If an employee who regularly works at a particular plant of the company and has his place of work there is appointed as the superior of employees of another plant, this may constitute a new hire under the Works Constitution Act in which case the works council of the other plant is to be consulted in accordance with Section 99 Works Constitution Act. This is not precluded by the fact that the employee is already integrated into the plant of his place of work.

Federal Labor Court, June 12, 2019 – 1 ABR 5/18

The employer, a telecommunications company, maintains several plants in Germany. An employee from headquarters, where a separate works council is established, was promoted to lead the TC division. This area is subdivided into several departments, including Manufacturing and Control, whose employees mainly work at the R plant. The head of the TC division essentially performs his work from headquarters. He has his office there and is only occasionally present at the R plant. A different works council is responsible for the R plant than for headquarters.

As part of an employer-initiated proceeding to replace the consent of the works council, the employer and employee representatives disagreed as to whether the fact that the head of the TC division was now appointed as a superior for employees working in R represented a new hire to the R plant, so that the works council responsible at the plant had to be consulted. This was affirmed by the Federal Labor Court. The decision is primarily based on the fact that the superior is involved in the work processes of the departments he manages and that his work also serves the technical purpose of the R plant. The Federal Labor Court considered it to be irrelevant that the superior was only on site at the R plant at irregular intervals. Nor did it matter how frequently the relevant management tasks were performed or how much time they took.

Finally, the court held that the fact that the head of the TC division is also integrated into the operation of headquarters is not opposed to the presumption that this is to be considered a new hire for the R plant. The Works Constitution Act does not contain any restrictions to the effect that an employee may inevitably only be integrated into one of several plants of a company. Due to the lack of relevance to the decision, the Federal Labor Court was able to leave open the questions – which are highly relevant in practice – as to whether this assignment under works constitution law to several plants leads to the employee also being entitled to vote or to be elected in all plants and whether he is counted when determining thresholds .

Tip for use in practice:

In matrix structures or other forms of inter-company cooperation, employers should keep an eye on the question of assignment under works constitution law. It may become relevant in a number of ways: In extreme cases, the question of whether, for example, the threshold for a change in operations has been reached may depend on whether or not an employee is assigned to a particular plant. If an employee who is assigned to more than one plant is dismissed, several works councils or the general works council, if available, may have to be consulted. It is therefore advisable to carefully examine in advance the potential effects of whether individuals are members of several company sites and to adapt procedures accordingly.