of Section 2 of the Berlin Neutrality Act on the prohibition of the wearing of visible faith-related signs in schools, the police, the administration of justice and the prison system, among others). Against this background, the assessment of the aspect that there is no contact with citizens would be significantly more important in the present context.

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