ESG: Environment – Social – Governance

LkSG and Labour Law

The Act on Corporate Due Diligence Obligations in Supply Chains (Lieferkettensorgfaltspflichtengesetz, “LkSG”) has been in force since 1 January 2023. The LkSG will impose extensive “best effort” obligations on companies to protect human rights and environment-related legal standards in their supply chains, which also include their own corporate business area. The aim of the LkSG is to prevent, end or minimise existing human rights- and environment-related risks. The LkSG is highly relevant from a labour law perspective.

The concept of an “employee” under labour law as well as questions of group attribution already play a role in determining the thresholds relevant for the application of the LkSG. The protected human rights that require interpretation, and which find expression, for example, in the prohibition of forced labour, discrimination or the withholding of an adequate wage, are also largely derived from international labour law. In addition, the LkSG raises the fundamental question of how companies can implement and firmly establish the due diligence obligations applicable to them in the employment relationship with their employees in a legally secure manner. This question is relevant for, among other things, the labour law status of the human rights officer recommended by the legislator, the enactment of codes of conduct for employees, and the establishment of the complaints procedure required by the LkSG. Co-determination rights are also very important in this context. Finally, the LkSG strengthens the role of trade unions in ESG. This is because persons potentially affected by fundamental human rights violations can authorise trade unions to assert rights in court on their behalf (vicarious standing).

Our casework has given us extensive experience in the field of individual and collective labour law and we regularly assist our clients with the introduction and further development of effective compliance systems. This includes labour law advice at all relevant stages – from the implementation of appropriate preventive measures to the clarification of potential rule violations to the response to concrete misconduct in order to ensure future compliance.