Germany: court ruling puts downward pressure on wages of works council employee representatives

A ruling on 10 January 2023 by Germany’s highest court, the Federal Court of Justice, means the career and salary evaluation practices that employers use for employees who have switched to the role of employee representative (works council member) will require serious reconsideration. Will the restrictive decision the federal judges recently handed down potentially lead to criminal charges being levied against the relevant managers and to a sharp reduction in the salaries being paid to employee representatives? Cases of pay cuts have already occurred and a first wave of complaints by employee representative works council members, with IG Metall trade union backing, have also been filed.

Through Thomas Schnee. Published on 19 April 2023 Ă  14h19 - Update on 19 April 2023 Ă  14h19

The issue at stake hinges on how to define the hypothetical career development path of an employee-turned employee representative, i.e. the career an employee would have had if they had not switched  (wholly or partly) to the unpaid employee representative works council role and consequently, how to determine the appropriate remuneration pathway for that employee. Until recently the issue had seemed settled, but in January 2023 the Federal Court of Justice (BGH, Az.: 6 StR 133/22) overturned the Brunswick Regional Court’s (Az.: 16 KLs 85/19) acquittal of four high-level Volkswagen Group managers who had been accused of having approved excessively high remuneration packages for employee-turned employee representative works council members.…

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