Works council election for delivery services: BAG clarifies the definition of a company

The increasing digitalization of the world of work also poses new challenges for employment law. This is particularly evident in Platform company such as delivery services, where Employees often organized via apps become. The Federal Labor Court (BAG) has with Resolution from 28.01.2026 (case no. 7 ABR 23/24) reached an important decision on the question of where in such companies a Works council can be elected.

The ruling makes it clear that the traditional rules of works constitution law continue to apply in the digital platform economy.

The case before the Federal Labor Court

The case in question involved a nationwide delivery service. The company organized its structure into two levels: so-called „hub cities“ and „remote cities“.

While administrative staff and managers worked alongside delivery drivers in the hub cities, only drivers worked in the remote cities. They received their orders, duty rosters and instructions almost entirely via an app and were mainly in contact with the company digitally.

Works councils were elected in several of these delivery areas. However, the employer contested these elections because, in its opinion, the remote cities were not independent companies within the meaning of the Works Constitution Act.

The decision of the BAG

The Federal Labor Court confirmed the decisions of the lower courts and declared the works council elections in the remote cities invalid.

According to the court, a works council can only be elected in a company or an independent part of a company. The prerequisite for this is an organizational unit with its own management that makes important personnel and social decisions.

The FOPH did not consider this requirement to be fulfilled in the remote cities. They lacked both a local management structure and their own administrative tasks. The work was organized entirely digitally via an app. All key decisions were made centrally at other locations.

In the opinion of the court, the mere grouping of drivers into a delivery area or a joint duty roster was not sufficient to establish an organizational unit capable of forming a works council.

Significance for practice

The BAG's decision has far-reaching implications for companies with digital or decentralized structures.

For employers, the ruling means more legal certainty regarding the question in which organizational units works councils can be elected. The decisive factor is not the actual place of work, but the location where personnel decisions and organizational management functions are carried out.

However, the ruling also highlights a potential challenge for employees: in highly digitalized company structures, it can be more difficult to establish a works council at local level if there is no independent local management.

Companies and employees should therefore carefully examine where the management responsible under works constitution law is located within the organization - because this is ultimately where co-determination can take place.