BAG: Pay cuts for works council members

Germany’s Federal Labor Court ruled that employers can’t unilaterally reduce pay for works council members unless they prove the original pay adjustment was incorrect. The case involved a long-serving works council member whose pay was cut from level 14 to 13 after the company reviewed compensation practices.

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Pay protection for works council members

Germany’s Federal Labor Court (BAG) ruled on April 15, 2026 (case no. 7 AZR 296/24) that employers can’t simply reduce pay for works council members. The court decided that once a company adjusts a works council member’s pay, they must prove any later reduction is justified. This means the employee keeps their higher pay level unless the employer can show the original adjustment was wrong.

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Why the court had to decide

Works council members in Germany have special pay protection. Their pay can’t fall behind comparable colleagues who stay in regular jobs. The law (§37(4) BetrVG) says their pay must develop like others with „normal career progression.” But what happens when a company later decides the pay adjustment was too generous? That’s what this case was about.

What happened in this case

A quality inspector at a car manufacturer became a works council member in 2002. The company adjusted his pay several times over the years, most recently to pay level 14 in 2010. After a 2023 court ruling about overpaying works council members, the company reviewed all pay levels. They decided this employee should only get level 13 pay and tried to reclaim some money. The employee sued to keep his higher pay level.