If an employer refuses to conclude an indefinite follow‑on contract with a fixed term employee because of the employee’s works council activities, the works council member is entitled, where discrimination is found, by way of damages, to the conclusion of the follow‑on contract.
Facts of the case
The fixed-term employment contract entered into with the claimant employee at the beginning of 2021 for an initial period of one year was later extended by another year until 14 February 2023. In the summer of 2022, the claimant was elected to the works council. Of the defendant’s 19 employees whose fixed-term contracts were due to expire on 14 February 2023, 16 were offered an indefinite employment contract. The claimant did not receive such an offer.
The claimant brought a claim, challenging the validity of the fixed-term contract and, in the alternative, sought an order requiring the defendant to enter into an indefinite employment contract with effect from 15 February 2023 on the existing terms and conditions. He argued that the failure to “permanentise” his employment relationship was solely due to his membership of the works council. While the defendant had concluded indefinite employment contracts with other works council members, those individuals—unlike the claimant—had not stood for election to the works council on the trade union list.
The defendant contended that it had not been sufficiently satisfied with the claimant’s performance at work and their conduct to justify continuing the employment relationship on an indefinite basis. It stated that the claimant’s works council activities had played no role in the decision. Both the Labour Court (Arbeitsgericht) and the Higher Labour Court (Landesarbeitsgericht) held that the fixed-term contract was valid and held that the failure to offer an indefinite follow‑on contract could not be attributed to the claimant’s works council position.
Decision
The claimant’s appeal on points of law was unsuccessful. The Federal Labour Court (Bundesarbeitsgericht) first confirmed that the election of a fixed‑term employee to the works council did not render the fixed-term contract invalid. However, the BAG also addressed another point that employers should pay special attention to in relation to fixed‑term works council members.
Pursuant to section 78 sentence 2 of the Works Constitution Act (Betriebsverfassungsgesetz – BetrVG), employers are prohibited from obstructing or interfering any works council member in the exercise of works council activities. If an employer refuses to offer a fixed‑term works council member an indefinite employment contract or follow‑on contract solely because of that individual’s works council activities, this constitutes a breach of section 78 sentence 2 BetrVG. Such a breach may give rise to a claim for damages, entitling the works council member being awarded an indefinite employment contract or the previously refused follow‑on contract.
The burden of proof with respect to the employer’s breach lies with the works council member. Since an employer is unlikely to admit the alleged motive explicitly, the works council member must rely on circumstantial evidence to justify the conclusion that the decision to decline the follow‑on contract was based on the individual’s works council activities.
(BAG, 18 June 2025 – 7 AZR 50/24)
Practical note
Where an employer does not intend to extend the fixed‑term employment of a works council member, it must exercise particular caution in any statements relating to the employee’s works council activities. The employer must not give the impression that the refusal to offer an indefinite contract or follow‑on contract is attributable to the employee’s works council role.