On 20.08.2019, the Second Civil Senate responsible for Corporate Law published the reasons for a resolution of 25.06.2019. (file no. II ZB 21/18). Accordingly, temporary agency workers who are employed on a permanent basis must also be counted when determining the threshold value of employees for a supervisory board with equal representation of shareholders and employees.
In accordance with the German Co-Determination Act (Mitbestimmungsgesetz – MitbestG) a corporation employing regularly more than 2,000 employees is obliged to involve the employees in the appointment and composition of the supervisory board. Thus, the supervisory board must be equally composed with representatives of the shareholders and the employees. The supervisory board of smaller corporations (more than 500 but not more than 2,000 employees), on the other hand, only one third of the members of supervisory board must be representatives of the employees under the German One-Third Participation Act (Drittelbeteiligungsgesetz – DrittbG).
The BGH now decided that temporary agency workers must also be counted when determining the threshold value of employees, provided that the company employs temporary agency workers on a permanent basis.
In the case decided by the BGH, the general works council of a German limited liability company (Gesellschaft mit beschränkter Haftung – GmbH) claimed the composition of a supervisory board with equal representation of shareholders and employees. The company mainly employs permanent staff. However, about one third of the staff consists of temporary agency workers – depending on the order volume. The general works council held the opinion that the supervisory board should be composed of equal numbers of employees, since the threshold value of 2,000 employees was exceeded if temporary agency workers were taken into account. In the period from January 2017 to March 2018, the total number of all employees had always averaged over 2.000 – but only in the case of temporary agency works being counted in. However, taking into account only permanent employees and temporary agency workers whose actual or planned duration of employment was more than six months, the number of employees was less than 2,000.
According to the decision of the BGH, in addition to permanent employees, temporary agency workers within the meaning of the German Temporary Work Act (Arbeitnehmerüberlassungsgesetz – AÜG) must also be qualified as employees within the scope of the MitbestG. However, this only applies if the duration of employment exceeds six months. According to the BGH, this minimum period of employment must not be determined regarding the respective temporary agency worker, but regarding the respective workplace. Therefore, it is not important in this regards that the respective temporary agency worker is employed by the company for more than six months. The decisive factor is how many workplaces in the company regularly exist over a period of more than six months, even if changing temporary workers are assigned to them. It is also irrelevant at which specific workplace the temporary agency workers are deployed during this period. According to the BGH, the main point is whether the involvement of temporary agency workers as such is so permanent that it is just as influential for the permanent size of the company as a permanent job.
The BGH did not see any indications that the involvement of temporary agency workers by the defendant company was merely based on an unusual need for employees based on an exceptional situation.
The background to the decision of the BGH is the new provision in sec. 14 para. (2) sentences (5) and (6) AÜG, which was introduced by the reform of the Law on Temporary Agency Work on 01.04.2017. According to this Law temporary agency workers are also to be taken into account in the borrower’s company when determining the number of employees in accordance with the MitbestG.
In contrast to the AÜG, which determines the maximum hiring period of 18 months based on the hiring of the individual temporary agency worker, the BGH bases its decision on a job-related consideration.
This is coherent because the question of the composition of the supervisory board depends on the size of the company and thus on the number of – permanently – occupied jobs and not on the protection of the individual temporary agency worker, as this is the case with the provision on the maximum duration of temporary employment under the AÜG.
According to sec. (14) para (2) sentence (5) AÜG, the decision can also be applied to the determination of the threshold values of, inter alia, the One-Third Participation Act.
Fachanwältin für Arbeitsrecht
Dr. Lorenz Mitterer
Fachanwalt für Arbeitsrecht