The next works council elections are coming up. This regularly leads to the question of what costs will be incurred in this connection and who will bear these costs. Please find below our overview.
Pursuant to Section 20 (3) sentence 1 German Works Constitution Act (Betriebsverfassungsgesetz – “BetrVG”), the employer bears the cost of the works council election. In a joint business, the employers bear the cost of the works council election as joint and several debtors, as a rule. Recourse between the employers depends on the individual agreement made or, alternatively, on the respective total wages.
1. Cost of materials
The obligation to bear the costs includes the cost of materials needed to prepare and hold the works council election. The cost of materials needed to prepare the works council election includes, for example, the cost of literature on works council elections, legal tests, office materials and rooms. The cost of materials needed to hold the works council election includes, in particular, the cost of ballot boxes, postage for the postal vote, lists of voters, ballot papers, ballot envelopes, voting booths and software to carry out the election. By contrast, the employer is not required to bear the cost of election advertising.
2. Personal costs of the electoral board
In addition to the cost of materials, the employer must also bear the personal costs incurred by the members of the electoral board in the context of a works council election. These costs include travel expenses and training costs. Each member of the electoral board must be granted training. If a motor vehicle is needed to carry out the election – for example, to transport election documents to other units of the business – the employer must make such a vehicle available or compensate the relevant member of the electoral board for the use of his or her private vehicle.
3. Limits to the obligation to bear the costs
The obligation to bear the costs is always limited by the rule that the costs must be necessary and reasonable. The employer is not required to bear unnecessary costs. Disputes about whether or not certain costs have to be borne by the employer are, on application, to be decided by the competent labour court in so-called decision proceedings (Beschlussverfahren), i.e. proceedings regarding collective employment law issues.
4. Lawyer’s fees
In addition to the above, the employer must bear the cost of hiring a lawyer in the event of legal disputes in connection with a works council election. This includes, for example, the cost of proceedings to contest the election or the cost of a lawsuit to clarify the electoral board’s rights. Courts generally tend to apply generous criteria when it comes to the costs incurred in connection with legal disputes in the context of a works council election. Costs are thus considered to be necessary as long as bringing an action does not appear to be a hopeless endeavour, or as long as claiming the costs does not constitute an abuse of the right to do so.
5. Cost of lost working hours
As a rule, the electoral board performs its duties during working hours. The employer must release the members of the electoral board from their duty to work, so they can carry out their activities for the preparation and holding of the election and must continue to regularly pay their wages. These costs must also be included in the overall budget for the works council election.
This means in practice that employers can expect to incur significant costs in connection with works council elections. Courts apply rather generous criteria when determining whether costs are necessary or not – a practice that is ultimately at the expense of the employer.