Works council's right of co-determination in the event of outsourcing a reporting office pursuant to Section 12 HinSchG

LAG Kiel, July 8, 2025 - 2 TaBV 16/24 / Laskawy, Dirk Helge / Lomb, Peggy

The decision of the Schleswig-Holstein Regional Labor Court (Kiel) clarifies that the works council has a say in the outsourcing of a reporting office to an external law firm in accordance with Section 12 of the German Whistleblower Protection Act (HinSchG).

A company with around 230 employees set up its internal reporting office in accordance with the Whistleblower Protection Act not within its own premises, but at a tax consulting and law firm that had already been mandated. Employees were informed by notice that reports could be sent by email to this external firm.

The works council considered this to be a matter subject to co-determination pursuant to Section 87 (1) No. 1 of the Works Constitution Act (BetrVG), because the design of the reporting office directly influences the orderly conduct of the business and the behavior of employees in the workplace. The employer, on the other hand, invoked the legal obligation to set up a reporting office in accordance with Section 12 HinSchG and assumed that outsourcing to an external agency was not subject to co-determination.

The Schleswig-Holstein Regional Labor Court confirmed the works council's right of co-determination pursuant to Section 87 (1) No. 1 of the Works Constitution Act (BetrVG) both for the establishment and the design of the reporting office. Although the "whether" of the reporting office is prescribed by law in Section 12 HinSchG and is therefore not subject to co-determination, the "how" of the specific design is subject to mandatory co-determination.

• Choice of reporting channels (e.g., email, hotline, online tool).
• Issues of anonymity and confidentiality.
• Response and processing times as well as internal procedures.
• The specific contractual arrangements for outsourcing to third parties, such as an external law firm.

The court emphasized that the right to co-determination must not be circumvented by outsourcing the reporting office to external service providers. Otherwise, this would create a loophole in protection that was not intended by the legislature, because outsourcing would effectively allow the employer to undermine the participation rights of the works council.

Both the Elmshorn Labor Court and the Schleswig-Holstein Regional Labor Court ruled in favor of the works council and found that the right to co-determination had been violated. The employer was not permitted to introduce the external reporting office without the consent of the works council; the court allowed the appeal to the Federal Labor Court.

You can read the entire article in: ZIP 2026, 221-225