Germany: Individual disputes at the workplace – alternative disputes resolution
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There are no alternative dispute resolution measures established in Germany. In addition to the traditional way of individual dispute resolution via labour courts, the works councils play an important role in resolving disputes before they come to court. Both trade unions and employers’ associations are rather sceptical towards the introduction of institutionalised mediation procedures into labour law.
Background
It is thought that the number of employees registering a complaint about their treatment at work is growing, but we need more evidence of this. The central question to be covered by this CAR is how these complaints are dealt with outside, and usually before, an application to a labour court or tribunal but which still provide the aggrieved worker with some avenue of redress, or a least a means for having the complaint heard. This is usually referred to as Alternative Dispute Resolution (ADR).
ADR normally uses well known processes of conflict resolution in collective labour disputes, such as conciliation, mediation and arbitration, but applies these to individual workers’ complaints. ADR may be an alternative to litigation through the courts or it can also be a consensual approach to the resolution of individual conflicts in the workplace used by the courts or an agent appointed by the court. ADR has a number of variants. It is usual for an independent person to be involved as a third party. This can sometimes be someone from inside the employing company or organisation but more usually involves someone from outside who is an independent person.
The main types of ADR are as follows:
- Conciliation: Here the third party who acts only as a facilitator by maintaining the two way flow of information between the conflicting parties and encouraging a rapprochement between their antagonistic positions. This is where the third party listens to each side, usually in person, but it can be done by phone, and seeks to find an acceptable solution, which can be compensation or alternatively, measures taken in the workplace. The conciliator does not make a judgement nor suggest a solution but works with the applicant and the employer to find an acceptable outcome. In some countries the law requires that before the matter can be heard in a labour court or tribunal the applicant must use the services of a conciliator. If agreement is reached it would be normal for the case to be withdrawn from the tribunal and registered as ‘settled’;
- Mediation: This is where an impartial third party, the mediator, helps two or more people in dispute to attempt to reach an agreement. Mediation is based on the principle of collaborative problem-solving with the focus on the future and rebuilding relationships, rather then apportioning blame. Sometimes a mediator may suggest a possible solution to the conflict, as they do in collective labour disputes. Another type of mediation is where the mediator guides the parties toward finding their own solution by getting them to explore different and new ways of thinking and acting. This approach has its origins in family mediation, and;
- Arbitration: This is where the third party hears the case presented by each person and makes a ruling on the outcome;
- Other ADR innovations: There can be other types of ADR such as the appointment of a third party as a ‘fact-finder’ who reports to the parties on the issues leaving them to find their own solutions. This can sometimes be used in disciplinary cases.
This EIRO CAR will focus on how far, if at all, the use of these various forms of ADR (and there may be other variants) is growing, how they operate in different EU countries, how they are viewed by the social partners, and the impact of ADR on employment relations. (An earlier EIRO ‘thematic feature’ exercise in 2004 looked at individual labour/employment disputes and the courts and EIRO national centres in 24 countries produced national reports. These were published online at http://www.eurofound.europa.eu/eiro/thematicfeature7.htm). The following questions should enable us to construct a comprehensive picture of practice and trends in ADR across the EU member states. We are essentially looking for evidence and explanation of the uptake of ADR, and details of how it operates.
(A) Recent trends (2005-2009)
1. What traditional or established methods are used in your country to seek to resolve individual disputes (e.g. labour courts/tribunals)? What ADR methods are now used as alternative or additional means to resolve individual conflicts?
In Germany, labour courts are the principal mechanism of conflict resolution, in individual as well as in collective labour disputes (DE0403105T). Labour law is applicable only to relationships based on private contract. Career public servants (Beamte), in the strict sense of the term, are excluded from labour law. The relationship between career public servants and the state is not a private contractual relationship, but is defined by, and based on, public law. This is why the law on career public servants (Beamtenrecht) is considered to be a special section of public law. Disputes concerning career public servants are not settled by labour courts, but by administrative courts.
The German labour court system is three-tiered: first-instance Labour Courts (Arbeitsgericht e); higher labour courts (courts of appeal) in the second instance (Landesarbeitsgericht e); and, at the top, the Federal Labour Court (Bundesarbeitsgericht), which has the final say in labour law matters (only cases that are believed to infringe constitutional rights may be sent, on further appeal, to the Federal Constitutional Court, (Bundesverfassungsgericht). These courts deal with private law disputes involving statutory rights - such as wrongful dismissal, infringement of works council procedures, disputes over wage payments and the interpretation of collective agreements (see below). In other words: ‘Labour courts have exclusive jurisdiction in matters involving civil legal disputes between employer and employee arising from an employment relationship, in questions relating to the existence or non-existence of an employment contract, as regards obligations remaining after the dissolution of an employment contract, and, in addition, in civil legal disputes involving torts, in so far as these are connected with the employment relationship. This means that labour courts have exclusive jurisdiction over virtually all legal conflicts between employer and employee arising from the employment relationship.’ (Labour law and industrial relations in Germany, Manfred Weiss and Marlene Schmidt, The Hague, London and Boston: Kluwer Law International, 3rd revised edition, 2000)
In Germany, unlike in some other countries, not only trade unions, but also - and, indeed, first and foremost - individual employees can be parties on the labour side to cases heard in labour courts. In other words, trade unions have no means of preventing an employee from going to court. Most lawsuits are initiated by individual employees, unions or works councils.
Labour court proceedings aim to be simple, speedy and inexpensive. Therefore, every case brought before a court of first instance begins with a conciliation hearing (Gütetermin), heard by the chair sitting alone. The purpose of this procedure is to achieve an amicable settlement - a compromise between the parties - without recourse to a formal hearing. At this stage both parties may also agree on a voluntary basis to mediation. If a settlement is concluded at this stage, the court will generally not charge court fees other than the initial filing fee.
The overall number of cases brought before labour courts of first instance has considerably declined over the years – see table 1 below
| 1997 | 2002 | 2005 | 2006 | 2007 | |
|---|---|---|---|---|---|
| Cases still pending at the beginning of the year | 262,599 | 199,469 | 187,175 | 146,765 | 138,603 |
| New cases, of which: | 659,185 | 625,323 | 523,516 | 467,807 | 454,533 |
| initiated by employees, trade unions or works councils | 637,486 | 607,467 | 513,415 | 460,747 | 447,807 |
| initiated by employers or employers’ associations | 21,373 | 17,417 | 9,887 | 6,884 | 10,169 |
| initiated by state (Länder) agencies | 326 | 439 | 214 | 176 | 224 |
| Total number of cases | 921,784 | 824,792 | 710,691 | 614,572 | 593,136 |
Source: Federal Ministry of Labour and Social Affairs ( Bundesministerium für Arbeit und Soziales, BMAS)
In 2007, the most recent year for which statistics are available, only 18% of cases brought before a labour court of first instance (Arbeitsgericht) ended with a court decision, about 51% were solved by an in-court settlement following a conciliation hearing and about 31% in other ways (most likely by the retreat of one of the parties, this may have different motives and can in some cases involve an out-of-court arrangement).
Out-of-court dispute resolution within the Works Constitution
There is neither an institutionalised nor an established practice of Alternative Dispute Resolution as described in the background note in Germany.
Cases are not generally expected to go to mediation before being heard by a labour court. The only exceptions are, first, if the case concerns vocational training or, second, if mediation is built into a relevant collective agreement. The latter is comparatively rare and concerns usually disagreements concerning the interpretation and application of collective agreements.
If it comes to solving individual disputes before they result in a court case the works councils play a very important role. The Works Constitution Act (Betriebsverfassungsgesetz, BetrVG) provides for a kind of arbitration in certain disputes of interests between works councils and the employer (BetrVG § 76). Employees are entitled to make a complaint to the employer if she or he has reason to believe that she or he has been treated unfairly, has been discriminated against, or has otherwise been put at a disadvantage by the employer or by other employees at the plant (BetrVG § 84). All employees also have the right for their grievances to be heard by the works council (BetrVG § 85). If employer and works council disagree with regard to the justification of a complaint or grievance and the works council does not reach an agreement with the employer, it may appeal to an establishment-level arbitration committee (Einigungsstelle). The Einigungsstelle consists of a certain number of members appointed by the employer and an equal number that is appointed by the works council, with an independent chair as the president of the committee. The number of members is determined by agreement between the employer and the works council. If the parties concerned fail to reach an agreement on the dispute, either side may request that the labour court decide the matter. Typical conflicts might include the conduct of workers, or the beginning and end of working hours.
In practice, however, the initiation of the above-mentioned complaint procedure at establishment level as established in the Works Constitution Act is the exception rather than the rule. In most cases where works council exist an employee might first address the works council with any complaint which could not be solved on the shop floor. The works council might then try to solve the conflict by negotiating with management or by informal mediation. In case there is no works council or the employee does not find it appropriate to address the existing body, a trade union member may also directly address the trade union concerned. It can be assumed that the union will first try to involve the works council concerned or in the absence of such a body, try to reach an out-of-court agreement with the employer.
In the case of individual dismissals the works council must be consulted by the employer according to the BetrVG. According to a representative survey of the Institute of Economic and Social Research (Wirtschafts- und Sozialwissenschaftliches Institut, WSI) within the Hans Böckler Foundation (Hans-Böckler-Stiftung, HBS) conducted in 2008, only 12% of forced dismissals resulted in court cases. This implies that most employees either might have seen no chance for success in going to the courts or might have accepted voluntary redundancy payments or a compensation payment without going to the courts.
ADR trial projects in various federal states (Länder)
In a number of federal states there have been pilot projects concerning so-called close-to-the-court mediation (gerichtsnahe Mediation). This means a mediation procedure which is on the one hand out-of-court but on the other hand embedded in the juridical system. These projects, however, did not focus on labour law but most often on civil law suits.
Although there is a debate on the introduction of formalised mediation procedures, neither the Federal Government nor any of the federal states (Länder) have so far passed such legislation.
2. Over the last five years, i.e. since the beginning of 2005, have there been any changes in your country in the volume of cases dealt with by ADR and in the proportion of individual disputes dealt with by ADR?
As there are no formalised or established ADR procedures in Germany no data or evidence concerning this issue exist. There are also no data available as how many individual disputes are resolved out of court directly by works councils or trade unions.
3. What are the main categories of individual workplace disputes dealt with by each type of ADR?
see answer to 2.
4. Does the use of ADR vary by industry sector and by occupational characteristics?
see answer to 2.
5. What impact is the recession having on the number or volume of individual disputes and on the use of ADR?
see answer to 2.
(B) Actors and processes
6. How does the aggrieved worker get access to ADR?
see answer to 2.
7. Where do independent experts in conciliation, mediation and arbitration come from?
see answer to 2.
8. Is there any formal link between ADR and a labour court or a tribunal?
see answers to 1 and 2.
9. Is the worker using ADR usually accompanied by someone at the hearing?
see answers to 1 and 2.
(C) Views of governments and social partners
10. What are the attitudes of the government and social partners (employers/employers’ associations and trade unions) to the use of ADR techniques?
In an answer to a parliamentary question by the party DIE LINKE (Left Party) the Federal Government stated on 23 June 2009 that it has established an expert commission with regard to the EU Directive 2008/52/EC of 21 May 2008 on certain aspects of mediation in civil and commercial matters which will consider various forms of out-of-court, close-to-court and in-court mediation procedures. The government proclaimed that they put the priority on the promotion of out-of-court mediation. The government does not directly mention the labour law but states that it believes that a wide range of matters might in principle be suitable for mediation.
With regard to the EU Directive on mediation the Confederation of German Employers’ Associations (Bundesvereinigung der deutschen Arbeitgeberverbände, BDA) issued a statement on 3 April 2008 in which it considered it not to be necessary to amend existing legislation in Germany in order to implement the Directive. In particular the BDA did not see any necessity to change the current labour law in order to extend mediation procedures in that field. The BDA explicitly rejected any attempt to implement close-to-court or in-court mediation or any other new legislation which went beyond the entirely voluntary mediation which it considered an established practice in German companies. As for the labour law, the BDA regards the existing conciliation hearing at labour courts of first instance as sufficient.
In July 2008 the Confederation of German Trade Unions (Deutscher Gewerkschaftsbund, DGB) developed a paper on the implementation of the Directive on mediation with so-called corner stones. The DGB does not see any necessity to implement this directive with regard to national labour law. It regards the dispute resolution mechanisms which exist at establishment level as sufficient - in particular as there are legal mechanisms which allow employees to pursue their interests if necessary in the courts. In case the government nevertheless deemed it necessary for political reasons to establish formal mediation procedures by way of legislation, the DGB insists that all mediation has to be independent, impartial and entirely voluntary and must allow all parties to return to the legal process if deemed necessary. The costs for any mediation in labour law should be borne by the employer.
(D) Commentary by national centre
11. Please provide a short commentary on the significance of ADR in your country and debates about its impact (or potential impact) on employment relations.
Both employers’ associations and trade unions do not see any necessity to amend the German labour law in order to introduce mediation or arbitration mechanisms which extend those already embedded in the Works Constitution Act. In terms of individual disputes at the work place it seems that the existing procedures are deemed to be satisfying by both employee and employer representatives.
Heiner Dribbusch, Institute of Economic and Social Research, WSI