Part I of III: The Works Council in Germany

“Works Councils – not again!” Every four years there will be new elections for the most important employee representative body in Germany. This coming March 2018 works council (re)elections will (again) take place in Germany. This blog series deals with the institute of the works council in Germany and will consist of three parts. Part I will provide you with an overview regarding its establishment, its structure, its rights and responsibilities, the election procedure and the costs related to it.

Establishment

The works council is the main employee representative body at company level. In any operation (Betrieb) with more than five regular employees a works council (Betriebsrat) can be elected at the full discretion of the work force. In addition, a joint works council (Gesamtbetriebsrat) must be established if a company has more than one works council. For a corporate group, a group works council (Konzernbetriebsrat) can be established. The works council will basically be in charge of its respective operation while the joint works council is responsible for matters affecting at least two operations of the same company. Finally, the group works council is competent for all matters on group level affecting at least two operations of two different companies.

Structure

The size of the works council depends on the number of regularly employed employees in the respective business operation. While there is one member of the works council in a workplace with up to 20 employees, there are, for example, 15 members in a workplace with 1,001 to 1,500 employees. Employers are well advised to closely monitor the elections proceedings to ensure that determining the respective size of the operation is legally compliant , the more so if calculating the correct size of the regularly employed staff is difficult and complex. It might be worthwhile considering filing preliminary injunctions against the election committee to keep the number of elected members in line with the law.

Rights and Responsibilities

The main task of the above-mentioned employee representative bodies is the representation of the interests of the work force. They must ensure compliance with the laws, works council agreements, collective bargaining agreements, and all other rules in favor of employees.

In order to do so, the employee representative bodies have comprehensive information, consultation and/or mandatory co-determination rights with respect to most organizational matters (working hours, restructuring measure, terminations, placements etc.). These rights can basically be divided into participation rights and co-determination rights. While the former grants the works council a right to be informed and to be consulted with and therefore enables professional exchange and discussions between the representative body and the employer, the latter may grant even veto rights.

The members of the employee representative bodies are in principal protected against dismissal during their term of office and for a year thereafter.

Election Procedure and errors

If no works council has been established, an election may take place at any time. In contrast, the re-elections of existing works councils take place every four years. Every employee of full age (including agency workers with a company seniority of more than three months) is entitled to vote. Errors in the election process may result in the necessity for new elections which would result in considerable additional costs for the employer and would impair the work of the employee representative bodies.

Costs

The employer has basically to bear all costs associated with the work of the employee representative bodies and must ensure that its members have time during normal working hours to carry out their duties. In larger operations (200 employees or more), the employer is even obliged to fully release a specific amount of employees from its duties to work (subject to the continued payment of their salary) to perform their duties as members of the employee representative body. As an example, two members of the works council will be permanently released from work in operations with the size of 501 to 900 employees and seven members released in operations of 4001 to 5000 employees.

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