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Achtung*: The Works Council!

Employees in Germany are very well protected, inter alia due to the regulations in the Works Constitution Act ("Betriebsverfassungsgesetz"). In general, the Works Constitution Act governs the cooperation between employers, the works council and employees. The employees of a company are represented by several corporate bodies, in particular by the works council. The works council is obliged to participate and be involved in certain decisions of the employer, e.g.: Do you want to completely ban smoking in the company? Do you want to have uniform work clothing? Do you want to implement a new shift system? Are you planning a reduction in workforce? Our advice is: Get the works council involved! Here are a few facts on the works council:

Overview

The concept of a works council has its origin in the Works Constitution Act of 1972 which applies to all companies with five or more employees. The works council and the employer have a duty to cooperate in the interest of the business and its employees. As a consequence, industrial disputes between them are banned. Works councils are very common in Germany.

Members

Works councils consist of representatives of the employees. Executives are not represented; they have their own committees. Candidates for election to the works council are nominated by the council prior to the end of its term or by the workforce.

Eligibility

Eligibility for membership extends to all employees with voting rights who have been employed in the company for at least six months. All employees over the age of 18 have the right to vote. Nominations must be supported by the signature of at least 1/20 of all employees entitled to vote but no less than three people (in small operations of up to 20 employees, the number is no less than two people). In addition, trade unions have an automatic right to nominate candidates. The representation of men and women in the council must be proportionate to the actual distribution in the workplace.

The works council must also appoint an electoral board to organise and supervise elections no less than eight weeks preceding the end of its term; each represented union has the right to nominate one non-voting member to this board. Elections are held every four years between March and May, the next elections will take place in 2018.

Members of the works council are protected against unfair dismissal while in office and for a period of twelve months thereafter. The same applies to those who have run for offices, but only for a period of six months. Notice may only be given on grounds that would entitle the employer to terminate the employment relationship without notice. This, however, requires the consent of the works council.

Meetings

Works council meetings must generally take place during working hours. Trade union representatives are entitled to attend works council meetings; the employer may be invited and may be accompanied by a delegate of the employers' association of which the employer is a member.

Time Off

In order to perform their council duties, works council members receive time off during normal working hours without cuts to their remuneration. Firms with more than 200 employees have to have at least one council member that is focusing entirely on his/her duties in the council and that does not assume regular work duties anymore. Generally, time off has to be “reasonable and necessary”, although the law provides a minimum number of members who are released full-time, proportionate to the total of employed personnel.

Participation Rights of the Works Council

The participation rights of the works council can be divided into three different levels:

  • The most basic right is the right to information.

  • A higher level of participation is granted in regards to the right to consultation.

  • The strongest form of participation is the right of codetermination.

Codetermination Rights

The areas covered by codetermination rights are:

  • Matters of social conditions and social welfare, ranging from canteen facilities to working hours and holiday planning.

  • Measures affecting personnel policies, including the alteration of production procedures, recruiting standards, criteria for job evaluation and the implementation of vocational training programmes.

  • Measures primarily directed at individual employees. This often leads to the joint development of work regulations and disciplinary procedures and also covers all recruitment and dismissals of employees serving on representative bodies created by the Act.

  • Economic affairs, including, in particular, transfers or mergers, the introduction of new working methods and production procedures and, in case of redundancies, the negotiation of social plans.

Employers must obtain the works council's approval before taking action in any of the above areas. Should the works council refuse to give its consent, the matter is referred to a board of arbitration made up of an equal amount of representatives of the employer and the works council.

Rights to Information & Consultation

The works council's right to joint consultation covers the following areas:

  • Safety regulations

  • Construction equipment and production planning (including new technology)

  • Manpower planning

  • Encouragement of vocational training

  • Factory organisation

  • Dismissals of ordinary employees

The employer must keep the works council comprehensively informed on any matters affecting its role, and in particular on the following subjects:

  • Plans for new buildings and equipment

  • Proposals for job procedures and methods

  • Layout of work sites

  • Personnel and manpower planning

  • Economic affairs of the company

Other Rights

In addition to the above rights, the legislators have granted the works council several other rights, i.e. the right to assist an employee with the inspection of his/her personnel record, grievance procedures, the right to demand the dismissal of employees who are “disturbing influences”, the right to commission outside experts to assist in the council's discussions at the employer's expense and the right to be provided with all the documentation relating to proposed technological innovation.

Works Committee

Works councils with more than eight members are also required to elect a works committee to conduct day-to-day business. The committee consists of chairmen and vice chairmen, plus further members depending on the size of the council.

Economic Committee

In companies with more than 100 employees an economic committee must be established and trained. Its purpose is to promote mutual understanding between the works council and the management as well as to ensure mutual exchange of information on economic matters.

Works Assembly

Once every quarter, the works council is supposed to call an assembly for all the employees in the company. The employer calls the meeting and publishes the agenda. The employer or a representative is allowed to address the assembly. Topics discussed must relate to economic matters or employee relations affecting the business or its employees. If the assembly is held during working hours, employees are entitled to their usual remuneration.

General & Group Work Councils

A general works council must be formed in companies which are divided into more than one division for geographical or operational reasons and therefore have several works councils. Each division of the company sends delegates to the general works council, who then elect a chairman from among its members.

The group work council is of special interest to multinational groups doing business in Germany as well as to any firm that is affiliated with another company following an acquisition or a merger. The formation of a group works council is not compulsory but can be requested by the employees if the employer is an integral part of an affiliated group or conglomerate as defined by the German Stock Corporation Act.

If you have questions related to this topic, please feel free to contact
Dr. Nina Springer(Lawyer, LL.M., Licensed Specialist for Labour Law)

*The title is inspired by the famous album "Achtung Baby" by the Irish rock band U2, which has been released in 1991 and sold over a 13 million times.