New case law – Duty to Negotiate

The dispute concerned whether a company, by divesting part of its business, decided on significant changes to its operations and to the working or employment conditions of employees who were members of a union, thereby breaching the duty to negotiate according to Section 11 of the Co-determination Act in relation to the union. The dispute also concerned whether the company decided on operational restrictions and reorganization before negotiating these issues with the union, thereby breaching the duty to negotiate according to Section 11 of the Co-determination Act in relation to the union, and whether the union’s claim regarding the company’s operational restrictions and reorganization should be dismissed because it was not subject to dispute negotiation. The Labor Court found that the company’s decision to divest was such a significant change to the company’s operations that the company was obliged to negotiate with the union and that the company thereby breached the duty to negotiate and must pay damages. The Labor Court further found that the issue of whether the company breached the duty to negotiate in the company’s decision on operational restrictions and reorganization was not subject to dispute negotiation and that an objection regarding this was made in due time, therefore the union’s claim in that part should be dismissed.

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