In the underlying case, a German limited liability company with less than 100 employees controlled an electric steel plant with about 750 employees. In contrast to the GmbH, the steel plant had formed a works council and an economic committee. Based on a contract, the electric steel plant supplied its products exclusively to the controlling German limited liability company. The company provided the material, determined the products to be manufactured and sold them in its own name and on its own account. Between the companies, there was a fiscal unity for sales, trade and corporate income tax purposes. The parent company was the controlling company.
The real estate, machinery and technical equipment of the electric steel mill served as collateral for loans and bank liabilities of the controlling German limited liability company.
Information for the Economic Committee
When short-time work was performed in the electric steel plant, the economic committee also requested information from the employer on the situation of the controlling company, i.e. the German limited liability company. As a result, an arbitration committee was set up to provide “information to the economic committee”. This establishment-level arbitration committee finally asked the employer for comprehensive information on the economic and financial situation of the controlling company. Without success.
No Right to Information on a Regular Basis
The employer asserted that the decision of the establishment-level arbitration committee of November 2016 was invalid. She argued that the establishment-level arbitration committee could not decide on regularly recurring requests for information or information submissions under Article 109 of the Industrial Relations Law (Betriebsverfassungsgesetz – BetrVG). Furthermore, as the information concerned exclusively the economic situation of the controlling enterprise, it did not have to provide it.
Works Council Insisted on Information
The works council insisted that the request for information by the economic committee was legitimate. Since both companies were closely interlinked, the controlling company’s economic situation also directly affected the employer’s economic situation. After going through the instances, the case finally ended up before the Federal Labour Court (Bundesarbeitsgericht, BAG).
Conclusion: Inter-Company Links do not Justify a Right to Information
In the end, the BAG decided that the economic committee was not entitled to the requested information. It is true that the establishment-level arbitration committee is also competent if the economic committee’s request concerns regularly recurring information on a specific economic matter. Nevertheless, pursuant to Article 106, para. 2, first sentence, Industrial Relations Law, the company was only obliged to inform the economic committee about the economic affairs of the company in which the committee was formed.
In this case, the company was only required to provide information on the electric steel plant, but not on the economic situation of the controlling German limited liability company. The BAG decided that even a strong economic and financial interdependence of the companies would not change this.