Payments in progress of high salaries of the VW works council – economy

Salaries of works council executives can be justified, even if they have already been hired as workers – this is, in short, the result of an important trial in a district court whose verdict was delivered on Tuesday . In Braunschweig, negotiations had taken place in recent weeks over whether longtime VW works council chairman Bernd Osterloh and other influential staff representatives had received disproportionately high salaries. Three former managers and one who is still in office today, of which former VW HR directors Horst Neumann and Karlheinz Blessing, were responsible.

The prosecution’s accusation: breach of trust, sometimes in a particularly serious matter. Part of VW’s profits were reduced by the excessive wages, which meant that VW also paid less tax. The prosecution assessed the damage to Europe’s largest car manufacturer at more than five million euros. Osterloh’s payments alone caused damages of 3.1 million euros between 2011 and 2016. In their plea on Monday, prosecutors therefore called for suspended sentences and financial conditions for executives who had acted in violation. of their homework and intentionally.

This was vehemently denied by their defense lawyers – and the relevant chamber of the Braunschweig Regional Court largely followed the defendants’ statements. The judges had previously shortened the process, which was actually scheduled until the end of October. Now they have acquitted the four HR managers: no criminal behavior can be proven.

With this, the defendants are off the hook. And Bernd Osterloh should be relieved. During his tenure, the employee representative was considered the “king of Wolfsburg” because, thanks to the “VW law”, he and his committee had a particularly strong voice: for example, no site could be closed against his will. The disputes between the VW board and him are legendary, in which Herbert Diess tried to implement tough austerity programs as VW brand boss – and for a long time failed because of Osterloh , who scolded loudly and just disagreed.

At the start of his time at VW, Osterloh only earned 2,500 euros gross

In this respect, from a political point of view, this procedure concerned only the desirability of granting employees’ representatives particularly high salaries. Osterloh is a trained industrial employee, joined VW in 1977 and has worked, among other things, as a “complaints manager” in quality control. In 1990 he was fired as a works council – and reached the top in this world: In 2005 VW employees elected active union members IG Metall to head the group works council . When he started working for VW, he was earning the equivalent of 2,500 euros per month, and in 2015, he was making 17,000 euros. In addition, there were voluntary bonuses of up to 560,000 euros. In short, it is much more than what an industrial clerk can regularly bring back.

Can this be justified? In any case, the law stipulates that exempt works councils must be remunerated according to their respective comparison group in the company. This is discussed again and again in German companies; At Volkswagen, works councils as well as employer representatives say in unison: Of course, competence is not only measured by the job benchmark at the time of hiring, people continue to develop . In addition, the law on the constitution of enterprises is not clear and precise with regard to the question of the correct level of salary. It is always important to weigh at what career level the person concerned would be today if they had opted for a managerial position. Especially since some managers in the second row earn seven-figure sums per year at VW headquarters. “The decision of the Braunschweig regional court will hopefully send a clear signal to the legislator: the constitutional law on works councils is around 50 years old in terms of works council remuneration and needs to be reformed at this stage” , commented a spokesperson for the VW works council on the outcome of the process.

Osterloh, 65, underlined as a witness: “I was not involved in any payment determination that affects me personally.” And he never concealed that employers called him so many times as a top manager, but had long refused. That year, he actually changed sides, going from worker leader to employer representative: as director of human resources, he has been heading the Traton trucks division since May. To do something else again, he explained. But perhaps that process also played a role: With the allure of the multi-million dollar executive position, he and the company provided the ultimate proof of what an Easter prize is worth in the VW world.

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