If the employer has only informed the works council per sec. 105 BetrVG when hiring a (would-be) executive employee, but did not submit the application for hiring approval pursuant to sec. 99 para. 1 BetrVG, the employer can retroactively complete the letter procedure until the legally final decision of the labor court concerning the cancellation of the hiring decision.
The subject of the proceedings before the Higher Labor Court Düsseldorf was a petition by the works council to cancel the hiring per sec. 101 para. 1 BetrVG. The employer had hired an individual designated as an executive employee as defined by sec. 5 BetrVG. Accordingly, the employer informed the works council about the hiring only per sec. 105 BetrVG. The employer requires no approval for hiring an executive employee. As opposed to the hiring of a staff employee, for whom the employee requires mandatory approval of the works council per sec. 99 para. 1 BetrVG. The works council initiated proceedings per sec. 101 para. 1 BetrVG with the objective of having the hiring decision canceled by the labor court. During the proceedings, by way of precaution, the employer involved the works council per sec. 99 para. 1 BetrVG, specifically as an alternative in case the hired person was an employee. The works council denied its approval without basing its decision on grounds to deny approval per sec. 99 para. 2 BetrVG. In the first instance, the labor court instructed the employer to cancel the hiring. The employer filed an appeal against this decision.
The Higher Labor Court Düsseldorf found in favor of the appeal. In doing so, the court left unresolved the issue of whether the person hired was a staff employee or an executive employee. The decisive factor was that the employer at any rate had effectively involved the works council retroactively per sec. 99 BetrVG. The response by the works council was irrelevant for lack of grounds to deny approval, with the consequence that approval per sec. 99 para. 3 sentence 2 BetrVG was considered granted. In this, the core element of the decision by the Higher Labor Court is that in the proceedings according to sec. 101 BetrVG, the involvement of the works council per sec. 99 para. 1 BetrVG – also by way of precaution – can be completed retroactively until the conclusion of the hearing of the first instance. This is supported by the systematic process of sec. 99 et seq. BetrVG as well as the subject on proceedings stated in sec. 101 BetrVG in terms of timing. The subject of proceedings is exclusively whether a personnel measure is valid in the present and future, and not, for instance, whether it was valid at the time the petition was submitted or at an earlier point in time. That is why, in particular, it is not necessary to initially cancel the personnel measure as long as no legally final decision has been issued on the proceedings according to sec. 101 BetrVG.
Recommendation for practice
The decision is consistent with case law of the Federal Labor Court, according to which the “remedy” of any defects of involvement depends on the factual and legal position at the time of the last hearing. Employers are not required to reverse the hiring decision as long as they still compensate for any defects in the co-determination processes by means of renewed involvement of the works council prior to conclusion of the first instance. This was also decided by the Higher Labor Court for the proceedings pursuant to sec. 101 para. 1 BetrVG, with which the works council may seek cancellation of a personnel matter. It needs to be emphasized in particular what every employer should undertake by way of precaution when hiring an executive employee: namely, in addition to involving the works council pursuant to sec. 105 BetrVG, it should petition for approval of the hiring decision pursuant to sec. 99 para. 1 BetrVG. Thus, the participation rights of the works council are preserved, independent of the often disputed question among the company parties as to whether the person to be hired is an executive or a staff employee.