Definition and Legal Classification of “Change”
The term “Change” (German: Veränderung, Wechsel) plays a significant role in the legal context, especially in contract law, labor law, corporate law, IT law, and public law. The legal concept encompasses various types of contractual, organizational, and structural changes that can occur within companies or in relation to contractual partners or the law. The legal framework and requirements for a change are specifically regulated depending on the area and differ significantly.
Change in Contract Law
1. Change Request and Amendment Agreement
In contract law, change refers to any form of contractual modification that is initiated by one of the contracting parties or mutually agreed upon after the contract has been concluded. A modification of an existing contract can generally only be made by a corresponding agreement (amendment agreement, contract addendum).Legal Basis: The possibilities for contractual modifications arise from the principle of contractual freedom (§ 311 para. 1 BGB). Any contract amendment requires concordant declarations of intent by all affected parties. A unilateral modification is generally only possible by express contractual agreement or based on specific statutory provisions.Change Request: In complex continuing obligations, particularly in construction and IT law, the so-called change request procedures are frequently used. They allow structured submission of change requests and the regulation of their implementation, additional costs, as well as their impact on deadlines and deliverables.
2. Unilateral Contract Modification
A unilateral change to a contract is only permissible in narrowly defined exceptional cases or if contractual modification clauses exist (e.g., adjustment clause, unilateral specification right according to § 315 BGB). As a rule, the contractual partner must agree to the change.
a. Statutory Adjustment Rights
A statutory right to modify exists in certain situations, such as in the event of a disturbance of the basis of the contract (§ 313 BGB), lapse or death of a contracting party (§ 356 BGB), or in tenancy law under specific conditions.
b. Clause Control and General Terms and Conditions Law
The law on general terms and conditions (AGB, §§ 305 et seq. BGB) places strict limits on the possibility of agreeing to unilateral change clauses. In particular, general change authorizations to the detriment of the contractual partner are regularly invalid (cf. § 308 no. 4 BGB).
Change in Employment Law
1. Changes to Employment Contracts
In employment law, the term change covers all contractual adjustments, whether by notice of change, amendment agreement, or works agreement.
a. Notice of Change
An important form is the notice of change under § 2 KSchG, through which the employer terminates the existing employment relationship and simultaneously offers continuation under amended conditions. Here, the strict requirements of the Dismissal Protection Act and the provisions on co-determination must be observed.
b. Operational Changes and Transfer of Operations
In connection with restructurings (so-called change management), statutory provisions apply, particularly §§ 111 et seq. BetrVG (operational change) and § 613a BGB (transfer of operations). Employee representatives have participation and co-determination rights here.
Change in Corporate Law and M&A
1. Company-Related Changes
In corporate law, change includes, for example, changes of company name, changes of legal form, amendments to the articles of association, or mergers and demergers according to the Transformation Act (UmwG). Typical change processes include the merger of two companies (§§ 2 et seq. UmwG) or structural changes through capital measures (§§ 182 et seq. AktG).
2. Change of Control Clauses
Particularly relevant in the context of company acquisitions, mergers, or sales of interests is the so-called “change of control” clause. It governs the legal consequences of a change in control, such as automatic termination rights for contractual partners or the adjustment/termination of ongoing contracts.
Change in IT Law and Project Contract Law
1. Change of Service and Change Request
IT projects and service contracts are often characterized by requests for changes during the project term. Change request processes serve to define, assess, and implement desired changes. Adjustment of remuneration and extensions of deadlines are central negotiation points.Contractual Foundations: Typical types of contracts such as EVB-IT in public procurement or standard service contracts regularly include provisions on change requests. These are necessary because even minor changes can have major impacts on the overall deliverables and schedule.
2. Contract Change Management
Contractual regulations on change management are legally necessary to avoid disputes regarding changes to services, remuneration adjustments, and the differentiation between primary and secondary obligations. In practice, precise documentation of all change processes is essential.
Change in Public Law
1. Modification Procedures in Administrative Law
In public law, change refers to legitimate modifications of administrative acts (revocation, withdrawal, subsequent requirements) as well as modifications of administrative contracts (§§ 54 et seq. VwVfG). As a rule, a modification of administrative decisions is only possible under the narrow requirements of the Administrative Procedure Act.
2. Changes in Public Procurement Law
In public procurement law, change processes play a central role, especially in contract adjustments during the term of the contract. According to the EU Procurement Directive and GWB/VOB/A, contract modifications are only permissible within clearly defined limits and under observance of transparency and equal treatment.
Significance and Risks of Change Processes
1. Legal Certainty
Contractual and statutory change provisions create legal certainty for all parties involved. Unregulated or informal changes carry significant risks of invalidity or disadvantageous contract interpretation.
2. Potential for Disputes
In practice, change processes often lead to disputes about the scope, remuneration, deadlines, and handling of ancillary duties. The exact design in the initial contract as well as documentation of all steps of modification are essential.
Conclusion
The term “change” is a legally complex term that plays an important role in almost all areas of private and public law. The respective requirements, preconditions, risks, and legal consequences are highly context-dependent and subject to strict statutory and contractual regulations. Careful contractual structuring, clear change processes, and precise compliance with special statutory provisions are indispensable for the legally secure implementation of changes.
Frequently Asked Questions
What legal requirements must be observed when introducing changes in a company?
When introducing changes (“change processes”) in companies, numerous legal requirements must be considered. Primarily, co-determination rights of the works council under the Works Constitution Act (BetrVG) must be observed, especially § 87 BetrVG regarding issues subject to co-determination such as working hours, remuneration, or technical monitoring systems. For larger changes such as operational changes, § 111 BetrVG applies, which requires a reconciliation of interests and social plan. In the course of reorganizations, the Transformation Act (UmwG) may also be relevant in the event of mergers, demergers, or changes in legal form. Data protection aspects under the GDPR and BDSG must be strictly observed when changing IT systems or workflows involving personal data. Employment contract adjustments may also be necessary, for example, for changed areas of responsibility or places of work—here, amendment agreements or, if necessary, notices of change under § 2 KSchG are usually required, which themselves are also subject to strict requirements. Depending on the industry, other regulations such as the Collective Agreements Act (TVG) or internal company regulations must also be reviewed, for instance, if collective agreement opening clauses are affected. Ultimately, companies should identify all legal framework conditions at an early stage to avoid legal risks such as challenges, cease-and-desist actions, or claims for damages.
What duties of information and participation do companies have vis-à-vis the works council in change processes?
Companies are obliged not only to comprehensively and promptly inform the works council about planned changes but also—in accordance with the specific measure—to involve it. The obligation to inform is set out in § 80 para. 2 sentence 1 BetrVG, according to which the works council must receive all documents necessary for forming an opinion about planned changes. For measures subject to co-determination, the approval of the works council pursuant to § 87 BetrVG is required. For operational changes within the meaning of § 111 BetrVG, i.e., fundamental structural changes with significant disadvantages for employees, the works council must also be informed at an early stage and fully in order to negotiate, if necessary, a reconciliation of interests and social plan. Failures to inform or involve the works council may result in the intended measures being legally contestable or even invalid. Furthermore, the labor court may, in certain cases, prohibit implementation of the measure until co-determination rights have been sufficiently respected. Companies operating internationally must also observe the requirements of the European Works Council Act (EBRG) for cross-border changes.
What particularities apply when modifying employment contracts in the course of change processes?
In the course of change processes, it may be necessary to adjust existing employment contracts, for example with regard to job duties, working hours, or place of work. Such changes generally require the employee’s consent. For mutually agreed contract amendments, a corresponding amendment agreement—preferably in writing—is sufficient. If employees refuse the changes, the employer’s last resort is a notice of change pursuant to § 2 KSchG. This must observe both general and special dismissal protection; that is, it is only socially justified if urgent operational reasons exist. The legal consequences of an inadmissible notice of change are its invalidity and, under certain circumstances, claims for damages. Additionally, the works council has rights of co-determination for major measures, especially regarding transfers which as changes of the work area require approval under § 99 BetrVG. Collective and company regulations usually take precedence over individual contractual amendments if they are more favorable to employees.
What regulations and limitations exist when introducing new IT systems in a company?
When introducing new IT systems as part of change processes, data protection and co-determination requirements are especially crucial. If personal data is processed, both the provisions of the GDPR and the Federal Data Protection Act (BDSG) apply. Prior to introduction, the purposes, types of data processed, access rights, and any transfers must be fully documented. Often, a data protection impact assessment under Art. 35 GDPR is also required. Co-determination rights of the works council arise from § 87 para. 1 no. 6 BetrVG, since IT systems regularly enable the monitoring of employees’ performance and conduct. Without concluding a corresponding works agreement, the introduction of such systems is generally not permissible. The works agreement should, among other things, contain rules on access restrictions, logging, monitoring, and the purposes of use. IT security aspects and reporting obligations under the IT Security Act should also be examined, especially if critical infrastructure is affected.
What are the employment law consequences of incorrect implementation of change processes?
Incorrect implementation of change processes can result in a wide range of employment law consequences. If co-determination rights of the works council are disregarded, measures may be prohibited or reversed by court order under §§ 23, 101, 102 para. 1 BetrVG. Employees may, in the event of unlawful measures, have claims for continued employment under previous terms, compensation for lost earnings, or reimbursement of expenses. Invalid notices of change result in the continued validity of the previous employment relationship. Failures in data protection can lead to civil liability as well as fines under the GDPR and BDSG. Equally, reputation-damaging lawsuits, claims for damages, and delays or even project failure may occur. In the worst case, personal liability of managing directors (§ 43 GmbHG) or board members (§ 93 AktG) may arise if there has been grossly negligent violation of statutory duties.
What is the significance of reconciliation of interests and social plan in major restructurings?
For major restructurings and operational changes, § 111 BetrVG obliges companies to negotiate a reconciliation of interests with the works council. The aim is to reach agreement on the ‘how’ of the measure, such as timetable, scope, and possible alternatives. If no agreement is reached, the works council can refer the matter to the conciliation committee, whose decision is binding on both parties. Parallel to the reconciliation of interests, a social plan under § 112 BetrVG must be negotiated, which mitigates adverse consequences for the workforce—especially loss of income or employment. The social plan is enforceable by the labor courts and gives affected employees individual claims for severance pay, retraining, or other compensation measures. The duty to negotiate applies from a certain company size (more than 20 eligible employees). Companies should calculate the cost and complexity implications of a social plan at an early stage to minimize subsequent financial and operational risks.
