Littler Global Guide - Germany - Q2 2021

Browse through brief employment and labor law updates from around the globe. Contact a Littler attorney for more information or view our global locations.

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Obligations Under the German Supply Chain Act

New Legislation Enacted

Author: Jan-Ove Becker, Partner - vangard | Littler

On June 11, 2021, the German Supply Chain Act (Lieferkettengesetz) was passed, requiring German and multinational companies, including foreign companies with branches or subsidiaries in Germany, to oblige their direct suppliers to comply with human rights in all aspects of their workers' employment. The Act imposes specific due diligence obligations, as well as limits and consequences of their duty, including (but not limited to): (a) establishment of mechanisms to identify human rights abuses or environmental violations; (b) requirement to draft a policy statement on their human rights strategy; (c) introduction of the intervention of mandatory preventive and remedial measures in the event of risk identification and (d) establishing of complaint (whistleblowing) procedures for affected workers.

The law also imposes documentation and reporting obligations, as well as the publication and filing of nonfinancial business reports. Noncompliant companies risk comprehensive fine sanctions. The German Supply Chain Act comes into effect on January 1st, 2023, for companies with more than 3,000 employees, and also on January 1st, 2024, for companies with 1,000 employees. The calculation of the number of employees is based on the total number of employees in Germany of all Group companies, including employees posted abroad.

Extension of Rights of Works Council

New Legislation Enacted

Author: Lara Müller-Esch, Associate - vangard | Littler

On June 18, 2021, the Works Council Modernization Act (Betriebsrätemodernisierungsgesetz) came into force, which facilitates the election and establishment of works councils, but primarily contains several technical innovations. For example, works councils will be able to hold virtual works council meetings in the future and works agreements can be signed with a qualified electronic signature.

Additionally, provision was made for the involvement of an expert for the works council when assessing the use of artificial intelligence in work processes. Moreover, it was determined that the employer is the “controller” within the meaning of Art. 4 (7) of the GDPR General for actions of the works council, and that the works council has a right of co-determination for “structuring mobile work provided by means of information and communication technology.”

No Extension of Obligation to Offer Remote Work

New Regulation or Official Guidance

Author: Dagmar Lessnau, Senior Associate - vangard | Littler

The temporary statutory obligation to offer remote work expired on July 1, 2021, though most pandemic-related regulations to be observed at the office remain effective. Employers must continue to implement appropriate technical and organizational measures to ensure compliance with hygiene and distance standards (e.g., lower room occupancy, reduced personal meetings, distance of 1.5 meters, partition walls, proper ventilation, and sanitary supplies). The provision of at least 10 sqm2 of office space per employee is no longer applicable, however.

Furthermore, company hygiene plans must be updated after carrying out a new infection risk assessment and free COVID-19 testing must be granted at least twice per calendar week for employees at the office/travelling (except for employees who are fully vaccinated or recovered from COVID-19). Evidence of offering testing shall be retained until September 10, 2021.

European Commission’s Draft Regulation on Use of Artificial Intelligence

Proposed Bill or Initiative

Author: Jan-Ove Becker, Partner - vangard | Littler

On April 21, 2021, the European Commission proposed regulations on the use of Artificial Intelligence (AI), which would represent the world's first legal framework for the future use of AI. The aim is to provide companies and the European economy with important competitive advantages (i.e., secure legal framework for investments and innovations) through the early regulation of AI processes.

The draft proposes comprehensive regulation on the use of AI, identifying four levels of risk and technical requirements for its use. The Commission's proposal ensures that AI Systems deployed in the European market are safe and respect existing law on fundamental rights and Union values and user safety. The proposal must go through the Union legislative process, which regularly takes one and a half to two years and will consequently go through several amendments.

Failure to Pass German Whistleblower Act

Proposed Bill or Initiative

Author: Dr. Sabine Vianden, Associate - vangard | Littler

The Whistleblower Protection Directive (EU) 2019/1937 of the European Parliament and of the Council must be implemented by European Member States by December 17, 2021. The Directive creates an obligation to establish internal reporting channels for legal entities in the private sector (with 50 or more employees) and the public sector for infringements of Union law in order to protect whistleblowers. In addition, it obliges member states to establish external reporting channels with the authorities and to provide whistleblowers with protection from retaliation.

A draft of the German Whistleblower Protection Act was more far-reaching than the European Directive, seeking to apply the law to notifications of infringements of national law and protect persons affected by the notification. Ultimately, the governing parties failed to agree on a draft, so the future of a new draft remains uncertain.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.