The Federal Labor Court has ruled that the works council has no co-determination rights regarding salary increases for released works council members. This right only applies to placement or reclassification. Our labor law attorneys explain the background.
By decision of November 26, 2024, the Federal Labor Court (BAG) in Erfurt clarified a central issue of works constitution law: the works council has no right of co-determination regarding salary increases for released works council members.
In the court's opinion, the right of co-determination under Section 99 of the Works Constitution Act (BetrVG) is limited exclusively to placements and reclassifications – not to subsequent salary adjustments. The Federal Labor Court thus contradicts the decisions of the lower courts, which had affirmed co-determination.
What impact does this ruling have on corporate practice? Our labor law attorneys shed light on the background and explain what employers and works councils need to consider now.
What awaits you:
No co-determination on salary increases for released works council members – Federal Labor Court provides clarity
(Decision of November 26, 2024 – Ref. 1 ABR 12/23)
The Federal Labor Court (BAG) in Erfurt has ruled that works councils have no right of co-determination regarding salary increases for released works council members. According to Section 99 of the Works Constitution Act, this right only applies to placements or reclassifications if the assignment is made to a remuneration structure.
Since salary adjustments for released works council members do not constitute a new classification, no co-determination takes place here. However, the Federal Labor Court emphasizes: Remuneration must be based on the development of comparable employees or may be adjusted to avoid discrimination.
BAG ruling: Works council has no say in matters of remuneration for released members
In this specific case, an employer with two car dealerships in Leipzig was successful. The lower courts had granted the works council a right of co-determination regarding the classification of the released works council chairperson – the Federal Labor Court rejected this view.
The core of the dispute: The works council saw its right of co-determination violated, while the employer argued that the so-called Loss of wages principle This means that the remuneration of released members is based on the income they would earn if they continued working for the company – without any special classification. This is because the special payment has a specific purpose – to compensate for the loss of the job and its associated economic disadvantages.
Image source: Jürgen Fälchle | stock.adobe.com
