Osterloh rejects influence on wages – economics

In the criminal proceedings for possibly excessive works council wages at Volkswagen, the former head of the group’s works council, Bernd Osterloh, denied any influence on his own compensation. “I was not involved in any payment determinations that affect me,” the 65-year-old said as a witness on the third day of the trial in Brunswick Regional Court.

The prosecution accuses two former members of the board of directors and two heads of Volkswagen personnel of having granted five works councils, including Osterloh, excessive salaries and bonuses between 2011 and 2016. According to the prosecution, the leaders have deliberately used an inaccurate peer group when determining the salaries of employee representatives. And this, although it is in contradiction with the law on the constitution of enterprises.

Investigators assess the damage caused to Volkswagen at a good five million euros, including three million attributable to the unjustified remuneration of the chairman of the group works council. Osterloh’s total salary had risen to 750,000 euros in one year thanks to the payment of bonuses. The defendants have denied the allegations. They explained at the same time that they would have fixed the remuneration of the members of the exonerated works council in accordance with the principles which apply at Volkswagen.

In response to questions from the judge, Osterloh described his professional career with the Wolfsburg-based automaker since 1977 and the qualifications he had acquired. He regularly rejected offers of passage to personnel management. It was always about representing the interests of his colleagues. He described the then human resources director Horst Neumann offered to him in 2015 to become his successor. A year earlier, the then chairman of the supervisory board, Ferdinand Piëch, had approached him with this offer. “I just had to say yes, then it would have been implemented,” Osterloh said. However, he refused. Its objective was to take responsibility for the employees, but not to lose sight of the well-being of the group. “You can only milk a cow if it gives milk.” Good collective agreements are only possible if a company makes more money.

In addition, Osterloh gave the court a detailed description of the particularly high level of co-determination at Volkswagen. This means that important decisions cannot be enforced against the works council and the Land of Lower Saxony, which has a 20 percent stake in the company. In this context, the former president of the works council spoke of a special relationship of trust between employee representatives, the management board and the supervisory board. Critics also call it the “VW system” and accuse the group of a lack of transparency.

In the infidelity proceedings before the regional court, Volkswagen has the role of the victim. However, the group also has an interest in clarifying the legal issues relating to the remuneration of works councils. In the opinion of the Wolfsburg-based company, the law on the incorporation of companies is imprecise and obsolete on many points. It did not take into account, for example, the fact that the representatives of the exempted employees had particular qualifications and often had hindsight on “particular careers”. They sometimes acted at “eye level with the managers”.

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