The Federal Labour Court (Bundesarbeitsgericht - BAG) ruled in its decision of 8 February 2022 (Ref.: 1 ABR 2/21) that a works council newly established only after the implementation of a change in operations has begun does not have an enforceable right of co-determination on the conclusion of a social plan.
The parties are in dispute about an enforceable right of co-determination of the applicant works council to conclude a social plan. The company involved had two establishments. On 22 June 2018, it informed the employees that it would close down the business on 31 August 2022 and that it would terminate the employment of all employees for operational reasons. A short time later (on 5 July 2018), the invitation to appoint an election committee was posted in the company. An election meeting was held one week later. The newly elected works council subsequently requested the company several times and unsuccessfully to enter into social plan negotiations with it. The conciliation board set up by the labour court at the request of the works council declared itself incompetent. The works council then brought an action for a declaration that it had an enforceable right of co-determination to conclude a social plan with regard to the change of operation (closure).
The Labour Court dismissed the application. The Regional Labour Court dismissed the works council's complaint against this. The works council pursued its claim before the Labour Court by way of an appeal on points of law.
The Federal Labour Court (in the result) confirmed the decision of the Regional Labour Court. The works council had no enforceable right of co-determination to conclude a social plan.
According to the established case law of the Federal Labour Court, the works council of a company previously without a works council, which is only elected after the start of the implementation of the operational change, cannot demand the preparation of a social plan.
The works council's participation rights and the employer's obligation to involve the works council arise at the moment when the facts to which the respective right is linked are realised. In the case of the works council's participation and co-determination rights under §§ 111 et seq. BetrVG, this is the intended and thus still future operational change. It is the subject of co-determination both in the case of a reconciliation of interests and - with regard to its consequences - in the case of a social plan. In principle, the works council should be involved before the operational change has been implemented. Therefore, an enforceable right of co-determination of the works council to conclude a social plan cannot arise if the social plan has not yet been formed at the time when the employer has started to implement the operational change.
The decision is convincing. All methods of interpretation of §§ 111ff. BetrVG show that such an understanding is correct. How should the employer also involve a works council that does not yet exist? Moreover, a retrospective involvement of the works council - i.e. at a point in time when the change in operation has long since been determined - would not be in line with the purpose of the law. The works council should be able to influence the content of the change through its participation. However, this is impossible if the change in operation has already been implemented. Consequently, within the framework of §§ 111ff. BetrVG, only an existing works council should be involved.