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Workplace Representation

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Works councils provide representation for employees at the workplace and they have substantial powers – extending to an effective right of veto on some issues. Although not formally union bodies, union members normally play a key role within them.

There is a clear legal basis in Germany for the workplace representation of employees in all but the very smallest companies. Under the Works Constitution Act (Betriebsverfassungsgesetz), a works council can be set up in all private sector workplaces with at least five employees. (There is a system of staff councils in the public sector which have a broadly similar structure.)

 

In practice large workplaces are much more likely to have works councils than small ones. Figures from the government-backed research body the IAB show that, in 2018, only 9% of all eligible workplaces had a works council in West Germany (10% in the East), but they covered 42% of all employees in the West and 35% in the East. Works councils covered 90% of employees in workplaces with more than 500 employees in West Germany, but only 8% of employees in workplaces with fewer than 50 workers. The comparable figures for East Germany were 86% (more than 500) and 10% (fewer than 50).[1] These figures are for works councils in the private sector. The proportions would be higher if staff councils in the public sector were also included.

 

Works councils are not directly trade union bodies. But the unions have a major influence on their operation. Analysis of the works council election results in 2014, on behalf of the Hans-Böckler-Foundation, found that around three-quarters of the members elected were members of unions in the DGB (the main union confederations), although there were variations between industries. In the energy and chemical industries (organised by the IGBCE), 80.0% were union members, and in the metal and textile industries (organised by IG Metall) the figure was 76.6%. However, the percentage of was lower, at 73.8%, in industries organised by the NGG food and hospitality union, and in services organised by Ver.di (61.0%).[2]

 

These figures are very similar to those for the works council election in 2010, although over a longer period the overall percentage of works council members who are in DGB unions has fallen slightly, dropping from 75.1% in 2002 to 72.7% in 2010.[3] Despite this, works councils remain an area of trade union dominance. (This is also the case for public sector staff councils, although here there are dbb members as well as those from the DGB.) Other links between unions and works councils are that works councils have the right to invite trade unions to attend their meetings, provided a quarter of the members are in favour, and works council members often go on union-organised training courses.

 

The law in Germany does not provide a separate statutory structure for union workplace representatives. However, some unions make provision for them. Their rights and duties are normally fixed by the unions, although in some industries their position is also regulated by collective agreements. In an ideal situation they exist alongside the works council. In practice there is often no separate specific trade union structure and the members of the works council will take over their tasks.

 

Figures from Eurofound’s 2013 European Company Survey show that 26% of establishments with at least 10 employees have some form of official employee representation, which may be a union body, a structure to represent employees’ social and economic interests, or an information and consultation body. This is slightly below the EU28 average of 32%. As elsewhere in Europe, larger organisations are much more likely to have such a structure than smaller ones. Among establishments with more than 250 employees, 77% have some form of employee representation.[4]

 

Numbers and structure

 

A works council can be set up once there are five permanent employees in a workplace, with the size increasing with the number of employees (see table). The employee numbers are based on headcount. There is no difference between part-time and full-time staff.  

 

Number employed

Number of works council members

5-20

1

21-50

3

51-100

5

101-200

7

201-400

9

401-700

11

701-1,000

13

1,001-1,500

15

 

From 1,501 to 5,000 employees the number in the works council increases by two for every 500 employees or part thereof; from 5,001 to 7,000 by two for every additional 1,000. Workplaces with 7,001 to 9,000 have 35 members on the works council, and above 9,000 workplaces have two additional works council members for each additional 3,000 employees. Changes in 2001 increased the size of the works council at almost all levels.

 

All employees are covered by the works councils with the exception of senior management, for whom separate representation is provided, and the owners of the business and their close relatives. In Germany works councils are purely employee bodies. There are no members representing the employer. Manual and non-manual employees should “as far as possible” be represented in proportion to their numbers in the workforce. Since 2001, agency workers who have worked in the workplace for at least three months have been entitled to vote, and, in March 2013, the labour court ruled that they should be counted in the numbers employed. This potentially increases the size of the works council, as well as the numbers of those entitled to time-off (see below).

 

There is also a requirement that the sex which is in a minority in the workforce must be represented in proportion to its presence in the workforce on all works councils with three or more members. The aim of this change, which was introduced in 2001, was to increase the number of women in works councils and research on works council elections since then suggests that it is having some effect. The proportion of women has increased gradually, from 23% in 2002 to 32% in 2018.[5] However, the researchers estimate that women continue to be under-represented in relation to the number of women employees.  

 

The works council chair, elected by the whole works council from amongst its members, plays a key role. His or her legal functions include calling the meetings and setting the agenda. The law also requires that in works councils with nine or more members (above 200 employees) a separate works committee should be elected from the works council to deal with day to day business. (The works council chair and deputy chair are automatically members of this committee.) If the works council wishes it can also set up other sub committees.

 

In companies with more than 100 permanent employees, the law requires the setting up of another body, the economic committee. This committee is consulted on economic and financial issues. But it is chosen by the works council, and in certain circumstances the works council can decide to do without an economic committee, and directly take over its functions.

 

Health and safety committees should be set up in all workplaces with more than 50 employees and in some with between 20 and 50 employees. Members of the works council take part in the meetings of the safety committee.

 

There is also separate representation for young people and the disabled, who are able to take part in works council discussions of concern to these groups.

 

In addition to the works council structure, there is separate provision for the representation of senior management. Provided there are 10 senior managers, either in the plant or in the company, they can choose to elect a body to represent them. This can have between one and seven members, depending on the number of senior managers involved.

 

 

Tasks and rights

 

Works councils exist to ensure that some of the key decisions at the workplace are not taken by the employer alone but involve representatives of the workforce. However, the works council cannot consider just the interest of the employees. Its legal basis is to work together with the employer "in a spirit of mutual trust ...for the good of the employees and the establishment". At the same time the law recognises that there will inevitably be conflicts between the interests of the employer and the workforce, and also makes it clear that trade unions have a separate duty to protect the interests of their members.

 

The law provides the works council with a range of rights, which can be divided into four main categories:

  • information – where the works council must be informed;
  • consultation – where the works council’s views must be listened to;
  • opposition and refusal of consent – where the works council can block the employer’s plans, although this opposition can be set aside by a decision of the labour court; and
  • enforceable co-determination – where the works council must agree before the employer can go ahead, unless the employer can persuade the “conciliation committee” (Einigungsstelle) to accept his or her proposals .

 

The most effective of these rights is enforceable co-determination, sometimes called “genuine” or “equal” co-determination. The conciliation committee, which determines the issue if the works council and the employer cannot agree is composed of representatives of both employer and works council, who may be from inside the workplace or external, with a neutral chair, often a judge from the labour court. The costs of the committee are borne by the employer, and the works council can make its own proposals, which must be considered in the same way as proposals coming from the employer. An attempt is first made to resolve the issue without the neutral chair voting, but, if there is a tie, the proposals are voted on a second time and the chair must vote.  Once a decision has been reached, it is binding on both sides.

 

A survey of works council members in 2015 found that the conciliation committee procedure was used relatively rarely, with only 6.5% saying that they had used it in their workplaces in the previous 12 months.[6]  In general, it seemed that often the threat of referring a disputed issue to the conciliation committee was sufficient to get the employer to agree.

 

The precise rights of the works council vary from area to area. The rights are strongest in the social area – organisation of hours, holidays, methods of payment and so on – and weakest in relation to economic issues. This reflects the overall principle that companies should be as far as possible free to take their own decisions in this area.

 

On economic issues, the works council should be informed about the economic situation, with quarterly reports in larger companies (more than 1,000 employees), and be consulted about changes in the workplace which could lead to disadvantages for the workforce, including the introduction of new techniques and procedures and in particular new technology. In workplaces with more than 100 employees, many of these rights are exercised by the economic committee, made up partially or wholly of works council members, to which the employer should report once a month. The issues covered by the economic committee include the company’s economic and financial situation, investment and rationalisation plans, work methods, closures and transfers, environmental policies and any possible takeover of the company.

 

The works council must be consulted on planned changes, like cut-backs, closure, or the introduction of new work methods, which may produce major disadvantages for the workforce. In these circumstances, the works council will normal have a two-fold response. It will try to negotiate the way the changes are implemented, through a so-called “reconciliation of interests”, so as to limit their impact, and it will also aim to agree a “social plan” to compensate employees for their losses. The reconciliation of interests is a voluntary agreement between the two sides, but the social plan, which typically includes elements like the level of redundancy payments, earnings protection in the case of job changes, and payments for additional travelling expenses, is subject to enforceable co-determination. In other words, the issue goes to the conciliation committee, if the two sides cannot agree.   

 

On staff planning and training, the employer is required to inform the works council of overall the staffing needs and discuss these with it. The works council has a particular role in promoting gender equality and it can also make proposals, such as changing working hours, to enhance job security. The works council has a general right to be consulted on training and, where workers need to be re-trained, the issue is subject to enforceable co-determination. Decisions on the implementation of training, such as the practical experience of trainees, the selection of trainees and the introduction of workplace examinations, are also subject to enforceable co-determination, although not whether training takes place at all. The works council also can veto the appointment of trainers if it thinks they are unsuitable.

 

On health and safety, the works council a general responsibility to try to ensure that the health and safety provisions and accident prevention measures are observed and a right to participate in health and safety inspections and to be given the necessary information. It must also be consulted on the appointment of safety delegates, (Sicherheitsbeauftragte), who are individual employees concerned with health and safety, appointed by the employer

 

On individual personnel issues, appointments, grading and re-grading, transfers and dismissals, the employer must inform the works council before acting, and the works council can withhold its consent (appointments, grading and re-grading and transfers) or oppose the planned action (dismissal). However, the works council can only do this in certain specific circumstances, such as where the proposal clashes with existing agreements or guidelines, would lead to unfair treatment for the individual concerned or (in dismissal cases) where the employer has failed to take sufficient account of social issues. If the employer does not accept the works council’s position, he or she can take the issue to the labour court, which can overrule the works council’s opposition.

 

The works council has enforceable co-determination rights where the employer wants to draw up guidelines for future action in these areas, for example selection criteria for redundancy. However, except in larger workplaces (more than 500 employees) the employer cannot be required to draw up guidelines of this sort.

 

Individual grievances can also be taken to the works council, and, where the works council takes them up, and cannot reach agreement with the employer, the issue goes to the conciliation committee

 

The works council has the most extensive rights  in relation to a range of day-to-day social issues, which affect the workforce. It has enforceable co-determination rights in relation to:

  • works rules;
  • starting and finishing times and breaks;
  • any temporary shortening or lengthening of working time - such as overtime or short time working;
  • the time, date and method of payment;
  • holiday arrangements;
  • the introduction of cameras or other devices to measure work or check the behaviour of employees;
  • health and safety arrangements within the framework of the legislation (It must also approve the appointment and dismissal of works doctors and health and safety specialists.);
  • arrangements for the operation of works institutions like canteens or sports grounds;
  • the rules for the use of works accommodation;
  • the principles used for the payment of wages and salaries - for example, should they be based on bonus or time work;
  • the setting of bonuses and targets;
  • the operation of the works suggestions scheme and
  • the introduction of group work.

 

The contents of staff questionnaires and the personal data held on individual employees for assessments are two other areas subject to enforceable co-determination.

 

The fact that all these issues can go to the conciliation committee if there are disputes means that on many of them the works council will be able to reach written agreements with the employer. A recent survey has found that on average each works council has 23 works agreements, with working time, holidays and health and safety issues among the topics most frequently covered. [7]

 

By law, works councils should normally not be involved in collective bargaining on issues, such as pay or working time, which are dealt with by the unions. However, recently works councils have had a greater role in these issues, as some agreements include “opening clauses”, which allow the works council and local management to agree variations to the deal reached by the union and the employers’ association at industry level (see section on collective bargaining).

 

The trade union representatives in the workplace are there to promote the interests of the union as well as representing union members.

 

Election and term of office

 

Nominations to the works council are made either by groups of individual employees – in most cases 5% of those eligible to vote – or from any trade union with at least one member in the workplace. The elections take place every four years, and, depending on the size of the workplace, are organised either on the basis of individual candidates or competing lists.

 

Trade union representatives, where they exist separately, are chosen in line with individual union rules or guidelines, normally by election at the workplace.

 

Protection against dismissal

 

Works council members are protected against dismissal during their period of office and for one year afterwards. They can only be dismissed for extraordinary reasons – such as gross misconduct – and only if the works council agrees, or, if it does not agree, the labour court considers the dismissal to be justified. The same applies to an involuntary transfer, if the consequence is that the works council member loses the right to be a works council member, for example by being transferred to another workplace.

 

Time-off and other resources

 

Works council members must be given time off at their normal level of earnings to carry out their duties - such as attending meetings or giving advice.  In workplaces with fewer than 200 employees, the details of this are not laid down by law. But in larger workplaces the law sets out the number of works council members who should be freed from their normal work. This is one member in workplaces with 200 to 500 employees; two where there are 501 to 900; three for 901 – 1,500; four for 1,501-2,000 and then one for each extra thousand employees up to 10,000 with one for each 2,000 after that. In practice, not all works councils make full use of their time-off rights.

 

The employer must bear the costs of the works councils. This includes providing rooms, stationery, photocopying, computers and telecommunications costs. In certain circumstances the employer will pay for outside experts brought in by the works council. This must generally be agreed in advance and is not guaranteed. However, in companies with more than 300 employees, where the employer proposes to make changes that may have a negative impact on the workforce, the works council has a right to the assistance of an external expert.  In very large companies the works council, or the works council for the whole group, may have paid professional staff.

 

Training rights

 

All works council members have the right to the training that is “necessary” for their work on the works council. This training must be fully paid for by the employer, including the costs of the course, accommodation, travel costs and the wages of the works council member attending.

 

Works council members also have the right to receive at least three weeks of more general training/education in the course of their period of office. However, this is a less useful right, as the training costs are not covered; only the wages of the member taking part are paid.

 

Representation at group level

 

As well as works councils at workplace level, the law also requires the setting up of a central works council at company level (GBR) if a company has several works councils. This brings together representatives of the individual plant works councils – normally one or two from each. This body tackles issues which affect more than one workplace and cannot be dealt with by a single works council.

 

It is also possible to set up a works council at group level, covering all the companies in a group (KBR). However, this is not obligatory, and can only happen if works councils covering 50% of the total group workforce want to set one up. It deals with issues that affect the whole group or more than one company with the group and cannot be resolved at the level of the central works council.

 

A high proportion of all works councils are in structures which also include central and/or group works councils. Research in 2019 showed that 17% of all works councils representing more than 20 employees had a central works council above them; 4% had a group works council above them; and 39% were in structures that included both a central works council and a group works council

[1] Tarifbindung und betriebliche Interessenvertretung: Ergebnisse aus dem IAB-Betriebspanel 2018,Tabelle 5 by Peter Ellguth and Susanne Kohaut, May 2019

[2] Trendreport Betriebsratswahlen 2014: Zwischenbericht, by Ralph Greifenstein, Leo Kißler and Hendrik Lange, Hans-Böckler-Stiftung, August 2014 http://www.boeckler.de/pdf_fof/S-2014-695-2-1.pdf (Accessed 16.04.2015)

[3] Trendreport Betriebsratswahlen 2010, by Ralph Greifenstein, Leo Kißler and Hendrik Lange, Hans-Böckler-Stiftung, August 2011

[4] Eurofound (2015), Third European Company Survey – Overview report: Workplace practices – Patterns, performance and well-being, Figures for Table 44

[5] Trendreport Betriebsratswahlen 2010, by Ralph Greifenstein, Leo Kißler and Hendrik Lange, Hans-Böckler-Stiftung, August 2011 and Trendreport: Betriebsratswahlen 2018 – Erste Befunde, Stand Herbst 2018, by Nur Demir, Maria Funder, Ralph Greifenstein, Leo Kißler and  Manuela Maschke, IMU 2018

[6] Einigungsstellen­Verfahren relativ selten byWolfram Brehmer and Helge Baumann, Mitbestimmungs-Portal, August 2015 https://www.mitbestimmung.de/html/einigungsstellenverfahren-relativ-selten-953.html

[7] Betriebsvereinbarungen 2017. Verbreitung und Trendthemen by Helge Baumann, Manuela Maschke and  Sandra Mierich, WSI-Policy Brief 25,2018

L. Fulton (2020) National Industrial Relations, an update. Labour Research Department and ETUI (online publication). Online publication available at http://www.worker-participation.eu/National-Industrial-Relations.