Reform of the works constitution law through the Betriebsräte­modernisierungs­gesetz (Works Council Modernisation Act)

The German parliament's decision a successful and promising initiative?

The German government's latest legislative initiative could come into effect this autumn, reshaping some areas of the works constitution. In particular, it seeks to promote the establishment and election of works councils, to reduce obstruction of works council elections and to achieve a modernisation through technical simplifications of digital works council work. We provide an overview of the main regulations:

At the end of the current legislative period, the German government introduced a "law to promote works council elections and works council work in a digital world of work" (so-called Works Council Modernisation Act). After approval by the Bundestag on May 21, 2021, the following changes in particular could come into force before the next Bundestag elections which will take place in September 2021:

Simplified establishment and election of works councils

A key objective of the legislative initiative is to increase the representation of works councils in smaller operations. By amending sec. 14 (4) of the Works Constitution Act (BetrVG), in operations employing regularly up to 20 employees no signatures of election proposals by employees entitled to vote (so-called support signatures) are required. A signature by at least two employees is now only required in operations with 21 to 100 employees; in operations with more than 100 employees either 1/20 of the workforce or a maximum of 50 employees have to sign.

The simplified election procedure under section 14a of the Works Constitution Act (including election during a works meeting instead of a ballot box) shall be possible in all operations with up to 100 employees entitled to vote (note: previously the threshold was 50). With the employer's consent, the simplified procedure can in future also be carried out in operations with up to 200 employees (previously: 100).

The Works Council Modernisation Act also provides that all employees over the age of 16 have the active right to vote.

Extension of special protection against dismissal

It is also envisaged to extend the special protection against dismissal in favour of the initiators of a works council election (sec. 15 para. 3b German Protection against Dismissal Act) instead of the previously applicable protection of candidates and elected works council members. The prerequisite is that the initiators have made it publicly recognisable through preparatory acts that they are seeking to establish a works council (e.g. mobilising other employees). The consequence for the employer is that he can only dismiss such employees ordinary for operational reasons or with extraordinary notice. Independently of this, the protection against dismissal for election initiators will in future be extended to the first six persons (note: instead of the first three as before) named in the invitation to an electoral works meeting.

Data protection responsibility of the works council

The uncertainties regarding the works council's own responsibility under data protection law since the introduction of the GDPR have been eliminated by the newly introduced sec. 79a BetrVG: If the works council fulfils its assigned tasks and thereby processes personal employee data, the employer is deemed to be the data controller. Thus, contrary to some interpretations, the works council has not its own responsibility under data protection law.

Involvement of the works council in mobile work and artificial intelligence

The works council is to be given a new right of co-determination in the "organisation of mobile work performed by means of information and communication technology" (new: sec. 87 (1) no. 14 BetrVG). The right of co-determination in the current version of the Works Council Modernisation Act will cover not only the home office, but also cases in which the employee works from alternating work locations. The right of co-determination on mobile work concerns the content of mobile work, not its introduction; the latter remains free of co-determination.

There are also provisions for an extension of the obligation to provide information on the use of artificial intelligence in the workplace. The works council must consult with the employer on this (new: sec. 90 para. 1 no. 3 BetrVG). This applies in particular to the use of artificial intelligence in the creation of selection guidelines. If the works council has to evaluate the use of artificial intelligence, the consultation of an expert at the employer's expense will be considered still necessary in future under sec. 80 para. 3 BetrVG. The employer and the works council may agree on a permanent expert for this purpose.

Digital works council meetings via video and teleconference

The German legislator clarifies that works council meetings are primarily designed as face-to-face events (new: sec. 30 para. 1 BetrVG). However, digital meetings may be held. This requires (1) a corresponding amendment to the works council's rules of procedure, (2) no objection from works council members and (3) the preservation of confidentiality in the digital meeting. Alternatively, mixed way of participation should be possible: Works councilors who are not present should be able to join the meeting via video or telephone conference, while the other works councilors take part in a face-to-face meeting.

Change in formal requirements for resolutions of conciliation boards and works agreements

The Works Council Modernisation Act provides that resolutions of the conciliation board, reconciliations of interests, social plans and works agreements can be signed electronically (sec.126a German Civil Code) or no longer have to be in writing.

Evaluation and perspective

It remains to be seen whether the law will achieve its goal of increasing the number of works council formations. We see the extension of the special protection against dismissal as problematic, as it could lead to a considerable risk of abuse in the case of threatened dismissals, through the merely pretended allegation by employees that they want to initiate a works council election. In addition, there is the threat of a cost-intensive escalation with regard to the consultation of experts on matters relating to artificial intelligence. Moreover, it remains to be seen whether the provision on co-determination on mobile working will actually play a major role in practice and whether the introduction of the possibility of "digital" works council meetings will really lead to the modernisation of the Works Constitution Act.

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