Germany: No entitlement of a works council member to a permanent contract

Both national law and EU law prohibit the discrimination of employees on the basis of their status as works council members. However, this does not mean that fixed-term contracts for employee representatives are invalid. A graduated system of burden of proof, burden of presentation, and burden of argumentation applies to a works council member's claim for damages due to discrimination on the grounds of failure to conclude a permanent employment contract.

BAG (7th Senate), judgement of 18 June 2025 – 7 AZR 50/24

Case

The employee was working for a company as a temporary worker. He was soon elected to the works council. In addition to him, 18 other employees were also on temporary contracts. 16 of them were offered a permanent follow-up contract at the end of their temporary contracts, but not the plaintiff. In court, the plaintiff argued that the fixed term was invalid and, in the alternative, demanded that the company be ordered to offer him a permanent employment contract. He based his argument on EU law and claimed that he had been discriminated against because of his role as a works council member. However, he was unsuccessful.

Decision

The court dismissed the plaintiff's claim. It first confirmed its established case law that the fixed term does not become invalid upon election to the works council. It justified this on the grounds that Articles 7 and 8 of the Directive establishing a general framework for informing and consulting employees in the European Community (Directive 2002/14/EC) – also taking into account Articles 27, 28 and 30 of the EU Charter of Fundamental Rights – do not give rise to a teleological reduction of Section 14 (2) of the Act on Part-Time Work and Fixed-Term Employment Agreements (TzBfG), and that it could not identify any unintended regulatory gap.

In principle, the works council member who claims that the employer should conclude a permanent follow-up contract bears the burden of proof and the burden of demonstrating the existence of unlawful discrimination. There is no empirical value according to which an employer's decision not to conclude a follow-up contract with a works council member employed on a fixed-term basis is based on that member's works council activities. Therefore, neither factual presumptions nor prima facie evidence apply.

However, the court considered that the question of whether the works council activity is the reason for the rejection was an "internal fact" that lies within the sphere of the employer. The plaintiff employee could therefore, despite a lack of precise knowledge, assert that he was denied a follow-up contract because of his works council activities, and the defendant employer had to respond truthfully to this assertion. The employee was required to present evidence by presenting supporting facts (circumstantial evidence), while the employer could dispute the supporting facts or, for its part, present circumstances that are likely to invalidate the circumstantial evidence.

Circumstantial evidence that justifies the conclusion of causality of the works council activity includes, for example the promotion of an employee who is less qualified for the position than the works council member, the offer of follow-up contracts to all other employees except the works council member, and statements by the employer in connection with the employee's works council activities which suggest that the employer is refusing a follow-up contract precisely because of the works council activities.

Practical note

Election to the works council does not, in principle, preclude the fixed-term employment of employees. However, employers should avoid treating works council members and other employees in comparable situations differently. In addition, statements that could establish a connection between works council activities and decisions under labour law should be avoided. If follow-up contracts are offered to other employees, there should be comprehensible, objective reasons for treating them differently to avoid any indication of bias.