Monthly Dose of Germany: September 2024

"Monthly Dose" Employment Law: 08/2024

The eights edition of our Monthly Dose Employment Law in 2024 on current case law explains the judgments of

(1) the German Federal Labour Court (Bundesarbeitsgericht, BAG) dated 24 April 2024 (7 ABR 26/23) on the effective election of a works council even if there are fewer candidates then stated under statutory provisions,

(2) the BAG dated 23 January 2024 (9 AZR 115/23) on statutory provisions of the General Terms and Conditions as international mandatory law despite a different choice of law by the parties under Article 8 (1) s. 2 Rom I-Regulation,

(3) the Regional Labour Court (Landesarbeitsgericht, LAG) of Dusseldorf dated 28 November 2023 (3 Sa 285/23) on the non-existent right to compensation in the event of delayed provision of information under the GDPR,

(4) the LAG Niedersachsen dated 8 February 2024 (6 Sa 559/23) on the burden of presentation and proof in the light of Sec. 37 (4) German Works Constitution Act (Betriebsverfassungsgesetz, BetrVG) in connection with the remuneration of released works council members by considering hypothetical development of the carrier and the remuneration, and

(5) the LAG Mecklenburg-Vorpommern dated 19 March 2024 (5 Sa 68/23) on the requirements for the declaration of leave of absence when granting leave.

Deloitte Survey: Scepticism towards EU AI Act

The EU AI Act has officially been in force since the beginning of August and must now be implemented in the EU member states. But how ready are German companies for the new AI regulation? Are they missing an important step on the road to the future of AI? Will the new EU AI Act even hinder AI development in Europe?

A recent survey by Deloitte of 500 managers who deal with the topic in companies shows a clear uncertainty in the assessment of the new regulation. Many companies are not yet aware of the specific implications and do not have a clear idea of how to deal with the requirements. Scepticism prevails, with only a minority of companies already dealing intensively with the new legal situation.

• Almost half of the companies surveyed have not yet prepared intensively for the implementation of the EU AI Act; only a good quarter have already put the topic on their radar.
  
• Nevertheless, around a third of participants believe they are well equipped to implement the requirements of the AI Act; just under a fifth feel ill-prepared.
  
• More than half of the companies surveyed believe that their innovation opportunities in the field of AI will be restricted by regulation; less than a fifth think that the AI Act will have a positive impact on innovation opportunities.

Draft Bill Zukunftsfinanzierungsgesetz II: Reduced dismissal protection for all High Earner MRTs?!

The German Federal Ministry of Finance (BMF) published on 20 August 2024 the draft bill for a ‘Second Future Financing Act’ (ZuFinG II.) The proposed legislation aims to improve the competitiveness of Germany as a financial centre. One component of the ZuFinG II legislative pact includes the reduction of dismissal protection for all MRTs with particularly high remuneration (‘High Earner MRT) in credit institutions, investment firms, capital management companies and insurance companies.

In this article, our authors discuss

1. Legal starting point: Reduced dismissal protection for High Earner MRT in significant institutions pursuant to Section 25a (5a) KWG - and its application in practice to date
2. Specific provisions in ZuFinG II: Reduced dismissal protection for High Earner MRTs in all financial services companies that have to identify MRTs in accordance with Section 25a (5b) KWG, as well as in all capital management companies, investment firms and insurance companies
3. (First) Practical issues in the application of the respective provisions of Sections 25a (5a) KWG, 46 (4) WpIG, 37 (4) KAGB and 24 (5) VAG
4. (First interim) summary and outlook

Deloitte Legal becomes strategic partner of LEDOX365

Deloitte Legal and Join GmbH have entered into a strategic partnership to offer the innovative contract lifecycle management system LEDOX365. The collaboration combines the technical expertise of Join GmbH with the extensive consulting experience of Deloitte Legal to provide companies with an integrated and productive solution for contract management, matter management and dispute management.

In a fundamental collaboration, Join GmbH and Deloitte developed the contract management platform LEDOX for the science and technology company Merck KGaA in 2020. The LEDOX365 platform has since been developed into a software solution that is accessible to other companies and has already been implemented at other global companies such as Heidelberg Materials.

Transaction News

We at Deloitte Legal Germany are constantly advising on numerous complex transactions and challenging projects.

We would be delighted to explain our services portfolio to you and discuss with you how we at Deloitte Legal Germany can assist you with your projects, whether in the field of Corporate Reorganizations, M&A transactions, including carve-outs, general commercial, employment law, IT/IP or LMC/LMS. Just reach out to us!

In order for you to better understand how we have helped other clients, we would like to hereinafter showcase information on two projects that our teams have recently advised on.

Deloitte Legal advises team agrar on the establishment of a joint venture with ForFarmers to bundle its animal feed activities in Germany
A cross-location and cross-functional Deloitte team led by Hamburg partner Dr Volker Schulenburg (Corporate/M&A) has advised team agrar, a company of the Danish DLG Group, on the merger of its animal feed business with the German animal feed business of ForFarmers, which is listed in the Netherlands. The aim of the joint venture partners is to consolidate and strengthen their respective feed activities in Germany. The merger leads to the formation of a 50:50 joint venture with the name ‘ForFarmers team agrar’.

Read more

Deloitte Legal advises founder of Rohlik Group on strategic investment to rescue organic baby food manufacturer Töpfer
A cross-office team led by Munich partner Eike Fietz (Corporate/M&A) advised Rohlik founder Tomáš Čupr and his family office TCF Capital on the preparation of a strategic investment to rescue Töpfer GmbH, based in the Allgäu region, Germany.

Read more

Deloitte Legal Webcast Series

In our German language Deloitte Legal Update webcast series, we address current legal issues and developments that are important for corporate practice.

In our upcoming "Legal Update" webcasts we will discuss:

Electricity storage – legal and regulatory framework in Germany 

Wednesday, 09 September 2024 | 11:00 - 11:45 a.m.
Register here (Webcast in German language)

The Federal Ministry for Economic Affairs and Energy's (BMWK) discussion paper on the “electricity market design of the future” is on the table. An important point of the paper is the expansion of the capacity (market) component. Although the merit order is to remain the basis for electricity pricing in the future, capacities and capacity pricing models will become increasingly more important in a future electricity market if the discussion paper becomes reality. This makes new business opportunities for market participants possible.

In our Deloitte Legal Update Webcast on October 9, 2024, Torsten Wielsch and Rebecca Gulden will present the state of the discussion according to the BMWK paper and explain the options relevant to the use of electricity storage. .They will then outline the current legal framework for the use of electricity storage.

How extensively is the use of electricity storage regulated? What relevant standards are there? What are the legal difficulties and obstacles? And what are the possible applications and business opportunities? These are the questions we aim to answer in our webcast.

Distressed M&A - The Fine Art of the Bespoke Deal Session 3: Purchase Price Determination

Wednesday, 16 October 2024 | 11:00 - 11:45 a.m.
Register here (Webcast in German language)

Following the first two successful events, which focused on the legal frameworks and employment law structuring options in distressed M&A deals, the third session of our "Distressed M&A Series" will address the accurate valuation of companies and the determination of purchase prices for assets during a crisis. Our experts Marcus Spangenberger from Deloitte Legal, along with Merlin Smeenk and Werner Warthorst from Deloitte Financial Advisory, Turnaround & Restructuring, will provide valuable insights into the challenges and opportunities of company valuation in distressed M&A transactions.

You can download the presentations of our recent webcasts here:

• Legal Update Webcast #15/2024 - Tax audits and criminal tax law - recognizing threats and reacting in a targeted manner / in light of recent events: Tax investigation at company headquarters in municipalities with low trade tax rates: In our Deloitte Legal Update Webcast on September 18, 2024, our experts Sandra Höfer-Grosjean and Volker Radermacher presented possible strategies for avoiding and dealing with administrative fine and criminal proceedings and highlighted the risks of correction declarations during a tax audit under criminal tax law. Furthermore, they explained options for dealing with the investigation of facts relevant to corporate administrative fines during a tax audit.
• Legal Update Webcast #14/2024  - Pillar 2 - Global minimum taxation does not spare the legal department!: In our Deloitte Legal Update Webcast on September 05, 2024, our experts Dr. Volker Schulenburg, Dr. Julia Petersen and Dr. Hendrik Breimann addressed the following topics during the webcast: What does Pillar 2 mean what are the legal bases for the  introduction of the global minimum tax and to whom do they apply? What compliance requirements are associated with the levying and calculation mechanisms? What do legal departments need to consider? How can the legal department work together with the tax department in preparation of implementation and implementation? Which data points are relevant, which data points are available and how can missing data points be collected with legal certainty? How can it be ensured that the legal departments know what data/information are need? How can legal departments support the collection of data? How does the practice deal with the new requirements? Which strategic approaches are being chosen, which implementation paths are being discussed or implemented? 

In our Webcast Archive, you can find a list of previous webcasts and also download the corresponding presentations.

Should you be interested in topics discussed during one of our German language webcasts, do not hesitate to contact the respective presenters – they will be delighted to provide you with additional information in the English language.

Webcast: 3 Months to DORA

Where does the financial industry stand with regard to contractual adjustments?​

Thursday, 17 October 2024 | 11:00 - 11:45 a.m.
Register here (Webcast in German language)

The Digital Operational Resilience Act (Regulation (EU) 2022/2554 ‘DORA’) will enter into force on 17 January 2025. The competent supervisory authorities have repeatedly pointed out that transitional periods are generally not envisaged.

In addition to many other requirements, affected financial institutions will need to adapt their contracts with third party ICT service providers and intra-group ICT service providers to the new requirements.

Deloitte Legal partners Dr. Till Contzen, Dr. Hannes Bracht and Klaus Gresbrand discuss the current state of implementation and the challenges faced from the following perspectives:

• Regulatory law,
• IT law,
• contract law and
• LegalTech.

Webcast: Fast-Track Your CLM

The Power of a Pre-packaged Contractify Implementation​

Thursday, 17 October 2024 | 2:00 - 3:00 p.m.
Register here (Webcast in English language)

Setting up a contract lifecycle management (CLM) system can be a complex and time-consuming process. Choosing the right Contract Lifecycle Management platform and configuring it to the organization’s specific requirements can tie up resources for months. But what if there’s a faster, more efficient way?

Deloitte Legal experts Klaus Gresbrand, Tom Mespreuve and Michiel Sudnik will show the pre-packaged implementation approach of Contractify. Joining us will be Contractify CEO Steven Debrauwere who will be answering your questions regarding their accessible Contract Lifecycle Management tool.

EMEA Dbriefs Legal Webcast Series

The Dbriefs Legal webcast programme for Europe, the Middle East and Africa help you gain insights on key legal trends and critical issues affecting your global business operations.

The upcoming "Dbriefs Legal" webcast will discuss:

Contracting following change (Contracts series)
Tuesday 1 October 2024, 12.00 BST/13.00 CET
(Webcast in English language)

Register here

Generative AI and the legal function – Supporting the adoption of Generative AI across your organisation
Thursday 17 October 2024, 12.00 BST/13.00 CET
(Webcast in English language)

Register here