Thematic feature - individual labour/employment disputes and the courts

Source: BMWA 2003; Weiss and Schmidt, cited above, 2000.

The figures above for the ordinary labour courts show a significant increase in workload between 1990 and 1997, but a notable fall thereafter. As a consequence, the period it takes for cases to be settled increased until 1997, but decreased after that date. As far as the issues covered are concerned, the number of cases regarding dismissals, remuneration and classification is very high (the data source does not give any further information on the content of the 'others' category). With regard to the number of appeals to higher courts, there was, as with the general workload, a rise in the period between 1990 and 1997, and a decline in the number of appeals thereafter.

The Federal Ministry of Economics and Labour (Bundesministerium für Wirtschaft und Arbeit, BMWA) is responsible for publishing statistics on labour court issues. Detailed statistics on costs are not available in its current official data (Ergebnisse der Statistik der Arbeitsgerichtsbarkeit 2002, Bundesministerium für Wirtschaft und Arbeit, Referat III A 1, Berlin 2003).

Other means of resolving individual disputes

Is there any kind of legal mechanism forcing or encouraging the two parties (management and employees) to resolve a dispute by prior negotiation? Where there is such a mediation process foreseen, please give details. Is there any evidence that mediation has had an effect on the volume of claims handled by courts? Are there any corporate policies built into the structure of organisations in your country specifically to deal with disputes? How are the employees’ representative bodies involved in the process?

Labour courts have jurisdiction in disputes of rights. In matters of individual labour law, the jurisdiction of the labour courts comprises all types of cases listed in the Labour Courts Act. In most of these cases, the labour courts have exclusive jurisdiction. In other words, even if the participants wish, the case may not be heard by a different court. Only a small amount of leeway exists within which the conflicting parties can decide if they wish to have the case heard by a labour court or by an ordinary court of civil law.

Nonetheless, arbitration as an alternative or supplementary means of resolving disputes of rights exists in Germany. This is true even if it is only in rare and exceptional cases that arbitration tribunals may give decisions in the place of labour courts. Provision is made for private arbitration only where the people covered by a collective agreement are stage, screen or variety artists or members of a ship’s crew, and only when provision is made in the collective agreement for a decision to be given by an arbitration tribunal. Beyond this, however, a further important area of arbitration exists. The Works Constitution Act (Betriebsverfassungsgesetz) provides for arbitration in disputes of interests between works councils and the employer. The arbitration system was introduced through an amendment of the Works Constitution Act in 1972. If employer and works council disagree with regard to the justification of a complaint by an employee, who has reason to believe that he or she 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, the works council may appeal to an arbitration committee. The arbitration committee 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 (see Birk and Waas, 1997, cited above).

The procedure to be followed by an arbitration committee depends on whether the conflict involves a conflict of rights or a conflict of interests. If the complaint involves a conflict of rights, the decision of the arbitration committee can only serve as a recommendation to the employer and works council on how the case should be settled. In a conflict of interests, the decision of the arbitration committee supersedes any agreement between employer and works council. Either of these two bodies may appeal to the labour court, however, arguing that the arbitration committee has exceeded its jurisdiction.

In practice, at establishment level the initiation of the abovementioned complaint procedure as established in the Works Constitution Act is the exception rather than the rule. According to Weiss and Schmidt (2000, cited above), 'employees prefer to settle complaints, which do not end up in a lawsuit, on the shop floor with the personnel management and without any subsequent formal procedure whatsoever.'

Debate

Please summarise any current debate on the issue of employment/labour disputes litigated by courts in your country.

Generally, the subject of individual disputes at workplace level that are settled by courts is currently not a matter of heated debate in Germany. For example, the involvement of the social partners in the labour courts appears not to be questioned. There has not, recently, been any major new legislation specifically on the subject. Furthermore, a recent survey article pays no specific attention to this subject ('Recent developments in German and European labour law', Manfred Weiss, in The changing contours of German industrial relations, Walther Müller-Jentsch and Hansjörg Weitbrecht (eds), Rainer Hampp Verlag, Munich and Mering, 2003).

In the course of recent amendments of labour law, however, the idea was mooted of merging labour (and social) courts and ordinary courts - partly in order to save costs. The permanent committee of the ministers of justice of the German states (Länder), who are competent in this regard, have discussed this idea. It is, however, not clear at the moment if these discussions will result in new legislation. The German Federation of Trade Unions (Deutscher Gewerkschaftsbund, DGB) rejects this approach, even if no plans currently exist to change the involvement of the social partners in the courts, arguing: 'The incorporation of social and labour courts in administrative and ordinary courts would strongly threaten the continuity and acceptance of the current judgments. Social balance in conflicts is especially important during the current reconstruction of the social security system and the labour market. The contribution of judgments to this process should not be threatened.'

A further debate concerns the question of whether or not collective actors should have a specific right to take legal action (Verbandsklagerecht). DGB, for example, demands such a right to take legal action against what it sees as discrimination (DE0308101T). The Confederation of German Employers’ Associations (Bundesvereinigung der Deutschen Arbeitgeberverbände, BDA), however, rejects such a right for associations.

The focus of discussions amongst employers’ federations has been on the more general costs linked to labour law and on the rising costs to firms that have resulted from recent changes in legislation with regard to, for example, the re-regulation of part-time working. These new regulations grant employees the right to demand part-time work, and this request can be refused only if the company can show that its urgent needs prohibit such part-time working. BDA supports, in general, fewer regulations in labour law. The BDA states: 'Labour law in Germany is currently highly complicated, extremely difficult to understand and unpredictable. It costs companies, especially small and medium-sized enterprises, time and money without positive effects for workers and job seekers on the other side of the balance sheet ... There can be no sustained expansion of employment without deregulation and a thinning of the forest of labour law. With this objective, BDA represents the interests of the German business community in all legislative proposals linked to labour law ... The tasks of BDA’s labour law department include a continuous analysis and interpretation of the current jurisprudence of labour courts and its implications for companies. BDA comments on new legislative rules and gives advice on how to apply them in day-to-day business practice.'

At the labour courts of first instance, trade unions provide legal counsel to their members at no cost: 'This, by the way, is for many employees the main reason for joining a trade union. Hence, trade unions serve in a way as a sort of legal expenses insurance' (Weiss and Schneider, 2000, cited above). In the higher labour courts of second instance, a union member may again be represented by legal counsel offered by his or her trade union free of charge. At this level, however, union membership does not automatically give the right to free legal counsel as the trade union decides in each case whether or not it is willing to offer legal aid for the second instance. This decision depends, for example, on the union’s evaluation of the member’s chances of winning the dispute. In 2003, DGB’s insurance scheme that covers legal fees (DGB Rechtsschutz GmbH) gave legal counsel to 164,600 trade union members at labour and social courts. The main areas covered concerned dismissal and remuneration disputes, and issues involving pensions, unemployment insurance and severe disability.

Finally, the labour courts do not have a formal say in the process of legislating in the field of labour law. There are major areas in German labour law, however, where no legislation exists at all; the law on strikes and lock-outs possibly forms the most important example. The courts fill these gaps by 'inventing' 'judge-made law' (richterliche Rechtsfortbildung) that is basically drawn from more fundamental principles such as the constitutional rights granted in the German Constitution. (Lothar Funk, Cologne Institute for Business Research, IW)