Germany: A Guide To Digital Technology And The Works Council In German Workplaces

How far do works councils in Germany get a say on the introduction of new technology with monitoring capability? This article provides some guidance.

The speed of digital change is remarkable. In order to remain competitive, companies need to drive and implement the necessary adjustments quickly. However, the decision to introduce new technologies is not solely up to the employer. The right of co-determination under s87(1) no. 6 of the Industrial Relations Act gives the works council far-reaching scope for participation in company decision-making. Our article explains to what extent a rapid digitalisation of operational processes is possible against this background.

German companies can’t opt out of digital progress

The galloping rate of mechanisation of all economic sectors demands a lot from organisations. They must adapt to rapid change as quickly as possible, for example by using innovative hardware, expanding a digital infrastructure and implementing intelligent software. Otherwise, they are threatened with disadvantages in international competition.

Digital change also has a considerable impact on the world of work. For example, 80 % of IT applications can be used to draw conclusions about the performance or behavioural data of their users. But is the fact this technology can be used for employee monitoring sufficient to trigger a right of co-determination for the works council? Case law says it can: this is justified by the protection of the personal rights of employees.

‘Suitable’ for monitoring: how far does it go?

According to s87(1) No. 6 of the Industrial Relations Act, a co-determination right exists on the introduction of technical equipment which is ‘designed’ to monitor the conduct or performance of employees. However, despite this wording, the Federal Labour Court interprets the right of co-determination broadly. It is sufficient that the equipment is objectively suitable for monitoring: the employer does not need to have an intention to monitor. Case law has recently upheld, for example, a right of co-determination with respect to the use of an Outlook calendar and an Excel spreadsheet and the operation of a Facebook page and a Twitter account.

Employer’s interests and immediacy

However, the Federal Labour Court has also pointed out ways in which this can lead to a restriction of co-determination rights.

In its ‘Facebook’ decision, the Federal Labour Court emphasised that the right of co-determination is aimed at protecting employees from infringements of their personal rights through use of technical monitoring devices that is not justified by the employer's legitimate interests and is disproportionate. At no point, however, does it weigh the interests of the employees against the interests of the employer. Instead, it assumes in its ‘Excel’ decision that the violation of the employees' right of personality does not have to exceed a minimum level. Employer interests are not taken into consideration.

In its ‘Google Maps’ Decision the Federal Labour Court applied the so-called ‘immediacy’ criterion to reject a right of co-determination. It argued that for a co-determination right to exist, monitoring must be carried out automatically by the technical equipment itself. Although the court cited this criterion at the beginning of its Facebook decision as a prerequisite for a co-determination right, in the end it concluded that it was not necessary for employee data to be collected automatically by the technical device itself. Which is correct?

Consequences of the case law

The wide and inconsistent jurisdiction leads insecure employers to submit all matters of regarding technology to the works council for decision ‘to be on the safe side’. However, a number of works councils are sceptical about the ‘digitisation project’ because they associate it with job losses or monitoring. Technical innovation processes can thus be delayed or even blocked. In addition, considerable costs can result from proceedings before labour courts and conciliation bodies.

‘Back to basics’: narrow interpretation

It would be desirable for employers for the Federal Labour Court to settle on a narrow interpretation of the co-determination right. The Federal Constitutional Court recently stated that further judicial development of the law must not ignore the clearly discernible will of the legislature and replace it with its own regulatory model. Whether the Federal Constitutional Court would still accept the Federal Labour Court’s broad interpretation of this question is debatable. The legislature could also definitively clarify the matter by adopting an even clearer formulation. Until that time, any problems can at least be mitigated by skilful drafting of framework works agreements on the operational use of IT. Employers can also draw comfort from the fact that these general works agreements can also serve as a legal basis for data processing under the GDPR.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.