Part Three – Effects of Commencement of Insolvency Proceedings

Chapter Two – Performance of Transactions. Co-operation of the Works Council

Section 122 – Judicial Approval for Undertaking an Operational Alteration

(1) If an operational alteration is planned and no agreement on a reconciliation of interests can be reached between the insolvency administrator and the works council pursuant to section 112 of the Works Constitution Act (Betriebsverfassungsgesetz) within three weeks from the date of commencement of negotiations or of a written request to commence negotiations, despite the administrator having provided comprehensive information to the works council in good time, the insolvency administrator may apply for the approval of the Labour Court to the implementation of the operational alteration without this being preceded by proceedings pursuant to section 112 (2) of the Works Constitution Act (Betriebsverfassungsgesetz). To this extent section 113 (3) of the Works Constitution Act (Betriebsverfassungsgesetz) shall not be applicable. The right of the insolvency administrator to bring about a reconciliation of interests pursuant to section 125 or to lodge an application for declaratory judgment pursuant to section 126 remains unaffected.

(2) The court shall grant its approval if the financial position of the enterprise, taking into consideration the social interests of the employees as well, requires the operational alteration to be implemented without prior proceedings pursuant to section 112 (2) of the Works Constitution Act (Betriebsverfassungsgesetz). The provisions of the Labour Court Act [Arbeitsgerichtsgesetz] concerning court order proceedings apply with the necessary modifications; the parties to the proceedings are the insolvency administrator and the works council. The application shall be dealt with as a matter of priority in accordance with section 61a (3) to (6) of the Labour Court Act.

(3) There is no right of appeal against the decision of the court to the Higher Labour Court. An appeal may be brought before the Federal Labour Court if this is allowed in the decision of the Labour Court; section 72 (2) and (3) of the Labour Court Act shall apply with the necessary modifications. The substantiated appeal must be lodged with the Federal Labour Court within one month of service of the Labour Court’s full written decision.

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German Insolvency Code / in force since 29. December 2016