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Source: DGB – Bundesvorstand December 18, 2020 Reorganization and insolvency law: Greater involvement of employee representatives achieved The Bundestag has passed a law on the further development of reorganization and insolvency law. The Federal Council has now also approved the law. The DGB and its member unions were able to partially prevail in the run-up to their demand for greater involvement of employee representatives. “This is a good day for employees in the factories to be able to save jobs threatened by insolvency by influencing their representatives in restructuring and reorganization processes,” said DGB board member Anja Piel on Thursday evening in Berlin.

DGB / Simone M. Neumann

On December 17, 2020, the Bundestag passed the extensive and long-awaited legislative package for the further development of restructuring and insolvency law (SanInsFoG). With its “main law”, the law on the stabilization and restructuring framework for companies (StaRUG), a restructuring process that avoids insolvency is created with a view to coping with the consequences of the COVID-19 pandemic, which has an impact on the preservation of jobs. The DGB and its member unions had criticized in advance that the urgently required process-specific employee participation was neglected. The appeal of the unions was partially successful: With an amendment by the coalition factions from the CDU / CSU and SPD on December 15, 2020, an additional employee participation was created “at the last second” for the restructuring process of the new “pre-insolvency” restructuring law: In proceedings that one Equal self-administration, the court can set up a creditors’ advisory board to which employee representatives belong. According to a legal clarification contained in the legislative package in the Insolvency Code (InsO) e.g. also be representatives of trade unions in the preliminary creditors’ committees. With minor exceptions, the legislative package will come into force on January 1, 2021. The DGB and its member unions rate the result achieved as part of the reform of restructuring and insolvency law for the protection of employees and their representatives as positive on the whole. “Due to our trade union initiatives and interventions in relation to the coalition factions, against great opposition from the interest groups involved, we have received a creditors’ advisory board with employee representatives as a rule in the StaRUG. That is important and a step in the right direction ”. However, there are restrictions here: it is only a matter of a discretionary decision in proceedings that affect the entirety of the creditors, i.e. are equivalent to self-administration. In addition, employee rights and labor law will remain unaffected in the restructuring process. With regard to company pension schemes, the amendment proposed by the coalition factions made it clear that entitlements also remain unaffected. On the assessment of selected regulations of the reform in detail, in its opinion on the draft bill of the Federal Ministry of Justice and Consumer Protection (BMJV) of a law on the further development of the restructuring and Insolvency law (SanInsFoG-E) of October 2, 2020, as well as in its statement of November 4, 2020, on the subsequent cabinet decision of the federal government (government draft for SanInsFoG-E), the DGB and its member unions had made it clear that procedural participation of employee representatives in one provisional creditors’ committee is essential in stabilization and restructuring proceedings. Because these procedures are similar to those of (provisional) self-administration or protective shield proceedings. There is a – provisional – creditors’ committee to control the self-administration and supervision of the restructuring with the participation of representatives of the employees. In their statements, the trade unions pointed out that the stabilization and restructuring process envisaged in the StaRUG when the SanInsFoG came into force will in practice largely replace the form of self-administration. If, in a largely functionally identical process, the influence and communication options of a Employee representation in provisional creditors’ committees, however, is missing, which represents a step backwards to be rejected compared to the corresponding regulations in the insolvency code. Here and there, such a committee would also serve to facilitate the restructuring and maintenance of jobs through a pre-structuring participation of those affected. The employee representatives on the creditors’ committee, often union representatives in practice, would be involved in discussions about the future of the company from the outset and not be confronted with a fait accompli afterwards. With the adoption of the resolution recommendation of the Committee on Legal Affairs and Consumer Protection of December 15, 2020, the Bundestag approved a regulation (§ 93 StaRUG) which takes up this demand of the unions for a creditors’ council in the restructuring process , but under restricted conditions, ie with exceptions: On the one hand, it is only a “can” committee, i.e. the court can, but does not have to set up a creditors’ advisory board in the restructuring process (Section 93 (1) sentence 1 StaRUG). On the other hand, a second hurdle consists in the fact that all – except for the privileged (i.e. excluded) – creditors must be involved and one thing in this respect shows “pan-procedural features”. However, the participation of an employee representative was adequately safeguarded by the reference to Section 21 (2) sentence 1 number 1a InsO (Section 93 (1) sentence 2 StaRUG). With Section 93 (1) sentence 3 StaRUG, according to which creditors who are not affected by the plan can also be represented on the advisory board, it has also been made clear that trade union representatives can also be named as employee representatives. Fortunately, it remains particularly that trade union representatives are appointed by one of them Reform envisaged change of the insolvency regulation (Art. 5) can already be appointed in provisional creditors’ committees (Art. 5 No. 12 SanInsFoG-E). Otherwise, the success achieved through the commitment of the DGB and its member unions in this legislative process was not “watered down” or “exchanged” elsewhere by worsening the demands welcomed by the unions: So it remains that any employee demands from the design by Restructuring plans (§ 4 StaRUG) are excluded. The amendment proposed by the coalition parliamentary groups in this context made it more concrete and improved that not only claims but (all) “rights from commitments to company pension schemes remain unaffected” (Section 4 No. 1 StaRUG). This also means that entitlements to a company pension will remain unaffected. Finally, employee claims remain exempt from possible enforcement and recovery bans (Section 49 (2) StaRUG). It is regrettable, however, that Section 92 StaRUG (“Participation rights under the Works Constitution Act”) has not been changed to the effect that information and consultation rights for employee representatives, As described in Art. 13 of the Directive (EU) 2019/1038 for the restructuring procedure and the Restructuring plan are included, to apply accordingly to this procedure and to expand it compared to the current legal situation. This is because ensuring these rights of employee representatives, such as the works councils in Germany, to be informed and consulted about the economic situation of the company, the restructuring procedure and the restructuring plan, is guaranteed to the member states by Art. 13 of the “pre-insolvency directive” on which the StaRUG is based given. However, due to the lack of implementation of Directive 2002/14 / EC, they do not come into play in the Works Constitution Act (see example here). In other words: As long as Directive 2002/14 / EC with its framework regulations for information and consultation in Germany is not fully and comprehensively implemented – especially for the works constitution – the order in § 92 StaRUG remains correspondingly deficient that the “… Participation rights under the Works Constitution Act … (remain) unaffected by this Act ”. In this respect, the StaRUG proves to be in breach of Union law in this point of failure to implement Article 13 of Directive (EU) 2019/1038. Finally, there are still no procedural rights for works councils, such as those in Sections 156 (2), 218 (3), 232, 235 InsO. Deficits can be found in these points, despite all the welcome regulations of the restructuring and insolvency law reform, which the DGB and its member unions will continue to advocate for the elimination of these.




EDITOR’S NOTE: This article is a translation. Apologies should the grammar and / or sentence structure not be perfect.

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