Social plan and reconciliation of interests
In operational changes, employer and works council negotiate two instruments: the reconciliation of interests on the "whether and how", and the social plan on compensating the economic disadvantages. This guide explains the difference, when an operational change exists and the role of the conciliation committee.
When is there an operational change? (Section 111 BetrVG)
In companies with generally more than 20 employees entitled to vote, the works council has a participation right in operational changes. Operational changes include in particular: reduction or closure of the whole business or of essential parts, relocation, merger or division of businesses, fundamental changes to the organisation, purpose or plant of the business, and the introduction of fundamentally new working or production methods.
Reconciliation of interests (Sec. 112)
Governs whether, when and how the planned operational change is carried out – aiming to avoid or mitigate disadvantages for the workforce.
- Concerns the implementation of the measure
- Not enforceable – it ends after a serious attempt
- Deviation without compelling reason → compensation (Sec. 113)
Social plan (Sec. 112)
Governs the compensation or mitigation of the economic disadvantages that the operational change causes for employees.
- Typically: severance, relocation and qualification costs
- Enforceable via the conciliation committee
- Committee decides under Section 112(5) BetrVG
The role of the conciliation committee
If no agreement is reached on the social plan, the conciliation committee decides. It must reconcile what is economically justifiable for the company with the social concerns of the employees and is bound by the discretionary guidelines of Section 112(5) BetrVG. An experienced chair steers precisely these often complex proceedings – with many participants – to a structured, legally sound conclusion.
Briefly answered
The reconciliation of interests governs whether, when and how the planned operational change is carried out and is not enforceable. The social plan governs the compensation or mitigation of the economic disadvantages (such as severance) and is enforceable via the conciliation committee.
Yes. If no agreement is reached, the conciliation committee decides on the social plan (Section 112 BetrVG) under the discretionary guidelines of Section 112(5) BetrVG.
If the employer deviates from a reconciliation of interests without compelling reason, or carries out the change without attempting a reconciliation of interests, affected employees can claim compensation for disadvantages – in particular severance – under Section 113 BetrVG.
More in the guide: When is a committee enforceable? · Process & duration · all guides
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