Regional Labor Court rules on reclaim of non-required works council expenses

  • 02/09/2023
  • Reading time 5 Minutes

Employers cannot reclaim from a works council member any non-required works council expenses paid by the employer. This was decided by the Lower Saxony Regional Labor Court in its ruling of August 30, 2022 (Ref.: 9 Sa 945/21).

The standards under works constitution law on the assumption of costs for works council activities supersede the standard rules on the agency without authorization (Geschäftsführung ohne Auftrag) in this respect. 

The facts

The plaintiff is a member of the defendant’s works council. The works council decided to send the plaintiff to training sessions for works council members. The defendant rejected the plaintiff’s participation in such sessions referring to corona-related travel restrictions. 

Subsequently, the works council once again decided to send the plaintiff to a training session. The plaintiff engaged a lawyer who requested the defendant in writing to consent to the plaintiff’s participation in such training. In another letter, the plaintiff’s lawyer charged the defendant for lawyer’s fees in the amount of EUR 413.90 net. 

The defendant forwarded the invoice to the works council requesting that such invoice be personally paid by the plaintiff. In this context, the defendant also pointed out that there was no resolution of the works council on the lawyer’s engagement. The plaintiff did not pay. Consequently, the defendant settled the invoice.

In the next payroll statement, the defendant deducted a net amount of EUR 413.90 from the plaintiff’s net salary which was designated as “advance payment specialist lawyer for labor law” and only paid out to the plaintiff the net amount reduced by such payment. The plaintiff demands payment of the amount withheld from his net salary. 

The legal situation

The plaintiff is entitled to a further claim for remuneration in the amount of EUR 413.90 net, which the defendant offset in the payroll. The defendant was not entitled to a counterclaim, with the result that the plaintiff’s claim to remuneration in the amount of EUR 413.90 net did not expire by offsetting. The reasons for the judgment in detail:

  1. It is sufficient for a claim of the defendant under an agency without authorization that the defendant has conducted a "third-party" business with the intention of conducting third-party business. When the defendant paid the invoice for the plaintiff, it assumed to be discharging a third-party debt. According to the rules of an agency without authorization, the debtor must return what he has obtained (the repaid debt) if the transaction corresponds to his interest or his presumed will. The plaintiff’s consent was not required.

    With the invoice addressed to the defendant, the plaintiff’s lawyer asserted the plaintiff’s indemnification claim pursuant to Art. 40 (1) BetrVG (German Works Constitution Act). With the resolution on his assignment, the individual works council member acquires his own claim arising from an individual right derived from the works council.

    Whether or not the transaction constitutes a third-party or the defendant’s own business depends on whether or not the defendant is required to bear the legal fees as works council expenses pursuant to Art. 40 (1) BetrVG.
  2. It is at the works council’s sole discretion to decide whether any measure is required in order to fulfill the works council’s tasks. In doing so, it must weigh the staff’s and the employer’s legitimate interests on the basis of the circumstances known to it at the time of the resolution.

    The question of whether the attorney’s engagement by the plaintiff to exercise the latter’s rights under works constitution law required a resolution of the works council as a body could be left open.

    In any event, an engagement was not required. The defendant rejected the plaintiff’s original participation due to travel restrictions in the context of the first lockdown during the Corona pandemic. After the works council again decided to send the plaintiff to a training session, there was no refusal by the employer. A lawyer’s letter was not necessary.
  3. However, it would be contrary to the special statutory provisions of Art. 40 (1), Art. 2 (1), Art. 78 sentence 2 BetrVG if the employer could also reimburse unjustified works council expenses (here: lawyers’ fees) on the basis of the agency without authorization principle and in return deduct them from the works council members’ remuneration.

    Before reimbursing the expenses, the employer can check whether the prerequisites for an assumption of costs are met. The defendant pointed out that, in the absence of a works council resolution, the plaintiff had to bear the costs of hiring the lawyer himself.

    The defendant’s measure which was based on an individual right may also constitute discrimination within the meaning of Art. 78 BetrVG. This is the case if the plaintiff is put in a worse position than other employees, which is not due to factual reasons or reasons lying in the person of the affected person, but due to his or her activity under works constitution law. Another employee would not be in the plaintiff’s situation as the costs relate to his function as works council member.

Practical advice for employers: Critically examine the assumption of costs for works council activities

We recommend that employers critically examine whether the expenses claimed were necessary before any assumption of costs in connection with works council activities. In the event of a refusal to assume the expenses, the lawyer should have contacted the works council member or the works council in this case.

Employers should also always check the content of training. Training events are only required to the extent they enable the works council to perform its statutory duties. A training on current developments in case law, for example, is not part of the required basic training. The labor courts decide on the necessity during the court proceedings

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