1. INTRODUCTION

The remuneration of works council members is complex, even if the legal basis At first glance, this statement does not seem to be supported. They do not specifically specify the amount of remuneration to be paid to the employer who has to remunerate exempt works council members. Rather, they merely define a narrow corridor in which the §§ 37 paragraph 4, 78 p. 2 BetrVG and Section 119 Paragraph 1 No. 3 BetrVG a lower limit and with the §§ 78 sentence 2, 119 Paragraph 1 No. 3 BetrVG, 266 StGB an upper limit is set. The employer can therefore only move between disadvantage and advantage.

2. THE LEGAL FRAMEWORK

According to the will of the legislature, the works council office is a free, voluntary position, cf. Section 37 Paragraph 1 BetrVG. In principle, the works council member does not receive any separate remuneration from the employer for his or her work as a works council member.

Loss of wages principle

However, according to the so-called loss of wages principle, the works council member is entitled to the remuneration that he or she would have received if he or she had worked. The scope of the claim is specified in §§ 37 paragraph 4 and 78 p. 2 BetrVG. The loss of wages principle also applies to exempt works council members.

No discrimination

As part of the § 78 sentence 2 BetrVG However, the following applies: A claim by the works council member can be justified if the payment of lower remuneration represents a disadvantage for the works council member because of his works council activity. It follows that there is also a higher one than that Section 37 Paragraph 4 BetrVG The remuneration to be paid can result insofar as the works council member (even) without working on the works council performs better than the work council member Section 37 Paragraph 4 BetrVG relevant comparison group would have been developed. 

Two independent bases of claim?

According to accurate – and from Federal Labor Court Confirmed in established case law, two coexisting legal regulations are relevant for the remuneration of works council members, namely those already mentioned Section 37 Paragraph 4 BetrVG and § 78 sentence 2 BetrVG. Although according to hM Section 37 Paragraph 4 BetrVG as a specification of the general prohibition of discrimination § 78 sentence 2 BetrVG to watch. However, both standards can only form an independent basis for claims in conjunction with Section 611a Paragraph 2 BGB and the employment contract.

Claim from the employment contract?

The employee's entitlement to remuneration and thus also the exempt works council's entitlement to remuneration results from the employment contract. The §§ 37 paragraph 4 and 78 p. 2 BetrVG In this context, they do not represent an independent basis for a claim, but merely specify this – already existing – claim to remuneration. This is already clear from the interpretation of the wording. Both standards in question are not designed as basis for claims, but speak of “remuneration” and therefore necessarily mean the remuneration already owed under the employment contract. 

3. INDIVIDUAL CASES

a. Comparison groups within the framework of the Section 37 Paragraph 4 BetrVG

The establishment and implementation of non-discriminatory remuneration can be carried out within the framework of Section 37 Paragraph 4 BetrVG can be achieved, among other things, by forming comparison groups. The comparison group should – in order to meet the requirements of the Section 37 Paragraph 4 BetrVG to correspond - only employees who perform an essentially equivalent activity to that of the works council member and who have equivalent professional personal qualifications are accepted. Two important restrictions must be taken into account: On the one hand, the characteristics must be relevant to remuneration and, on the other hand, they must allow the derivation of a rule.

What exactly does the obligation to adapt look like?

The company's obligation to adjust can be specified as follows: If the remuneration of the entire comparison group is increased, the exempted works council member is entitled to a corresponding increase in remuneration. If the remuneration of the employees in the comparison group is different, the employer must adjust the remuneration of the works council member if the normal company development has been achieved by the majority of the members of the comparison group. If a “majority” cannot be determined, the average of the salary increases granted to employees in the comparison group may be relevant. If there is no comparable employee, the most comparable employee should be used.

aa. Comparison group formation

When forming a comparison group, according to the Federal Labor Court's very restrictive case law in this regard, the employer can only access employees who, when viewed objectively, performed essentially the same activity as the works council member in his last job before taking office. The comparison employee must also be personally and professionally similarly qualified, which results from training and previous professional career. However, the employer must note that both characteristics (activity and training) must be present in the potentially comparable employee. It is not sufficient, for example, to determine the group of comparable employees by forming two different comparison groups, one of which includes the activity and the other the training. 

Comparison groups are not a panacea

However, with regard to the creation of comparison groups, it should be noted that this does not represent a “panacea”. As explained above, the employer cannot, by forming a comparison group, exceed the requirements of the § 37 paragraph 4 and the § 78 sentence 2 BetrVG override. Both standards are mandatory law and cannot be deviated from by agreement etc.^, Any comparison group formation is therefore subject to the proviso that an affected works council member may still be able to name a comparable employee with normal company development if the comparison group used by the employer is not considered to be sufficiently representative. The works council member can then assert his claim on this alone Section 37 Paragraph 4 BetrVG in conjunction with Section 611a Paragraph 2 BGB and the employment contract. 

1 example:

The company has formed a comparison group consisting of a total of 9 employees. These are – assumed here – all comparable to the works council member in the sense Section 37 Paragraph 4 BetrVG. However, there are also 9 other employees, all of whom are also comparable to the works council member. It is assumed here that the 9 comparable employees selected by the employer are not representative in order to derive a remuneration rule.

The works council member could now name the comparable employees in court. If a normal company development can also be demonstrated in this regard and the employer does not raise any objections to this, the works council member may be entitled to higher remuneration. The employer can only counter this risk by including as many comparable employees as possible in the comparison group. 

bb. Size of the comparison group

The size of the comparison group must therefore always depend on the specific circumstances of the individual case. According to what has been said above, the group must be large enough so that regular development can be demonstrated. For highly specialized tasks, naming a single comparable employee may be sufficient. Example 1 also shows the employer's risk if the comparison groups are too small.

cc. Median or quota regulation etc.

Affected companies that have decided to form a comparison group usually also set a rule at the same time as to when the exempted works council member will receive higher remuneration. According to the signatory's experience, two basic patterns can be identified here. On the one hand, a claim to higher remuneration is considered to exist if the works council member concerned falls below the median of the comparison group in terms of his remuneration. On the other hand, quota regulations are often used. The works council member concerned should be entitled to higher remuneration if, for example, at least 1/3 of the employees in the comparison group receive higher remuneration. 

Bexample 2:

The company from example 1 - based on good legal advice - expanded its comparison group to 18 people (all comparable) and also set the rule for this comparison group that the remuneration of the works council member should be adjusted upwards if 1/3 of the employees of the The comparison group receives higher remuneration than the works council member. 4 employees in the comparison group earn significantly more. According to the rule set by the company, the remuneration would therefore not have to be adjusted. 

In this example, if one assumes that there are no other comparable employees apart from the 18 employees in the comparison group, then the works council member has no claim to an increase in remuneration. Because – as explained above – a claim in this constellation only arises when the majority of the comparison group receives higher remuneration. It should be noted, however, that Section 37 Paragraph 4 BetrVG The works council member is not granted absolutely the same remuneration as comparable employees, but only the remuneration increases of comparable employees.

3 example:

The company in example 1 has set the rule for its comparison group consisting of 18 employees that the remuneration of the works council member should be adjusted upwards if the works council member earns below the median of the comparison group. The median remuneration of the comparison group is EUR 4.000 gross per month. The works council member earns EUR 3.900 gross per month. It is assumed here that when the works council member takes office, all employees including the works council member earned EUR 3.900 gross per month. 

According to the rule set by the company, the remuneration would therefore have to be adjusted. The adjustment of the remuneration to EUR 4.000 gross per month is correct according to the case law of the Federal Labor Court. However, something different must apply if the works council member takes office and the employee and comparable employees already have different earnings. Then there is no need to adjust compensation to the median compensation. Otherwise the works council member would object § 78 sentence 2 BetrVG be better off because of his works council activities. Rather, only the remuneration increases that occurred during the relevant period need to be passed on. 

b. Consideration of special achievements, training and qualifications during the works council term

In practice, the question often arises as to how special achievements, qualifications or the like that the works council member has demonstrated/completed during his work council activity should be assessed in terms of remuneration law. From the principle of voluntary work described at the beginning, it follows that remuneration cannot, in principle, be linked to the activities and special achievements during the time on the works council. According to this principle, the performance shown in the exercise of office cannot be the benchmark for remuneration. However, they can still be an indication that the works council member has above-average qualifications. 

Basis of claim

The only possible basis for a claim is here § 78 sentence 2 BetrVG into consideration. With a correct understanding of the in § 78 sentence 2 BetrVG In accordance with the principle of discrimination laid down, it is mandatory for the employer to take into account such training and qualifications carried out on a voluntary basis when making remuneration and promotion decisions. Otherwise, the works council member, for whom this training is not taken into account in this context, would be disadvantaged compared to other employees. 

Contrary to some voices in the literature, however, there does not have to be a connection to previous activity. The only decisive factor is the suitability of the works council member as an applicant for the potential position. If you do not require a “normal” employee to have a reference to their previous job in relation to an advertised position, you cannot also require this from a works council member due to the prohibition of discrimination.

c. Commissions, bonuses and other one-off payments

From § 78 sentence 2 BetrVG and the loss of wages principle means that the exempted works council member is entitled to the remuneration that he or she would have received if he or she had not been released. If the works council member received bonuses, stock options or other performance-related payments before his term of office, he will retain these entitlements during his work as a works council member.

4. CONCLUSION

Despite some imponderables, the author believes that a legally compliant remuneration structure for exempt works council members can be installed in the affected companies. However, the formation of comparison groups and in particular the question of when the remuneration of a public official in the comparison groups is adjusted should be treated with the greatest care. Otherwise, there is a risk that the affected works councils will successfully sue for higher remuneration. A very differentiated presentation is then required before the labor court.