Business
What is a business?
In everyday language, the term ‘business’ is often used as a synonym for ‘company’. In the context of labour law, a ‘workplace’ is defined as any place of work that constitutes an organisational unit within which a natural or legal person, or a group of persons, continuously pursues the achievement of specific work outcomes using technical or intangible means, regardless of whether or not this is done for profit.
Given the central importance of the ‘betrieb’ in labour constitution law, it is possible to initiate proceedings to determine whether a ‘betrieb’ exists (Section 34(2) and (3) of the Labour Constitution Act (ArbVG)). This is particularly significant when a works council is to be elected for a sub-operation. Unlike a company, a business unit does not have legal personality. Rather, it must always be attributed to a legal entity. A business unit is therefore not subject to insolvency proceedings and cannot act as an employer. This role is always fulfilled by the business entity.
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