Artificial intelligence can streamline workflows, reduce the workload on employees, and make companies more competitive. However, if a company has a works council, the introduction of an AI system often cannot be treated solely as an IT project. Depending on how the application works, the works council must be informed at an early stage or may even be required to be involved.
When must the works council have a say in matters involving AI?
The most important right to employee participation stems from Section 87(1)(6) of the Works Constitution Act (BetrVG). According to this law, the works council must have a say in the introduction and use of technical devices that can monitor employees’ behavior or performance.
The decisive factor is not merely whether the company actually wishes to monitor its employees. According to labor court case law, it may be sufficient for a system to be objectively suitable for monitoring. This applies, for example, to AI applications that can track usage times, work results, communication data, error rates, or performance metrics and assign them to individual employees.
The right to co-determination may therefore also apply to software that is primarily intended to make work easier. If data is stored in the background and personal analyses are possible, the involvement of the works council should be carefully considered.
Not every AI tool is automatically subject to employee participation
Whether the works council must be consulted depends on the specific technical and operational arrangements. For example, the Hamburg Labor Court ruled that, under certain conditions, the use of publicly accessible AI services does not fall under Section 87(1)(6) of the Works Constitution Act (BetrVG). In this specific case, employees used the applications via private accounts; the employer had no access to the usage data stored by the provider. Therefore, there was no technical monitoring by the employer. However, the decision is not a blanket exemption: A right to co-determination may exist in cases involving company accounts, access privileges, or analyses of personal data.
Early Notification Pursuant to Section 90 of the Works Constitution Act (BetrVG)
In addition to mandatory employee participation, Section 90 of the Works Constitution Act (BetrVG) is important. The employer must inform the works council in a timely manner about plans for work procedures, workflows, and technical equipment. The employer must also consult with the works council on the proposed measures early enough so that the works council’s suggestions can still be taken into account.
In an AI project, the works council should therefore not be involved only shortly before the project begins. It is particularly important to provide information about the system’s purpose, the data being processed, possible analyses, automated decisions, and the impact on jobs and work processes.
When evaluating complex AI systems, the works council may also seek expert assistance under simplified conditions.
Planned Reform: Faster Procedures While Maintaining Co-determination
On July 2, 2026, the governing coalition announced plans to make the introduction of software, updates, and technical equipment faster and easier. The works council’s existing rights of co-determination are to be expressly preserved. The social partners are to develop proposals by mid-October 2026 on how cooperation can be accelerated through changes, for example, in works constitution law.
No specific legal provisions have been established yet. Possible options could include, for example, standardized procedures, clearer deadlines, or company agreements that cover certain updates and similar applications in advance. Companies should therefore not assume that AI systems or software updates can already be implemented today without the involvement of the works council.
Early collaboration prevents delays
Before selecting an AI tool, companies should assess what employee data will be processed and what oversight mechanisms are available. Involving the works council early on, maintaining transparent documentation, and establishing a forward-looking AI works agreement can significantly reduce future conflicts.
The planned reform could accelerate digital projects. However, until the law is actually amended, the existing rights to participation and co-determination will remain in effect unchanged.
Does the works council have to approve every use of AI?
No. What matters are the system’s functions and its specific operating conditions. However, if the AI can record or evaluate employees’ behavior or performance, a right to co-determination often applies.
Is a company allowed to test an AI system before negotiations are concluded?
Even a pilot project may be subject to co-determination requirements if employee data is already being processed or if it creates opportunities for monitoring. The pilot project should therefore undergo a legal review in advance and be coordinated with the works council.
Are software-only updates subject to employee participation?
Not every technical update triggers a new participation process. However, if an update changes functions, data processing, or analysis options, renewed employee participation may be required.
What should an AI workplace agreement cover?
Typical provisions include the permitted purpose of use, the data being processed, access rights, prohibitions on analysis, retention periods, options for human oversight, and rules regarding updates and new areas of application.
