As a result of the COVID-19 pandemic, the level of digitalisation involved in the activities of works councils has increased. This development was initially only of a temporary nature. With the adoption of the German Works Council Modernisation Act (Betriebsrätemodernisierungsgesetz) with effect from 18 June 2021, the German legislator has now provided what it considers to be a permanent basis for the digital performance of works councils’ duties and, among other things, has laid down rules for virtual works council meetings and works agreements. These rules will be presented below in a practical-focused manner, taking into account the most recent changes in law.
The COVID-19 pandemic required the German legislator to intervene in all areas of the working world. The rule that had applied until then that works council meetings should be held as face-to-face meetings could not be maintained, for example. Quick solutions were needed. This is why, in March 2020, the German legislator hastily cobbled together Section 129 German Works Constitution Act (Betriebs-
verfassungsgesetz – “BetrVG”) for the performance of the duties of works councils, which permitted works councils for the first time to meet digitally, by video conferencing or conference call, and initially applied for a limited period that was set to expire on 30 June 2021. The German Works Council Modernisation Act to promote works council elections and works council activities came into force on 18 June 2021 and now provides a (permanent) new legal framework for digital works council meetings. Under said act, works council meetings may continue to held by “video conferencing or conference call”; the German legislator has, however, defined additional requirements for such meetings. The level of digitalisation within the context of the works constitution has additionally increased as a result of the fact that it is now possible to enter into works agreements digitally, as provided in Section 77 (2) sentence 3 German Works Constitution Act.
1. Requirements for digital works council meetings and digital works council resolutions
In the German Works Council Modernisation Act, the German legislator has maintained the option of holding virtual works council meetings, but has made such virtual meetings the “exception to the rule”. This means that works council meetings must generally take place as face-to-face meetings, despite the pandemic and ever-increasing digitalisation. The reason given for the German legislator’s decision is the experiences from the pandemic, namely the lack of social interaction, reduced intelligibility because of video and audio problems, as well as a growing trend towards monologuing, rather than exchanging ideas and discussing matters.
There are now three requirements for holding a virtual works council meeting (Section 30 (2) nos. 1 to 3 German Works Constitution Act), which must all be met at the same time: the conditions for holding a virtual meeting must have been defined in rules of procedure (a), no objection may have been raised in due time by at least one fourth of the members of the works council (b) and it must be ensured that no third party can obtain knowledge of the matters dealt with during the meeting (c).
a) Incorporation in the rules of procedure
The works council must define the conditions for virtual works council meetings in rules of procedure and, in doing so, is only required to observe the principle of priority of face-to-face meetings. According to the explanatory memorandum accompanying the act, this priority can be ensured, for example, by limiting the number of meetings that may be held in whole or in part by video conferencing or conference call, or by limiting such meetings to certain topics, to matters which, in the opinion of the works council, need to be dealt with as quickly as possible or in cases where such meetings serve the purpose of protecting the works council members’ health. The works council is additionally free to define the conditions for virtual attendance. We would recommend taking into account any past experience with virtual works council meetings when defining the conditions.
b) The new right to object
The German legislator additionally requires that the members of the works council are given the opportunity to object to a virtual works council meeting. An objection by a single member is not sufficient, however. Instead, in order for an objection to be valid, at least one fourth of all members of the works council must object to the planned virtual meeting within a reasonable time period to be determined by the chairperson. To this end, the chairperson should provide information about the planned use of a virtual meeting and the way this is intended to be done already when issuing the proper invitation to the meeting and set a reasonable deadline for objection. The objection must be addressed to the chairperson.
c) No knowledge of third parties
According to the act, it must finally be ensured that no third parties can obtain knowledge of the matters dealt with during the meeting. The act additionally contains an express provision to the effect that recording meetings is not permitted. In addition to the above, there is a duty to implement technical and organisational security measures. This is the works council’s responsibility. Conceivable measures include the use of encrypted connections, the works council members’ presence in non-public rooms during the meeting and a declaration that no persons who are not entitled to attend are present in the relevant rooms. If the works council violates one or more of these requirements, there is a risk that any resolutions made during such meetings will be null and void.
The German legislator hat attached particular importance to expressly stating that the recording of meetings is not permitted.
Employers should note that they are obliged under Section 40 (2) German Works Constitution Act to provide the required technology for the meetings and any other necessary means and bear the costs incurred in doing so. This obligation is only limited by the principle of proportionality, according to which the acquisitions, if any, must not be unreasonable for the employer, which regularly leaves ample room for interpretation in practice. In this respect, too, we would recommend proceeding in a coordinated manner and answering the following questions: what precisely is needed and how much should or may it cost?
2. Digital works agreements
Works agreements may also be entered into digitally in future, pursuant to Section 77 (2) sentence 3 German Works Constitution Act. Said provision deviates from Section 126a (2) German Civil Code (Bürgerliches Gesetzbuch – “BGB”) by providing that if a works agreement is entered into electronically, the works council and the employer must sign the same document electronically. Thus far, electronic signatures had been held to be insufficient, most recently by decision of the German Federal Labour Court (Bundesarbeitsgericht – “BAG”) from the year 2010 (decision of 5 October 2010, case no. 1 ABR 31/09) regarding the conciliation committee.
In addition to the German Works Council Modernisation Act, the German Bundestag decided on 10 December 2021 based on the current rate of new infections to revive Section 129 German Works Constitution Act in a modified form; Section 129 German Works Constitution Act in its new version is to apply initially for a limited period from 12 December 2021 to 19 March 2022. It especially contains provisions regarding aspects not yet covered by the German Works Council Modernisation Act, such as the virtual conciliation committee or the option of holding works council meetings and works meetings for young and trainee employees using audio-visual equipment.
In practice, the German Works Council Modernisation Act provides an opportunity to organise the activities of works councils in a modern way and maintain them despite the pandemic. The German legislator has entrusted the works council with important aspects of concrete organisation, for example by requiring it to adopt rules of procedure that are tailored to the business. We would recommend that the works council and the employer consult with each other with a view to creating the best possible basis for the new meeting formats.
The new German coalition government of Social Democrats (SPD), Greens (Bündnis 90/Die Grünen) and Free Democrats (FDP) has also put the topic of digital works council work on its agenda.
According to the coalition agreement, it is planned that works council members may decide for themselves in future whether they wish to work using analogue or digital processes and technologies. We can, therefore, expect a further increase in the level of digitalisation in the activities of works councils. In this context, the current digitalisation is to be reviewed and the new act evaluated in order to ensure that works councils work as efficiently as possible in future.