No entitlement to financial compensation for Works Council duties outside of working hours

BAG, judgment dated 28.5.2014, 7 AZR 404/12

Based on the decision of the Federal Labour Court (BAG), a member of the Works Council is only entitled to financial compensation for time spent on Works Council activities outside of working hours if compensation in the form of corresponding paid time off in lieu is not possible for operational reasons. This can only be assumed if the employer invokes this and therefore refuses to grant time off in lieu.

The parties are essentially arguing about claims to compensation asserted by the Claimant – an employee of the Defendant – for work for the Works Council. Before these claims were asserted, the  Defendant had terminated the employment relationship with the Claimant without notice for operational reasons and with a social phase-out period. The Claimant was released from her work duties during the subsequent legal action for unfair dismissal. Although the Claimant won the legal action for unfair dismissal, she did not exercise her legal entitlement to continued employment and did not resume her work as company doctor. Nevertheless, the Claimant continued to perform duties for the Works Council up until the end of the employment relationship – by her own accounts both during her (fictitious) working hours as well as during the period of release, which was expressly described as holiday time.

Through her legal action, the Claimant is asserting that time off in lieu should have been granted for all hours spent on her activities for the Works Council. As this is now no longer possible due to the ending of the employment relationship, the time must be the subject of compensation. She was not obliged to work either during the dispute for unfair dismissal or during the release phase, and therefore performed all duties outside of her working hours. The Labour Court as well as the State Labour Court largely dismissed the legal action. The appeal on a point of law was unsuccessful.

As a fundamental rule, activities for the Works Council must be performed during working hours.

In the opinion of the Federal Labour Court, the precondition for an entitlement to compensation for Works Council activities, required under Section 37 Subsection 3 Sentence 3 Half-Sentence 2 BetrVG (Works Council Constitution Act) is not satisfied through mere notification of work for the Works Council performed during leisure time. This is because members of the Works Council fundamentally do not receive official remuneration for their work on the Works Council under the principle of lost pay, nor is work for the Works Council a work performance to be remunerated. The time off in lieu, regulated in Section 37 Subsection 3 Sentence 1 BetrVG for Works Council activities performed outside of working hours, applies only to the consequences of a deviation, made necessary by operational reasons, from the principle that Works Council duties must be performed during working hours.

Entitlement to compensation only if release from work is not possible for operational reasons.

Remuneration of duties for the Works Council can be considered in exceptional cases if the time off in lieu is not possible for reasons within the employer’s sphere of control. Impossibility of release from work for operational reasons can only be assumed if the employer invokes this and therefore refuses time off in lieu. As long as these preconditions are not given, a member of the Works Council is dependent on claiming time off in lieu and, if necessary, asserting this through the courts. In this respect, the member of the Works Council must also actually demand time off in lieu from the employer

Right of the employer to choose between paying remuneration for additional work or granting release from work.

The mere notification of Works Council duties performed during leisure time is not sufficient. Even in the case of high entitlements to time off in lieu, the decision on whether to invoke operational reasons and pay remuneration for additional work or possibly grant extensive release from work lies with the employer. According to the BAG, operational reasons are by all means not given if the member of the Works Council decides to perform duties for the Works Council during his/her holiday.

Summary

As a fundamental rule, activities for the Works Council must be performed during working hours. If a member of the Works Council has performed duties for the Works Council outside of his/her personal working hours for operational reasons, he/she has an entitlement to paid time off in lieu. The Works Council member must assert this entitlement. If the employer is unable to grant the release from work within one month for operational reasons, the Works Council member will become entitled to financial compensation. The decision to invoke operational reasons and to pay remuneration for additional work or grant corresponding time off in lieu is the responsibility of the employer. As such, the employee does not have a right of choice.