Bundestag adopts clearer rules on the payment of works councils
The Bundestag passed a unanimous resolution to amend a law that establishes clear rules for the penalty of works councils. With the amendment of the so-called Betriebsverfassungsgesetz, the German government aims to eliminate legal uncertainties and strengthen works councils in Germany, said Federal Labor Minister Hubertus Heil during the final plenary debate.
The background is a judgment of the Federal Court of Justice (BGH) from January 10 of the previous year, which caused great uncertainty regarding the payment of works council members in some companies regarding their remuneration. The BGH overturned acquittals of former personnel managers at Volkswagen, which the Braunschweig Regional Court had previously issued.
The issue concerned whether the Volkswagen managers had approved excessive salaries for works council members over several years. For instance, former works council chairman Bernd Osterloh had received more than 700,000 euros in some years.
Unlike their colleagues in Braunschweig, the highest judges did not consider it excluded that the four former decision-makers at Volkswagen could have committed bribery through the high payments to works councils. The core argument for this assessment: For leading works council members, only the level of remuneration should be considered as a benchmark, which employees with comparable tasks stand at - and that at the beginning of each respective activity.
Following the BGH judgment, several companies reduced the compensation of their works councils out of fear of legal consequences - which in turn led to several lawsuits by affected works council members before labor courts. With the legislative amendment, according to Labor Minister Heil, such uncertainty should no longer arise in the future. Union MPs praised the innovation but criticized, among other things, that it took so long to pass the law.
- In response to the judgment from the Federal Court of Justice, the Bundestag passed an Amendment to the Betriebsverfassungsgesetz with a unanimous resolution, aiming to provide clear Rules for works council members' payment and eliminate legal uncertainties.
- The Payment changes as part of the amendment are essential to prevent situations like those in Volkswagen, where former managers were suspected of committing bribery through unjustified Works councils' remuneration.
- The Bundestag's move to reform the law was applauded by Union MPs but was also met with criticism for the delay in implementing Rules that would ensure fair payment for works councils without causing legal concerns for companies.
