Digital employment contracts and more efficient processes – finally free from the shackles of written employment contracts?
Legislators are preparing to pave the way for leaner processes and a more modern way of working in HR in 2024. This means that the right course must be set for HR managers.
For a long time, the 1995 Employment Verification Act (NachwG) led a shadowy existence and was primarily known to experts. This is because the employment contract as such is not subject to any form. The written form for the contract only becomes important if individual contract components (e.g. for a fixed term or for a post-contractual non-competition clause), which must be in writing, are to be agreed. With the outbreak of the COVID-19 pandemic, a large number of HR departments therefore switched to digital documents and processes in the knowledge that no written form was required for employment contracts. A development that could have led to a permanent reduction in workload, even if quite a few companies returned to a supplementary paper form during the course of the pandemic. From the summer of 2022, however, this relief seemed to have come to an end again for the time being, as the amendment to the NachwG threatened to keep the HR department committed to the written form, which was perceived as a stone age, in the long term. In implementing EU Directive 2019/1152/EU, the German legislator imposed the obligation on every employer to record the essential contractual terms of an employment relationship (still extended in the catalogue), sign the minutes and hand them over to the employee, unless they already result from an employment contract concluded in writing. Since then, failure to provide or breach of the written form requirements has also constituted an administrative offence for the first time, Section 4 NachwG.
From Dr. Nicole Elert und Sebastian Schepp
No co-determination right of the works council in the introduction of AI?
The Hamburg Labour Court caused a stir in early 2024 with one of the first decisions on AI, in which it ruled that the works council had no right of co-determination in the use of ChatGPT.
What was it about?
A company issued a policy allowing its employees to use ChatGPT for business purposes, whereby it stipulated that ChatGPT could only be used in the browser version and via a private employee account. The works council was not involved. By way of interim legal protection, the works council defended itself against the authorisation to use ChatGPT without its involvement. Among other things, it took the view that the company could monitor employees' performance and behaviour when they used ChatGPT for work purposes. In this respect, the consent of the works council was mandatory due to its right of co-determination pursuant to Section 87 (1) No. 6 of the German Works Constitution Act (BetrVG).
However, the Hamburg Labour Court rejected the works council's right of co-determination with regard to Section 87 (1) No. 6 BetrVG, arguing, among other things, that performance and conduct monitoring was excluded, as ChatGPT was not installed on the employees' computers by the employer, but only permitted for business use on the basis of private accounts. In this respect, the company was unable to access the employee user data necessary for monitoring work behaviour. For example, the company could not track when which employee used ChatGPT, for how long and for what purpose.
From Dr. Nicole Elert und Malte Schönfeld
© 2017 - 2024 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.
