In This Issue: → 5 Restructuring During Insolvency → 8 Home Office And

ISSUE 3 / September 2020

ÆÆIn this issue:

ÆÆ5 ÆÆ8 ÆÆ11 ÆÆ15 Restructuring during Insolvency Home Office and Mobile Working in The Coronavirus Liability Trap Revised Posting of Workers Directive Germany EDITORIAL AND CONTENT

IN-HOUSE TOP 5 LABOR LAW 3 In a Nutshell: Everything Leading Labor Lawyers need 11 The Coronavirus Liability Trap to Bear in Mind An overview of employer liability risks if employees Prof. Dr. From practice for practice become infected at work Thomas Wegerich Christian Berg, LL.M. (Pennsylvania), Leader Business HR, Refrigeration By Dr. Thilo Mahnhold and Dr. Sebastian Schulte Editor Technologies Division, GEA Group AG, Düsseldorf Labor Law Magazine LABOR LAW LABOR LAW/INSOLVENCY LAW 15 Revised Posting of Workers Directive 5 Restructuring during Insolvency Equal pay in Germany: Amended requirements for Dear Readers, A chance to tailor the business for the future international assignments and extended protection By Peter Weck for posted employees The network of our Labor Law Magazine continues By Svenja C. Schreurs, LL.M. to grow. With immediate effect, Frank Racky, LL.M., MPA, Head of HR Legal & Projects, Heraeus LABOR LAW & PRAC TICE Holding, will strengthen our advisory board. – 8 Home Office and Mobile Working in Germany: LABOR LAW/COMPLIANCE Welcome to the Club. Employment law aspects of the “new way of 19 Remobilisation across the EU working” Posted worker requirements and social security In Germany, the amended Posted Workers Act By Hagen Köckeritz, Ph.D., LL.M. oec. int. compliance came into force on 30 July 2020, making considera- By Audrey Morew and Wim Cocquyt ble changes to the posting regime in Germany. We look at this topic, which is important in practice, from two different angles. Svenja C. Schreurs has prepared an overview of the new law; Audrey Morew and Wim Coquyt focus on compliance aspects.

Home office and mobile working have taken on a completely different significance for many people during the coronavirus pandemic. Form a legal point of view, both forms must be distinguished. Dr. Hagen Köckeritz knows the details.

Sincerely yours, CONTACT INFORMATION Advisory Board 21 Visit our website: 23 Partners www.laborlaw-magazine.com Thomas Wegerich 24 Imprint

Issue 3 | September 2020 2 IN-HOUSE Top 5

ur In-House Top 5 section in the Labor Law Maga- In a Nutshell: zine presents all of the important and practice-ori- ented topics that are high on the agenda of leading Olabor lawyers in Germany and abroad. Since 2015, Everything the core statement of this magazine has been: “From law- yers for companies.” In implementing this journalistic Leading Labor claim, it is helpful for all parties involved if external con- sultants actually know which questions move the client in-house. With the In-House Top 5, we would like to con- Lawyers need to tribute further to improving transparency in the German legal market in the future, on both the demand and supply side, for companies, law firms, auditing firms and service Bear in Mind providers. In-House Top 5 supplements the practice-ori- ented reporting introduced in the Labor Law Magazine From practice for practice five years ago. And because time is a factor (and of course, time is money), we have tried to make our reporting as Christian Berg, LL.M. (Pennsylvania), Leader Business HR, succinct as possible. ©AdobeStock/winston – stock.adobe.com Refrigeration Technologies Division, GEA Group AG, Düsseldorf ©

reductions and many strategically important Things you should keep in mind when you projects). deal with German works councils: 2 Works councils are often well-networked opinion 1 In Germany, works councils are elected employee multipliers. If you can convince a works council, representatives protected by law. They have to projects and topics often get “tail wind” in the represent the interests of the employees in the workforce as well. Conversely, the resistance of a company within the scope of their mandate. They do works council can quickly have a negative impact on not represent managing directors, managing boards the acceptance of topics and projects as well as on or senior staff members. The employer should costs and time planning among the entire work- Christian Berg develop and maintain a “permanent good relation- force. GEA Group AG, Düsseldorf ship” with the works council as the works council is LL.M. (University of Pennsylvania), Leader Business HR, Refrigeration Technologies Division often needed (e.g. for the introduction of software, 3 Works councils appreciate commitment and [email protected] working time accounts, overtime, recruitment, staff transparency. Take the employee representatives and www.gea.com/en/refrigeration-heating/index.jsp their arguments seriously, hand over comprehensi-

Issue 3 | September 2020 3 IN-HOUSE Top 5

ble, German-language documents to the employee representatives in the initial meeting and proactively explain the most obvious questions. Actively address critical points instead of waiting to see if and when the works council notices them. The law speaks of a “trustworthy cooperation“ in this context. Know what you want, stick to your plans, promise only what you can keep, and avoid 180 degree turns.

4 Prepare yourself and your team well, especially for difficult negotiations, and put yourself in the shoes of the works council. Don’t forget that there are diverse individuals behind the works council. Listen carefully, use open questions and find out why certain positions are so important to the employee representatives. On this basis, look for creative solutions to achieve both the aims of the works councils and your objectives.

5 Clearly allocate the different negotiating roles within your team and stick to them. Exclude your “final decision maker” (e.g. CEO) from the negotiations at the beginning so that there is still a level of escala- tion and resolution, if needed. Do not rely solely on individual, benevolent employee representatives in your discussions, but provide factual arguments to convince even critics within the works council. Work in a transparent, fair manner, build and maintain trust and promote clear majorities. ß

©©AdobeStock/winston – stock.adobe.com

Issue 3 | September 2020 4 Labor Law/Insolvency law Restructuring during AdobeStock/9dreamstudio – stock.adobe.com – AdobeStock/9dreamstudio © Insolvency © A chance to tailor the business for the future

By Peter Weck

Many industries have suffered historical losses due to the pandemic and its associated restrictions.

mployers all around the world are facing numerous The following statutory regulations help facilitate restruc- challenges just to stay in business. Many industries turing, including the need to lay off personnel: have suffered historic losses due to the pandemic Eand its associated restrictions. Despite the many governmental programs that have been put in place to Simplified termination of employment save businesses and to prevent mass layoffs, such as short- time work and the corresponding subsidies, the ongoing Section 113 InsO provides significant relief in insolvency pandemic continues to claim its victims, with insolvency procedures. It stipulates that a maximum notice period of numbers rising. three months shall apply to the termination of employ- ment. This will be the case even if longer notice periods Peter Weck But an insolvency procedure also provides a company and were agreed and even where collective or individual agree- Beiten Burkhardt, Düsseldorf its shareholders with the opportunity to restructure the ments exclude the ordinary right to termination. Where Lawyer, Partner business for future endeavours while using the significant the employees concerned have a shorter notice period [email protected] advantages provided by the German Insolvency Act (In- than the three months provided in Section 113 InsO, the www.bblaw.com solvenzordnung – InsO). shorter notice period will naturally apply.

Issue 3 | September 2020 5 Labor Law/Insolvency law

Termination of Works Agreements tee procedure) if both the works council and the insol- Economic position vency administrator jointly request the mediation. Section 120 InsO also makes it easier to terminate works The question the Labor Court must answer is whether agreements which foresee benefits that would impact on • Approval of the Labor Court to implement opera- the operational changes are particularly urgent and the insolvency assets. However, Section 120 (1) InsO stip- tional changes not whether they are reasonable and economically ex- ulates that the insolvency administrator must first discuss pedient. In so doing, the Court must base its decision with the works council the possibility of a mutual agree- Section 122 InsO also provides that, under certain on the interests of creditors. It is therefore really a ment on the reduction of benefits. Only if the parties are conditions, the employer or insolvency administrator question of whether there would be any negative im- unable to reach an agreement may the notice of termina- may seek the approval of the Labor Court for the im- pact on the insolvency assets if the operational chang- tion be issued with a three-month notice period, even plementation of operational changes. es could only be implemented at a significantly later where the works agreement establishes a longer notice date due to a conciliation procedure. This must be period. It should be noted, however, that the consequenc- The procedure is simplified and allows the employer compared with the question of the likely savings if the es of Section 77 (6) Works Constitution Act (Betriebsver- under self-administration (or the insolvency adminis- operational changes are implemented earlier; the fassungsgesetz) remain unaffected, meaning a terminated trator) to apply for the approval of the Labor Court for planned measures must be described in detail. The in- works agreement shall remain effective until replaced by a the implementation of the operational changes, where solvency itself will not be sufficient to justify the re- new works agreement in this matter. a reconciliation of interests is not reached within ei- quired urgency. Details must be provided of the debts ther three weeks of the start of negotiations or the that would be incumbent on the assets if the reconcili- written request to start negotiations. However, for this ation procedure is carried out. Expedited reconciliation of interests to apply, the works council must have been provided procedure with detailed information in good time. Where this is Interests of employees the case, the procedure under Section 112 (2) Works Sections 121 et seq. InsO expedite the reconciliation of the Constitution Act does not have to be performed, so On the other hand, the Court must take into account interests procedure, eliminating the need for intermediate that there will not be any claims for indemnities from the interests of employees and the question of what steps and providing the employer with additional options. employees under Section 113 Works Constitution. social considerations are in favour of first carrying out In detail: a reconciliation procedure. This can only be the case if Pursuant to Section 122 (2) InsO, the Court must there is a reasonable prospect of a socially acceptable • No attempt at mediation upon application of only grant its approval where, also in light of the social con- solution being found if the reconciliation procedure is one party siderations of the employees, the economic position of carried out. the company requires that the operational changes be In contrast to the relevant rules in the Works Constitu- implemented immediately. There are two steps to this Finally, it should be noted that the order of the local tion Act, there can only be an attempt at mediation examination: Labor Court cannot be appealed to the Regional Labor before the employment agency (conciliation commit- Court, but only to the Federal Labor Court where the

Issue 3 | September 2020 6 Labor Law/Insolvency law

order of the Labor Court at first instance so allows, cial selection still takes place but that it may only be In addition to the age structure, other aspects can be taken Section 122 (3) InsO. reviewed for gross errors on the basis of duration of ser- into account to arrive at the personal structure, such as vice, age of the employee and maintenance obligations. education or qualifications, so that the relevant education Restricted scope of the social plan Moreover, Section 125 (1) (2) clarifies that there will not or qualification groups are formed. Personnel structure be a gross error if it creates or maintains a balanced per- planning may also take into account performance, periods Section 123 InsO restricts the amount of the social plan sonnel structure. In detail: of absence, and certain conduct. during the insolvency procedure; when the social plan is established after the insolvency procedure has been Gross errors The Court can examine the formation of this balanced opened, Section 123 InsO foresees a total amount of 2.5 personnel structure. It is therefore necessary to stipulate months’ wages for each employee (absolute limit). In addi- The case law views a gross error in social selection as one which specific personnel structures will be created and tion, pursuant to the first sentence of Section 123 (2) InsO, where “there is an obvious, eye-catching gross error and the why these are necessary. no more than one third of the insolvency estate may be reconciliation of interests lacks any social balance” (judge- used to settle social plan claims (relative limit). ment of the Federal Labor Court of 19 December 2013 in 6 AZR 790/12). It should be noted that there is no relief for Judicial orders under Section 126 InsO A social plan that is established no more than three employers with respect to the burden of proof. The em- months before the request to open insolvency proceedings ployer must still make a submission establishing the basis Finally, it should be noted that – where a reconciliation of may be revoked by both parties, Section 124 (1) InsO. for the social selection. The Court then only determines interests is not reached with the works council within whether this selection was based on gross errors. three weeks – the employer can ask the Labor Court to order that the termination of the employment contracts Drawing up list of names of employees who Balanced personnel structure for certain designated employees is necessitated by urgent will receive notice is facilitated operational requirements and justified under social as- The term “balanced personnel structure” should not be pects. If, as part of the reconciliation of interests, the works confused with the age structure or distribution of the age council and the insolvency administrator draw up a list of of the workforce. Other aspects should be taken into ac- Considering these options, it is safe to say that insolvency names of employees who will receive notice of the termi- count when establishing the personnel structure because does not need to be the final chapter, even during a pan- nation of their employment, Section 125 (1) InsO facili- the creditor or acquirer should be left with a functioning demic. Instead, it can be an opportunity for employers to tates the issue of these notices for the employer. team of employees. tailor the business for the future. This may mean that the restructured operation can be continued as a leaner and On the one hand, it is assumed that there are urgent oper- The age structure can constitute part of the personnel more tailored structure, or it might be sold and continued ational requirements which necessitate the issue of the no- structure. Accordingly, age groups may be formed and the in a different setting. Either way, the options available un- tice of termination and which would also prevent the em- number of employees to be given notice can be designated der insolvency law should not be discounted. ß ployee from being further employed at the same site. Sec- for each age group, so that the percentage of employees to tion 125 (1) (2) InsO simultaneously provides that the so- be given notice is the same for each group.

Issue 3 | September 2020 7 Labor law & Prac tice

n response to the health and safety risks resulting from employee’s home, a customer’s office, a coffee shop, a Home Office and a potential coronavirus outbreak in the workplace, shared working space, a hotel room or lobby, or even a many employers moved to home office or mobile work- train or plane. Iing concepts earlier this year. For many companies, this Mobile Working has now proven to be a successful new way of working. Employees turn out to be more productive and companies Implementation in Germany: already see their chance of reducing office space and costs. The following article describes the labor and employment Home office work and mobile working concepts can be law aspects of the implementation of home office and mo- implemented in different ways. Employment law aspects of the “new bile working concepts. way of working” • The most common and highly recommended way is the conclusion of a home office/mobile working agree- By Hagen Köckeritz, Ph.D., LL.M. oec. int. Home office vs. mobile working – what is ment between the company and the employee, either the difference? at the time of hiring or later as an amendment to an existing employment contract. For evidentiary pur- One of the central questions is what the difference is be- poses, a written agreement on the specific terms and tween home office and mobile working. In both cases em- conditions of the home office work is preferable over a ployees work remotely outside of the employer’s company purely oral arrangement. office. Home office work (also called “working from home” – WFH) means that the employer sets up a fixed work- • In other situations, a works agreement or even a col- place for the employee outside of its company premises. If lective bargaining agreement may set out the general the terms and conditions of the home office work arrange- terms and conditions for home office/mobile work, ment are determined in an agreement between employer which can then be referenced in a short agreement and employee and the provision of necessary office equip- between the company and the employee. ment and telecommunication lines is the employer’s re- sponsibility, the home office work qualifies as so-called • There may be situations where the employer unilater- telework (Telearbeit) in accordance with Sec. 2 para. 7 of ally instructs an employee to work from home or a the Workplace Ordinance (Arbeitsstättenverordnung - place at the employee’s choice and no agreement is in Dr. Hagen Köckeritz, LL.M. oec. int. ArbStättV). place at all. Especially during the COVID-19 pandem- Mayer Brown LLP, Frankfurt/Main ic, many companies had to take a pragmatic approach Lawyer, Partner Unlike in a home office setup, in a mobile working scenar- and asked their employees to work from home literally [email protected] io employees do not work from a fixed place but can freely from one day to another without having the time to www.mayerbrown.com choose and switch between different locations such as the produce policies or agreements.

Issue 3 | September 2020 8 Labor law & Prac tice

Information and consultation/ codetermination Obligations

In companies with works councils, employers have to be aware of certain information and consultation rights that have to be observed before implementing remote working concepts. The decision itself to implement a home office/ mobile working concept is not subject to codetermination and works councils do not have a right to force employers to facilitate remote working. However, once the employer takes the initiative, information and consultation obliga- tions under the Works Constitution Act (Betriebsverfas- sungsgesetz – BetrVG) may be triggered. Such obligations may result from Sec. 80 para. 2 BetrVG (general right to monitor employer’s compliance with laws and collective agreements protecting employees), Sec. 87 para. 1 BetrVG (codetermination right regarding various aspects such as AdobeStock/REDPIXEL – stock.adobe.com AdobeStock/REDPIXEL © © rules of engagement during work hours, working time, While home office or mobile working come with a number of benefits, there are also additional legal obligations that employers need to be aware of and practical implementation of electronic devices and software, health recommendations that should be observed at an early stage. and safety at work, and remuneration), Sec. 90 para. 1 and 2 BetrVG (information and consultation regarding chang- In fact, unless the place of work is already defined in There is consensus that employees are not automatically es to workplaces and processes), Sec. 95, 99 BetrVG (ap- the employment contract, in a collective agreement or entitled to work from home or otherwise remotely. De- proval requirement in case of assignment to new position otherwise, Sec. 106 Trade Regulations (Gewerbeord- spite the lack of a general entitlement, under rare circum- or workplace), Sec. 102 BetrVG (notification requirement nung – GewO) generally allows the employer to deter- stances employees may be able to refuse to work from a regarding potential terminations for change of condi- mine the place of work unilaterally using equitable company office and perform their work from home or tions), and Sec. 111 BetrVG (consultation requirement in discretion. Certain limitations arise from the special elsewhere. This may apply, for instance, if the employer case of more substantial operational changes). As a gener- protection that an employee’s home enjoys pursuant to materially fails to implement necessary safety standards in al rule, works councils can force employers to complete Art. 13 German Constitution (Grundgesetz - GG). In a response to a pandemic such as the technical, organiza- consultation obligations before mobile working concepts pandemic, if health and safety cannot be sufficiently tional and personal measures recommended by the Feder- are implemented. guaranteed in the company office, instructing an em- al Ministry for Labor and Social Affairs. ployee to work from home may be an equitable deci- sion.

Issue 3 | September 2020 9 Labor law & Prac tice

Employer obligations and items to consider danger for safety and health (Sec. 16 ArbSchG) play a business secrets. However, since the employer’s ability greater role than in an office setup. to monitor the employee and take corrective action is Whenever employers implement or operate remote work- limited in a home office or mobile working setting, the ing models, they not only have to inform or consult with • Working time: The fact that in a remote working setting employer is well advised to assess in advance whether a their works councils. They also have a number of other employees are given the freedom to work either from job is actually suitable for remote working. It is, for legal obligations to comply with. home or any other location of their choice does not instance, recommended to exclude departments and eliminate the mandatory nature of existing working positions from remote working that to a large extent • Health and safety: The employer’s obligations under time laws. Employers and employees still have to en- handle customer or (sensitive) employee data. In addi- health and safety at work law apply with certain mod- sure compliance with the daily maximum working tion, it is recommended to provide for additional ifications also in remote working settings. Employers time, break times, minimum rest times between daily training and give clear instructions in order to create have the general obligation to take necessary measures work cycles and the general prohibition to work on awareness of the specific risks that personal data and to ensure or at least improve safety and health protec- Sundays and public holidays. The employer has to take knowhow are exposed to in a non-office work envi- tion at work (Sec. 3 Health-and-Safety-at-Work Act appropriate measures to ensure that working time re- ronment. (Arbeitsschutzgesetz - ArbSchG)). Work has to be struc- quirements are complied with and that working time tured in a way that hazards for life or physical and is properly recorded. While home office or mobile working come with a num- psychological health can ideally be avoided; remaining ber of benefits, there are also additional legal obligations hazards need to be kept at a minimum (Sec. 4 no. 1 • Working equipment and costs: As a general rule, the em- that employers need to be aware of and practical recom- ArbSchG). Employers have to carry out risk assess- ployer has to provide the necessary work equipment. mendations that should be observed at an early stage. Be- ments in accordance with Sec. 5 ArbSchG. Since the Employees incurring additional expenses have a statu- sides taking appropriate technical and organizational employers’ ability to perform such a risk assessment in tory entitlement to get reimbursed for these. This may measures, employers are well advised to put proper con- a remote working environment is naturally limited, it apply especially in situations where employees bring tractual arrangements in place that not only define the is widely accepted that for the risk assessment they can their own devices (which may cause a number of is- rights and obligations of the parties but also allow the em- rely on information specifically obtained from the em- sues especially when it comes to data security or the ployer to end remote working arrangements in a flexible ployee for this purpose. In a mobile working setup, it is return of confidential information). Often, employer manner, if needed. ß even more difficult for an employer to perform a risk and employee agree on a lump sum cost reimburse- assessment taking into account that the employee can ment in advance. The tax treatment of both the provi- Editor’s note: freely decide where he or she wants to work at any sion of company equipment with a right to private use A longer version of this article will be published in ILO later on. (tw) given time. On that basis, the employer’s obligation to and the reimbursement of costs needs to be carefully properly instruct the employees in accordance with considered. Sec. 12 ArbSchG as well as the employees’ obligation to protect themselves against hazards (Sec. 15 ArbSchG) • Confidentiality and protection of (sensitive) data and knowhow: and notify employer or manager of any imminent Remote working is subject to the same legal rules in terms of data privacy and the protection of trade and

Issue 3 | September 2020 10 Labor Law The Coronavirus Liability Trap An overview of employer liability risks if employees become infected at work

By Dr. Thilo Mahnhold and Dr. Sebastian Schulte

Dr. Thilo Mahnhold JUSTEM Rechtsanwälte, Frankfurt/Main Lawyer, Partner, Special Lawyer for labor law

[email protected] www.justem.de

Dr. Sebastian Schulte JUSTEM Rechtsanwälte, Frankfurt/Main Lawyer, Associate AdobeStock/alphaspirit – stock.adobe.com AdobeStock/alphaspirit © © [email protected] With the world still in the throes of COVID–19, a return to normalcy remains far from sight. Still, the gradual resumption of everyday work is on the horizon. www.justem.de

Issue 3 | September 2020 11 Labor Law

Introduction A short overview: to pay maintenance to his survivors and to assume burial costs. With the world still in the throes of COVID–19, a return Liability of the employer to normalcy remains far from sight. Still, the gradual re- As developed early on in several groundbreaking deci- sumption of everyday work is on the horizon. More and Under the employment relationship, not only the primary sions, the Federal Labor Court has ruled that an employee more employees are returning to the workplace after hav- performance obligations (“work for pay”), but also pe- who raises such claims must merely substantiate and ing worked from home. On the one hand, both working ripheral obligations, particularly the employer’s duties of prove that he has incurred damage and that an irregular from home and mobile working have proven their feasi- care under Sec. 618 German Civil Code, must be observed. situation existed that is generally capable of causing the bility for many job profiles, and both employees and em- These duties oblige the employer to protect employees incurred damage (see, for instance, Federal Labor Court, ployers alike have experienced the various advantages of against risks to life and health. The standard to be com- judgment of February 27, 1970 – 1 AZR 258/69 or the such forms of workplace flexibility. On the other hand, the plied with by the employer is specified more closely in the judgment of May 8, 1996 – 5 AZR 315/95). With regard to “old office” has also had an opportunity to remind em- public law occupational safety regulations such as the Oc- the current situation, this means that an employee must ployees and employers of its many advantages inasmuch cupational Safety Act. With respect to the coronavirus, only present that he is sick with COVID–19 and that the as it is a marketplace for ideas, provides the opportunity to this means that the employer must implement the re- standard of protection at his place of work was insufficient coordinate and facilitate the exchange of work results quired measures of health safety in his business in order to in order to successfully assert his claims. It is then the duty among team members and provides the chance to protect employees from contracting infections at their of the employer to refute that the asserted damage was strengthen employer identification and branding. In addi- place of work. based on an irregular situation or to show that he is not at tion, the housing situation of many employees will not al- fault. This will likely present a special challenge in the liti- low them to work from home on a permanent basis. Re- gation. gardless of when the virus is defeated, it is not hard to According to the DGUV, a different situation predict that COVID–19 will entail some fundamental can apply, however, to healthcare workers. changes to workplace flexibility and office concepts. The corona as occupational disease and thus question for now is: What liability risks actually threaten application of statutory accident insurance? employers if employees become infected with the virus at work? And what precautions can employers take to mini- If an employer does not comply with this duty of care, The fatal issue in this scenario: The German statutory ac- mize their liability exposure? Some recent cases, especially there is the risk of liability for the employer under Sections cident insurer, Deutsche Gesetzliche Unfallversicherung in the meat processing industry, have moved these ques- 280 (1), 823 et seq. German Civil Code for personal injury (DGUV), rejects that it has a duty to become involved in tions into the spotlight. in the event of the illness or even death of an employee, cases of injury to health due to COVID–19 infections in provided his conduct was culpable, that is, intentional or the workplace. The DGUV justifies this stance by arguing negligent (Sec. 276 German Civil Code). The reimbursa- that illness based on the coronavirus, which has been clas- ble costs include the costs of treatment, the loss of income, sified as a pandemic by the World Health Organization the costs of possible long-term effects and their related (WHO), does not constitute a risk specific to the work- loss of earnings. If an employee dies, it may be necessary place, but is realised as an illness presenting as a public

Issue 3 | September 2020 12 Labor Law hazard. The rule (cf. Sec. 104 (1) sentence 1 Social Code Liability of company management an undertaking omitted to take necessary supervisory VII) that employers are not liable for work accidents and measures. The latter legal requirement is again well known occupational disease – save in the event of willful miscon- Not only companies, but also their management could be as one of the most important triggers for CMS. duct –, which is otherwise very useful for employers, will made liable, as management must also institute new meas- not help in the event of COVID–19 infections in many ures to protect employees from infection at work if no Even more drastic consequences may arise for the individ- cases, if one assumes that argument is correct. such sufficient measures previously existed. This duty is uals in charge on the employer side if a violation of occu- particularly derived from the duty of company manage- pational safety regulations triggers criminal liability, e.g. According to the DGUV, a different situation can apply, ment to use care in conducting the business of the compa- for negligent bodily harm under Sec. 229 German Crimi- however, to healthcare workers. Here, COVID-19 infec- ny. In the event of breaches, there will at least be liability nal Code or involuntary manslaughter under Sec. 222 tions can be recognized to be occupational illnesses under exposure in relation to the company, e.g. under Sec. 93 (2) German Criminal Code. In these cases, there is even the the following conditions: Joint Stock Companies Act or Sec. 43 (2) Limited Liability risk of incarceration. Company Act. While personal liability is primarily direct- • contact with individuals infected with ed to the members of the management board, board mem- Furthermore, employees may refuse under some circum- ­SARS-CoV-2 ­under the scope of occupational activi- bers are entitled to delegate responsibilities to other per- stances to perform work obligations under Sec. 273 (1) ties in health care and sonnel, including – to a certain extent – external staff. German Civil Code without losing their claim to pay if However, because this does not include selection, instruc- occupational safety requirements are not met by the em- • relevant manifestations of illness such as fever and tion and monitoring obligations, which cannot be delegat- ployer. coughing and ed, board members are well advised to establish an effi- cient and reasonably equipped health & safety organiza- • positive evidence of the virus through a PCR test. tion with responsibilities for COVID–19. Companies and Codetermination of the works council management staff who have already implemented Com- It remains to be seen whether the stance of the DGUV pliance Management Systems (CMS) are familiar with The works council also plays an important role if employ- regarding the general non-acceptance of COVID–19 as an these mechanisms, as such concepts are based on the same ers want to take steps to prevent COVID–19 infections. occupational disease will prevail in the courts. Doubts legal foundation. According to Sec. 87 (1) No. 7 Works Constitution Act, could be particularly justified if several employees become internal regulations which specify statutory occupational infected at the workplace. As long as no other clarification health & safety provisions are subject to co-determina- by court rulings exists, there is the risk, however, that em- Miscellaneous tion. As the German health & safety laws are full of “catch- ployers will also be made liable for merely negligently all” provisions, Sec. 87 (1) No. 7 Works Constitution Act caused infections in their employees. In addition, violations of occupational safety regulations has a broad scope of application. One example of such may constitute an administrative offence according to Sec. catch-all provisions is Sec. 3 (1) Occupational Safety Act, 25 Occupational Safety Act, which may entail fines of up which requires employers to take the necessary steps to to EUR 25,000, or Sec. 130 Administrative Offences Act protect employee health in the workplace. It is very likely with the threat of substantially higher fines if the owner of that courts will deem the prevention of COVID–19 to be

Issue 3 | September 2020 13 Labor Law

ANZEIGE this kind of measure, making it no surprise that ­COVID–19 COVID–19, there will likely be the assumption to the ben- works agreements have been circulating among employers efit of the employer that he has taken the “required action“. in recent months. The employer will then be more easily able to refute a From lawyers possible connection between an irregular situation and for companies the illness of employees. Furthermore, works council co-determination has to be taken into account and Recommended action Subscribe ­COVID–19 is definitely one more opportunity to review for free!

In addition to compliance with the statutory occupational the efficiency and appropriateness of the health & safety Æ In this issue: safety regulations, it is highly recommended to follow the organisation. ß

Æ 3 Æ 7 Æ 10 Æ 14 20 points to reflect on As a team through the COVID-19 crisis to Hopes pinned on second half of year Pre-insolvency M&A “non-binding recommendations“, specifically the SARS- the “new normal” of work CoV-2 Occupational Safety Standards of the Federal Min- istry of Labor and Social Affairs of April 16, 2020, to min- The BusinessLawMagazine reports quarterly on imize a company’s liability exposure as much as possible. all important questions related to German corpo- rate, commercial, tax, labor, compliance and IP/ Although there might not be a direct duty to follow the IT law. Featuring articles written with real-world measures provided for therein (including social distanc- legal practice in mind, the online Englishlanguage magazine primarily targets company lawyers, ing of 1.5 meters, possible provision of nose/mouth cover- managing directors, judges, prosecutors and ings, working from home where possible) since the occu- attorneys in Germany’s leading trade partners. pational work standard has not been passed as either a statute or ordinance, the occupational safety standard has www.businesslaw-magazine.com been attributed significant relevance because it is clear Published by that it will be taken into account when a review of “re- quired” protective measures under Sec. 3 (1) sentence 1 Occupational Safety Act is made. To such extent, its im- plementation will also be relevant for the question of Strategic Partners whether the employer has complied with his duties of care and diligence. The DGUV, for instance, views the occupa- tional safety standard, together with its specific imple- mentations in the specific industries to be “specific ­requirements“ of occupational safety. If there is compli- ance with the occupational safety standards and any in- F.A.Z. BUSINESS MEDIA GmbH – Ein Unternehmen der F.A.Z.-Gruppe dustry-specific requirements when occupational safety Frankenallee 71–81 • 60327 Frankfurt/Main, Germany measures are introduced and implemented with regard to

BLM_Anzeigen_alleFormate_2020.indd 5 02.09.2020 13:42:11 Issue 3 | September 2020 14 Labor Law Revised Posting of Workers AdobeStock/Andrey Popov – stock.adobe.com Popov AdobeStock/Andrey © Directive © Equal pay in Germany: Amended requirements for international assign- ments and extended protection for posted employees

By Svenja C. Schreurs, LL.M.

Regulations in other EU Member States may differ in detail from those in Germany.

n 30 July 2020, the deadline for transposing the re- In Germany, the regulations of the revised Directive are Svenja C. Schreurs, LL.M. vised Posting of Workers Directive (EU) 2018/957 implemented in the amended Posted Workers Act (Arbeit- KPMG Law, Berlin expired. Since then, the principle of Equal Pay ap- nehmer-Entsendegesetz – AEntG) which came into force Lawyer Oplies to all workers posted within the Member on 30 July 2020, making considerable changes to the post- [email protected] States. Under certain conditions, remuneration must be ing regime in Germany. Regulations in other EU Member www.kpmg-law.com equivalent to that of local employees. States may differ in detail from those in Germany.

Issue 3 | September 2020 15 Labor Law

Key aspects What is new? Currently, federal generally binding collective bargaining agreements are in place in the following sectors: The original Posting of Workers Directive 96/71/EC pro- The Directive (EU) 2018/957 extends the working condi- vided that mandatory minimum working conditions, such tions to be observed in the respective host Member State. −−Construction industry as minimum wages, must be observed in the host country Thus, comparable working conditions rather than mini- −−Cleaning services in case of a posting within the EU. mum working conditions must be guaranteed to posted −−(Coal) mining industry workers, also known as “Equal Pay Principle”. −−Laundry services for commercial clients With the Enforcement Directive (EU) 2014/67, registra- −−Waste industry including road cleaning and winter tion obligations were introduced as a monitoring instru- Given the fact that the application of such rules to interna- services/road clearance ment. Even though greater transparency has been estab- tional road transport would entail legal difficulties due to −−Training services pursuant to Social Security Act lished, the Directives did not provide a level playing field the highly mobile nature of work, sector-specific regula- −−Meat processing industry for posted workers within the European Union. tions are planned for this sector. The corresponding Di- −−Nursing care rective (EU) 2020/1057 was published on 15 July 2020, laying down specific rules for posted drivers in this sector. Additional, regional generally binding collective bargain- The AEntG extends applicable regulation ing agreements may be relevant in case of long-term post- with regard to the target remuneration for Consequently, companies will have to become familiar ings. If no generally binding collective bargaining agree- with applicable local laws and generally binding collective ment applies to the posting, mandatory working condi- posted employees. bargaining agreements which apply to their international tions, such as minimum wage, maximum working hours assignments. and minimum annual leave, must still be observed.

The revised Posting of Workers Directive (EU) 2018/957 The applicable working conditions to be observed are con- will now come closer to achieving the objective of equal Implementation in Germany trolled by means of the existing EU registration obliga- pay for equal work. The Directive aims to protect the tions with the competent authority. rights of posted workers, prevent social dumping and seek On 30 July 2020, the amended AEntG came into force to ensure a level playing field. Further, it aims to foster the which extends the catalogue of applicable working condi- Remuneration free provision of services between Member States – tions to posted employees. The essential changes concern ­although these more rigid regulations may seem to have a inter alia the applicability of generally binding collective The AEntG extends applicable regulation with regard to controversial effect to this purpose at first. bargaining agreements for posted employees in all sectors, the target remuneration for posted employees. By replac- the mandatory payment obligation of overtime rates, bo- ing the term “minimum wage rates” with “remuneration” nuses for hazardous work as well as benefits in kind and in Sec. 2 (1) No. 1, the AEntG ensures that posted employ- extended working conditions for long-term postings. Pre- ees will in future be entitled not only to minimum wage viously, generally binding collective bargaining agree- rates pursuant to the Minimum Wage Act (Mindestlohng- ments were limited to the construction sector.

Issue 3 | September 2020 16 Labor Law

esetz, MiLoG), but the same remuneration as local em- allowances or allowances granted for higher-value tasks • the entitlement to continued remuneration on public ployees. are to be regarded as accountable. Allowances which com- holidays, pensate for costs incurred in connection with the posting, • parental leave, For comparability, the total remuneration must be consid- such as tax compensation allowances, rent allowances or • nursing care time off and ered, which consists of the following components: cost-of-living allowances, are not eligible. Sending compa- • reimbursement of expenses and tortious liability. nies should therefore define precisely the purpose of the • Base salary allowances granted. However, the above listed rights are limited to the labor • Any remuneration components which are granted de- law entitlement and do not include any entitlements re- pending on the type of work, qualification, and/or the As regards accountability, it is also of the utmost impor- garding continued payments which are based on social professional expertise and experience of the employees tance for sending companies to comply with mandatory security regulations. as well as the region, allowances in the host Member State. In this context, the • Any other allowances, supplements such as overtime AEntG stipulates that posted employees in Germany are Exemptions allowance or benefits-in-kind. not only entitled to reimbursement of board, lodging, ac- commodation and costs which are incurred in connection Besides the general exemption for the road transport sec- Regarding the remuneration components, the amended with the posting, but also to overtime bonuses. These reg- tor, Sec. 24 AEntG explicitly introduces exemptions from Sec. 5 AEntG clarifies that minimum rates defined in col- ulations will, however, not apply, if the law applicable to the regulations for selected activities. Exemptions are fore- lective bargaining agreements which make a distinction the employment contract is more favorable (principle of seen inter alia for short meetings or attending of trade depending on type of activity, qualification and regional favorability). fairs if they are performed only to a minor extent. differences. However, it stipulates a limitation to three wage levels and does not cover entire pay scales. Long-term postings Consequences A closer look is necessary with regard to allowances. Ac- Long-term postings will be subject to extended employee cording to Sec. 2b (1) AEntG, payments received by the protection. Corresponding to Article 3 of the Directive Challenges for companies are twofold: on the one hand employer for board, lodging, travel or accommodation (EU) 2018/957, all working conditions applicable at the companies need to ensure that postings are identified and cannot be offset against the remuneration to the posted place of employment by law, regulation or administrative registered prior to the commencement of work. This in employee. In order to avoid a circumvention of this regu- provision and generally binding collective bargaining turn brings about the necessity to collect a great variety of lation, Germany has laid down a new rule under which agreement must be guaranteed to the posted employee data depending on the respective host country. This in- conditions posting allowances can be recognized as remu- after the expiry of a twelve-month period. This period can creases the administrative burden resulting from the noti- neration. It stipulates an irrebuttable presumption for al- once be extended up to 12 months. Effective as of now, fication and record keeping obligations and can create an lowances whose purpose is not clearly specified. In these regional generally binding collective bargaining agree- obstacle – especially in case of ad hoc trips. cases, it is presumed that the posting allowance is intend- ments must also be considered. Working conditions in ed to reimburse the employee for expenses and will thus this sense are in particular: On the other hand, companies are specifically challenged not be considered as part of the remuneration. Functional as regards assessing local legal requirements which must

Issue 3 | September 2020 17 Labor Law

ADVERTISEMENT be considered to ensure comparable working conditions – keeping in mind the great variety of legal obligations and number of collective bargaining agreements within all Member States. Besides the necessity to identify all provi- sions which must be observed, the employer must keep in mind the different legal regime depending on short-term New: postings up to 12 months (or extended 18 months) and long-term postings. It will therefore be of particular im- portance to review assignment policies and compensation GoingDigital structures. A close look at posting allowances, their inten- tion and their accountability, is inevitable. Subscribe for free! Next to this, a great variety of universally applicable col- lective bargaining agreements exist. As demanded by the Æ In this issue: Enforcement Directive (EU) 2014/67, Member States are requested to publish information required to enable com- panies to comply with all mandatory working conditions.

Æ 3 Æ 7 Æ 13 Æ 17 Digitization of German Corporate Law Suddenly in the Fast Lane Low Code and No Code: The future is already here It remains to be seen which information will be provided The Next Level of Digitization? as well as its depths and helpfulness in order to enable companies to conduct a legal assessment in a foreign juris- diction and ensure compliance for their international as- GoingDigital is the new online-magazine for the changing legal market. It reports signments. ß quarterly on all issues of digitization that are essential for business practice and the legal market, as well as on the topics of cyber security, data protection and IT.

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Issue 3 | September 2020 18 Labor law/Compliance Remobilisation across the EU AdobeStock/greenbutterfly – stock.adobe.com – AdobeStock/greenbutterfly © Posted worker requirements and © social security compliance

By Audrey Morew and Wim Cocquyt

In order to mitigate costs and continue to operate efficiently and profitably, businesses need to look for an integrated solution ensuring Day One Compliance.

he year of 2020 has been unlike any other. The fication. Other countries such as Denmark have commu- COVID–19 pandemic has not only greatly impact- nicated to the European Commission that they will trans- ed health care systems and economies across the pose the Revised Directive by January 2021. Tworld but it also has deeply affected the global mo- bility and immigration landscape. As countries around the On the other hand, while the EU Coordination Regula- world went into lock-down, businesses focused on repa- tions on social security (EU Regulations 883/04 and triation of their employees abroad and ‘smart’ working 987/09) still are under revision, the compliance with social (i.e. working remotely) has increased at unparalleled rates. security obligations has gained in importance because of Audrey Morew Mobilization across borders while travel bans are in place the rules introduced by the Posted Workers Enforcement Fragomen Global LLP, Frankfurt/Main or are being introduced has created additional challenges Directive (2014/67/EU) that has offered Member States Senior Manager to cross-border mobility. In addition, by 30 July 2020 EU the necessary tools to monitor the compliance with the

[email protected] Member states were to implement Directive 2018/957/EU core labor law rights for posted workers, such as a posted www.fragomen.com amending the Posting of Workers Directive 96/71/EC, worker notification system, but also and more important- which introduces higher labor protection standards for ly, a document retention requirement. The obtainment of Wim Cocquyt employees and some stricter posted worker requirements an A1 form, to give evidence of social security compliance Fragomen Global LLP, Brüssel for employers. Many Member States such as France, Po- from Day One of the posting, is in the majority of EU Client Engagement Director for Europe, co-lead EU advisory team developing and offering land, Sweden and Belgium have amended the notification Member States one of the important documents to be kept [email protected] systems as well as in some cases (e.g. in Sweden) they have on record for such purpose. www.fragomen.com removed exemptions to the requirement to submit a noti-

Issue 3 | September 2020 19 Labor law/Compliance

Impact of the Revision of the Posting of cial representative). The principle of “equal pay for equal notification to the competent authorities in the host coun- Workers Directive work” will likely aide in creating additional challenges to try to extend the posting period from 12 to 18 months. companies. The Revised Directive (2018/957/EU) has its origins in the In Poland, the new rules extend the action radius of labor obligations set out in the Posting of Workers Directive Clients now have to ensure that the remuneration for their inspections. Therefore, an increase in auditing activity of (96/71/EC), namely guaranteeing to posted workers the employees meets the local host country standards. How- the Polish labor inspection can be expected after Septem- ‘core labor rights’ applicable in the host country based on ever, the process of determining the ‘remuneration’ can be ber 3, 2020, when the new rules based on the Revised Di- law, regulation or administrative provision, and/or uni- complex and information is not always publicly available. rective will enter into force. versally applicable collective bargaining agreements For example, in Sweden wage levels are determined by the (CBA). However, key changes in the Revised Directive relevant trade unions who in turn hold collective bargain- that have come into effect on July 30th 2020 stipulate that ing agreements with local Swedish entities and these are Conclusions employees are entitled to: not always publicly available. Under the obligations the Revised Directive imposes, the host country will have to Now that borders are re-opening and cross-border mobil- −−“Equal pay for equal work”: Posted workers are enti- publish all relevant remuneration information on one sin- ity is changing shape (more short-term travel, pan-Euro- tled to the level of remuneration as local employees gle official website, however, how soon Member States will pean roles, rotational roles, more intra-EU travel etc.), for the same work in the same (work)place. implement this remains to be seen. In addition, some businesses need to focus on all legal requirements to en- −−In case of assignments exceeding 12 months (ex- countries have a high number of different unions and sev- sure their employees can legally enter and start working in tendable to 18 months upon a duly motivated notifi- eral hundreds of collective bargaining agreements, so de- the host EU country of travel destination (i.e. Day One cation), all mandatorily applicable working condi- termining which one to use can be cumbersome. Another Compliance requirements) and this need is further en- tions of the host state, with the exception of the rules layer of complexity is added if the sending entity is going hanced by the new rules imposed by the Revised Posted on conclusion and termination of employment con- to post an employee directly to a customer in the host Workers Directive. tracts and the supplementary occupational pension country, and has no local entity and therefore has no CBA schemes. to refer to when determining the applicable wage. In order to mitigate costs and continue to operate effi- ciently and profitably, businesses need to look for an inte- “Equal pay for equal work” grated solution ensuring Day One Compliance. ß Further away from simplification? The Posting of Workers Directive has received increasing attention with the entry into force of the Posted Workers With Member States transposing the new rules into their Enforcement Directive, that has introduced the tools for national legislations, other requirements have also come Member States to monitor effective compliance with the into force or have been amended, such as the full applica- core labor standards for posted workers (such as the post- bility of mandatory labor law rules of the host country to ed worker notification, the document retention require- long-term postings exceeding 12 months of effective dura- ment, the obligation to appoint an administrative and so- tion. The home country employer may submit a motivated

Issue 3 | September 2020 20 Advisory Board

Christian Berg, LL.M. Gerrit-Michael Böning Stefan Braun Sandra Dreyer University of Pennsylvania Deutsche Bank AG Diebold Nixdorf, GE, GEA Group Aktien- Frankfurt/Main Paderborn Frankfurt/Main gesellschaft, Düsseldorf Managing Director / General Counsel EMEA, Senior Counsel for Labor and Head of Labor Relations/HR Head of Labour Relations Special Lawyer for Labor Employment Region DACH&EE Law & IT-Law [email protected] [email protected] [email protected] [email protected]

Adrienne Ekopf Michael Fritze Dr. Marc Kaiser Dr. Frank Kohls Roche Diagnostics GmbH, DB Engineering & Consulting AUDI AG, Ingolstadt IBM Deutschland Mannheim GmbH, Berlin Head of Labor Law, Management & Business Head of Labor Relations Head of the Human Insurance-/Claims Support GmbH, Ehningen Germany Resources Management Counsel, Labour Law Europe [email protected] [email protected] [email protected] [email protected]

Stefan Möhren Thomas Pein Ellen Raahede-Secher Frank Racky, LL.M., Continental AG, Group Human Resources, VELUX Deutschland GmbH, MPA Frankfurt/Main Merck KGaA, Darmstadt Kaarst Head of HR Legal & Projects Head of Labor Relations Senior Director, Head of Head of Human Resources Heraeus Holding GmbH Labour Relations Hanau [email protected] [email protected] [email protected] [email protected]

York von Roenne Dr. Frank Rütten Dr. Janna Schumacher Frank Schürmann Leica Camera AG, Wetzlar Human Resources FoG, Deutsche Lufthansa AG, UPS Deutschland Inc. & Co. Bereichsleiter Human Cologne Labour Law Department, FRA OHG, Neuss Resources / Global Director Head of Human Ressources CJ/A, Lufthansa Aviation Director Labor Relations of Human Resources Center, Frankfurt/Main Germany Head of Labor Law [email protected] [email protected] [email protected] [email protected]

Issue 3 | September 2020 21 Advisory Board

Alexandra Seemann Christian Stadtmüller Christian Vetter Dirk Wasmuth SAP SE, Walldorf Infineon Technologies AG, Dow Deutschland Inc., Porsche, Ingolstadt Legal Department Neubiberg Hamburg Head of Labor Law, Manager / German Labor Head of HR Labor Relations Head of Labor and Social Insurance-/Claims Relations, Labor & Social Law Germany Management Law [email protected] [email protected] [email protected] [email protected]

Liana Weismüller Alexander Werner Condor Flugdienst GmbH, Merck, Darmstadt Frankfurt/Main Head of Team Labor and Leiterin Arbeitsrecht und Employment Law Betriebsverfassung / Head of Labor Law [email protected] [email protected]

Issue 3 | September 2020 22 Partners

Strategic Partners

Markus Künzel Dr. Axel Boysen Caroline Bitsch Dr. Thilo Mahnhold BEITEN BURKHARDT Fragomen Global LLP, JUSTEM Rechtsanwälte, JUSTEM Rechtsanwälte, Rechtsanwaltsgesellschaft Neue Mainzer Str. 75, Neue Mainzer Str. 26, Neue Mainzer Str. 26, mbH, Ganghoferstr. 33 60311 Frankfurt/Main 60311 Frankfurt/Main 60311 Frankfurt/Main 80339 Munich Partner Partner Partner Partner [email protected] [email protected] [email protected] [email protected] www.bblaw.com www.fragomen.com www.justem.de www.justem.de

Dr. Martin Trayer, LL.M. Dr. Guido Zeppenfeld Edinburgh Mayer Brown LLP, KPMG Rechtsanwalts- Friedrich-Ebert-Anlage gesellschaft mbH, THE 35-37, SQUAIRE, Am Flughafen, 60327 Frankfurt/Main 60549 Frankfurt/Main Managing Partner Partner [email protected] [email protected] www.kpmg-law.com www.mayerbrown.com

Cooperation Partners

Julia Zange Christian Vetter ACC Europe Bundesverband der c/o Fresenius Medical Care Personalmanager (BPM), AG & Co. KGaA, Oberwallstraße 24, Else Kröner Str. 1, 10117 Berlin 61352 Bad Homburg [email protected] [email protected] www.acc.com/chapters-networks/ www.bpm.de chapters/europe

Issue 3 | September 2020 23 PARTNERS

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Publishing companies: F.A.Z. BUSINESS MEDIA GmbH – Ein Unternehmen der F.A.Z.-Gruppe Managing directors: Dominik Heyer, Hannes Ludwig Frankenallee 71–81, 60327 Frankfurt/Main, Germany Commercial register number: 53454 Cooperation Partners Local court: Frankfurt/Main, Germany Phone: +49 69 7591 2217

German Law Publishers GmbH Managing director and publisher: Professor Dr. ­Thomas Wegerich Stalburgstraße 8, 60318 Frankfurt/Main, Germany Phone: +49 69 9564 9559 / Fax: +49 69 7591 80 2217 E-mail: [email protected] Internet: www.laborlaw-magazine.com

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Issue 3 | September 2020 24