Payment of works councils: Bundestag adopts new rules

Amendment to the law - Payment of works councils: Bundestag adopts new rules

The German Bundestag passed a unanimous legislation amendment with clear rules for the remuneration of works council members. With the amendment of the so-called Works Constitution Law, the German government aims to eliminate legal uncertainties and strengthen works council members in Germany, stated Federal Labor Minister Hubertus Heil (SPD) during the final plenary debate.

Background is a judgment of the Federal Court of Justice (BGH) from January 10th of the previous year, which caused great uncertainty regarding the payment of works council members and chairpersons in some companies. The BGH overturned acquittals of former personnel managers at Volkswagen, which had been issued by the Brunswick Regional Court. The issue at hand was whether the Volkswagen managers had approved excess salaries to works council members over several years. For instance, former works council chairman Bernd Osterloh had received more than 700,000 Euro in some years.

Unlike their colleagues in Brunswick, the highest judges considered it not impossible that the four former decision-makers at Volkswagen could have been charged with premeditated embezzlement due to the high payments to works council members. The core argument for this assessment: For leading works council members, only the compensation level applicable to employees with comparable duties at the beginning of their tenure should be considered as a benchmark.

Precise regulation aims to reduce risk of infringements

Following the BGH judgment, several companies reduced the remuneration of their works council members out of fear of legal consequences, leading to numerous lawsuits from affected works council members before labor courts.

With the legislative amendment, Minister Heil aims to prevent such uncertainty from arising in the future. Union MPs praised the innovation but criticized, among other things, the lengthy process of passing the law.

FDP MP Carl-Julius Cronenberg referred to the question of works council remuneration as "tricky." The remuneration should be designed in such a way that it neither tempts them to take the side of the employer nor causes disadvantages for them through their actions, he explained. This balance would be disturbed by the legislative amendment.

The Works Constitution Law already regulates that works council members should not be disadvantaged or favored due to their activities. This also applies to their professional development and wages. The legislative amendment now sets a minimum remuneration claim. Therefore, the wages of works council members cannot fall below the wages of employees with comparable industrial careers in the future.

1. The amendment to the Works Constitution Law, passed by the Bundestag in Germany, aims to strengthen works council members, as stated by Federal Labor Minister Hubertus Heil (SPD).
2. The German government's move follows a judgment by the Federal Court of Justice (BGH) that caused uncertainty about the payment of works council members and chairpersons in some companies.
3. The Brunswick Regional Court had acquitted former personnel managers at Volkswagen, but the Federal Court of Justice overturned these acquittals, considering it possible that they could have been charged with premeditated embezzlement due to high payments to works council members.
4. Minister Heil's legislative amendment aims to prevent the uncertainty and potential legal consequences that led several companies to reduce remuneration for their works council members.
5. FDP MP Carl-Julius Cronenberg criticized the amendment, expressing concern that it could disrupt the balance between works council members not being disadvantaged or favored due to their activities.
6. According to the Works Constitution Law, works council members should not be disadvantaged or favored due to their activities, including their professional development and wages.
7. With the new amendment, the wages of works council members will now have a minimum remuneration claim, ensuring they cannot fall below the wages of employees with comparable industrial careers in the future.

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