New challenges Regarding Staff-Related Restructuring Measures in Insolvent Group of Companies

Legal and economic interdependencies within a group of companies usually complicate staff-related measures such as mass dismissals as well as negotiations with (group) works councils regarding changes in operations. This situation is even more complicated in the event that more than one company in a group becomes insolvent.

In April 2018 Germany has introduced new rules on insolvencies of group of companies. These new rules provide obligations for insolvency administrators, courts and creditor committees to cooperate and to communicate with each other. For the better handling of the multitude of the insolvencies in a group the new rules allow for the appointment of a coordinator who may act as mediator between the administrators and other parties and who may be entitled to draw up a coordination plan. This coordination plan would incorporate the restructuring measures for the group as a whole and the individual companies and may also include a restructuring scheme regarding the head count.

Nevertheless a lot of questions evolving around staff-related restructuring measures have not been answered by the legislator, such as the rights and duties of a group works council in light of an insolvency situation and its questionable ongoing existence write Simone Wernicke and Steffen Schneider (both at BBL Bernsau Brockdorff) in an article that is published in Betriebsberater 2018, page 948.

Download: BB_180423_arbeitsrechtliche_herausforderungen_konzernangehoeriger_unternehmen.pdf