No works council for Lieferando's remote cities: Why AI and platform control do not create a establishments

Companies in the “Gig Economy” that offer app- or platform-based “on-demand” services – such as delivery, transportation, courier, or IT service providers – usually organize their work in a decentralized manner across geographical units. In the case of app-based delivery services such as Lieferando, these areas of activity are subdivided into so-called “hub cities” (main transshipment bases with administration and back office) and “remote cities” (delivery areas without a “head office” where only deliveries take place). 

In several related proceedings (decisions of January 28, 2026 – 7 ABR 23/24, 7 ABR 26/24, and 7 ABR 40/24) that purely remotely controlled organizational areas in “remote cities” are generally not eligible for works councils. In the court's opinion, such purely digitally controlled entities are neither establishments nor independent separate departments of establishments within the meaning of Section 4 (1) sentence 1 BetrVG. For an independent separate departments of establishments, a minimum degree of organizational independence from the main enterprise is required. This minimum degree is not achieved solely by the fact that there is a distinct group of delivery drivers with common interests or that these drivers are grouped together in a duty roster.

The court thus concurs with a series of previous state labor court decisions from recent years. The lower courts made it clear that a digitally controlled organizational unit can only be considered an independent separate departments of establishments if there is an “institutionalized” management on site that determines the deployment of employees and actually exercises the employer's authority to issue instructions. This therefore requires structured management that makes decisions on social and personnel matters. However, in the case of platform-based control of personnel and business processes, these decisions are usually made purely “remotely.” According to the Schleswig-Holstein Regional Labor Court (6 TaBV 20/23), the use of artificial intelligence in personnel management does not change this.

The decision of the Federal Labor Court is relevant for all companies that use platform-based business models and work with decentralized structures or purely digitally controlled (personnel) processes. It gives reason to review the platform- or app-controlled organizational structure to determine whether individual units meet the requirements for a business or independent part of a business. 

If units are to be considered independent, organizational responsibilities and personnel management powers must be clearly defined and documented. Otherwise, companies should ensure that the management of remote cities actually originates from the hub cities and that no independent management functions arise in the remote cities that could unintentionally lead to works council eligibility.

The Platform Work Directive (Directive (EU) 2024/283), which has not yet been implemented in Germany, does not require a different assessment. According to Article 20 of the Directive, it must only be ensured that workers can communicate privately and securely with their representatives via the digital infrastructure of the platforms or comparable effective means. However, the Directive does not contain any requirements regarding the organizational prerequisites for employee representation.

We are happy to assist you with any questions you may have about your digital business processes and the design of works council structures.