HR-Glossar
Versetzung und Direktionsrecht (transfer and the right to give instructions)
How far a German employer's right to give instructions reaches, what reasonable discretion requires and why a transfer must pass two separate tests.
1. What are Versetzung und Direktionsrecht (transfer and the right to give instructions)?
The Direktionsrecht – the employer's right to give instructions – is the power to determine the content, place and time of work more precisely. Section 106 of the Trade Regulation Act (GewO) governs it and sets its limit in the same breath: the determination must be made at reasonable discretion (nach billigem Ermessen), and it must not conflict with the employment contract, a works agreement, a collective agreement or statute.
The right to give instructions is therefore the instrument that fills the gaps in the employment contract. The more precisely the contract fixes duties and place of work, the narrower it is; the more general the contract, the wider. A clause naming only "administrative work" opens a far larger scope than one describing a specific role at a specific site.
On a transfer, two tests sit side by side and are frequently run together. As a matter of individual employment law: is the measure covered by the contract, and does it meet reasonable discretion? As a matter of collective employment law: has the works council consented under Section 99 of the Works Constitution Act (BetrVG)? Both must be satisfied – neither substitutes for the other.
2. Origin and development
An employment contract cannot specify in advance what is to be done on any given day. It describes a framework and leaves the concrete filling-in to the employer. The right to give instructions is therefore not a special privilege but the necessary complement to a necessarily incomplete contract.
Its limit, billiges Ermessen, is a balancing exercise: the interests of the business are set against those of the individual, and both must be given appropriate weight. The usual English rendering, "reasonable discretion", carries only part of this. It is not a test of whether the decision was defensible in the abstract; it asks whether the two sets of interests were actually weighed. Caring responsibilities, looking after relatives, health limitations and how long the person has done the current job all count, as does the operational reason for the measure.
What happens to an unreasonable instruction matters in practice. On the case law of the Federal Labour Court it need not be followed – not even provisionally. That defuses the earlier position, in which employees had to choose between compliance and a formal warning. The route is still not safe: anyone who misjudges it, where the instruction was in fact reasonable, is refusing to work.
3. Core principles and how it works
The contract sets the frame
The right to give instructions reaches only as far as the contract leaves scope. What is fixed there can be changed only by a variation agreement or a dismissal with an offer of altered terms.
Reasonable discretion as the limit
Section 106 GewO requires the interests on both sides to be weighed. An instruction that pushes through operational concerns without regard to substantial personal ones is unreasonable.
Unreasonable instructions do not bind
On the case law an unreasonable instruction need not be followed, not even provisionally. Anyone who misjudges the position, however, risks the accusation of refusing to work.
Works council consent under Section 99 BetrVG
A transfer in the sense of the Works Constitution Act requires consent. The works council may refuse only on the grounds listed in the Act; the labour court then decides on application.
Two tests, two outcomes
Works council consent does not make an instruction that fails the individual test valid. Conversely, a valid instruction does not make the consent dispensable.
Limits from other provisions
Working time law, maternity protection, the law on severely disabled people and the prohibition on victimisation all constrain the right to give instructions further.
Pay cannot be varied by instruction
The right covers content, place and time – not remuneration. Changing pay requires an agreement or a dismissal with an offer of altered terms.
4. Who are Versetzung und Direktionsrecht (transfer and the right to give instructions) relevant for?
- Managers – they exercise the right daily, usually without calling it that. - HR – they test transfers and run the Section 99 BetrVG procedure. - Employees with caring responsibilities – the balancing exercise weighs particularly heavily for them. - Works councils – Section 99 BetrVG is their most effective lever on individual personnel measures. - Businesses with several sites – there the reach of the mobility clause is decisive.
5. How it differs from related terms
- Transfer and dismissal with an offer of altered terms – what the right to give instructions does not cover can be achieved only by agreement or by an Änderungskündigung. The latter is a dismissal and is subject to dismissal protection. - Transfer in the employment law and the works constitution sense – the terms do not fully coincide. For Section 99 BetrVG it suffices that a different area of work is assigned for a substantial period or with a substantial change of circumstances. - Right to give instructions and works agreement – a works agreement can bind the right, for instance on shift rosters or mobile working. - Transfer and secondment – a secondment is temporary; it is more readily covered by the right to give instructions, but may still require consent. - Right to give instructions and homeworking – without a contractual or collective arrangement, mobile working can in principle neither be imposed unilaterally nor ended unilaterally once it has become contractually established.
6. Variants and adaptations
Typical measures and where they fall:
- Change of tasks within the same job profile – regularly covered by the right to give instructions. - Assignment of lower-grade work – not covered; it cuts into the contractual position. - Change of site – depends on the mobility clause and on whether the new distance is reasonable. - Change to shift or duty rosters – usually also subject to co-determination under Section 87 BetrVG. - Ordering attendance instead of homeworking – permissible so far as mobile working has not become contractually or collectively established. - Transfer within the group – the right to give instructions ends at the contracting employer; a move to another company requires an agreement.
7. Advantages and challenges
Advantages
- Allows work to be adapted to changing requirements without varying every contract
- Creates flexibility in the face of workload, absence and restructuring
- Reasonable discretion compels a weighing exercise rather than simple enforcement
- Co-determination under Section 99 BetrVG gives employees collective representation
- A clear mobility clause creates predictability for both sides
Challenges
- The two tests are regularly run together – and then one of them is missing
- Reasonable discretion is a case-by-case balance and hard to predict
- Anyone who declines to follow an unreasonable instruction and misjudges it is refusing to work
- Mobility clauses drawn too widely are subject to review of standard terms
- The Section 99 BetrVG procedure needs lead time, which is rarely planned in
- The line between secondment and transfer is prone to dispute
8. Best practices for implementation
Run both tests separately
First the individual one – is the measure covered by the contract, is it reasonable? Then the collective one under Section 99 BetrVG. Testing only one leaves the measure unsecured.
Document the balancing exercise
The operational reason, the alternatives considered, the personal circumstances raised and how they were taken into account. That is what counts in a dispute.
Talk before you instruct
An employer knows personal circumstances only if they are raised. A conversation before the instruction is at the same time the basis for a balance that will hold.
Draft mobility clauses with restraint
A clause permitting any work at any location is vulnerable. One describing the realistic field of deployment holds.
Observe notice periods for the measure
Even where no period is prescribed, reasonableness includes appropriate lead time – particularly for changes of location and of working time patterns.
9. Tips for employers and employees
For employers
- **Check the contract first** – no instruction changes what is fixed there
- **Document reasonable discretion** – the balancing exercise has to be set out in a dispute
- **Do not forget Section 99 BetrVG** – consent is a separate requirement
- **Pay cannot be varied by instruction** – that needs an agreement or a dismissal with an offer of altered terms
For employees
- **Raise personal circumstances early** – they can only be taken into account if they are known
- **Unreasonable instructions do not bind you** – but the judgement is risky, take advice
- **Check your contract** – the more specific the duties and place of work, the narrower the right to give instructions
- **The works council is involved** – on transfers under Section 99 BetrVG
10. Conclusion
The right to give instructions fills the gaps an employment contract necessarily leaves – and its reach depends precisely on how much the contract leaves open. The more specifically duties and place of work are described, the less can be changed unilaterally.
Its limit is the billiges Ermessen of Section 106 GewO: a weighing of the interests on both sides, not a formula. Personal circumstances go into that balance – but only if they are known. A conversation before the instruction is therefore not merely courteous; it is the basis for a decision that will hold.
The most common structural error is to run two tests together. A transfer must be covered and reasonable as a matter of individual employment law and capable of consent under Section 99 BetrVG as a matter of collective employment law. Works council consent does not cure an invalid instruction, and a valid instruction does not make consent dispensable.
For a group there is a further limit. The right to give instructions ends at the contracting employer. A matrix organisation may direct work across company boundaries in practice; it cannot transfer anyone across them.
Sources
- Section 106 GewO – Employer's right to give instructions (German original; no official English version) (opens in a new tab)
- Section 99 BetrVG – Co-determination in individual personnel measures (official English version) (opens in a new tab)
- Section 87 BetrVG – Co-determination rights in social matters (official English version) (opens in a new tab)
- Section 611a BGB – Contract of employment (official English version) (opens in a new tab)
- Section 307 BGB – Review of the content of standard terms (official English version) (opens in a new tab)
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