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German Court Rules Second-Tier Managers Personally Liable for Compliance Failures in €457.7 Million Case

Rodolfo Hanigan by Rodolfo Hanigan
June 7, 2026
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On 6 June, judges found that managers on the second tier can be held personally responsible for oversight failures — even if their employment contracts say nothing about it.

The case involved a chief legal officer who failed to act despite repeated warnings about illegal practices at his company. The firm was forced to set aside €457.7 million in provisions. The court upheld his dismissal, delivering a stark warning: executives who sit on knowledge of wrongdoing face direct liability, regardless of their written duties.

EU Pay Transparency Deadline Missed

Germany has let the transposition deadline for the EU Pay Transparency Directive slip past. It expired on 7 June. The BAVC and other business associations argue the rules are overly complex. Labour lawyers caution that the delay raises litigation risks for employers.

From 8 June, German courts can already interpret existing law in line with the directive — a shift that strengthens workers’ positions in pay discrimination disputes. Germany’s unadjusted gender pay gap stood at 16 percent in 2026.

Scaffold Blitz in Hesse

On Monday 8 June, Hesse’s three administrative districts — Giessen, Darmstadt and Kassel — launched a week-long inspection blitz targeting construction scaffolding. The reason is stark: falls account for roughly 31 percent of all serious and fatal workplace accidents. Previous checks found that only 21 percent of construction sites fully met safety requirements.

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With so many construction sites failing safety checks, the risk from overlooked hazardous substances is equally serious. A free COSHH toolkit provides 43 customizable templates, checklists and toolbox talks to help you identify, assess and control dangerous materials — keeping your workplace compliant and your workers safe. Get the free COSHH Risk Assessment Toolkit

Explosives and Workplace Safety

The Federal Institute for Occupational Safety and Health (BAuA) released a dossier on 7 June detailing safety standards for explosives. It includes tables on blast pressure thresholds — specifying at what pressure life-threatening injuries occur and what safety distances are necessary. The German Hazardous Substances Ordinance mandates specialised instruction for such materials.

Experts increasingly reference the “Swiss Cheese Model” to explain accidents as the accumulation of multiple small weaknesses rather than a single failure.

Switzerland Lags in Risk Assessments

Across the EU, roughly 77 percent of companies carry out regular risk assessments. In Switzerland, the trade union federation puts the figure at just 46 percent. The result: rising sickness absence rates. The Swiss Trade Union Federation (SGB) calculates the cost of presenteeism — working while ill — at 33.7 billion Swiss francs.

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Even where risk assessments exist, gaps in documentation can undermine compliance. The free Risk Assessment Toolkit offers 41 ready-to-use templates and checklists covering fire safety, manual handling, first aid and lone working — everything you need to document and manage risks effectively. Download the free Risk Assessment Toolkit

Continued Debate on Working Hours

Germany remains locked in a debate over working-time reform. The Social Association rejects any relaxation of the eight-hour day. Crafts organisations, by contrast, want a multi-year trial of flexible maximum weekly hours. The discussion is part of the coalition agreement’s promise to overhaul the Working Time Act.

Official Warning: Expect More Inspections

On a parallel track, the Maschinenring Eckernförde warned in early June that state inspections are on the rise. Focus areas include safety briefings, operating instructions, and documentation of risk assessments. Experts stress that regulations themselves are not the problem — it is their everyday application on the ground.

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Rodolfo Hanigan

Rodolfo Hanigan

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German Court Rules Second-Tier Managers Personally Liable for Compliance Failures in €457.7 Million Case

by Rodolfo Hanigan
June 7, 2026
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On 6 June, judges found that managers on the second tier can be held personally responsible for...

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