WOLFSBURG/LEIPZIG (dpa-AFX) - Possible pay cuts for works council members at Volkswagen and other major companies could affect not only top earners, but also many employee representatives in lower income brackets. Voices from the group environment confirmed on Tuesday, more details on the consequences of a revision decision of the Federal Court of Justice (BGH) can be said only after the presentation of the judgment. But already now it is foreseeable that in the case of an "extreme scenario" it might come to noticeable losses in the remunerations - with leading like with simple work councils.

VW is preparing itself for the possibility of having to fundamentally revise the internal salary system for its 250 employee representatives. Concrete details of the BGH argumentation are still necessary. However, a working group is already considering possible consequences.

The key issue is the "hypothetical" career development of works council members. Can the prospect of further tasks or a position with greater responsibility be a yardstick for how much they earn? Or must a so-called comparison group always be used - with similar activities to those that existed at the beginning of a works council career?

The issue, which is already complicated in terms of labor law, had led to a sensational criminal trial at the Regional Court of Braunschweig in 2021. There, four VW personnel managers were charged with having, in the opinion of the public prosecutor, approved inappropriately lavish salaries and bonuses for senior works council members from 2011 to 2016. Ex-works council head Bernd Osterloh, for example, came to more than 700,000 euros in some years.

Since profits were reduced and income taxes squeezed in this way, the charge was breach of trust. The court acquitted the managers because, in its interpretation, no intentional breach of duty could be proven. However, this decision was recently overturned: It did not meet the legal requirements, the 6th Senate of the BGH ruled two weeks ago. The district court's assessment of the evidence on the question of intent was incomplete. Germany's highest criminal and civil court thus referred the case back to Braunschweig.

If it is confirmed that possible career paths - also in the direction of management-like tasks - may no longer be a basis for the salary classification of works councils, then not only top earners would have to reckon with cutbacks, insiders said. Also the tariff-bound remuneration would probably have to be partly reorganized.

At the six VW plants in western Germany, with the exception of Osnabrück, 98 percent of the members of the works council currently receive normal collectively agreed salaries, according to reports. Four individuals are assigned to management salary brackets. On the other hand, there is "a large subset of cases" for which there is probably no need for change because no hypothetical career plan has been formulated for them.

The latter also applies to the head of the Group Works Council, Daniela Cavallo, who, after being replaced by Osterloh in the spring of 2021, had stated that she would receive an annual fixed salary of around 100,000 euros, plus a five-figure bonus based on business performance and other criteria. This order of magnitude has not changed recently, was heard on Tuesday. There were also no indications of imminent changes in Cavallo's salary.

According to information in the Handelsblatt, 170 works council members who are not facing any cuts have now been contacted. A comparatively small group, on the other hand, is said to be threatened with considerable losses in some cases. The company is continuing to review the situation and is talking to individual employees, it said. The point is to be prepared for the case of "what if?" Officially, with a view to the BGH's written statement of reasons, which is still pending, the following still applies: "Volkswagen AG will align itself with this decision."

A central problem in all of this, even beyond Wolfsburg: the Works Constitution Act, which in principle regulates the payment of employee representatives, dates back to the 1970s - and its regulations are considered outdated and woolly by quite a few legal commentators. According to the law, it is always necessary to assess at what career level a person would be today if he or she were to take up a comparable position in management instead of the "honorary office" of works council. In the opinion of various labor law experts, there is still a lack of clear guidelines as to which comparative groups are decisive when classifying an experienced works council member.

Several calls for amendments and attempts at reform by politicians have so far failed to make any headway. However, the fundamental decision under criminal law could now force many other companies with similar practices regarding the remuneration of works councils to make changes - even if labor courts often see the handling of this practice more loosely./jap/DP/jha