Invalidity of a Works Council's resolution on the grounds of an incorrectly convened Works Council Meeting

10.12.2020

AbstimmungThe Works Council has a right of co-determination for individual staff measures under section 99 (1) of the Works Constitution Act (Betriebsverfassungsgesetz, BetrVG). This means that staff may only be recruited, transferred and regraded with the consent of the Works Council. If the Works Council refuses its consent, the employer must apply to the Labour Court (Arbeitsgericht) under section 99 (4) BetrVG for a decision in lieu of consent if the employer still wishes to carry out this staff measure. 

Judgment

In July of this year the Federal Labour Court (Bundesarbeitsgericht, BAG) held that an em-ployer is not obligated to initiate court proceedings for a decision in lieu of consent if the Works Council's resolution refusing to grant its consent for an individual staff measure was passed at a Works Council Meeting that was not convened by the Chair of the Works Council or their deputy (BAG, decision dated 28.7.2020 – 1 ABR 5/19).

Facts of the matter

In the case in question the employer had requested the consent of the Works Council for individual staff measures prior to the transfer of an undertaking. At the time, the Chair of the Works Council who had been completely released from their work duties in accordance with sec-tion 38 (1) BetrVG, had been signed off as unable to work for several months. The deputy Chair of the Works Council was absent on annual leave during the period in question.

Subsequently, another “simple” member of the Works Council invited the remaining members of the Works Council/substitutes to a Works Council Meeting via the email account of the Chair of the Works Council and signed the email with their own name. This allegedly took place in the presence of the Chair of the Works Council who had been signed off. At the fol-lowing Works Council Meeting, which the Chair of the Works Council attended as a “guest”, the present “simple” members of the Works Council unanimously resolved to refuse consent for the individual staff measures applied for by the employer. In the aftermath the employer still implemented the measures without initiating court proceedings for a decision in lieu of consent.

BAG’s reasoning

The BAG held that the employer was not obligated to initiate court proceedings for a decision in lieu of consent as the Works Council had not refused consent for the proposed individual staff measures in a valid and timely manner. Therefore the Works Council's consent was deemed to have been given pursuant to section 99 (3) sentence 2 BetrVG.

The Works Council’s decision to refuse its consent was invalid, as the Works Council Meeting at which the resolution was passed had been convened invalidly. Only the Chair of the Works Council, or if they are unable to act, their deputy, may convene a Works Council Meeting in accordance with section 29 (2) sentences 1 and 3 BetrVG; this cannot be carried out by a “simple” member of the Works Council.

The BAG also classified the regulation in section 29 (2) sentences 1 and 3 BetrVG as an essential procedural requirement, the breach of which results in the invalidity of all resolutions passed at such incorrectly convened Works Council Meetings, as there would be the risk that the structured and goal-oriented work of the Works Council could no longer be guaranteed if any member of the Works Council could convene and invite members to a meeting.

Also, the fact that the Chair of the Works Council was said to have been present while the other member of the Works Council invited the members to a Works Council Meeting does not change the fact that section 29 (2) sentences 1 and 3 BetrVG had been breached, as the Chair of the Works Council could not have taken any valid actions due to their inability to work, but rather were unable to discharge their duties. If a member of the Works Council who has been completely released from their work duties in accordance with section 38 (1) Be-trVG is subsequently certified as unable to work this also means that it is not possible for them to exercise their office while they are signed off. It is irrelevant whether they subjectively feel that they are able to do so.

Practical relevance

The decision of the BAG is welcome and emphasises two important aspects: Firstly, the BAG clarified that a member of the Works Council who has been completely released from their work duties in accordance with section 38 (1) BetrVG also cannot carry out any actions for the Works Council in the event of their certified inability to work. They are prevented from exercising the obligations of their office. Any actions taken notwithstanding are invalid.

Secondly, the BAG stressed that only the Chair of the Works Council, or if they are unable to act, their deputy, is permitted to convene a Works Council Meeting. Resolutions that were passed at an incorrectly called Works Council Meeting are invalid and thus immaterial. In both aspects this decision provides a significant amount of legal certainty for the parties, in that clear standards can be formulated governing the validity of convening Works Council Meetings and generally regarding the actions of the Chair of the Works Council. In this re-spect the employer has the option to independently ensure that its Works Council is quorate.

It should also be mentioned in this context that the Works Council may also have a “right to self-convene” under certain conditions. In such a case resolutions are then valid, if they were passed at a meeting which was not convened by either the Chair of the Works Council or their deputy. Such a right to self-convene requires, however, that both the Chair of the Works Council and their deputy are unable to act. The right to self-convene also only applies to ur-gent advisory items that cannot be postponed but must be resolved. As these hurdles are, admittedly, very high, it remains the principle ofsection 29 (2) BetrVG, that, as a general rule, Works Council Meetings may only be validly convened by the Chair of the Works Council or their Deputy.

 

Tatjana Hahn

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