April showers bring May flowers?! - The draft law on the Works Councils Modernization Act

May 2021 · Estimated read time: mins

Ein Überblick über die beabsichtigten Änderungen

So now it is after all: The amendment to the rights and obligations of the works council partners, which was already intended last year by the draft bill of the Federal Ministry of Labor and Social Affairs for the Works Council Strengthening Act, has recently been forwarded to the Bundesrat "in a new guise" as a draft of the Federal Government for the Works Council Modernization Act. It is to be discussed there for the first time as early as May 07, 2021. Similarly, the draft is expected to be passed by the Bundestag in May.


If the draft legislation - as planned - can actually be concluded before this year's parliamentary summer recess, the far-reaching changes it contains could have an impact in particular in spring 2022 in the context of the next works council elections. In addition to reforming the election process through various measures, the intended changes also relate to technological modernization (such as the use of a qualified electronic signature) and new initiative and co-determination rights for works councils.

In detail:

Simplification of the election process: fast, simple and straightforward

According to the draft legislation, the election procedure is to be reformed in several aspects. 

Firstly, in companies with up to 20 employees, the basic requirement for signed electoral lists is to be dispensed with entirely in future (Sec. 14 (4) BetrVG-E).

On the other hand, the possibility of an accelerated implementation of the works council election is provided for: The obligation to conduct the simplified election procedure is no longer to be limited to establishments with up to 50 employees, but is also to apply to establishments with up to 100 employees. In addition, establishments with a workforce of up to 200 employees may also opt to implement the simplified election procedure on a voluntary basis (Sec. 14a lit. a, b BetrVG-E). According to the National Standards Control Council, the associated expansion of the simplified procedure should mean that in many establishments with fewer than 200 eligible voters, the entire works council election can be held within two weeks (instead of the previous duration of 8 to 10 weeks).

Furthermore, according to the draft legislation, the age limit (eligibility up to the age of 25) for the election of youth and trainee representatives (sections 60, 61 BetrVG-E) shall be dropped. In order to enable older trainees to hold such office, the status of trainee shall be necessary but also sufficient for eligibility. Finally, the employer's right to challenge the works council election is restricted (Sec. 19 (3) BetrVG-E) to the effect that a challenge based on the incorrectness of the electoral list is excluded if this incorrectness is based on the information provided by the employer.

Special protection against dismissal through notarized election initiation

If the draft law enters into force, the special protection against dismissal will also be extended in quantitative as well as temporal terms. 

In future, the special protection against dismissal under Section 15 of the German Unfair Dismissal Act (KSchG) is to cover not only the first three employees, but now the first six employees in the invitation to election meetings, and is thus to be extended in quantitative terms. In addition, the special protection against dismissal will take effect earlier in terms of time. Under the new provision, employees who have taken preparatory steps for a works council election and have submitted a notarized public-law declaration to this effect cannot be dismissed for personal reasons or for reasons of conduct. According to the explanatory memorandum to the draft act, protection against dismissal thus begins with the certification of the signature under the declaration of intent by the notary and ends at the time of the invitation to the works council election, but no later than three months after the certification. Due to the requirement of notarial certification, however, the risk of abusive invocation of a planned election initiation for the purpose of obtaining special protection against dismissal is likely to be rather low. The possibility of ordinary termination for operational reasons and extraordinary termination also remains.

General right of initiative for vocational training

The draft grants the works council a general right of initiative for offering vocational training opportunities in the company. If no agreement is reached on the vocational training measure, the reconciliation body can be called upon to mediate (Sec. 96 (1a) BetrVG-E). One of the formulated aims of this new provision is to counter demographic change in society.

Test phase passed: Virtual works council meetings even after the pandemic

In the course of the COVID-19 pandemic, the possibility of holding works council meetings virtually was initially introduced until June 30, 2021. According to the proposed amendment, entire works council meetings or the participation of individual works council members may now be held virtually on a permanent basis - i.e. irrespective of incidence values - provided that the requirements for this have been laid down in rules of procedure (section 30 (2) BetrVG-E). However, the fundamental primacy of the face-to-face meeting remains intact (Section 30 (1) BetrVG-E). The framework conditions for holding virtual meetings are to be established solely by the works council.

Effectiveness of company agreements & Co. with electronic signature

The draft legislation renders the dispute over the validity of qualified electronically signed works agreements obsolete and in this respect clarifies that the written form requirement is adequately met in this way. This applies in any case to the case where the employer and the works council - in deviation from Section 126a (2) BGB - electronically sign the same document (Section 77 (2) sentence 2 BetrVG-E). The same also applies to the decision of the conciliation committee, the reconciliation of interests and the social plan. Corresponding electronic signature processes are thus becoming more important in company practice. Many providers advertise that they meet the requirements. However, in our experience, this is not always the case. Employers must therefore ensure that selected providers meet the legal requirements for effective electronic signatures.

Use of artificial intelligence (AI) only after obtaining expert advice

The draft AI regulation recently presented by the EU Commission makes it clear that AI is also becoming increasingly relevant in the day-to-day work of many companies in the EU. German legislators have also recognized the need for regulation in this area. Insofar as the use of AI is to be introduced in a company or the applicability of AI is to be assessed, the involvement of an expert for the works council will be required (Section 80 (3) BetrVG-E), but is also controversial with regard to the associated cost causation. According to estimates by the National Standards Control Council, the possibility of using external IT experts for consulting purposes is estimated to cost 1.1 million euros annually (daily rate 830 euros, number of cases 1,370 works councils with IT consulting requests according to WSI - Works Council Survey 2017).

Furthermore, the draft law clarifies that the works council's co-determination and/or consultation rights regarding work processes and procedures and the definition of guidelines on personnel selection cannot be eliminated by the use of AI. This applies in particular in the event that guidelines have been drawn up exclusively or with the support of AI.

Data processing by works council: yes, responsibility: no

According to the planned Sec. 79a BetrVG-E, it is not the works council itself but the employer who is to be responsible for the processing of personal data by the works council within the meaning of the data protection provisions. In the view of the German government, the works council is not an externally legally independent institution, as it only acts internally within the organization. Consequently, the responsibility for any missteps by the works council remains, in the view of the Federal Government, "appropriately" with the employer.

In tune with the times: Mandatory co-determination when agreeing on mobile work

Until now, claims for injunctive relief asserted by the works council regarding the introduction and handling of mobile work have not been successful in court due to a lack of relevant co-determination rights. This is now to change: While the decision on the introduction remains the sole responsibility of the employer, the works council will in future be involved in the concrete design of mobile work. The catalog of co-determination rights under Section 87 (1) of the German Works Council Constitution Act (BetrVG) is to be supplemented by a further provision (Section 87 (1) no. 14 BetrVG-E). According to this, the works council has a right of co-determination in the "design of mobile work performed by means of information and communication technology". The aim is to ensure a uniform legal framework for the entire workforce during implementation and to reconcile the advantages and disadvantages of mobile work with specific operational concerns.


It is to be welcomed that the simplifications associated with technological advances (in particular the possibility of virtual works council meetings and the effectiveness of qualified electronically signed documents) will be incorporated into the Works Council Constitution Act in the future. However, it is regrettable that the legislator has failed to streamline the Works Council Constitution Act in key areas in order to reduce the existing administrative burdens for employers. Employers should familiarize themselves promptly with the regulations that are expected to come into force soon in order to be able to design structures of mobile work in a legally secure manner and to apply the reformed election procedure - invitations to works council elections are often already sent out in the fall. It remains to be seen how the planned changes will shape operational practice in the future. It remains exciting.

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