Germany’s top labor court ruled last month that a domestic work site can form a works council even if its parent company is based abroad. The decision, issued by the German Federal Labor Court (Bundesarbeitsgericht), centers on an airline with headquarters in Ireland and a registered seat in Malta. The company operates a base at Berlin-Brandenburg Airport (BER) with around 320 crew members, but key management decisions are made overseas.
The airline argued that the BER location did not qualify for a works council because its main operations were elsewhere. However, lower courts in Berlin-Brandenburg rejected this claim, stating the BER site met criteria for a “separate department of an establishment” under Germany’s Works Constitution Act (BetrVG). The ruling now confirms that such departments can form councils even without central oversight.
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Works councils in Germany have long had the right to negotiate on wages, working conditions, and other workplace issues. But the BetrVG typically requires a site to be an “establishment” (Betrieb) to qualify. The court clarified that while BER lacks full establishment status, it still qualifies as a “self-contained department” (selbständiger Betriebsteil) under the law.
The decision hinges on where key functions are performed. Scheduling, hiring, and disciplinary actions are handled from Malta and Ireland. But the site has a base captain and supervisor on-site, giving it some autonomy. The court said this enough to meet the BetrVG’s requirements for a works council.
German labor law has always prioritized local representation. The court emphasized that the territoriality principle—limiting the BetrVG to domestic sites—still applies. But it also said a foreign-owned site in Germany can form a works council if it meets the criteria for a separate department.
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The ruling is a win for workers at BER. It means they can elect a council to represent their interests, even though their employer’s main operations are overseas. For companies with cross-border structures, the decision adds a layer of complexity. They may now need to plan for potential council elections at domestic sites, regardless of where leadership is based.
Employers with international operations may want to review their policies. The court’s press release notes that the full ruling will clarify how the BetrVG applies in such cases. But the key takeaway is clear: German labor law extends to domestic sites even when parent companies are abroad.
The airline’s case highlights tensions between global management and local rights. While the company maintains control from Malta and Ireland, the BER site’s workforce now has a formal avenue to voice concerns. The ruling could set a precedent for similar cases in other industries.
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Legal experts say the decision may affect how multinational firms structure their German operations. They may need to adjust how they handle staffing, disciplinary actions, and other functions to avoid triggering works council elections. But the court’s stance seems firm: local sites with sufficient autonomy can form councils, even if the main company is overseas.
For now, the airline’s BER site has a works council in the works. The ruling gives employees a new tool to influence workplace conditions. It also adds a layer of legal certainty for German workers at foreign-owned sites, reinforcing their rights under domestic law.
