Payment of works councils now clearly regulated
The payment structure for works councils should be designed in such a way that it neither tempts them to take the side of the employer nor results in disadvantages for them due to their activities. For the "tricky" businesses from an FDP perspective, there is now a corresponding legislative amendment.
The Bundestag passed a legislative amendment unanimously, which provides clear rules for the remuneration of works councils. With the amendment of the so-called Betriebsverfassungsgesetz, the Federal Government eliminates legal uncertainties and strengthens works councils in Germany, said Federal Labor Minister Hubertus Heil during the final plenary debate.
Background is a judgment of the Federal Court of Justice (BGH) from January 10, 2023, which caused great uncertainty in some companies regarding the remuneration of works council members. The Federal Court of Justice overturned acquittals of former personnel managers at Volkswagen, which the Braunschweig Regional Court had previously granted. The issue at hand was whether the Volkswagen managers had granted excess salaries to works council members over many years. For example, former works council chairman Bernd Osterloh had received more than 700,000 euros in some years.
Unlike their colleagues in Braunschweig, the supreme judges did not consider it excluded that the four former decision-makers at Volkswagen could have committed premeditated embezzlement 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 earn - and that at the beginning of each respective tenure.
Works council remuneration "tricky"
Following the BGH judgment, several companies have curtailed the remuneration 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, Minister of Labor Heil aims to prevent such uncertainty in the future. Even Union MPs praised the innovation but criticized, among other things, that it took so long to pass the law.
FDP MP Carl-Julius Cronenberg called the question of works council remuneration "tricky." The remuneration should be designed in such a way that it is not tempted to take the side of the employer nor results in disadvantages for them due to their activities, he explained. This balance is disturbed by the legislative amendment.
In the Betriebsverfassungsgesetz, it is already regulated that works councils may not be disadvantaged or favored due to their activities. This also applies to their professional development and wages. The legislative amendment now also sets a minimum remuneration claim. Therefore, henceforth, the wages of works councils may not fall below the wages of employees with comparable industrial careers.
The German Bundestag approved a legislative amendment to address the complexity in determining works council remuneration, aiming to prevent future uncertainty. This move, initiated by Federal Labor Minister Hubertus Heil, follows a controversy over income dispensations for works council members in some companies, particularly at Volkswagen.
In the discussion surrounding the amendment of the Betriebsverfassungsgesetz, FDP MP Carl-Julius Cronenberg mentioned the complexity of politics involving works council income, stating that it should neither favor the employer nor disadvantage the works council members due to their activities.
