Costs of the works council attorney

No cost reimbursement for inadmissible court proceedings involving the works council

(Labor Court Berlin, decision dated April 18, 2016 – 19 BV 17837/15; decision dated April 31, 2016 – 34 BV 296/16 & 17836/15)

Pursuant to sec. 40 para. 1 Works Constitution Act (German BetrVG), the employer shall bear the costs of the works council. These generally also include costs for attorney fees, to the extent that the works council justifiably deems the hiring of such services necessary to represent its legal works constitution rights. In doing so, the works council is to adhere to standards that it would apply if it had to bear the costs on its own. The employer is not obliged to bear costs in the event of an obviously futile and/or willful legal action on the part of the works council. Moreover, the hiring of the attorney must be based on a proper resolution passed by the works council.

The Labor Court Berlin was called upon to decide in three cases through different chambers concerning the necessity of the works council’s hiring an attorney. At the core of the decisions was the question as to whether the works council justifiably deemed it necessary to carry out decision-making procedures, thereby hiring an attorney, which were inadmissible.

The works council had hired an attorney to have several conciliation committees set up by the court on the topic of “information technology”. The labor court had rejected the petitions as impermissible because the works council lacked legal interest in being protected by these petitions.

The requests to set up committees were not preceded by any negotiations or any respective efforts by the works council concerning the regulatory issues. The works council had not even attempted negotiations with the employer.

Furthermore, the works council represented by an attorney had divided up the regulatory issue of “information technology” into six separate regulatory areas and thus filed six separate petitions for the setting up of conciliation committees on these sub-areas.

Moreover, the labor court was called upon to decide on the obligation of the employer to bear the costs in several cases, in which there was no ordinary works council resolution at the time when legal proceedings involving the works council or legal remedy were initiated.

In all of the above-mentioned scenarios, the chambers of the labor court of Berlin decided against the employer’s duty to bear the costs. Therefore, a cost reimbursement is ruled out, because it was inadmissible, and the works council was not allowed to deem it admissible. Finally, it was obvious that no works council can request to set up a conciliation committee without at least having negotiated with the employer beforehand. Furthermore, a petitioner concerned with limiting costs would not split up a regulatory topic into six separate areas and submit six separate committee petitions. The chambers of the labor court also confirmed the legal precedence of the Federal Labor Court (BAG) that for all proceedings and all legal remedies, there must be a proper works council resolution, which has been reached prior to submitting a petition or a legal remedy. The decisions are legally final.

Practical recommendations:

In labor court decision-making procedures, employers should ensure that each instance is pursued based on a proper works council resolution. If the court already rejects the petitions of the works council being represented by an attorney as inadmissible, this is generally due to the failure on the part of the works council to meet a requirement. In general, proceedings that are already inadmissible cannot be considered necessary by the works council.

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Tags: #Labour law, #Newsletter Employment Law 4/16

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