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Conciliation Board

"First-come, first-served" principle in relation to the chair of the conciliation board (Higher Labour Court (LAG) Düsseldorf, Court Order of 2014-08-25 – 9 TaBV 39/14)

The higher labour courts of the various German states continue to dispute whether the "first-come, first-served" principle applies to conciliation boards convened by courts. Once again, a higher labour court dealt with the question of whether the candidate for conciliation board chair proposed by the employer is to be selected. A special characteristic of this case was that the works council did not provide any reasoning at all for the reservations it had in respect of the candidate proposed by the employer. The works council expressed only its rejection.

The LAG Düsseldorf considered this straightforward "no" to be sufficient. Reasoning: The chair of the conciliation board has to have the trust of both parties. In the expedited procedure pursuant to section 98 Labour Court Act (ArbGG), the labour courts' scope of discretion in rejecting the proposed person extend to the same extent. If it were to be required that reasons be provided for the rejection, the conciliation board proceedings would suffer considerably under the leadership of precisely that person acting as chair. This is inconsistent with the function of the conciliation board as a mechanism of conflict resolution.

The LAG Düsseldorf furthermore has taken a position against the "first-come, first-served" principle which is widely recognized (the LAG Berlin-Brandenburg, for example, has adopted the contrary position; see Labour Law Update, 4th Quarter 2010). According to the principle, the labour courts should be bound to the candidate proposed in the application (exceptions: bias or ineptitude, which can hardly ever be demonstrated). In other words: first-come, first-served. The LAG Düsseldorf, in this case the 9th Chamber, rejected this strategic advantage as a result of the time required alone, and places the emphasis on the issue of trust in the person selected as chair.

The great importance of the issue is obvious: the vote of the conciliation board chair is decisive in the event of doubt (cf. section 76 para. 3 sentence 3 Works Constitution Act (BetrVG)). For the parties, the judgement regarding the chair of the conciliation board is often an advance decision on the outcome of the entire conciliation board proceedings. The success of installing the desired chair now often depends on the jurisdiction in which the employer is domiciled. The degree to which the case law landscape is split on this question is apparent in that just one year before the 9th Chamber's judgement, the 7th Chamber of the LAG Düsseldorf had still demanded that relevant reasons for concerns and reservations be given for rejection of the proposed candidate (Higher Labour Court (LAG) Düsseldorf, Court Order of 2013-05-06 – 7 TaVG 5/13)

Recommendation for practice:
An increasing number of labour courts are tending to no longer observe the "first-come, first-served" principle, and instead themselves suggest another candidate to serve as chair of the conciliation board. In practice, this can be an advantage for conflict resolution since a chair appointed in accordance with the "first-come, first-served" principle always fears being perceived as the favourite of one side or the other. Employers should obtain advice in advance as to which legal view the higher labour court in their jurisdiction (still) adopts on this matter. It can be strategically expedient initially to not disclose one's first choice for chair of the conciliation board; this leaves the option of potentially bringing in that person as a compromise candidate in the negotiations.

Dr Jan Tibor Lelley, LL.M.
Dr. Jan Tibor Lelley, LL.M.,
lawyer and specialist lawyer for
labour law

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