Thematic feature - individual labour/employment disputes and the courts

This article examines how individual labour/employment disputes are handled through the courts in Germany, as at March 2004.

In March 2004, the EIRO national centres in 24 European countries were asked, in response to a questionnaire, to give a brief overview of their country's system for dealing with individual labour/employment disputes through the courts, along with data on: the volume of cases; the costs; the timeframe; alternatives to going to court; and any current debate on these issues. The German responses are set out below (along with the questions asked).


Please give a brief description of how disputes concerning individual employees' employment and labour rights are handled in your country by courts, tribunals or other official judicial bodies.

In Germany, labour law concerns the rules that are applicable to the employment relationship and that structure the collective relationship between employers and labour. Individual labour law focuses on the individual employment relationship, while collective labour law focuses on the structure of industrial relations. Despite this seeming dichotomy, the two areas are closely interrelated. In particular, the distinction between individual and collective labour disputes is of no relevance for the jurisdiction of the labour courts: their jurisdiction covers both types of disputes. In Germany, labour courts are the principal mechanism of conflict resolution, in individual as well as in collective labour disputes.

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. Nonetheless, labour law covers a part of the public sector, namely the blue- and white-collar workers employed in the public service: 'These public employees are ordinary employees with a normal contractual employment relationship and are therefore covered by labour law' (Labour law and industrial relations in Germany, Manfred Weiss and Marlene Schmidt, Kluwer Law International, The Hague, London and Boston, 3rd revised edition, 2000).

The German labour court system is three-tiered: labour courts of first instance (Arbeitsgerichte); higher labour courts (courts of appeal) in the second instance (Landesarbeitsgerichte); 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). 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. In this context the notion employee includes manual workers, white-collar workers, apprentices and even employee-like persons' (Weiss and Schmidt, 2000, cited above).

Each labour court contains a mixture of professional and lay judges. A labour court of first instance is composed of one professional (Berufsrichter) and two lay members (ehrenamtliche Richter) drawn mainly from representatives nominated by employers' organisations and trade unions. According to the law, the organisations nominating the lay judges are prevented from exerting influence on the courtroom decisions of the lay judges. In practice, however, this may be different. In the process of decision-making, the votes of the lay members carry as much weight as those of professional judges, which at least theoretically opens up the possibility of the professional judges in the labour courts of first instance and courts of appeal being outvoted. This, however, seems to happen only very rarely, reportedly because the extensive, and sometimes very complicated, regulation of industrial relations in Germany gives the professional judge the upper hand vis-à-vis the lay judges.

Representation by counsel is optional in labour courts of first instance. It is, however, required at higher levels - that is to say, the parties involved in the dispute must be represented either by an attorney, or by an employers’ association official, or by a trade union official. Any attorney admitted to practise in Germany can represent clients before any labour court of any instance.

Social security cases are heard by separate courts. This is due to the fact that social security law in Germany is strictly separated from labour law, and is understood to be a part of public law. Therefore, disputes arising in the field of social security are not settled by labour courts (or administrative courts), but by special social security courts (Sozialgerichte). Around 250,000 cases are heard by social security courts each year; the large majority of these cases deal with questions concerning either the statutory pension scheme or unemployment insurance or total disability law. As the focus of this article is on labour courts, these social security courts will not be dealt with in any greater detail here.

Civil law courts play a role mainly in two respects. First, all problems relating to the field of workers’ representation on company supervisory boards are dealt with by the civil courts (this is because civil courts are responsible for the settlement of company law cases, and workers’ representation is partly embedded within the traditional structures of company law). Second, civil courts decide disputes of rights referring to the internal structure of trade unions and employers’ associations. For example, disputes concerning whether or not a union member can be excluded or not are decided by the ordinary civil courts (see Dispute resolution systems in EU state nations and their practices, Rolf Birk and Bernd Waas, Institute for Labour Law and Industrial Relations in the European Union Discussion Paper, Trier, 1997).

Unlike in some other countries, in Germany 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 - see table 1 below.

Table 1. Cases before labour courts of first instance, by initiating bodies, 1990-2002 (selected years)
. 1990 1997 2002
Cases still pending at the beginning of the year 99,975 262,599 199,469
New cases, of which: 325,969 659,185 625,323
initiated by employees, trade unions or works councils 315,902 637,486 607,467
initiated by employers or employers’ associations 9,841 21,373 17,417
initiated by state agencies 226 326 439
Total number of cases 425,944 921,784 824,792

Source: Federal Ministry of Economics and Labour (Bundesministerium für Wirtschaft und Arbeit, BMWA) 2003; Weiss and Schmidt, 2000, cited above.

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. If a settlement is concluded at this stage, the court will generally not charge court fees other than the initial filing fee. Although each party must meet its own costs for legal representation in a labour court of first instance, the losing party will have to pay court fees plus witness expenses. In the other labour courts, the losing party must bear the attorney fees of both parties. However, if one of the parties is unable to pay the costs of the proceedings without jeopardising his or her family’s income, state legal aid is, under certain conditions, available (for details, see Weiss and Schneider, 2000, cited above).

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.

There is an automatic right of appeal for all cases before the labour courts of first instance within one month, provided that: the award is in excess of EUR 600; or the existence or termination of an employment relationship is at stake; or appeal is explicitly admitted by the labour court of first instance. A right to appeal must be granted if either: the dispute is of fundamental importance or deals with matters relating to collective bargaining in the wider sense; or the decision of the labour court of first instance is, amongst other points, based on a deviation from an earlier decision of a higher labour court.

The higher labour court reviews the case in complete detail, both on points of law and on matters of fact. Normally, an appeal to the Federal Labour Court requires consent either from a higher labour court or (on complaint) from the Federal Court itself; this consent has to be issued within one month of the ruling by the higher labour court. The appeal may be based on points of law (Berufung) in the case of civil proceedings and through a petition for review (Beschwerde) in the case of collective proceedings (that is, all matters arising in connection with the Works Constitution Act). The Federal Labour Court gives decisions only with regard to questions of law. German labour court proceedings recognise two forms of appeal.

Number of cases/disputes and costs, and litigation timeframe

How many cases have been dealt with in your legal system by each category of court? Where possible, please provide statistics on the number of disputes in your country each year from 1990 to 2003 (or the latest year for which data are available). Where possible, please provide statistics on costs.

Where possible, please provide statistics on the timeframe within which court cases over individual labour/employment disputes are settled.

Information on the overall number of new and pending cases before labour courts of first instance is provided in table 1 above. Table 2 below breaks down the labour court of first instance cases closed each year by the issue concerned.

Table 2. Cases closed before labour courts of first instance, by issue, 1990-2002
Type of dispute 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Dismissals 135,565 135,565 183,048 230,355 235,853 287,008 313,586 310,295 285,474 260,249 246,808 256,384 296,609
Remuneration 107,271 109.181 119,810 126,474 141,174 211,412 226,443 249,485 236,042 226,937 223,982 221,382 211,618
(Correction of) certificate of employment 10,203 10,775 11,417 11,910 12,457 14,089 15,395 15,939 17,585 21,254 23,425 25,878 27,908
Holidays, holiday bonus 12,306 12,932 13,034 12,308 12,908 16,533 17,209 19,331 19,307 23,399 20,026 22,741 19,819
Damages 4,637 4,583 4,710 4,596 4,241 5,204 5,601 4,951 5,283 5,515 5,144 4,861 4,525
Classification 3,071 3,176 4,071 5,062 5,539 15,061 8,426 9,484 5,787 4,243 3,195 3,513 2,843
Others 105,291 101,794 105,175 114,917 126,201 155,892 162,665 167,708 162,835 162,816 164,026 166,700 170,599
Total closed cases* 320,298 330,298 383,545 441,920 472,816 621,460 656,207 672,804 625,462 589,531 574,644 582,598 610,079

* The sum of closed cases by type of dispute is higher than closed cases in total due to multiple claims in some cases.

Source: Federal Statistical Office (Statistisches Bundesamt, destatis), various years.

Tables 3 and 4 below give figures for how long cases before labour courts of first instance take to be dealt with.

Table 3. Duration of cases before labour courts of first instance, from filing until settlement, 1990-2001
. 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
% of cases closed after 6 months 86 85 82 81 77 76 78 75 75 73 81 82
% of cases closed after 12 months 97 97 97 96 95 94 95 95 94 90 96 97
No. of pending cases at end of year 105,646 117,531 149,797 185,055 176,410 243,509 262,572 248,980 208,178 192,539 187,001 199,564

Source: Destatis; various years.

Table 4. Duration of cases before labour courts of first instance, 1990-2002 (selected years)
. 1990 1997 2002
Duration from filing complaint until settlement - dismissal cases
  • up to 1 month
42,687 62,765 72,186
  • 1-3 months
53,468 123,601 134,254
  • 3-6 months
22,641 65,117 59,092
  • 6-12 months
12,939 53,487 34,933
  • more than 12 months
2,138 23,395 6,039
Duration from filing complaint until settlement - all other cases
  • up to 1 month
47,030 57,545 59,029
  • 1-3 months
70,385 123,057 116,534
  • 3-6 months
38,442 70,551 59,149
  • 6-12 months
242,501 80,422 55,051
  • more than 12 months
6,067 23,395 13,822
Disputes not yet settled at end of year 105,646 248,980 214,713

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

Tables 5 and 6 below provide similar data on the number and duration of appeals in higher labour courts.

Table 5. Status of appeals before higher labour courts, and duration from filing until settlement, 1990-2002
. 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Total no. of closed cases 16,019 14,823 15,643 17,963 20,202 26,646 25,133 27,062 29,109 27,134 25,224 22,701 21,145
% of cases closed after 6 months 72 71 73 72 68 60 60 62 59 56 62 64 na
% of cases closed after 12 months 91 91 92 91 90 86 86 88 87 86 88 89 na
No. of pending cases at end of year 7,700 7,802 9,234 11,084 11,711 15,016 15,866 17,280 16,191 14,145 11,970 11,221 11,356

Source: Destatis, various years.

Table 6. Status and duration of appeals before higher labour courts, 1990-2002 (selected years)
. 1990 1997 2002
Appeals still pending at beginning of year 7,936 15,865 11,221
New appeals 15,827 28,477 21,280
Total appeals 23,763 44,342 32,501
Appeals settled within the year: 16,019 27,062 21,145
  • by judgment on merits of the case
5,931 8,536 6,487
  • by other judgment
168 286 243
  • by compromise reached in court
4,873 8,812 7,070
  • otherwise (eg withdrawal of appeal)
4,051 9,428 6,800
Duration from filing until settlement - dismissal cases
  • up to 3 months
2,448 3,865 3,199
  • 3-6 months
2,138 4,448 3,718
  • 6-12 months
1,093 3,423 2,334
  • more than 12 months
341 1,252 798
Duration from filing until settlement - all other cases
  • up to 3 months
3,812 4,410 3,319
  • 3-6 months
3,158 4,086 3,693
  • 6-12 months
1,964 3,543 2,804
  • more than 12 months
1,065 2,035 1,280
Appeals not yet settled at end of the year 7,744 17,280 11,356

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

Finally, tables 7 and 8 below provide data on the number and duration of cases in the Federal Labour Court.

Table 7. Status of appeals before Federal Labour Court, and duration from filing until settlement, 1990-2001
. 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Total no. of closed cases 1,494 1,437 1,386 1,615 2,195 2,184 2,221 2,086 2,284 1,996 2,054 1,862
% of cases closed after 12 months 64 62 68 72 60 51 44 36 45 42 41 47
% of cases closed after 24 months 99 92 96 93 95 96 87 95 100 100 99 97
No. of pending cases at end of year 805 891 813 1,163 1,343 1,258 1,151 1,153 1,163 1,136 1,095 1,077

Source: Destatis, various years.

Table 8. Status and duration of appeals before Federal Labour Court, 1990-2002 (selected years)
. 1990 1997 2002
Appeals still pending at beginning of year 675 858 783
New appeals 658 774 695
Total appeals 1,333 1,632 1,478
Appeals settled within in the year: 715 775 849
  • by judgment on merits of the case
466 587 548
  • by other judgment
18 - 0
  • by compromise reached in court
111 60 61
  • by withdrawal of appeal
101 110 204
  • otherwise
10 18 36
In cases of appeals settled by judgment on merits of the case, duration between filing appeal until settlement:
  • up to 6 months
114 34 21
  • 6-12 months
184 175 177
  • more than 12 months
168 378 350
Appeals not yet settled at end of the year 618 857 629

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.'


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)

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