Germany: Matrix Managers May Vote in Works Council Elections in Multiple Operational Units

Authors: Verena Braeckeler-Kogel, MAES (Basel) and Meike Christine Rehner

Background

The employer operates in the IT sector, providing services and distributing products from multiple locations. Based on a company-wide works agreement, several organisational units were established, each with its own works council, deviating from traditional operational structures. Work within the company is organised across departments, with employees from different units collaborating in teams. These teams are led by matrix managers who are not classified as senior executives. This reflects an internal matrix structure, where reporting lines and responsibilities are shared across units.

Under German law, works council elections take place per establishment (Betrieb). It has to be determined on a case-by-case basis which organisational structures in a specific company form an establishment. During the 2022 works council elections, the election committee in the case at hand deemed matrix managers to be eligible voters if they supervised employees assigned to the relevant operational unit. However, the employer challenged the election, arguing that these managers were not eligible to vote because they had not been formally assigned to that unit.

The lower courts upheld the employer’s objection, declaring the election invalid on the basis that the managers were already assigned to another unit and could not hold voting rights in more than one unit. However, the Federal Labour Court overturned this decision and referred the case back for further review.

Key Issues

An employee’s eligibility to vote is determined by their integration into the operational structure of a given operational unit. This integration is based on the employee’s actual performance of work within that unit and the organisational framework in which they operate.

According to the new case law, being integrated into one unit and eligible to vote there does not preclude eligibility to vote in another unit. An employee may be eligible to vote in more than one unit if they are functionally integrated into multiple operational structures.

Practical Points

• The decision highlights that voting eligibility in matrix structures cannot be determined by making general assumptions. In each case, it must be assessed whether a matrix manager is functionally integrated into a specific operational unit.
• This requires an in-depth understanding of how leadership responsibilities are exercised across units, particularly in virtual or cross-site settings.