Germany: Establishment of a conciliation committee for the introduction of an IT system for recording working hours

Cologne Regional Labour Court, decision of 28 January 2025 – 9 TaBV 88/24

In its decision of 28 January 2025, the Cologne Regional Labour Court established important principles for the appointment of conciliation committees in cases of unclear jurisdiction between different levels of employee representation. The decision concerns the practically relevant question of how to proceed when a matter affects several companies within a group and the division of responsibilities between the general works council and the group works council is unclear.

Facts of the case 

The dispute concerned the establishment of a conciliation committee regarding the introduction and use of an IT system for recording working hours at several companies within the D-Group.

The employer intended to introduce a cloud-based IT system as software-as-a-service (SaaS) in certain companies within the group, which was to be used both for recording attendance and absence times and for personnel deployment planning, whereby the system was to be introduced in the same way across all companies as a “single-client solution.” A single-client solution means that the software is intended exclusively for one group of companies.

The group works council refused to enter into negotiations on the grounds that it was not responsible for the regulation and considered that this responsibility lied either with the local works councils or the general works council. The group parent company then applied to the Bonn Labour Court for the appointment of a conciliation committee, which, in a legally binding decision dated 29 October 2024, appointed a presiding judge at the Cologne Regional Labour Court as chairman of the conciliation committee.

The general works council also considered itself to have jurisdiction and, on 21 August 2024, decided to call on the employer to negotiate a general works agreement on the introduction and use of the IT system. After the employer rejected this request, the general works council initiated proceedings to establish a conciliation committee.

Legal situation

The legal situation was complex because the question of jurisdiction between the general works council and the group works council depended on technical details of the software. The employer took the view that the group works council was responsible for exercising the right of co-determination in the introduction and use of the planned IT system because the software was to be introduced in several companies within the group and, for compelling technical reasons, only a cross-company regulation at group level could be implemented.

The general works council, on the other hand, argued that it was technically possible for the IT system to separate the individual companies, which is why the conciliation committee was not obviously incompetent, especially since it was not sufficiently clear whether the right of co-determination also applied to the question of whether a single-client solution or a multi-client solution would be introduced.

Decision of the Cologne Regional Labour Court

The Cologne Regional Labour Court upheld the first-instance decision of the Bonn Labour Court and established three key legal principles:

1. Preliminary inquiry jurisdiction of the conciliation committee in cases of unresolved questions of jurisdiction

Complex technical and unresolved legal issues, the resolution of which determines the jurisdiction of an employee representative body (in this case: the general works council or group works council when introducing a working time recording system in a single-client model), are not to be conclusively clarified in the conciliation committee appointment procedure pursuant to article 100 of the German Labour Court Act (ArbGG), but fall within the preliminary jurisdiction of the conciliation committee.
The court stated that, in the present proceedings, without a more in-depth analysis of the system, it could not be determined with the necessary certainty which data on which servers could be processed and viewed by which employees for which other companies, that the software was only administered uniformly for the entire company and that administration rights were only assigned centrally. Furthermore, the questions of whether the introduction of the IT system as a single-client solution was based solely on considerations of expediency by local management or whether a binding organisational decision by the group's top management resulted in an objective compulsion to adopt a uniform company-wide regulation could not be conclusively clarified in the expedited proceedings under article 100 Labour Court Act (ArbGG)

2. Possibility of appointing two conciliation committees

If neither the group works council nor the general works council is clearly incompetent, two conciliation committees may be appointed to settle the same matter.

3. Appointment of the same chairperson to avoid diverging decisions

In order to avoid diverging conciliation committee decisions, it is advisable in such cases to appoint the same chairperson for both conciliation committees.

The Regional Labour Court considered it appropriate for the labour court to appoint the same chairperson for both conciliation committees, as this was the best way to ensure that the conciliation committees appointed to introduce and apply the IT system did not arrive at different conclusions.

Practical consequences of the decision

This decision has significant practical consequences for business practice:

For employee representatives, the decision means that they do not risk losing their co-determination rights if they apply for the establishment of a conciliation committee in cases where jurisdiction is unclear. The question of jurisdiction is then clarified by the conciliation committee itself within the scope of its preliminary jurisdiction.

For employers, this means that in complex IT projects involving several group companies, they must expect several conciliation committees to be set up if the question of jurisdiction is not clearly resolved. 

Conclusion

The decision of the Cologne Regional Labour Court provides clarity for the practical implementation of group-wide IT systems. It is significant that complex technical issues do not have to be clarified in the accelerated appointment procedure, but can be left to the conciliation committee for clarification. The appointment of the same chairperson for competing conciliation committees is a pragmatic solution to avoid conflicting decisions.