Digitalization in recruitment

From now on, works councils must also accept digital application documents in recruitment processes as long as they provide the same information content as traditional paper documents. This means that companies can digitize their recruitment processes as long as they ensure that the works council receives all the necessary information.

Under German law, the employer must obtain the consent of the works council prior to any recruitment. If the works council refuses to give its consent, the employer can have the consent replaced by costly proceedings to replace the consent at the labor court. To avoid this, the works council should be properly informed about the specific recruitment - this includes the employer's obligation to "submit" the necessary application documents.

Background

A few days ago, a decision was published by the Federal Labor Court dated December 13, 2023 (Ref. 1 ABR 28/22) was published in which the Federal Labor Court dealt with the question of when the employer fulfills its obligation to submit documents as part of a digital application process. The Works Constitution Act (BetrVG) regulates in particular the co-determination of works councils in recruitment. Digitalization is increasingly changing how companies recruit their employees. The use of digital application documents, online interviews and other digital selection procedures is becoming increasingly common. This brings with it new challenges for the co-determination of works councils.

Facts of the case

The decision of the Federal Labor Court relates to a case in which a works council refused to approve the intended recruitment of an employee. The employer had previously stored the required application documents of all applicants, including the job description and intended job classification, in an internal and external digital application portal using "recruiting" software to which the works council had access. The works council argued that it had not been properly informed, as the employer should have submitted all application documents to it in (original) paper form. The employer then applied to the labor court to replace the works council's consent.

Decision

After the lower instances had already granted the employer's application, the Federal Labor Court agreed with the content of the application.

The court's substitution of consent requires the works council to be properly informed.
The employer must inform the works council of the planned recruitment and submit the necessary documents. It is necessary and sufficient to provide information that enables the works council to examine, on the basis of the facts communicated, whether one of the statutory grounds for refusal of consent exists. These requirements are also met by providing information by means of digital application documents.
Accordingly, the requirements of Section 99 BetrVG are met if an employer grants a works council the right to inspect and read the digital application documents of all applicants. This enables the works council to view the cover letters and CVs as well as references and certificates of all applicants stored in the program at any time using the computers available to it. This enables the works council to obtain the information it needs to properly exercise its right to comment. Contrary to the opinion of the works council, the employer is not required to submit the application documents in paper form.

Legal consequences / Conclusion

The decision of the Federal Labor Court has several implications for companies and works councils:

Companies: Companies should design their digital recruitment processes to be transparent and data protection compliant. They should ensure that works councils have access to the necessary documents and are able to adequately review and understand the digital documents so that their co-determination rights are not impaired.
Works councils: Works councils should adapt to digitalization and be prepared to accept digital documents. This may require training or support to ensure that they can interpret the digital process correctly.

Overall, the Federal Labor Court's decision is a step in the right direction towards a more modern and efficient working environment. While works councils may have concerns about data protection, transparency and technical competence, the decision of the Federal Labor Court shows that digital processes are acceptable as long as they provide the same information as traditional methods. So far, the decision only covers recruitment in accordance with Section 99 (1) BetrVG. However, the fact that it can also be extended to the other individual measures mentioned in Section 99 (1) BetrVG, such as groupings, regroupings and transfers, seems obvious due to the comparable interests involved.