BAG specifies requirements for works agreements
The Bundesarbeitsgericht (BAG, Federal Labour Court) ruled on 27 January 2026 on the circumstances under which courts must investigate the validity of a works agreement ex officio. The subject of the proceedings was the question of whether an original commitment to provide an occupational pension scheme had been validly replaced by a later works agreement.
The decision was issued under case reference 1 AZR 147/24 and bears the ECLI DE:BAG:2026:270126.U.1AZR147.24.0. The lower courts were the Arbeitsgericht Mönchengladbach (Labour Court Mönchengladbach) by judgment of 26 April 2023 – 5 Ca 2326/22 – and the Landesarbeitsgericht Düsseldorf (Higher Labour Court Düsseldorf) by judgment of 5 June 2024 – 12 Sa 506/23. The Bundesarbeitsgericht dismissed the defendant’s appeal on points of law; the defendant bears the costs of the appeal on points of law.
Dispute over occupational pension benefits
Original pension provision via pension fund
The claimant, born in 1960, had been employed since 1980 by an employer that subsequently underwent several transfers. On the basis of a general commitment, he had been promised occupational pension benefits via a pension fund. From 1 May 1980, pension provision in this respect existed through B Pensionskasse VVaG.
In the course of several transfers of business, the employment relationship ultimately transferred to the defendant as of 1 January 2006. The defendant was unable to continue membership in the pension fund on a permanent basis. It deregistered the claimant from the pension fund with effect from 28 February 2007 and, in practice, changed the implementation of the pension provision to a support fund. The employment relationship ended on 31 March 2022.
Changeover to a support fund
The defendant argued that the pension provision had been reorganised on the basis of a works agreement. The claimant countered that the original commitment had not been validly replaced. In support of this, he asserted that the works council chair at the time had signed the works agreement without a proper resolution of the works council.
The claimant’s application for a declaratory judgment was directed at obliging the defendant to pay him, from 1 January 2027, a monthly lifelong old-age pension in the amount of EUR 421.98 gross. The Landesarbeitsgericht Düsseldorf upheld the application. In doing so, it also addressed, among other things, the issue that the occurrence of the pension event is a minimum requirement for an order to pay future occupational pension benefits under § 258 ZPO (German Code of Civil Procedure), and did not consider it contrary to good faith for the claimant to rely on the absence of a works council resolution.
Works council minutes were at the centre of the case
Resolution of 17 April 2007
The works council dealt with the reorganisation of the occupational pension scheme at a meeting on 17 April 2007. Under agenda item 7, “Reorganisation of the occupational pension scheme – resolution”, the minutes recorded that the concept presented by the defendant was approved “in the version submitted”.
A further works council meeting took place on 19 June 2007. The minutes of this meeting showed that the available version of the new works agreement on the occupational pension scheme still required improvement. At an undetermined point in time, probably after 19 June 2007, the works council chair at the time signed a “Works Agreement on the Occupational Pension Scheme” dated 13 June 2007.
No sufficient finding of a specific resolution to conclude the agreement
In the view of the lower court, it could not be inferred from the documents with the required degree of certainty that the works council had resolved to conclude precisely this works agreement. The Landesarbeitsgericht did not proceed on the basis that the works council had rejected its conclusion. Rather, it considered it possible that an express resolution had simply been overlooked by the body.
These factual circumstances were decisive for the Bundesarbeitsgericht’s decision. This is because the validity of a works agreement requires more than just a signature. Proper formation of the works council’s intent by way of resolution is also required.
Decision of the Bundesarbeitsgericht
Defendant’s appeal on points of law unsuccessful
The Bundesarbeitsgericht upheld the decision of the Landesarbeitsgericht. Accordingly, the defendant is liable for the difference between the benefit actually envisaged from the support fund and the higher pension provision under the original pension fund commitment. The basis is the employer’s liability under § 1 Abs. 1 Satz 3 BetrAVG (German Occupational Pensions Act), which only applies upon occurrence of the pension event.
The Bundesarbeitsgericht did clarify that occupational pension provision granted by way of a general commitment can, in principle, be replaced by a works agreement. In the case decided, however, the replacement failed because the works agreement was invalid due to the absence of a proper works council resolution.
Ex officio investigation under § 293 ZPO
According to the court’s headnote, courts must determine the provisions of works agreements ex officio under § 293 ZPO. Depending on the parties’ submissions, this duty may also extend to the validity of the works agreement.
This means that the court must independently ascertain the relevant collective-law provisions. In this respect, it is not limited solely to the parties’ submissions. At the same time, it does not follow that courts would have to conduct an in-depth review of every proof of resolution in every proceeding without specific cause.
Rather, such a review is required where the parties’ submissions give rise to specific doubts as to whether the works agreement was properly concluded. The Bundesarbeitsgericht considered these requirements to be met in the present proceedings.
Significance of the decision for works agreements
No validity through apparent authority or authority by acquiescence
The Bundesarbeitsgericht emphasised that a works agreement cannot become valid through apparent authority or authority by acquiescence of the works council chair. In the court’s view, these principles do not fit the creation of workplace norms.
The reason for this is that works agreements do not merely concern the relationship between employer and works council. Under § 77 Abs. 4 Satz 1 BetrVG (German Works Constitution Act), they have direct and mandatory effect vis-à-vis employees. Proper adoption of a resolution by the works council is therefore of particular importance.
Nor does the actual implementation of a body of rules that is not covered by a works council resolution retrospectively replace the required resolution. Proper formation of the body’s intent remains a necessary prerequisite.
Subsequent approval remains possible
At the same time, the Bundesarbeitsgericht confirms that a works agreement signed without a prior resolution may initially be provisionally invalid. It may be approved by a later proper resolution of the works council. In the case decided, however, there was no proper works council resolution, meaning that the works agreement could not replace the original commitment.
The decision thus particularly highlights the following points:
- Works agreements require a proper resolution of the works council.
- Mere signature by the works council chair is not sufficient if a supporting resolution is lacking.
- Courts must determine works agreements ex officio under § 293 ZPO.
- A review of validity may be required if the parties’ submissions reveal specific doubts.
- The actual implementation of a set of rules that was not validly resolved does not replace the works council resolution for the past.
Classification regarding § 293 ZPO and party submissions
The First Senate of the Bundesarbeitsgericht also took the decision as an opportunity to classify its earlier, non-decisive assumption from the judgment of 8 February 2022 – 1 AZR 233/21 –. The Senate expressly no longer adheres to the assumption that a denial based on lack of knowledge under § 138 Abs. 4 ZPO is also possible within the scope of application of § 293 ZPO.
This emphasises the nature of the court’s duty to investigate in relation to works agreements. § 293 ZPO requires independent determination of the relevant provisions insofar as this is necessary in light of the subject matter of the dispute. However, the decisive question remains whether the specific submissions give reason to review validity.
Parallel proceedings on the same day
On 27 January 2026, the Bundesarbeitsgericht also decided three parallel proceedings with the case references 1 AZR 148/24, 1 AZR 149/24 and 1 AZR 150/24. In these proceedings, in view of the decision in 1 AZR 147/24, the parties waived the statement of facts and reasons for the decision under § 72 Abs. 5 ArbGG (German Labour Courts Act) in conjunction with § 555 Abs. 1 and § 313a Abs. 1 ZPO.
In the proceedings 1 AZR 149/24, the defendant’s appeal on points of law against the judgment of the Landesarbeitsgericht Düsseldorf of 5 June 2024 – 12 Sa 517/23 – was dismissed; the defendant was ordered to bear the costs of the appeal on points of law. In the proceedings 1 AZR 148/24, the operative part of the appeal judgment in item 2 was corrected due to an obvious inaccuracy under § 319 ZPO with regard to the date, to 1 March 2030.
The decision 1 AZR 147/24 was issued with the participation of Judge at the Bundesarbeitsgericht Dr. Rinck, Judge at the Bundesarbeitsgericht Pessinger, and lay judges Wankel and Mertz. It was also discussed in ArbRB 2026, 205–206 by Marc Reuter.
Relevance for employment law disputes
The decision shows that the formal requirements for works agreements can acquire considerable significance in disputes concerning claims arising from the employment relationship. This applies in particular where an existing legal position is alleged to have been changed or replaced by a works agreement.
For companies, the parties to works agreements and affected employees, it may therefore be decisive how the resolution, signature and subsequent implementation of a works agreement are to be legally classified in the individual case. MTR Legal Rechtsanwälte supports clients with questions relating to works agreements, occupational pension schemes and employment law disputes; further information can be found under Legal advice in employment law.
