In private businesses, and in companies of a size of 5 or more permanently voting-entitled employees of which 3 are entitled to stand for election, the employees are entitled to elect a works council, according to Industrial Constitution Act (BetrVG). The employer is in no way active in that process. The employer must not hinder or forbid the election but still bears the expenses related to the election as well as all costs that arise through the works council.
Entitlement to vote is constituted to all workers and employees of the company who are 18 years old or older – including field workers, distant and home workers (as far as predominantly working for the company), and apprentices. If employees of another employer are lent for some work, then they are entitled to vote if they work in the company for longer than 3 months. This mainly concerns the official borrowed workers.
The works council represents the employees’ interests towards the employer and has rights in dismissal and recruitment. The works council is (or are) elected every 4 years by the employees. Election normally is dated somewhere from March 1 to May 31. Out of that period, election can only be done if before there has not been any works council constituted.
An early re-election is due already after 2 years if the number of employees has changed by 50 per cent (unless fewer than 50 employees), decreasing or increasing. Everybody is entitled to stand for election who have been in the company for at least 6 months when the election is being done. Both for standing for election and for voting, you must be 18 years old or older. Executive employees are excluded from both being elected and voting.
Every member of the works council is dismissal protected for the time in office plus one year after. Exceptions are extraordinary dismissal and company-closing dismissal. Depending on the number of employees of the company, a certain number of works council members is fully exempt from non-works-council work.
Industrial Constitution Act does not apply to public service. There, personnel representatives law applies, regulating elections of personnel councils. Employees of so-called tendency companies, mainly being religious companies, constitute representatives using their own specific church laws.
First and main commission of the works council is advancing and securing employment of the employees. Connected tasks and rights are covering:
The employer must inform the works council about all planned actions that affect the employees, early enough for the works council to exercise their corresponding rights and discharge their duties. Rights and duties range from pure advice to employees, e.g. for building certain technical facilities, to actual codetermination in issues for which yet no collective agreements have been made, e.g. extra work or the determination of start and end of daily working hours. If no agreement can be achieved between employer and works council, the works council may use legal means to enforce their rights. Legal means range from involving an arbitration committee to demand for penalty.
In Germany, nearly all companies sized larger than 250 employees have a works council. That rate continuously when you look at smaller companies. For companies sized fewer than 100 employees, it is only 30 to 40 per cent that have a works council. Studies, however, have shown that normally both employers and employees benefit from a works council. In works council companies, both productivity and wage level are above average, and their personnel turnover is lower. Also it is easier to communicate certain painful measurements like outsourcing and closings to the staff, when there is a works council.