Businesses of every size and sector today depend on a wide variety of software solutions – from complex ERP and HR systems to simple collaboration tools, security software, and cloud-based specialist applications. Every such introduction regularly involves the processing of personal data, in particular employee data. In practice, this regularly creates a tension: works councils frequently claim far-reaching co-determination and consultation rights in these processes, arguing that any processing of personal data simultaneously triggers obligations to involve the works council under works constitution law.
This understanding is legally untenable. The following article explains what rights a works council actually holds when software is introduced – and where those rights end.
1. The Misconception: Personal Data as the Triggering Factor
The error that leads to protracted and resource-intensive disputes in many organisations rests on a false equation: because the GDPR covers employee data, because Art. 88 GDPR allows collective agreements on the processing of data in the employment relationship, and because the supervisory function of the works council under Section 80 BetrVG expressly includes monitoring compliance with data protection law, the conclusion is often drawn in practice that any processing of personal data in the context of a software introduction simultaneously establishes a co-determination right.
This conclusion is incorrect. The co-determination right under Section 87(1) No. 6 BetrVG, which is the primary provision applicable to software introductions, does not depend on the mere processing of personal data. The decisive question is solely whether a technical device is deployed that is capable of monitoring the conduct or performance of employees.
2. Section 87(1) No. 6 BetrVG: Co-Determination Only Where Monitoring Capability Exists
The Federal Labour Court (Bundesarbeitsgericht) has over decades of consistent case law clarified what constitutes a technical monitoring device subject to co-determination. The decisive criterion is whether the software collects and records individualised or individualisable conduct or performance data – i.e. data that permits inferences about the specific actions or work output of individual employees.
The subjective intention of the employer is irrelevant. It is sufficient that the objective technical capability for monitoring exists. Where such capability is present, the co-determination right is triggered. Where it is absent, no co-determination obligation arises – regardless of whether personal data is processed within the software in question.
In consequence, numerous software solutions used by organisations today are typically not subject to the co-determination right under Section 87(1) No. 6 BetrVG. This applies in particular to cloud-based whiteboard or project planning tools, image editing or analytical software, content management systems, and software distribution and update management solutions. While such systems also collect personal account or log data, this data does not as a rule permit conclusions about the performance or conduct of individual employees – and therefore the condition for the co-determination right under Section 87(1) No. 6 BetrVG is not satisfied.
3. Scope of Co-Determination: Confined to Monitoring Functions
Even where monitoring capability is affirmed for a specific piece of software and the works council may therefore exercise its co-determination right under Section 87(1) No. 6 BetrVG, that right is narrowly circumscribed in substance. It covers exclusively the monitoring-relevant functionalities of the system to be introduced.
Outside that boundary lies the entire data protection review programme: whether the deployment of the software is based on a valid legal ground under the GDPR, how service provider relationships are contractually secured, what technical and organisational safeguards have been implemented, or whether the legal requirements for transfers of data to non-European countries are being observed – none of these are independent matters over which the works council has a right of co-determination.
Section 87(1) No. 6 BetrVG therefore grants the works council no general right to examine or veto data protection matters. The catalogue in Section 87 BetrVG is exhaustive; there is no general clause from which a broader data protection co-determination right could be derived.
4. Art. 88 GDPR: No Expansion of Co-Determination Rights
It is sometimes argued that Art. 88 GDPR gives rise to an independent right of participation on data protection questions. This approach also leads nowhere. Art. 88 GDPR opens the possibility of establishing more specific rules for the processing of data in the employment relationship through collective agreements. However, this presupposes that such an agreement is actually concluded – either voluntarily or in the context of enforceable co-determination.
Art. 88 GDPR does not establish an obligation to conclude collective agreements, nor does it create any new co-determination right. And where works agreements are concluded, they may only give further shape to the GDPR – they may not modify it.
5. Section 80 BetrVG: Supervisory Function Within Clear Limits
Through its general function under Section 80(1) No. 1 BetrVG, the works council is empowered to monitor compliance with the statutory provisions applicable to employees – which naturally includes data protection law. To this end it has an information right under Section 80(2) BetrVG: the employer must inform it of forthcoming system introductions, and the works council may request additional documents where it requires these to fulfil its function. It is equally open to the works council to draw the employer’s attention to alleged legal violations.
The rights under Section 80 BetrVG are thereby exhausted. The Federal Labour Court has repeatedly held that neither a right to determine legal violations nor any additional co-determination right follows from the statutory supervisory function. The works council is not a superior internal control body. It may communicate its legal view to the employer – but it cannot compel the employer to negotiate data protection matters, issue directives to it, or block business operations outside existing co-determination rights.
Concretely, this means: the works council cannot block the introduction of software or force it into negotiations over detailed data protection questions – whether concerning the contractual design of service provider relationships, the choice of legal basis, or the adequacy of technical security measures. Such questions are exclusively the employer’s responsibility and do not become the subject of works constitution negotiations.
6. Sections 90, 91 BetrVG: Applicable Only in Exceptional Cases
For the sake of completeness, it should be noted that Sections 90, 91 BetrVG also do not as a rule create broader rights upon the introduction of software. Section 90 BetrVG concerns information and consultation rights in the planning of technical installations and the design of work procedures and processes; the provision falls within the sphere of occupational health and safety. Software on its own – much less the replacement of existing digital systems with newer ones – is not, in the prevailing view, a “technical installation” within the meaning of that provision, nor does it alter work processes in an occupational health and safety sense.
Section 91 BetrVG requires that employees be burdened by changes to work processes in a manner that manifestly contradicts occupational science findings on the humane design of work. In the case of the introduction of standard enterprise software, this threshold is virtually never met.
7. Summary
- A co-determination right under Section 87(1) No. 6 BetrVG exists only where the software to be introduced is objectively capable of collecting conduct or performance data that enables the monitoring of individual employees. The mere processing of personal data is insufficient.
- Where a co-determination right exists, it relates exclusively to the monitoring functions of the software. All further data protection questions remain unaffected by it and fall outside the scope of collective bargaining.
- The works council has a broad information right under Section 80 BetrVG, but no right of remedy, co-determination, or obstruction in data protection matters. It may flag concerns – nothing more.
Practical Tip
Many organisations find themselves in a situation where data protection discussions with the works council tie up considerable time and personnel resources at every software introduction – even though there is no legal basis for this. The recommended first step is a structured clarification of the parties’ mutual understanding of participation rights. The process of software introduction should then be clearly governed in a framework works agreement.
Recommended Measures
- Clarification of participation rights: Explain to the works council, as appropriate, the rights arising under the BetrVG and their limits. A shared understanding is a prerequisite for efficient cooperation.
- Framework works agreement on software introduction: Govern in a works agreement what information is to be provided to the works council (system description, assessment of monitoring capability, data protection documents on request), within what timeframe feedback is to be given, and that data protection questions beyond the Section 87(1) No. 6 assessment are not part of the works partnership.
- Consistent limitation of the subject-matter of negotiations: Point out at an early stage that data protection aspects of software are not the subject of works constitution proceedings. This substantially streamlines the introduction process and prevents resource-intensive discussions without a legal foundation.
- Structured information for the works council: Inform the works council in a structured manner for each software introduction – with a general system description, an assessment of monitoring capability, and, upon request, the data protection-relevant documents. This satisfies the requirements of Section 80(2) BetrVG and creates transparency without co-determination risk.
Contact:
Jens Borchardt