If works councils are paid excessive salaries, the offense of breach of trust may be fulfilled. This is shown by a ruling of the Federal Court of Justice on January 10, 2023 (Ref. 6 StR 133/22).
In economic criminal law, the offense of breach of trust plays an important role. According to a ruling by the BGH, the offense of breach of trust can be fulfilled if there is a violation of the ban on favoritism, says Michael Rainer, a lawyer in economic criminal law at MTR Legal Rechtsanwälte.
In the case before the BGH, the issue was the high remuneration of works councils. An automaker had granted its works councils generous bonus payments in addition to a lavish salary from 2011 to 2016. Although the competent regional court acquitted two former board members of the car manufacturer of the charge of breach of trust, the BGH overturned these judgments earlier this year. The regional court must now decide again.
The background is that the works councils were remunerated according to the model of a “hypothetical career,” as F.A.Z. online reported. A model that is not uncommon in corporations, but which the BGH has now rejected. Rather, the salary of a works council must be oriented toward the remuneration of comparable employees with a company-standard career. The automaker adjusted the salaries of its works councils downward. A subsidiary took similar action.
However, the ruling not only impacts the remuneration of works councils but also the liability of employers or board members. The judges considered the criminal offense of breach of trust to be fulfilled, although the regional court saw no intent. The board members had relied on the assessments of internal and external advisors in categorizing the works councils into their salary classes and had also found an existing remuneration system. As a result, they mistakenly assumed they were not violating any obligations.
However, the BGH found this assessment to be too incomplete. The regional court only considered the salary classes, but not the generous bonus payments, which always have to be individually negotiated. The regional court will have to decide on this again.
The ruling shows that board members are exposed to a significant liability risk if they violate their duties of care.
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