Works council costs and expenses
Employers are required to bear the necessary costs to enable the works council to work professionally and properly. This is laid down in Section 40 (1) Works Constitution Act (BetrVG).
This applies to all material costs incurred in the course of business, such as travel costs, training costs, telephone costs, etc. Under certain circumstances, the employer may even be required to bear the costs of experts if the works council is dependent on their work (Section (3) Works Constitution Act (BetrVG)) and this has been agreed between the employer and works council.
This also applies if the works council hires a lawyer to enforce its rights pursuant to the Works Constitution Act. However, the employer is only required to reimburse the costs if:
- the legal fees are necessary and
- the works council has passed a proper resolution commissioning the law firm.
Is the company also obliged to bear the legal fees of an individual works council member if the complaint is directed against their employer?
Works council member takes legal action and the employer foots the bill
In the case before the Federal Labor Court, a works council member had a legal dispute with his employer. The employer had refused the works council member two training courses on various grounds (COVID-19 restrictions, internal training possible, etc.).
The man objected and hired a lawyer, who then informed the employer that the works council member would attend the training courses, which he did. The law firm also sent the works council member a bill for just under 500 euros, stating that he was required to pay this bill personally because the required works council resolution to hire lawyer and assume the costs was missing.
And yet the man did not pay. The employer covered the bill and then offset the amount against the bus driver’s salary.
The works council member also objected to this and filed a complaint, arguing that his employer was required to bear the costs in accordance with Section 40 (1) Works Constitution Act (BetrVG) and deducting the legal fees from his salary was not permissible.
If the employer had not paid …
Although Federal Labor Court did not share the works council member’s opinion, the man still won the case. The works council member was not required to accept the legal fees being offset and deducted from his salary.
The employer was not obliged to pay the actual legal fees because the works council had never passed a resolution to hire a lawyer to enforce the training claim.
As such, the employer could not simply pay the bill and then take recourse against the employee. A transaction without mandate and also the rules of unjustified enrichment would not apply to resolution proceedings in disputes under works constitution law.
Accessing the income of the works council member in this way is neither appropriate nor in the interests of the company.
The legal perspective?
If the employer had not paid voluntarily, they would ultimately not have been left sitting on the works council member’s legal fees.
In this respect, it is worth examining exactly which works council costs employers are required to reimburse before paying.
Following this ruling, recourse will be almost impossible to enforce.
What can we do for you?
Do you have questions about an employer’s obligation to bear works council costs? Do not hesitate to contact us!
Summary of the key facts:
- Employers must bear the costs necessary for works council work. This also applies to costs incurred by a single works council member.
- These costs may include legal fees arising from disputes under works constitution law if the works council passes a resolution to engage a lawyer.
- If an employer pays legal fees without being required to do so, they cannot take recourse against the works council.
