Agile Practices affect Consultation Rights of German Works Councils (“Scrum Teams“)

In a decision dated October 6, 2022 (3 BV 116/21), the German Labor Court in Bonn ruled that agile teamwork organized in the form of partially autonomous groups is subject to consultation rights pursuant to Sec. 87 (1) No. 13 of the Works Council Constitution Act (BetrVG). This assumes that the agile work is characterized by staff teams that operate self-organized and as a self-sufficient unit, regardless of whether the teamwork is following Scrum principles or other agile working methodologies.

The case

The parties involved dispute consultation and co-determination rights of the company’s works council with regard to the implementation of group work under agile principles. In the specific case, the employer deploys staff within so-called HUB-units when working on project assignments. In these units agile working groups are installed consisting of a scrum master, product owner and the developers. Together they form the so-called scrum team. Within the scrum team, the product owner is responsible for the product and its business success. He/she manages the so-called product backlog, an emergent list of all requirements for the product to be built. He/she explains any necessary prioritizations. The scrum master is responsible for the implementation of the scrum framework. He/she ensures best possible working conditions and supports the team in its organization. The developers build the product in consideration of the technical characteristics and the requirements from the so-called product backlog. They are responsible for the quality of the product.
The company’s works council considers this working practice to be subject to consultation and co-determination, as it is a type of “group work” in the meaning of Sec. 87 (1) No. 13 BetrVG. After no mutual works agreement could be reached on this topic, the works council called on the conciliation committee (a specific conciliation process under German law) and applied to the court for an injunction against the further use of these agile principles when working in groups.

The court’s explanation

The Labor Court granted the application of the works council insofar as each individual team of the respective HUB-unit was specifically named. The court considered a request which only generally requested the omission of agile working in the company without having settled a works agreement with the works council as unfounded.
The court was convinced that the respective teams named in the applications perform “group work” within the meaning of Sec. 87 (1) No. 13 BetrVG. For the legal classification as group work, the actual design of the collaboration in the named teams had to be examined in each individual case plus the significance of the team in the overall organization of the company. In this context, the degree of autonomy of the teams is to be considered with focus to the performance of their work, not the work result. In practice, the legal classification depends on how pure agile working frameworks are applied, or whether and to what extend these practices are combined with elements of traditional working methods.
Despite the principle of investigation pursuant to Sec. 83 (1) German Labour Court Act (ArbGG), which applies in this proceeding, the court based its decision primarily on the, in the end, limited facts and circumstances presented by the parties. After the works council has presented relevant information to support its consultation rights in this case, the employer must respond with its own factual presentation. Unsubstantiated denials and own evaluations or arguments are not sufficient to meet this burden of proof.

Comments

Modern forms of autonomous teamwork will continue to increase – depending on the industry. When introducing new working principles in companies with existing works councils, consultation rights and the works council’s involvement must be diligently examined to avoid unnecessary conflicts.
However, the decision of the Bonn Labor Court also shows that in the event of a lawsuit, it is worthwhile to take sufficient care with one's own presentation of facts and circumstances to support the application or response. In this particular case the employer had failed to do so.