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The Works Council and Employee Participation in Germany

Employee participation in private sector companies often takes place through the so-called works council. Its value is not limited to the mere exercise of co-determination and participation rights but also in that employee representation is directly linked to internal structures. Participation in company decisions also increases commitment and the sense of belonging and responsibility towards the company.

This article will examine works councils (private sector) and staff councils (public sector).

The primary task of a works and staff council is to represent the interests of the workforce and express their issues to the management of the company. However, disputes do arise, and boundaries can be blurred. At Schlun & Elseven Rechtsanwälte, our certified specialists in employment law advise businesses and work councils in disputes.

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The Law in Germany with Works Councils

The basis for the existence and activities of the works council is the Works Constitution Act (Betriebsverfassungsgesetz – BetrVG) and for the staff council (in the public sector) the Federal Personnel Representation Act (BPersVG) alongside corresponding state law. These laws stipulate which rights of co-determination and participation exist concerning economic, personnel or social matters.

Germany is in the lead among the EU states in terms of the extent of co-determination rights with works councils. However, it is not yet enough to comply with the rules of the central normative structure, i.e. the Works Constitution Act or the employee representation laws of the federal or state governments. In many cases, it is necessary to look further. For example, the works council has to observe the Working Hours Act, Federal Leave Act, Maternity Protection Act, Youth Protection Act and Vocational Training Act.

Staff councils, however, have to answer specific questions concerning civil service law. Here the staff council must be familiar with the Civil Service Act and the TVöD, for example.

Therefore, employees and employers have a great deal to consider placing their cooperation on a legally sound and trustworthy basis. The most important rights when it comes to disputes between works councils and employers are information rights, hearing rights, consultation rights, veto rights, initiative rights and co-determination rights. The genuine rights of co-determination are particularly relevant. If these are not exercised, the decision taken is invalid. In the case of works councils, this is, for example.

  • Participation in the preparation of social plans
  • Guidelines for recruitment and termination
  • Working hours and order in the company
  • Technical monitoring of behaviour and performance control

Staff councils have similar rights and duties. However, specific aspects have to be considered separately due to the public service sector, such as transfers, career changes, etc.

Council members themselves are subject to special protection against dismissal (§ 15 para. 2 KSchG) and may not be disadvantaged by this honorary activity, especially in professional terms.


When can a Works Council be Established?

Works councils exist from the smallest works council to the general works council (§ 47 BetrVG). Furthermore, company-specific rules modify such works councils in case of an existing collective agreement (per § 3 BetrVG). Thus, work councils can be established in even very small companies. The requirement for establishing a work council is that there need to be 5 employees within the company entitled to vote, of which 3 are eligible for election. This is per § 1 Abs. 1 BetrVG. However, personnel representations must be created as part of the council’s creation (§ 12 exp. 1 BPersVG).


Elections in Work Councils

The standardized course of the election is regulated in great detail. Formal aspects have to be taken into account as well as the action of the right initiators. Moreover, special attention must always be paid to who is considered “eligible for election” and who is considered “entitled to vote”. Work councils should ensure that the correct procedures are followed when it comes to these matters. Not doing so can lead to potential legal difficulties and disputes within the company.

Particularly when a company/office has to deal with the establishment of an employee representation for the first time, it can happen very quickly that specifications regarding the election are not sufficiently precise or are not observed at all. Receiving mentoring from those experienced when it comes to running works councils is recommended if unsure of how to proceed with such a council.

The conducted election can then be challenged by means of the so-called election challenge.


Election Contestation and its Consequences

Like all elections, works councils’ elections have certain rules that they must follow to be considered valid. It is not uncommon for disputes to arise, however. Candidates who feel that their rights were not respected or that the election was not carried out correctly can bring their cases to employment lawyers. Dissatisfaction within the works council can lead to the council not being able to complete its important work. Therefore, there must be rules in place when it comes to elections. Violation of essential election regulations can take place in the following examples:

  • Incorrect appointment of the election committee
  • Admission of an unauthorised worker
  • non-admission of an eligible worker
  • Election announcement and voter list are missing

A staff council election may be contested by at least 3 eligible voters in the office; any trade unionist represented in the office or the head of the office (or his representative). A works council requires at least 3 eligible voters, the trade union or the employer.

For an election to be deemed to have been influenced by an error, it must be shown that an error occurred and that it influenced the election. In addition, this error must not have been corrected or be correctable and must have influenced the election result. The court will then determine the invalidity or validity of the works council election.

An election in which there have been significant violations of eligibility, voting rights and election procedures can be challenged before the Labour Court (Works Council) or the Administrative Court (Staff Council) by way of contesting the election.

If the employer contests the works council election, that employer has to bear the costs, regardless of the outcome of the proceedings. This also includes the costs of the opposing legal counsel. Due to the high-cost risk, the employer is therefore well advised to forecast the expected benefit as precisely as possible by obtaining legal advice beforehand.

The deadline for contesting the election is 12 working days from the announcement of the election results.

If the election challenge is successful, the court, if the election is invalid, either orders re-elections or declares the election null and void. Here it must be noted that with the legal force of the decision, the previous council loses its office. Even a specially initiated new election, which has not yet been completed by the time the decision becomes legally binding, is then replaced by the court-initiated repeat election.


Our Services: Employment Lawyers in Germany & Work Councils

From the establishment of the works council (or another form of employee participation group) to the clarification of (extra)judicial disputes, the Schlun & Elseven team offers the necessary advice. We advise personnel and works councils daily, taking into account the neighbouring fields of law that become relevant in individual issues. At the same time, we would also like to enable employers to benefit from legally sound cooperation for their business. As certified specialists in employment law, our lawyers have wide experience in advising the different parties in disputes.

Should more serious conflicts arise, such as a challenge of a works council election, our experienced team will support you here as well. In a network of court proceedings, appeals, appeal proceedings and legal force, we provide in-depth knowledge and legal experience to enforce your rights. In this way, we transform the damaged relationship between employee and employer. We aim to repair the damage that has arisen in the employer-employee relationship and ensure that cooperation can return. Here are just some of our services which we offer to works councils:

  • Advice on company or service agreements
  • Advice on labour law issues
  • Judicial and extrajudicial assistance in conflicts within the framework of rights of co-determination and participation
  • Expert activity in the performance of duties (§ 80, Subsection 3, BetrVG)
  • Supervision of negotiations between employer and employee representatives

For further information contact our office today using our contact details below this article.

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Practice Group: German Employment Law

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Dr. Thomas Bichat

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Jens Schmidt

Certified Specialist Lawyer in Employment Law

Martin Halfmann, LL.M.

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