Hourly fee for Works Council lawyers

LAG Lower Saxony - 11 TaBV 51/14

Under the provisions of the Works Council Constitution Act (BetrVG), an employer must assume the necessary costs of the Works Council. These can also include the legal costs of the Works Council. It is clear that the assumption of costs for advice aimed against the employer creates enormous potential for conflict.

The legislator has regulated the basic model for lawyers’ fees in the Lawyers’ Remuneration Act (RVG). This links the fee to a large extent to the “value” of the dispute. However, this says nothing about how long the lawyer spends working on the case. The Federal Labour Court (BAG) has affirmed the authority of the RVG. Hourly fees are admissible only in justified exceptions. The BAG is regularly of the opinion that the dispute concerning co-determination rights is always of the same value, irrespective of the number of employees concerned. A value of 5,000 EUR results in a fee of less than 1,000 EUR, irrespective of the amount of work involved.

Decision of the LAG Lower Saxony

A recent decision by the LAG Lower Saxony (ruling dated 14.10.2014 - 11 TaBV 4159/14) must be seen against this background. In this decision, the court considered the granting of an hourly fee of 290 EUR net, or 100 EUR net for pure travelling time, by a Works Council as well as the overall fee of 35,000 EUR for the accompaniment of restructuring measures as appropriate, and obliged the employer to make corresponding payment.

Criticism of the decision

The LAG Lower Saxony justified the exception from the applicable principle (RVG) through a series of (fictitious) arguments. The fact that the employer’s lawyer was paid on an hourly basis was irrelevant. The BetrVG does not recognise any right to equal remuneration of employer and Works Council lawyers. Even the reference of the LAG to the fact that the responsibility of the General Works Council makes the advising generally more complex and thus justifies higher remuneration, fails to convince. The reference to the commenting literature on the RVG, which regarded hourly rates of 500 EUR as appropriate, was also wide of the mark. The point quoted addresses in particular the violation of morality through (excessive) hourly rates, not their necessity within the context of the BetrVG.

Fictitious arguments

The opinion of the court that the employer must prove there are Works Council lawyers with above average qualifications who settle in accordance with the RVG, is also misplaced. The Works Council bears the burden of proof as regards the necessity of the specific fee. A telling factor is the comment by the LAG that the fixing of the value in dispute is difficult and that a legal dispute is therefore likely. The LAG Lower Saxony draws the conclusion from this that the hourly fee is the more reliable and verifiable variant. This is denial of justice.

Basis of trust and prior involvement

Two other arguments of the LAG are worthy of note: on the one hand, the employer had, several years previously, once agreed to the specific hourly rate for the same Works Council lawyer. On the other hand, this lawyer has already known the group of companies and the people working there for many years. During the difficult restructuring situation, the basis of trust with him was therefore of fundamental importance.

Checking standard under Section 40 BetrVG

In contrast to the wording of the law, the necessity of costs is not checked against a purely objective view, but whether the Works Council – after weighing up all aspects – could justifiably assume that specific costs were “necessary”. The verification standard is subject to the Works Council’s diligence also so as not to expose the “honorary office of member of the Works Council” to any excessive liability risks. In individual cases, the two last named arguments of the LAG can indeed justify the awarding of an hourly rate. The LAG adopts a very general approach here. The Works Council may frequently trust in assumption of costs by the employer as in the past. In the case in dispute however, the employer had not declared any such placet prior to the awarding of the mandate. Fortunately, concessions at company level are normal for both sides, even over and beyond the statutory minimum limits. Nevertheless, a voluntary concession must not result in self-commitment for the future. As such, it would have been desirable here for the LAG Lower Saxony to check the factual circumstances more in detail.

Summary

The constellation, in which the employer is required to pay for the Works Council’s lawyer, in itself contains the potential for conflict. It is not without good reason that the BGH recently affirmed personal liability of members of the Works Council for the triggering of inappropriate, unnecessary costs. In this respect, the courts and the legislator frequently leave employer and Works Council to themselves. Reliable tables on the value in dispute would help all parties.