Employer and works council in the coronavirus crisis: Lonely together? – Feasibility of implementing co-determined measures during the current pandemic

The coronavirus pandemic poses enormous challenges to businesses, especially if jobs are to be preserved and safeguarded. Many important measures such as the introduction of social codes of conduct (section 87(1)(1) of the German Works Constitution Act – BetrVG), health protection measures (section 87(1)(7) of the Act), the introduction of short-time work (section 87(1)(2) of the Act) or company holidays (section 87(1)(5) of the Act) and accompanying measures such as the assignment of employees (to work from home, section 99 of the Act) in companies with works councils require the participation of the works council (if, as so often, there is no collective bargaining agreement). However, this presupposes a functioning works council. But in many companies, the works council’s capacity to act is increasingly being called into question due to correct and important measures such as no-contact rules and social distancing to prevent the spread of coronavirus (Covid-19). There is therefore intensive discussion at present about the possibility of properly involving the works council without the need for the works council to be physically present, which has largely been thought to be necessary to date. The aim is to be able to implement measures fast and with legal certainty to protect the company and its employees. Politicians, in particular the Federal Minister of Employment Hubertus Heil, naturally want to help in this. The following article provides an overview of the options and a guide for practical implementation in companies.

 The problem – works council decisions must be taken by the physically present members of the works council, excluding third parties

According to the concept of the German Works Constitution Act, the works council acts as a collegial body. It forms its common intentions by means of resolutions (section 33(1) Works Constitution Act), which must of course have been passed in the proper manner. According to the case law of the Federal Labour Court, the works council must be ‘quorate as defined in section 33 Works Constitution Act and, at a working council meeting on the basis of a summons in accordance with the provisions of the Works Constitution Act, must have considered the facts of the case and have led to a uniform formation of the intention by vote’ (FLC, 15 April 2014 – 1 ABR 2/13 [B], para. 20). Consequently, a proper working council decision requires that the decision pursuant to section 33(1) Works Constitution Act be taken by a majority of the votes of the members present. A works council is only quorate if at least half of the members of the works council take part in passing the resolution (section 33(2) Works Constitution Act). In addition, the decision-making process requires proper summoning of the members of the works council with communication of the agenda (section 29(2) and (3) Works Constitution Act). In addition, works council meetings may not be held in public (4th sentence of section 30 Works Constitution Act).

These requirements are difficult to meet within the requirements for quarantine, social distancing, etc. What if individual members of the works council are infected with Covid-19, are subject to an official ban on employment or refuse to attend the works council meeting for fear of contagion?

What about virtual alternatives?
 

In view of the digitalised world of work, the technological ‘reluctance’ of works constitutional law has already been (rightly) complained about at length by almost all sides, but in the current situation, salvation is increasingly being sought in alternative technological solutions. These are, in descending order:

• Works council meeting via video conference (WebEx, FaceTime, Skype)
• Works council meeting via teleconference
• Written resolutions circulated by email, WhatsApp or similar messaging services

This discussion was fuelled in particular by the well-intentioned ministerial declaration on 23 March 2020 by the Federal Minister of Employment, Hubertus Heil, which states, among other things:

‘We believe that in the current situation if participation in a meeting, for example, leads to risks to the life or health of the members of the works council or is not possible because of government orders, participation in a works council meeting by video or telephone conference including online applications such as WebEx Meetings or Skype is also permitted.’

This opinion from the Ministry is certainly a good first step. However, it does not comply with the legal requirements to date. Why?

Video conferencing and its risks 

Passing a resolution by video conference may be accepted in the opinion of some of the leading judges of the Federal Labour Court (see APS/Koch, Works Constitution Act section 102, para. 142) and leading commentaries (Fitting, Works Constitution Act section 33, para. 21c), provided that no member of the works council objects. It can ensure that the members of the works council are present in person as specified in Works Constitution Act, even if they are not in a room together, as they have the opportunity not only to listen to each other but also to see each other. There are good arguments for this. However, even at a video conference, it cannot be ruled out that an unauthorised third party may participate in the decision-making by the works council. This applies even if the room in which the members of the works council attending the meeting are located is fully visible from the video camera. This is because in this case, too, there are technical possibilities for taking part in the video conference in an unauthorised manner. This applies even where legitimate participation in the video conference is encrypted. This may be considered a weak argument, because, after all, physical works council meetings can theoretically be eavesdropped on through the wall or door. However, it is easier for the works council to monitor this at physical meetings.

Telephone conferences

In a telephone conference of the works council, it may be possible to ensure that the members of the works council can communicate directly with each other and thus have a direct influence on the formation of the other members’ intentions. However, it still does not meet the requirements of the Works Constitution Act. This is because the principle of the non-public nature of works councils cannot be guaranteed during a telephone conference. Finally, it cannot be technically ruled out by the works council that third parties may participate in such a conference without authorisation.

Written resolutions

There is agreement in the case law that a circulated written resolution is inadmissible for several reasons (Cologne Regional Labour Court, 25 Nov 1998 – 2 TaBV 38/98; Hamm Regional Labour Court 17 Aug 2007 – 10 TaBV 37/07). It is therefore not possible for the chairperson of the works council to send a draft resolution to the individual members of the works council, e.g. by email, who will then have the opportunity to vote Yes or No, or to abstain. 

Does anything else apply due the ministerial declaration of 23 March 2020?

No, the ministerial declaration of the Federal Minister of Employment has not changed this legal situation. It cannot undermine the legal requirements, because the Works Constitution Act does not provide for the option for the minister to amend the existing legal regulations, e.g. by issuing an appropriate order. In this respect, the onus is on the legislator. However, section 41a of the European Works Council Act, which entered into force at the end of 2017, explicitly permits the admissibility of new information and communication possibilities to ensure participation in the works council meetings of a European works council, but expressly only for crew members of seagoing ships when they are at sea or in a foreign port. The conditions for admissibility include ensuring that third parties do not become aware of the contents of the meeting. So far there has been no similar provision for works councils other than maritime works councils. 

What if you don’t want to rely on virtual sessions?

In practice, the problem of an alternative to physical meetings only arises if a sufficient number of works council members are not willing or (legally and/or actually) able to participate in a physical session.

Measures subject to legal deadlines

In the case of a measure subject to a time limit (sections 99 and 102 Works Constitution Act), the ‘problem’ initially lies with the works council, which must give its opinion within the prescribed period. If it fails to do so, the employer may implement the measure requiring co-determination. This result of risk-sharing for temporary measures is not as unilateral as it appears at first sight. This is because the works council will benefit from a number of practical simplifications in a pandemic situation:

• Substitute members may (and must) be summoned for members who are prevented from attending due to being quarantined or ill (section 25 Works Constitution Act).
• In the absence of sufficient members for the reasons set out above, the works council, by way of derogation from the law, is also entitled to a quorum with less than half of its members according to the case law of the Federal Labour Court (FLC, 18 August 1982 – 7 AZR 437/80). If the works council is no longer properly staffed even after all the substitute members of the works council have been made available, the case law on the determination of a quorum by analogy with section 22 Works Constitution Act refers to the number of members of the works council who are actually available. It is sufficient for half of the works council members actually available to participate in passing the resolution.
• If a works council member refuses to do so simply because of fear of contagion, a substitute member should and may be summoned as a precautionary measure. For without concrete indications of an increased risk of contagion, there is much to be said for the fact that the mere fear of contagion will not be recognised as a reason for failing to attend. 

Emergency measures without legal deadlines

The above facilitating factors, in particular the reduction in the number of members of the works council required, also apply in the case of important measures where time is of the essence for which there are no legal deadlines for conclusion but which cannot be postponed for long in order not to endanger jobs. These include the conclusion of company agreements on introducing social codes of conduct (section 87(1)(1) Works Constitution Act), measures for the protection of health (section 87(1)(7) of the Act), for the introduction of short-time work (section 87(1)(2) of the Act) or company holidays (section 87(1)(5) of the Act), but also for negotiations on the reconciliation of interests and social compensation plans or participation in the event of mass redundancies becoming necessary.

In addition, the following measures are conceivable in practice: 

• Using rooms (disinfected, possibly converted or hired) in which social distancing and hygiene requirements are respected. Use of protective clothing. 
• Transferring works council tasks to committees, with fewer members having to meet in order to prepare and, where admissible, pass valid resolutions. 

Conclusion

Since the legislator, unlike in the case of stock corporation law, where virtual general meetings are possible (see section 1 of the Act on Measures in Company, Cooperative, Association, Foundation and Housing Property Law to Combat the Impact of the Covid-19 Pandemic) has so far failed to adapt the Works Constitution Act to the current situation in such a way that virtual meetings and resolutions of works councils are definitely possible, restraint is advisable. The ministerial declaration by Heil does not change this. Therefore, before ‘new’ technologies are used to effect works council resolutions, traditional alternatives should first be exhausted. According to the case law of the FLC, not only do legal simplifications apply to the prevention of attendance by members of the works council (section 22 Works Constitution Act analogously applied), but practical measures are also possible which create an actual environment in which the works council is not exposed to any (unreasonable) risk of infection. In particular, in the case of measures of significant economic importance (short-time working arrangements, reconciliation of interests and social compensation plans, mass redundancies), virtual opportunities for holding a works council meeting should only be used once all the traditional alternatives have been exhausted. The order of priority outlined above is clear: the best thing to do is to have a video conference, and the least certain is to circulate a written resolution by email or messaging service. Regardless of what action is to be taken, professional and solution-oriented collaboration is essential in order to master the current challenges.