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LAG Berlin-Brandenburg: The Creation of a Solely “Virtual Joint Operation” does not Lead to an Operational Alteration

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According to the State Labour Court (LAG) of Berlin-Brandenburg (decision of December 10, 2020 – 26 TaBVGa 1498/20), the creation of a solely virtual joint operation does not constitute an alteration in operations within the meaning of sec. 111 Works Constitution Act (Betriebsverfassungsgesetz – BetrVG). Accordingly, the works council is not entitled to demand that the implementation measures be omitted in order to secure its right to negotiate the reconciliation of interests.

1. Facts

In the case decided by the LAG Berlin-Brandenburg, the employer operates clinics in Brandenburg an der Havel, Lübben and Teupitz. Together with its subsidiary, the employer intended to establish a joint operation at each of these locations. For this purpose, the employer and the subsidiary agreed on an operating agreement. New hires were to be made from the time of the establishment of the joint operations via the subsidiary, which had previously had neither operating resources nor personnel. At the time of the decision, no hires had yet been made. In the view of the works council, the establishment of the joint operation constituted an alteration in operations pursuant to sec. 111 BetrVG. In order to enforce its right to negotiate, the works council applied for a preliminary injunction ordering the employer and the subsidiary to refrain from setting up a joint operation and from the planned recruitment.

2. Background

2.1       Works Council’s Right to Consultation in the Event of Operational Alterations according to sec. 111 BetrVG

Establishments that normally have more than twenty employees the employer shall inform the works council in full and in good time of any proposed alterations, which may entail substantial prejudice to the staff or a large sector thereof and consult the works council on the proposed alterations, cf. sec. 111 BetrVG. The aim of the consultation is the agreement of a reconciliation of interests and the conclusion of a social plan. The creation of a joint operation is generally to be assessed as an alteration in operations in this sense.

2.2       Injunctive Relief of the Works Council

In case the employer grossly violates his obligations according to the Works Council Act, the works council is entitled to take legal action requesting the employer to refrain from, carry out or tolerate a certain measure, cf. sec. 23 para. 3 BetrVG. Additionally, in order to effectively enforce its co-determination rights pursuant to sec. 87 BetrVG, the works council is entitled to demand the omission of the infringing action in accordance with the case law of the Federal Labour Court (Bundesarbeitsgericht – BAG) – irrespective of the requirements of sec. 23 para. 3 BetrVG. A measure taken by the employer nevertheless is ineffective.

It is highly disputed among the State Labour Courts and in the literature whether the works council can prevent the operational alteration itself. Some of the State Labour Courts derive such a claim to refrain from the measure changing the operation directly from sec. 111 BetrVG. However, this view is not convincing. This is because the planned operational alteration – unlike matters subject to co-determination pursuant to sec. 87 BetrVG – does not depend on the consent of the works council. A claim for injunctive relief by the works council in connection with an alteration in operations can therefore only serve to secure its right to negotiate, but cannot be used separately to prohibit the measure itself.

In 2014, the LAG Berlin-Brandenburg had already taken the position that the works council may only claim injunctive relief against measures taken by the employer that in law or in fact call into question its right to negotiate, cf. LAG Berlin-Brandenburg, decision of June 19, 2014 – 7 TaBVGa 1219/14.

3. Decision of the LAG Berlin-Brandenburg

With the current decision, the LAG confirmed its case law in this respect and dismissed the works council’s application as groundless. This is because the works council does not have the right to an injunction preventing the establishment of a joint operation itself. Such a claim for injunctive relief by the works council could at most be considered to secure the works council’s right to negotiate.

Furthermore, the LAG already doubted that there was an alteration in operations pursuant to sec. 111 BetrVG. This was because the plan of the employer and its subsidiary did not change anything for the employees. In addition, the existing structures were to be retained. Rather, a „virtual joint operation“ existed only on paper. According to the LAG, it was therefore already questionable whether the intended measures even met the requirements for a joint operation developed by the case law of the BAG. The conclusion of an operating agreement on its own is in any case not sufficient for this.

Ultimately, however, the LAG was able to leave this question open for another reason. In the case decided, the works council was not reliant on injunctive relief to secure its rights. It could also have prevented the planned hiring by refusing its consent required for this, cf. sec. 99 BetrVG.

As usual, we will keep you up to date on the latest developments in case law and legislation.

Dr. Lorenz Mitterer                                                  Katharina Schlonsak

Lawyer                                                                      Lawyer

Specialist Lawyer for Employment Law

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