Remuneration of Works Council Members: Burden of Proof

In a case recently decided by the Federal Labour Court (BAG), a works council member of VW challenged a reduction of his remuneration (Judgment of 20 March 2025 - 7 AZR 46/24).

The decision establishes that the burden of proof for a claim for higher remuneration typically rests with the works council member. However, the employer carries the burden of proof if he intends to correct already communicated and granted remuneration. In such case, the employer must demonstrate and substantiate that the increase was objectively wrong.

According to statutory law (Sec. 37 para. 4 Works Constitution Act (BetrVG)), the remuneration of works council members must not be lower than the remuneration of comparable employees with a typical career development in the company. This provision was amended last year clarifying that the relevant reference point is when the works council office was assumed (see our Insight dated 6 August 2024 "Amendment of the Works Constitution Act" in German). The plaintiff was employed at VW for many years and had been released from his work duties to exercise his works council office since 2002. During this time, the company repeatedly classified him into a higher pay grade.

The BAG referred the case back to the Regional Labour Court (LAG) of Lower Saxony, which will determine whether the employer can substantiate the erroneous adjustment. Only then will the court decide on the merits.

Following a decision of the Federal Court of Justice (BGH) in 2023, which stated that company boards expose themselves to suspicion of breach of trust if they grant works council members excessive remuneration, a total of four VW cases were heard by the BAG. The number of released works council members is likely to lead to a number of potentially contentious cases not only at the automotive giant.