Digitalization & AI: Federal Council seeks more say for works councils

The Federal Council has called on the Federal Government to "reliably shape the works council's participation rights for handling employee data" as part of a reform of the Works Constitution Act. This applies in particular regarding the increased use of artificial intelligence (AI) and software-based systems. It is also important to involve the works council more closely in the introduction and design of the framework conditions for working from any time or place, such as home office or flexitime, to develop reliable internal data protection regulations.

Bremen, Brandenburg, Hamburg, Lower Saxony, North Rhine-Westphalia and Saarland introduced the corresponding resolution on the modernization of co-determination in companies to the chamber and found a majority for it on Friday. Previously, the Hamburg Labor Court had ruled: If companies want to introduce AI systems such as ChatGPT or Gemini, they do not have to involve the works council in every case. According to the Works Council Modernization Act of 2021, however, the rights of employee representatives in the design of the working environment and processes in the company apply. For example, if algorithmic decision-making systems are to be used for personnel selection and evaluation.

In addition, the Federal Government should examine how it can be made possible or easier for employees to establish a locally accessible work council, even with modern working models. The Federal Council refers in particular to the platform economy. This means that services are increasingly being provided digitally. In such constellations, work processes often no longer take place within a business premises, but are also only controlled digitally. However, this development should not lead to "employees working for platform operators not being able to establish a locally accessible works council".

Works councils at delivery service companies

In several recent labor court decisions, employees who work in a delivery area delimited with the help of an app are predominantly denied the right to elect a works council for this area, according to the decision. The legislator must therefore adapt the definition of a company. Particularly in the founding phase of relevant bodies, the federal states want to see them better protected against obstruction and interference with their work ("union busting"). Between 2020 and 2022, employers obstructed or at least attempted to obstruct first-time works council elections and the establishment of new bodies in 21.2% of cases.

In general, the Federal Council recognizes co-determination in companies as a cornerstone of the social market economy and an expression of democracy in action. Such bodies are a cornerstone of good work. However, the world of work has changed so much lately as a result of advancing digitalization that work councils are no longer effectively involved in all key business decisions under the existing legal situation. For example, the very concept of an employee needs to be revised. It is often barely possible to distinguish between employees and self-employed workers. Finally, meetings in the form of video or telephone conferences should also be permitted for work councils.

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