Temporary employees cannot be counted towards the threshold level for co-determination

The regular use of temporary employees remains part of the organisational concept in many companies. As such, the question frequently arises as to the extent to which temporary employees
must be taken into account when calculating threshold levels under employment law. The Higher Regional Court Hamburg has now rejected inclusion of temporary employees when calculating the authoritative co-determination threshold level under Section 1 MitbestG (Co-determination Act).

The background to the proceedings was a permanent reduction in the number of employees to below 2,000 in the eyes of the company. Consequently, the equal representation on the Supervisory Board, previously required under the Co-Determination Act (MitbestG), was no longer lawful. Only the Law on One-Third Participation (DrittelbG) was now applicable. In the status proceedings, the objection was raised that the threshold level of 2,000 employees was still exceeded if account was taken of temporary staff.

The OLG (Higher Regional Court) Hamburg rejected consideration of temporary employees when calculating the threshold levels for co-determination in the company. While the Federal Labour Court (BAG) has since abandoned its original principle that “temporary employees are entitled to vote but do not count” and has repeatedly taken them into account when determining the threshold levels, the OLG has stood by earlier case law. Like the OLG Düsseldorf in 2004, it is still of the opinion that equal treatment of temporary employees and the core staff in codetermination of the company is neither intended nor necessary. It is the duty of the Supervisory Board to act on a medium and long-term basis and to control the decisions of the company. This has only a marginal impact on the interests of the workers used merely on a temporary basis, who have the alternative of returning to the hirer company.

Appeal on a point of law to the Federal Supreme Court allowed

Given the fundamental significance of this decision, concerning which there has thus far been no decision by the Supreme Court, the OLG Hamburg has allowed the appeal on a point of law, with the result that a decision of the Federal Supreme Court (BGH) (II ZB 7/14) on this matter can be expected soon.

BAG will also decide

A case is also before the BAG (7 ABR 42/13) concerning the consideration of temporary workers under the MistbestG. This concerns the question of whether the election of the employee representatives under Section 9 Subsection 1 MitbestG is to be conducted as an election of delegates, because, as a rule, there are more than 8,000 employees including the temporary staff. In contrast to the OLG Hamburg, the LAG Hesse (ruling dated 11.4.2013 - 9 TaBV 308/12) has decided that temporary employees must be taken into account when calculating the number of employees in accordance with Section 9 Subsections 1 and 2 MitbestG.

Government (still) inactive

Further clarity could (even) be provided soon by the government. The coalition agreement sets out clearly that, in order to facilitate the work of Works Councils, the law will provide clarification that temporary employees must, as a fundamental rule, be taken into account when determining the threshold values under the Works Council Constitution Act, provided this does not contradict the directional aim of the respective standard. Thus far, however, there are no known legislative activities in this respect.

Counting under BetrVG and KSchG

The U-turn by the BAG as regards the counting of temporary employees was initially for the area of works council constitution law. According to Section 7 Sentence 2 BetrVG, temporary employees eligible to vote must be taken into account when determining the authoritative threshold level for changes in operations as per Section 111 Sentence 1 BetrVG (BAG, judgment dated 18.10.2011 - 1 AZR 335/10). As a fundamental rule, temporary employees must also be counted when determining the size of the Works Council as per Section 9 Sentence 1 BetrVG (BAG, judgment dated 13.3.2013 - 7 ABR 69/11). Additionally, the BAG has already extended the inclusion of temporary employees to the determination of the size of the company under Section 23 Subsection 1 Sentence 3 KSchG (judgment dated 24.1.2013 – 2 AZR 140/12).

Summary

It remains to be seen what positions the BGH and the BAG adopt concerning consideration of temporary employees as regards the threshold levels for co-determination in companies. Overall and in view of the high number of employment-law threshold levels, a check must be carried out in each individual case in terms of whether established case law already exists or whether individual legal thinking from previous decisions can be taken over.