German Works Council Constitution Act

In Germany, the Works Council Constitution Act governs the relationship between the employer and its employees.

It grants employees a right of participation and co-determination in social, personnel and economic matters.

The works council constituted at the employees request

In private-sector companies in Germany that employ at least five employees over the age of 18, and of whom three have worked there for longer than six months, these employees may elect a works committee.

• The law does not mandate the establishment of a works council.
• The company's employees may decide to elect a works council at their discretion.
• The works council and the employer must collaborate in good faith.

Composition of the works council

• The works council does not represent executive officers of the company.
• The size of the works council depends on the number of people employed by the company. This also applies to agency workers.

Employees entitled to vote	Number of members of the works council
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
1.501 - 2.000	17
2.001 - 2.500	19
2.501 - 3.000	21
3.001 - 3.500	23
3.501 - 4.000	25
4.001 - 4.500	27
4.501 - 5.000	29
5.001 - 6.000	31
6.001 - 7.000	33
7.001 - 9.000	35
> 9000	+ 2 for each additional 3,000 employees

In companies with more than 100 employees an economic committee must be formed as part of the works committee, which is responsible for determining and advising on economic issues.

Subject to certain conditions being met, officials of those trade unions may attend works council meetings whose members are employed by the company.

Tasks and duties of the works council

Among other matters, the works council is to ensure compliance with the laws, ordinances and accident prevention regulations by the employees, as well as with collective wage agreements and operating agreements by the employer.

The works council is involved in issues concerning the company’s:

• Rules of operation;
• Working hours;
• Wage structure;
• Workplace layout;
• Projected staffing requirements;
• Vocational training;
• Questions related to occupational safety;
• Questions about the introduction of software.

In companies employing more than twenty members of staff with voting rights, the works council must approve:

• New appointments;
• Allocations and re-allocations of staff members to wage groups;
• Employee transfers.

In the event of terminations, the works council is to be consulted and may lodge an objection; the termination may be upheld in spite of the works council’s objection.

If a company with more than 20 employees plans to change its operations, it must conclude a reconciliation of interests with the works council regarding the “if” and “how” of the change in operations, as well as a social plan.
 

Types of rights of participation

• Involvement rights
  If the works council solely has the right to be involved, the employer must inform the works council, hear the council and discuss certain matters with it.
• "Co-determination" rights
  If the works council has a right of co-determination, the employer can only act if the works council agrees. If no agreement is reached between the employer and the works council regarding rights of participation, a special arbitration committee, the arbitration board, shall decide.