Employment Law

DE

Whistleblower protection and works constitution – the outsour­cing of a reporting office to an external third party is subject to co-determination

In its ruling of 8 July 2025, the Schleswig-Holstein Regional La­bour Court (LAG) determined that outsourcing an internal re­por­ting office to an external law firm in accordance with the Whistleblower Protec­tion Act (HinSchG) is subject to co-deter­mination pursuant to Section 87 (1) No. 1 BetrVG (Works Consti­tution Act) – opera­tional order. This is because the company cannot evade its obligation by outsourcing. It is not a non-binding offer to its employ­ees to report, as the employer argued in court.

The LAG stated that the ‘whether’ of the establishment is not subject to co-determination, as it is specified in Section 12 HinSchG. However, the ‘how’ was open to design, as it influenced the orderly conduct of the employees and the organisation of the business and was therefore subject to co-determination. The ‘how’ of the reporting office also included, for example, the choice of reporting channel – external or internal – questions of anonymity, response time and the con­tractual design of the external operation. The employer must ensure through appropriate contractual provisions that the works council's participation rights are preserved when outsour­cing to third parties. Since the employer had not involved the works council in the present procee­dings, the LAG upheld the works council's application for an injunction.

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By Dr. Nicole Elert

Abuse of position of power as managing director towards an employee

Over the summer, there were reports in the media about mana­ging directors being dis­missed for consensual romantic rela­tion­ships with employees. This is not an un­fa­miliar topic in Ger­man labour law. In its so-called WalMart verdict 2003, the Fe­deral Labour Court already established that a general ban on romantic relationships in the workplace is inadmissible, as Article 2 of the constitution protects the privacy of employees. Regulations that require rela­tion­ships to be reported to the em­ployer are therefore generally invalid. This also applies in the case of consensual relation­ships with a superior, provided that work performance or the working atmosphere are not affected. This can lead to conflicts of interest, as it could give the im­pression that the subordinate is being favoured or disad­van­taged, other employees may feel unfairly treated, or there is a risk that the relationship of dependency existing in the employ­ment relationship could be abused unilaterally.

On 9 July 2025, the Cologne Regional Labour Court (LAG) issued another ruling that has attrac­ted a lot of attention under the heading of abuse of power. Legally, the case concerned the termination of an employment relationship at the plaintiff's request in accordance with Section 9 (1) sentence 1 of the German Employment Protection Act (KSchG) against the setting of a severance payment due to the unreasonableness of continuing the employment relationship in the context of insults and sexual harassment. More specifically, according to the press release issued by the Cologne Regional Labour Court, the case concerned sexist, humiliating and ar­bitrary comments made by the managing director via WhatsApp, who, in view of his displea­sure with the development of his private relationship with the plaintiff, threatened her with sanc­tions under labour law, which ultimately resulted in a dismissal that was clearly contrary to social norms. The severance payment set by the Regional Labour Court was above average at two months' salary per year of employment.

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By Dr. Nicole Elert

Are employers required to imple­ment preventive measures in fa­vour of severely disabled em­ployees during the waiting period pursuant to section 1 (1) KSchG?

In its recent ruling of 3 April 2025 (judg­ment – 2 AZR 178/24), the German Federal Labour Court (BAG) has provided legal certainty and confirmed that employers are not obliged to implement a prevention pro­cedure within the meaning of Section 167 (1) SGB IX prior to ordinary termination during the waiting period (Section 1 (1) KSchG).

What has been the issue?

A severely disabled employee was hired by the employer as head of building services and operations on 1 January 2023. A six-month probationary period was agreed. The employer was aware of the employee's severe disability at the time the contract was concluded. In March 2023, the employer terminated the employment relationship with due notice during the waiting period under unfair dismissal protection law, effective 15 April 2023, on the grounds of lack of professional suitability.

The employee filed an action for unfair dismissal in good time, arguing that the dismissal was invalid because the employer had neither carried out a prevention procedure in accordance with Section 167 (1) of the German Social Code IX (SGB IX) nor offered him a workplace suitable for his disability before giving notice of dismissal. In addition, he claimed that he was discriminated against by the dismissal because of his existing severe disability.

The action was unsuccessful in all instances up to the Federal Labour Court (BAG).

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By Dr. Nicole Elert and Sabine Fabig

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