Fallstricke im Konsultationsverfahren gemäß § 17 Abs. 2 KSchG

While in the case of mass layoffs, reconciliation of interests and social plan negotiations between the employer and the works council generally proceed in an orderly manner (at least legally), there are considerable uncertainties regarding the equally important consultation process in accordance with Section 17 Paragraph 2 of the KSchG. These can have fatal consequences, as a recent ruling by the LAG Berlin-Brandenburg dated August 10, 2016 (ref.: 24 Sa 1763/15) shows.

If an employer carries out a major reduction in personnel that exceeds the threshold for mass dismissals in accordance with Section 17 Paragraph 1 KSchG, and there is a works council in the company, there is no way around its proper participation. This means, on the one hand, the initiation of reconciliation of interests and social plan negotiations, but on the other hand, the initiation of the consultation process in accordance with Section 17 Paragraph 2 KSchG. In practice, the latter often does not receive the attention it deserves and is more or less lost in the reconciliation of interests and social plan negotiations. This can have bitter consequences.
The consultation procedure in accordance with Section 17 Paragraph 2 KSchG has recently become increasingly the subject of highest and higher court decisions in the labor courts. If the employer and the works council properly integrate the consultation process in accordance with Section 17 Paragraph 2 KSchG into the reconciliation of interests and social plan negotiations, subsequent operational dismissals are not exposed to any additional legal risks. However, if the employer is careless in this regard, the dismissals for operational reasons can all be ineffective despite supposedly sufficient involvement of the works council.
What is the most practical way to proceed in practice?
The BAG has now made it clear beyond any doubt that the employer can fulfill the obligations incumbent on him under Section 17 Paragraph 2 Sentence 2 KSchG and those under Section 111 Sentence 1 BetrVG (negotiation of a reconciliation of interests) at the same time, provided that these obligations correspond. However, the works council must be able to clearly recognize that the consultations taking place are also intended to fulfill the employer's obligation to consult under Section 17 Paragraph 2 Sentence 2 KSchG (judgment of February 26, 2015, Ref.: 2 AZR 955/13).
In many cases, the consultation process as part of the reconciliation of interests negotiations is “processed” by the works council confirming in the reconciliation of interests that it has been properly informed in accordance with Section 17 Paragraph 2 Sentence 1 KSchG and carrying out the necessary consultations in accordance with Section 17 Paragraph 2 Sentence 2 KSchG and the works council ultimately sees no possibility of avoiding or limiting the redundancies for operational reasons. The employer can then attach such a final statement from the works council to the mass layoff notice in accordance with Section 17 Paragraph 3 Sentence 1 KSchG, which means that it has been duly submitted, at least in this respect (BAG, judgment of February 26, 2015, Ref.: 2 AZR 955/13).
If the works council refuses to give such a statement or the declaration it has made is inadequate, the employer can take precautionary measures in accordance with Section 17 Paragraph 3 Sentence 3 KSchG. Two weeks after the works council has been fully informed, it can submit a legally secure and legally effective notice of mass layoffs, outlining the status of the discussions (BAG, judgment of February 26, 2015, ref.: 2 AZR 955/13). However, one must add: Only if the works council was able to clearly see that the consultations were also intended to fulfill the employer's obligation to consult under Section 17 Paragraph 2 Sentence 2 KSchG.
It should be emphasized that the obligation to consult the works council according to Section 17 Paragraph 2 KSchG (i.e. the obligation to consult with the works council) and the obligation to notify the employment agency are two procedures that must be carried out separately and each of these two procedures is an independent one reason for the invalidity of the termination in connection with a mass layoff (BAG, judgment of January 20, 2016, Ref.: 6 AZR 601/14). From this it follows - in favor of the employer - that the employee who only complains about deficiencies in one procedure in the first instance in the labor court is excluded if a notice is properly given in accordance with Section 6 KSchG in the second instance with complaints about deficiencies in the other procedure ( BAG, judgment of January 20, 2016, Ref.: 6 AZR 601/14). From this it follows - to the employer's detriment - that the employer must also clearly express to the works council within the framework of the reconciliation of interests and social plan negotiations that the consultations taking place also serve to fulfill the consultation obligation under Section 17 Paragraph 2 Sentence 2 KSchG should.
This was exactly the problem faced by the employer in the Berlin-Brandenburg LAG case mentioned at the beginning. Since this employer had not taken the appropriate care, the result was that the mass layoffs announced in the event of a company shutdown were ineffective despite two meetings with the works council and four subsequent meetings of the conciliation board because the consultation obligations towards the works council (namely those under Section 17 Para. 2 Sentence 2 KSchG (following) were not sufficiently fulfilled.
In this case, before initiating the reconciliation of interests and social plan negotiations, the employer had not made it clear that it also wanted to fulfill its advisory obligations in the consultation process in accordance with Section 17 Paragraph 2 Sentence 2 KSchG. He had simply started the reconciliation of interests and social plan negotiations. After he had declared the reconciliation of interests negotiations in the conciliation board to have failed, he informed the works council separately about the intended mass dismissals in accordance with Section 17 Paragraph 2 Sentence 1 of the KSchG, but no longer gave it the opportunity to decide whether to avoid or limit the dismissals in accordance with Section 17 (2) sentence 1 KSchG. 17 Paragraph 2 Sentence 2 KSchG. Contrary to the employer's opinion, the LAG Berlin-Brandenburg did not allow the previously extensive negotiations with the works council within the framework of the reconciliation of interests and social plan negotiations, including the conciliation board meetings, to be sufficient for this. It did not emerge from the relevant minutes that these negotiations were conducted specifically with the aim of “avoiding or limiting” layoffs. Rather, it was essentially about financially cushioning the social consequences of mass layoffs.
The only conclusion that can be drawn from this dilemma is that every employer, when entering into reconciliation of interests and social plan negotiations, must unambiguously inform the works council by submitting the draft of a reconciliation of interests and social plan that this also means that the obligation to provide information in accordance with Section 17 Paragraph 2 Sentence 1 of the KSchG is waived is to be fulfilled and the works council is asked to begin consultations within the meaning of Section 17 Paragraph 2 Sentence 2 KSchG.
As already stated: the obligation to submit a proper notification of collective redundancies and the obligation to carry out the consultation procedure are two different things. A proper notification of mass layoffs does not relieve the employer of the obligation to carry out the consultation process properly. The latter is still necessary; if it is missing, all terminations are invalid. In this respect, the question arises as to what exactly the employer actually has to do in order to fulfill its advisory obligations to the works council under Section 17 Paragraph 3 Sentence 2 KSchG.
Another current ruling from the Federal Labor Court dated September 22, 2016 (ref.: 2 AZR 276/16) provides information here. The BAG decided there that the employer was not subject to any obligation to reach an agreement in the consultation process in accordance with Section 17 (2) KSchG. It is sufficient if he goes into negotiations with the works council with a serious desire to reach an agreement and is prepared to deal with its suggestions. There is also no specific minimum duration for the negotiations. In particular, the employer may consider the works council's right to consultation as fulfilled if it has previously informed the works council in full and the latter does not indicate any willingness to engage in targeted negotiations.
In those cases in which it is not possible to "extract" confirmation from the works council in the reconciliation of interests that the information and consultation obligations in accordance with Section 17 Paragraph 2 Sentence 1 and Sentence 2 KSchG have been properly fulfilled, there is still some scope for judgment as to whether the consultation process in accordance with Section 17 Paragraph 2 Sentence 2 KSchG has been properly completed and the collective dismissal can therefore be implemented. This must be checked carefully in such cases. At least other formal risks due to insufficient clarification to the works council about which advisory duties should actually be fulfilled should be able to be legally ruled out in the future.