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Fixed term employment contracts with members of the works council

A works council member can be entitled to a permanent employment contract under the prohibition against discrimination pursuant to section 78 sentence 2 of the Works Constitution Act (BetrVG) if the employee's activity on the works council is the sole reason for not making the employment relationship permanent (Federal Labour Court, BAG, decision of 25/06/2014 7 AZR 847/12)

The employer employed the employee who brought the action on a fixed-term basis for no objective reason. During the period of this fixed-term employment, she was elected to the works council. Afterwards the employer extended the contract once, however refused to extend it again. The employee then challenged the fixed-term employment in the courts and demanded a permanent employment relationship. She argued that the employer had discriminated against her by making her employment fixed-term as a result of her activity on the works council.

The Federal Labour Court (BAG) has kept with its case law in asserting that the office of works council member does not prevent application of the Act on Part-Time Work and Fixed-Term Employment Contracts (TzBfG). Pursuant to section 78 sentence 2 of the Works Constitution Act (BetrVG), works council members must not be discriminated against as a result of their activity on the works council. According to the Federal Labour Court (BAG) discrimination of this nature exists if the employer makes the employment relationship of a works council member fixed-term, then refuses to conclude a subsequent employment contract directly as a result of their activity on the works council. Insofar as this is the case, the circumstances of each individual case are authoritative. The works council member must demonstrate and furnish evidence for the illegal discrimination. The employer must then refute these indications.

To date the Federal Labour Court (BAG) has only issued a press release with regard to this decision. It should be assumed on this basis that the Federal Labour Court (BAG) took into consideration any influences exerted by European Union community law, in particular, on the legal question. Specifically, the issue is effective minimum protection for employee representatives (Article 7 of Directive 2003/14/EC). "Protection" of works council members against fixed-term contracts in the form of restricting or invalidating the applicability of section 14 para. 2 of the Act on Part-Time Work and Fixed-Term Employment Contracts (TzBfG) has primarily and most recently been discussed in literature that tends to favour the position of employees. The Higher Labour Court (LAG) of Lower Saxony has already dismissed this in its appellate capacity (decision of 08/08/2012 2 Sa 1733/11). According to the Higher Labour Court (LAG), in German law the prohibition on discrimination, the penal provision pursuant to section 119 of the Works Constitution Act (BetrVG) as well as damage claims offer sufficient minimum protection to works council members who have been employed on a fixed-term basis. The Higher Labour Court (LAG) also held that the minimum protection is also implemented insofar as only a reduced burden of demonstration and evidence applies within the scope of the prohibition on discrimination. It is expected that the Federal Labour Court (BAG) will also fully hold to the opinions expressed in its press release in its forthcoming grounds of the decision.

Recommendation for practice:

The special protection of works council members provided for in dismissal protection works constitution law does not extend to the law on fixed-term employment contracts. Since opposing positions have proliferated lately in the law literature, the decision of the Federal Labour Court (BAG) is to be welcomed. It provides a clear refusal to any employees holding works council office whose employment has been made fixed-term and who would like to use the office to protect them inadequately. To exclude allegations of discrimination, it is crucial that employers follow transparent rules in creating the terms of employment contracts.

Bianca Brier
Author:
Lawyer
Bianca Brier
brier@buse.de

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