Downgrading the remuneration of a released works council member

The Baden-Württemberg Regional Labor Court (LAG) follows the case law of the Federal Labor Court (BAG), according to which a direct claim of a released works council member can arise from Section 78 sentence 2 of the Works Constitution Act (“BetrVG”) in conjunction with Section 611a (2) of the German Civil Code (“BGB”) if the payment of lower remuneration constitutes discrimination. If a higher remuneration has been promised and paid, the employer bears the burden of presentation and proof for a breach of the prohibition of preferential treatment under Section 78 sentence 2 BetrVG if this higher remuneration promise is to be withdrawn. (LAG Baden-Württemberg, judgment of August 7, 2024 - 8 Sa 18/24)

Facts of the case

The parties are in dispute about the adjustment of the plaintiff's remuneration as an exempted works council member. Until taking up this position, he was employed as an assembler and was classified accordingly under the applicable collective agreement.

As part of an external review of the remuneration of all released works council members in 2019, it was concluded on the basis of a hypothetical analysis that there was an overwhelming probability that the plaintiff would have moved from his original job as an “assembler” to one of the vacant positions as a “production control clerk”. During the period of his leave of absence, at least two such positions were advertised at the defendant.

It was taken into account, that he plaintiff had already, bevor taking office, represented his superiors, had always carried out additional tasks and was classified by his superiors as one of the top 5% of employees. The plaintiff had also demonstrated a willingness to develop and a strong personality through numerous - although non-specialist - further training courses and various offices in addition to his work on the works council. Accordingly, the defendant adjusted the plaintiff's remuneration on March 1, 2020 by classifying him in a higher pay group.

Following a re-examination prompted by the verdict of the BGH of January 10, 2023 (6 StR 133/22), the plaintiff was informed in a letter dated March 9, 2023 that he would be reclassified and remunerated as an “assembler” in accordance with the collective agreement and that overpaid amounts would be reclaimed.

In his lawsuit, the plaintiff asserts claims for payment and demands a declaration that, as an exempted works council member, he should be remunerated in accordance with the higher pay group. He was successful in the lower court, against which the defendant lodged an appeal.

Reasons for the decision

The defendant's admissible appeal was unfounded. According to the LAG, the plaintiff was entitled to remuneration in accordance with the higher pay group under the collective agreement pursuant to Section 611a (2) BGB in conjunction with Sections 37, 78 sentence 2 BetrVG.

According to Section 37 (4) BetrVG (old version), the remuneration of released works council members may not be set lower than the remuneration of comparable employees. However, the LAG emphasizes that the standard does not contain a conclusive regulation on the amount of the remuneration of the office holder, but that Section 78 sentence 2 BetrVG must also be taken into account. According to this, members of the works council may not be disadvantaged or favored because of their official duties. Therefore, in conjunction with Section 611a (2) BGB, a direct claim to a specific remuneration can arise if the payment of a lower remuneration constitutes discrimination against the works council member due to their works council activities. This is particularly the case if the works council member has not been promoted to a position with higher remuneration solely because of his official activities. The hypothetical professional development of the specific employee is assessed here.

The LAG emphasizes that the decision of the BGH of January 10, 2023 (6 StR 133/22) does not contradict this. Firstly, the decision refers to BAG case law, meaning that the consideration of hypothetical professional development is not excluded when determining remuneration. However, even if one were to assume the opposite, the case law of the BAG alone is decisive for the assessment under employment law.

The LAG also ruled that, in principle, the works council member claiming payment of higher remuneration from the employer bears the burden of presentation and proof for the existence of unlawful discrimination. However, the burden of presentation and proof shifts to the employer if the employer asserts towards the works council member that remuneration promised in the past violates the prohibition of preferential treatment under Section 78 sentence 2 BetrVG. The employer would have to present facts that would allow the conclusion of an unlawful favoritism. This corresponds to the general principle that the person who invokes a violation of a prohibition law must prove it.

According to the LAG, the defendant, which has the burden of presentation and proof, was not able to demonstrate that a fictitious application by the plaintiff for one of the vacant positions would have been unsuccessful or that the remuneration according to the higher pay group under the collective agreement would only have been granted because of the plaintiff's works council activities.

The fact that the willingness to continuing education during the works council activity and his willingness to take on further offices was also taken into account as an indication of personal potential when upgrading. Admittedly, it could be an inadmissible favoritism pursuant to Section 78 sentence 2 BetrVG if knowledge acquired in the course of holding office is taken into account. However, a distinction must be made as to whether the knowledge in the company is also relevant to the position in terms of career and remuneration outside the works council. The consideration of the plaintiff's willingness to continuing education and his personality is not linked to the works council activity as such, but to the plaintiff's personal characteristics, which are in principle relevant to remuneration. It should also be taken into account that these characteristics were not the main basis for the defendant to grant the higher remuneration.

Practical advice

The LAG Baden-Württemberg agrees with the case law of the BAG and emphasizes that the decision of the BGH does not allow any deviation from this. On the one hand, this verdict refers to the case law of the labor court, and on the other hand, it is not bound by the case law of the BGH with regard to the assessment under labor law. This means that the hypothetical professional development of the individual works council member must continue to be taken into account in the remuneration of the released works council members. The burden of presentation and proof is based on general principles.

The LAG also stipulates that the consideration of knowledge acquired during the term of office may be taken into account in the hypothetical professional development if it is linked solely to the personal characteristics of the works council member, which are relevant to remuneration irrespective of the office held in the company.