Labor Law: Federal Supreme Court Ruling on the Composition of the Supervisory Board

The Federal Supreme Court issued a landmark ruling on whether a company’s supervisory board must, in accordance with the provisions of the Third-Party Participation Act consist of one-third employees, and when the threshold of 500 employees is reached, § 1(1) DrittbG. The key issue here was how exactly employees should be counted: should only the employees of a single company be counted, or should the employees of various affiliated companies be aggregated within the framework of a so-called “joint enterprise”?

Complaints were filed by the works councils of the relevant companies. They argued that employees of the so-called “joint enterprise” should be counted toward each other’s totals and that the threshold should be determined precisely in this manner.

The defendant companies objected to this, arguing that reaching the threshold of 500 employees cannot be contingent on the existence of a joint venture involving several companies. The benchmark for determining the relevant threshold is the number of employees at each individual company, not the number of employees within a joint venture involving several companies.

After the lower courts had dismissed the works councils’ complaints, the Federal Supreme Court concurred with the defendants and ruled that the legislation contains no explicit provision regarding the aggregation of the number of employees across multiple companies; on the contrary, the law explicitly bases its calculation on the number of employees of a single stock corporation, and in the absence of a separately concluded agreement, such aggregation does not apply.

Federal Supreme Court (BGH), Decisions of June 23, 2026 — II ZB 11/25 and II ZB 12/25