Dusseldorf The Federal Court of Justice (BGH) has lifted the acquittals for two former Volkswagen Group board members and two other former VW HR managers. The case is about possible breaches of trust in connection with the remuneration of leading works councils, including the long-standing chairman of the general and group works council, Bernd Osterloh.
The judgment of the Braunschweig Regional Court does not meet the legal requirements, the 6th Senate of the BGH decided on Tuesday in Leipzig. The judges in Braunschweig now have to make a second judgment on the matter: the case was referred back to another economic crimes chamber of the regional court for a new hearing.
The proceedings were triggered by the salaries that several senior Volkswagen works council members received between 2011 and 2016. The top earner at this time was Osterloh. According to his own statement, in his best year he even collected around 750,000 euros together with bonus payments.
The two former VW HR directors Horst Neumann and Karlheinz Blessing were initially acquitted of the charge of infidelity by the Braunschweig district court in autumn 2021. The responsible public prosecutor’s office in Braunschweig then requested an appeal from the Federal Court of Justice.
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The district court saw no intent
The regional court complained that the salaries of the works councils were too high. However, the defendants erroneously assumed that their decisions on works council salaries did not violate any obligations, according to the first decision by the Braunschweig judges. Presiding judge Bohle Behrendt explained the acquittal at the time: “None of the accused was found to have acted with infidelity.”
Criminal infidelities are often about personal gain. You cannot be held against the four VW personnel managers. Negligence is also no reason for a conviction. “Negligent breach of trust is not punishable,” said Behrendt at the verdict in September 2021.
>> Read about this: Four accused VW managers acquitted in criminal proceedings over works council salaries
Germany’s highest criminal court has now expressed considerable doubts about the reasoning of the Braunschweig judges. The BGH classified the district court’s assessment of the evidence of the accused’s intent as incomplete. It is entirely possible that the defendants acted intentionally.
“The rulings made by the regional court do not meet the legal requirements for presentation,” said the BGH’s statement. On the basis of the Braunschweig judgment, the 6th Senate was unable to understand whether the approval of the remuneration and bonus payments to the VW works councils contradicted the principles of works constitution law. It is unclear whether the district court had ruled on the right basis that the defendants did not act intentionally.
Under what circumstances are VW employees promoted?
“We miss the answer to the question of which standards the approval decisions were based on in the judgment,” said the presiding judge Günther Sander. Accordingly, there were no statements as to when a promotion was planned for VW employees, which rules applied for admission to certain management levels or which standards were used as a basis for granting bonuses. The regional court’s assessment of the intent of the accused was also incomplete because the high bonus payments were not taken into account.
Volkswagen announced that it would review the BGH decision. A spokeswoman for the company said that the company will follow these statements and take them into account to the extent that it contains statements on the lawful standard of works council remuneration.
>> Also read: Ex-VW works council chief Bernd Osterloh: “The offers were clear, I just had to say yes”
Hanns Feigen, defender of former VW HR director Karlheinz Blessing, criticized the decision. “The Federal Court of Justice is thus counteracting the highest court decisions on labor law. According to the Federal Labor Court, it is just permissible to remunerate experienced works council members as well as higher-ranked managers,” Feigen told the Handelsblatt.
What are group works councils allowed to earn?
The judgment caused a lack of understanding in circles of the group and its environment. “I’m speechless,” said a lawyer involved. The decision potentially fuels the death of co-determination in large corporations. It prevents any form of career in the works council. For some time there have been calls for a new legal regulation to give companies more planning security.
The accused VW personnel managers had defended the high payments to the works councils in the first Braunschweig proceedings as lawful. The employee representatives, above all the long-time chairman of the works council, Osterloh, had taken on responsible positions that would have justified higher salaries in line with group management. Various independent reports have confirmed this legal opinion.
As a witness, Osterloh had argued similarly during the court hearing. During his tenure, he was repeatedly offered board positions by the Volkswagen Group. Since May 2021, the former top employee representative at Volkswagen has been Chief Human Resources Officer of the truck subsidiary Traton, where he now receives annual remuneration of around two million euros.
The public prosecutor’s office in Braunschweig did not agree with this position. Even as leading works councillors, Osterloh and his colleagues should not have been compared to VW managers. Rather, the benchmark would have to be the salaries that the employee representatives would have received as part of their last regular job before being released from work as a works council. The Braunschweig investigators had therefore come to the conclusion that the four Volkswagen HR managers had approved excessive payments of around five million euros to the detriment of the company.
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