This is probably the situation every HR manager wants to avoid during a restructuring: being booed at by employees at a works meeting. Lea Corzilius, HR director at the automotive supplier ZF Friedrichshafen, apparently didn’t succeed. What had happened?
The ZF management had terminated the internally so-called “Zeppelin bonus” as an above-tariff bonus at the headquarters in Friedrichshafen in mid-2027. The remuneration component was a fixed performance bonus, which is now not to be completely abolished, but rather converted into a performance bonus.
Cozilius wanted to inform employees about details at the works meeting on Tuesday. After she was booed for minutes, according to media reports, the works council canceled the meeting. “We canceled the works meeting; people were no longer able to listen,” said Achim Dietrich, head of the general works council, to the Frankfurter Allgemeine Zeitung (FAZ).
What is behind the Zeppelin allowance at ZF Friedrichshafen?
According to information from several media outlets, around 7,500 of the 9,000 employees at the headquarters in Friedrichshafen receive the so-called Zeppelin allowance. It consists of a five percent surcharge on the basic salary and an additional bonus. Together, this makes up around ten percent of the salary. ZF employees told SWR that capping the above-tariff benefits would mean wage and salary losses of 300 to 500 euros per month for many of them.
The planned elimination of the allowance, which is named after Count Ferdinand von Zeppelin – ZF Friedrichshafen is largely owned by the Zeppelin Foundation – and is highly symbolic among the workforce, follows previous cuts to employees. Working hours were shortened, which was accompanied by falling remuneration. Collectively agreed 40-hour contracts were converted into 35-hour contracts – for some employees, for example in administration, the hours were reduced even further.
At the same time, up to 14,000 jobs are to be cut across the group by the end of 2028. The reason for this is a billion-dollar loss that the company has suffered in each of the past two years.
The works council and ZF management are currently negotiating what the new performance bonus should look like. The works council has already shown itself to be combative: “We will use the entire range of the Works Constitution Act to achieve this,” said works council leader Dietrich to the FAZ
How does HR avoid escalations at staff meetings during restructuring?
It is well known that things can sometimes get lively at company meetings. But how can escalations be avoided? According to restructuring consultant and former human resources manager Matthias Mittelsten-Scheid, escalations during company meetings are often an expression of internal disagreements, perceived insecurities, existential fear and frustration. “People who are under the influence of these feelings are internally unwilling to engage in rational reasoning,” he says.
Here, HR managers would first have to focus on the “relationship level”. And to do this you would have to put yourself in the shoes of the employees and think about how they are doing with the current situation and what needs they have based on it. Between the economic crisis and wars, many employees – probably also at ZF – would be afraid.
In Mittelsten-Scheid’s opinion, HR boss Lea Corzilius should have addressed this fear in order to be able to communicate with the workforce. “Escalation happens when I have not shown sufficient respect for the human needs of my target group,” says the expert.
What four ways can help you stay connected to the workforce?
If you believe the restructuring consultant, employers and HR managers can connect with employees in similar situations in four ways:
- About the focus on safety: Do employees understand what is happening and what is planned? Is everything understandable?
- Emphasis on impact: What does it bring to the company and the employees? What specific result do we achieve with this?
- Put the meaning at the center: Why is this step worth it? What is it good for?
- About the focus on trust: Can employees rely on management and its plans? Does management think about employees?
If Mittelsten-Scheid had advised Corzilius and ZF Friedrichshafen on communication surrounding the termination of the above-tariff allowance, he would have gone through the following checklist with them:
- Analyze the needs of the target group – the affected employees.
- Answering the question: “What objections will the target group have?”
- Build a communication strategy to avoid escalations. The identified possible objections should be included here.
- Gain advocates for the project who will inform my target group step by step.
- Build communication strategically – and also align it with the respective recipients.
What to do if the works meeting has already escalated?
The measures themselves initially played no important role in these preparations. “Measures are just the tip of the iceberg,” says Mittelsten-Scheid. “What is more important is what they are based on – respect for the company’s decision or a lack of understanding.”
At ZF, it is too late for these measures – at least as far as the first round of communication about changing the allowance is concerned. How can the HR leadership there best deal with the current misery? First of all, she has to accept the headwind. “As human resources managers, we must not relate this to ourselves personally, but we should also not let it reflect on us with a touch of arrogance,” says the restructuring consultant. “We have to give the whistles space, ask the senders how they would like to deal with the situation and then ensure connectivity at the relationship level before we add rational aspects.”
Under what conditions can employers terminate above-tariff bonuses?
In addition to questions about communication, the ZF case also raises questions about labor law. According to Thomas Ubber, specialist lawyer for labor law and partner at Ubber Labor & Law, ZF apparently agreed the above-tariff allowance with the works council.
“Whether the bonuses will no longer apply when the notice period expires depends largely on what regulations the operating parties have made regarding the subsequent effect,” says Ubber. If a subsequent effect has been specified, this means that the conditions of a terminated or expired agreement continue to apply temporarily until new regulations are found. According to Ubber, three scenarios are conceivable for ZF:
- The bonus provisions do not continue to apply: In this case, the employer can unilaterally eliminate the bonuses upon expiry of the notice period.
- Aftereffects were determined: ZF would then have to replace the bonus by agreeing on a new performance bonus.
- The agreement with the works council on the allowance could be ineffective anyway: “In principle, wages cannot be the subject of a works agreement,” says Ubber. Here it would first have to be checked whether the allowance is based on a collective agreement opening clause for collectively agreed performance fees. If the agreement on the allowance is invalid, according to Ubber, ZF theoretically would not even have to wait for the notice period to expire and could stop the allowance immediately.
Converting performance bonuses into performance bonuses: What applies under labor law?
But what should you take into account if an employer wants to convert a fixed performance bonus into a performance bonus linked to the location – as is planned at ZF Friedrichshafen, according to media reports?
“The first question is whether the works council is even allowed to have a say here,” says Ubber. “To do this, it would first have to be determined to what extent one of the tariff opening clauses is relevant here.” Depending on the situation, ZF Friedrichshafen would have to look for a solution with the works council or with IG Metall, but it also has its own scope for action if necessary. “In any case, care must be taken to ensure that the performance bonus sets the relevant parameters in a sufficiently precise manner,” says Ubber. Meanwhile, negotiations between the ZF management and the works council continue. What the new success bonus will look like remains to be seen.
Lena Onderka is editorially responsible for the Employee Experience & Retention area – which also includes, for example, the topics of BGM and employee surveys. She also looks after the topic of diversity. She is also the editorial contact for the German Human Resources Summit and the HR Forum Banking.
