Employment Law

News from Germany

Here’s an interesting update on proposed employment law changes:

http://ehoganlovells.com/cv/9e6938f5f64b6bdf5c3e9e9b3e69149d49c6b0dc/p=9157826#page=1

Employment law in Germany and New Zealand both consist of numerous statutes and a substantial body of case law. In both jurisdictions, the superior courts more or less determine and write law, often leading to Parliament either changing current or introducing new legislation after another landscape-changing last instance ruling. Of course, Germany has far more employment law related statutes and far more powerful unions than New Zealand (anyone able to see a connection here?).

Union representation is also far more common and a so called ‘works council’ (Betriebsrat) is mandatory for every employer with more than 20 employees (and increases in size proportionate to the total number of employees). The works council is the first port of call for employees wanting to raise a grievance. It also has to be consulted in the case of redundancies to ensure a fair and consistent selection process. Similar to New Zealand,  Courts do  not question whether an employer’s decision to restructure its business makes commercial sense, as long as the redundancy is genuine. However, an employer is required to compensate redundant employees according to an agreed compensation plan,  based on re-employability factors (for instance, the older the redundant employee, the longer the notice or higher the payment).

Such plans are not common in New Zealand where redundancies, even in higher numbers, are dealt with on an individual basis (and may also be challenged individually). This, of course, makes sense in a country with predominantly small businesses and where manufacturing on a big scale is unknown.

Which at least makes maneuvering through the statutes and the regulations much easier.