Works councils and staff councils are often unionised. However, it is not mandatory. The employer shall bear the costs of the works councils. This includes the provision of rooms, stationery, copying, computer and telecommunications costs. In certain circumstances, the employer pays for external experts who are consulted by the works council. This usually has to be agreed in advance and is not guaranteed. However, in companies with more than 300 employees, where the employer proposes changes that may have a negative impact on staff, the works council is entitled to the support of an external expert. In very large companies, the works council or works council may have paid professional staff for the whole group. Entering a new market always comes with obstacles, and if your company plans to set up in Europe, you may encounter the nuances of the German works council. These union-type organizations give employees a voice and connect team members with management. Members of the works council must be released in their normal amount in order to perform their duties – for example, to attend meetings or to advise.
In companies with fewer than 200 employees, the terms and conditions are not set by law. But in large companies, the law determines the number of members of the works council who must be exempted from their normal work. He is a member of companies with 200 to 500 employees; two, where there are 501 to 900; three for 901 – 1,500; Four for every 1,501 to 2,000, then one for every thousand additional employees up to 10,000 with one for every 2,000 thereafter. In practice, not all works councils make full use of their exemption rights. In practice, works councils are mainly set up in medium-sized and large enterprises, but much less frequently in small enterprises: in Germany, works councils are organised in 97.5% of enterprises with more than 1,000 employees, but only in 4.2% of enterprises with 5 to 20 employees. While there are many advantages for these groups, there are also disadvantages. We help you understand the German works council so that you can enter the new prepared market. If you work for a large company and there is already a central works council, it can simply appoint an electoral council to take care of the process of electing a works council. In economic matters, the works council should be informed of the economic situation, with quarterly reports in large companies (more than 1 000 employees) and consulted on changes in the workplace that could lead to disadvantages for the workforce, including the introduction of new techniques and procedures and, in particular, new technologies. In establishments with more than 100 employees, many of these rights are exercised by the Economic Committee, composed in whole or in part of members of the works council and to which the employer must report once a month. The topics covered by the Economic Committee include the economic and financial situation of the enterprise, investment and rationalization plans, working methods, closures and transfers, environmental policy and a possible takeover of the enterprise. It is important to know that in most countries there is no “will” employment.
In fact, German employers are generally required to contact the works council for all dismissal procedures and severance pay obligations. This process makes it very difficult to dismiss employees. Results vary widely, resulting in possible severance packages and long notice periods. It is also required that the minority sex in the workforce be represented in proportion to its presence in the workforce in all works councils with three or more members. The aim of this change, introduced in 2001, was to increase the number of women on works councils, and research on works council elections since then suggests that it has some effect. The proportion of women has gradually increased from 23% in 2002 to 32% in 2018.  However, researchers believe that women are still under-represented relative to the number of female employees. Works councils and trade unions are intended to protect the rights and interests of workers. Works councils are active in the larger individual companies and trade unions represent the interests of workers in certain sectors. Here you will find what the works council and the union do and how you can become a member.
The works council must approve the implementation of these measures. The best way to achieve these objectives is to set up a works council (“works council”). A works council can be set up as soon as there are five permanent employees in a workplace, the size increasing with the number of employees (see table). The number of employees is based on the number of employees. There is no difference between part-time and full-time employees. The works council is committed to the rights and interests of workers and is supported and advised by the trade union concerned. In companies with more than 100 permanent employees, the law requires the creation of another body, the Economic Committee. This committee shall be consulted on economic and financial matters.
But he is elected by the works council and, in certain circumstances, the works council may decide to renounce an economic committee and take over its functions directly. A works contract is a special type of contract concluded between the employer and the works council and contains general provisions on the working conditions of individual workers. Company agreements have the same direct and binding effect on individual employment relationships as statutory law. In addition to the structure of the works council, there is a separate regulation for the representation of management. Provided that there are 10 senior managers, either in the factory or in the company, they can choose to elect a board of directors to represent them. Depending on the number of executives involved, it can have between one and seven members. In the absence of a central works council, three employees may convene a company meeting by sending an invitation to all employees or by attaching office boards visible to all employees. The invitation must be sent to the staff at least three days before the day of the meeting and clearly inform the staff that an electoral commission is to be elected for an election of the works council at the meeting. The electoral commission organizes the election of the works council and then dissolves.
Works councils in Germany correlate with a number of positive effects. They favor higher wages, even more so than collective bargaining (although situations with both favor wages the most), They make firms more productive (although the extent to which they increase productivity can be difficult to measure).  and they do not hinder investment or innovation.   Works councils have also been shown to help women, East German and foreign workers.  However, they are correlated with lower profitability, likely because they tend to bring higher wages, and there may not be as many benefits in small firms as in large ones.  The German works council has many advantages for employers and employees. These benefits include: L. Fulton (2020) National Industrial Relations, an update. Department of Labour Research and ETUI (online publication). Online publication available at www.worker-participation.eu/National-Industrial-Relations. The law grants the works council a number of rights that can be divided into four main categories: If your company is preparing to enter the German market, give us a call. We answer your questions about the German works council and also offer options to help you navigate the international rollout.
The members of the works council are protected against dismissal for the duration of their term of office and for one year thereafter. They can only be dismissed for exceptional reasons – such as serious misconduct – and only if the works council agrees to this or, if it does not agree, if the labour court considers that the dismissal is justified. The same applies to an involuntary transfer if this results in the member of the works council losing the right to be a member of the works council, for example by transferring to another place of work. .