When does the works council need to be involved?

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Introduction

In the wake of the Covid-19 pandemic all forms of distant working have been intensified. When employers were forced to let their workers set up provisional offices at their homes, only few works councils opposed distant working or even insisted on a detailed agreement before implementing the new distant working schemes (see, however, the case before the State Labor Court of Hesse dated 18 June 2020, file number 5 TaBVGa 74/20). With distant working becoming increasingly popular, the German legislator passed new laws to foster mobile work and ensure that works councils are properly involved.
The new laws were part of a potpourri of regulations meant to cope with the challenges of a digital world and to enhance the position of the works council (Betriebsrätemodernisierungsgesetz). This set of laws was passed on 28 May 2021 by the German Parliament (the Bundestag) and came into force on 18 June 2021. It contains, inter alia, regulations regarding virtual meetings of the works council or the use of artificial intelligence by the employer. The new § 87 (1) no. 14 of the German Works Constitution Act (Betriebsverfassungsgesetz) stipulates that the works council has a right to co-determine in any mobile work arrangement performed by means of information and communication technology.

Does the employer have to permit mobile work?

The new co-determination right only refers to the “arrangement”, i.e. the design, of the mobile work regulations. It does not cover its introduction. Thus, the works council has no legal authority to introduce a home or mobile work scheme. The employer remains free to decide whether mobile work shall be permitted or not. This was explicitly stated in the official notes (Gesetzesbegründung) to the new law (BT-Drs. 19/28899, p. 24). After several attempts to regulate a right for employees to work from home failed, neither the works council nor an individual employee can force the employer to permit mobile working.
However, the official notes do not address whether an employer may agree with the works council to introduce mandatory mobile work for employees. With an increasing number of employees working from home or other places outside the office, the need for office space (and the costs associated with it) will decrease. Against this background, employers may seek to reach an agreement with the works council that employees have to work from home for a specified number of days. However, such an agreement with the works council is likely to interfere with the individual employment contracts which frequently provide for an agreed place of work. An agreement with the works council may not deprive the employee of any contractual rights which are more beneficial, at least not where these rights have been agreed separately. Some authors have taken a different view, though, if the place of work has not been agreed separately but was contained in the template employment contract used by the employer.

When does the new co-determination law apply?

While the decision to introduce mobile work is at the discretion of the employer, the design of such a scheme will require the consent of the works council. Otherwise, the works council or the employer may initiate an arbitration procedure ending with a binding decision on the issue.
Pursuant to § 87 (1) no. 14 of the German Works Constitution Act, the works council must consent to any mobile work arrangement performed by means of information and communication technology:
In this context, mobile work means that an employee performs his work outside the business premises at a place of his choice or a place agreed with the employer. According to the official notes (BT-Drs. 19/28899, p. 15), the co-determination right shall cover mobile work carried out regularly as well as occasional mobile work. Work that must be performed outside the business premises by its nature, such as traditional field technician work, shall not be covered by the new co-determination right, though (BT-Drs. 19/28899, p. 24).
The new co-determination right only applies if the mobile work is performed by means of information and communication technology. Work performed in a mobile environment without using any IT such as laptops, mobile phones or tablets will not be covered. Thus, the work performed by couriers or drivers does not fall within the scope of § 87 (1) no. 14 of the Works Constitution Act.

What should be regulated?

Mobile work schemes typically address items such as:

  • Who shall be permitted to participate in the mobile work scheme? Is there an approval process?
  • Where can employees work? What requirements should the places they work from meet?
  • When can employees work? What are the core times at which an employee must be at his desk? What measures are taken to ensure compliance with maximum working hours and rest periods?
  • How shall mobile devices be used? Will performance be monitored by software or other technical devices?
  • How to ensure data protection and confidentiality?
  • Who is liable for accidents occurring outside the office?
  • Will any costs be taken over by the employer?
  • Does the employer reserve the right to ask the employee to return to the office?

Employers should pay particularly attention to defining where employees can do their work. If employees are given full freedom to choose their place of work, it might be tempting to work from holiday locations abroad (sometimes referred to as “worcation” or “work from anywhere”). National tax and social security laws applicable at these destinations might limit the new freedom. Employers will need to verify whether working abroad creates a taxable presence or causes transfer pricing issues and set up rules to avoid unwanted effects. Moreover, local mandatory employment laws should be considered (see the global survey on home office regulations by KPMG).
Some issues listed above have already been covered by existing co-determination rights such as the beginning and end of the daily working hours (no. 2), technical measures which may serve to monitor employees (no. 6), or accidents at work (no. 7). These individual co-determination rights shall remain unaffected by the new co-determination right. The new co-determination right is intended to cover the (few) gaps left by the existing rights.

Summary

Mobile work will be an important element in the new work scenarios. More flexible schemes are likely to replace the current regulations for home offices in place in many companies and the provisional schemes hastily implemented during the Covid-19 pandemic. Any new mobile work scheme will require an agreement with the works council pursuant to the new co-determination right in § 87 (1) no. 14 of the German Works Constitution Act. In addition, employers should take the aspects of foreign employment and tax laws into account when offering mobile work schemes across borders (work from anywhere).

 

mtrayer@kpmg-law.com

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