No works council election for app/AI organisations

No works council election for app/AI organisations

The next regular works council elections are scheduled for spring 2026. In digital, decentralised platform organisations and AI-supported management systems, the typical prerequisites for an independent business establishment are often lacking. Employees are provided with apps or AI tools that take over many tasks, such as shift planning, job assignment, communication, and reporting sickness, without any human management functions "on site".

The regional labour courts in Cologne, Schleswig-Holstein and Hamburg have recently clarified that works council elections are not possible without institutionalised, human management on site. AI- or app-controlled instructions are not sufficient for institutionalised management. Works council elections in such business establishments are thus contestable.

Regional labour courts

The three current regional labour court decisions mentioned above show a consistent trend:

• The Cologne Regional Labour Court (judgment of 7 March 2025, ref. 9 TaBV 29/24) ruled that a delivery area without an institutionalised management body is not eligible for a works council. Pure "app instructions" do not constitute the necessary management authority. The works council election is therefore contestable.
• The Schleswig-Holstein Regional Labour Court (judgment of 7 August 2024, ref. 6 TaBV 20/23) ruled that a so-called remote city without a physical management organisation in the area does not constitute a business establishment. The use of AI is relevant to co-determination (e.g. Section 90 of the Works Constitution Act), but does not change the threshold for works council eligibility.
• Furthermore, the Hamburg Regional Labour Court (judgement of 21 November 2024, ref. 3 TaBV 1/24) also came to the same conclusion that an institutionalised management level is essential in order to determine a works council-eligible unit. AI/platform control alone only leads to "shapeless" units.

According to the regional labour courts, the human management authority, as counterpart to the works council, remains the decisive factor for determining the eligibility for a works council. The legislator refrained from making any changes to the definition of "business establishment" in the course of the 2021 reform of the Works Constitution Act.

Appeal proceedings

Several proceedings are pending before the Federal Labour Court. It is to be expected that the Federal Labour Court will essentially follow the uniform case law. However, this remains to be seen. It cannot be ruled out that the Federal Labour Court will only decide after the upcoming regular works council elections.

Conclusion

For employers with highly digitalised, AI-supported decentralised platform organisations, the location of institutionalised human management authority determines whether a works council can be established. AI tools and apps are essentially mere aids and do not replace management. Works council elections that are based solely on the use of AI or criteria such as delivery areas, regional allocation of drivers and customers, or app workflows in the interest of "local representation" are contestable.