BERLIN / LONDON – The increasing implementation of Artificial Intelligence (AI) in German companies is creating tension between employers and employees, with works councils demanding greater co-determination rights to regulate the monitoring of employees through AI systems. Experts warn of a new era of performance control that could jeopardize the protection of employee rights.
The rapid introduction of AI in German businesses has sparked an intense debate about employee rights and surveillance. Works councils are facing new challenges as AI systems are increasingly used to monitor employee performance and behavior. This development has led to calls for stronger involvement of works councils to ensure the protection of employee rights in the digital age.
At the heart of the discussion is the use of AI-based applications, ranging from personnel planning and recruitment to the analysis of daily work processes. While these systems promise efficiency gains, they also collect extensive data about employees. This data can provide detailed insights into the way employees work and their productivity, increasing the risk of constant surveillance. The upcoming implementation of the EU AI Act, which classifies the use of AI in personnel as a high-risk application, reinforces the urgency of this debate.
The legal basis for the co-determination rights of works councils in the introduction of such systems is enshrined in the German Works Constitution Act (BetrVG). Specifically, Section 87 (6) of the BetrVG gives works councils a binding right of co-determination when introducing and using technical devices designed to monitor employees. This regulation presents companies with significant challenges, as almost all modern IT systems fall under this right of co-determination.
Works councils are utilizing works agreements on AI systems to create a clear, standardized framework for their use, aiming to promote trust, protect rights, and shape the technology in the interests of employees. It’s about responsible use – in compliance with legal requirements, ethical standards, and a cooperative partnership.
Key areas of concern for works councils include transparency and traceability of AI systems. They want to know what data the AI collects, how the algorithms work, and whether employees can review and question the AI’s decisions. Protection of personal rights is also paramount, with a focus on preventing the collection of sensitive information like emotions, health data, or political attitudes, and ensuring clear rules for data processing in accordance with GDPR. Works councils are advocating for human control and responsibility in decision-making processes.
The Hamburg Labour Court recently ruled that the works council’s right of co-determination under Section 87 (1) No. 1 Works Constitution Act was not affected, as generative AI systems constitute a work tool. However, the court also acknowledged that works councils have a general right of co-determination when it comes to health and safety issues or changes to working methods. If the use of AI significantly changes the work processes of employees, an operational change within the meaning of Section 111 Works Constitution Act may also be relevant, requiring negotiation of an agreement.
Experts emphasize the need to defend and expand existing protective rights for employees. A central demand is the early involvement of works councils in the planning phase of new IT systems. You’ll see concerns that employers may try to undermine co-determination through the use of complex and intransparent AI systems. Only through strong co-determination can it be ensured that AI is used to improve working conditions and not to intensify control and pressure.
The discussion about regulating the digital world of work is part of a larger debate that also includes the implementation of the European Pay Transparency Directive. These various regulatory strands are forcing companies to reassess their digitalization strategies not only from an efficiency perspective but also from a compliance and co-determination standpoint. An increase in negotiations over works agreements specifically tailored to the regulation of AI systems is expected in the near future.
As more companies allow or even require their employees to use AI, it is likely that there will be more case law on co-determination rights in the future. Even small differences in the facts of a case can lead to a different legal assessment of the works council’s co-determination rights, highlighting the need for careful consideration and legal counsel.
