Trade unions and works councils: What co-determination exists in Germany? - A guide for employers from the EU

Companies from the EU that operate in Germany or employ workers here must comply with the Co-determination rights of trade unions and works councils. German labor law is strongly geared towards the protection of employees, and the participation of employee representatives is enshrined in law.

1. trade unions in Germany: influence on working conditions and wages

Trade unions in Germany are Powerful interest groups of the employees. They play a central role in shaping working conditions and collective agreements.

Important points for EU employers:
- Trade unions represent the interests of employees vis-à-vis employers and politicians.
- You negotiate Collective agreementswhich regulate wages, working hours and working conditions.
- Collective agreements can be be bindingif:

• The company is a member of the relevant employers' association.
• A Declaration of general applicability by the Federal Ministry of Labor (e.g. in the construction industry or in the care sector).

Practical example:
A Spanish construction company posts employees to Germany. As the construction collective agreement has been declared generally binding, the company must comply with this collective agreement - even if it is not a member of the employers' association.

1.1 What collective agreements are there in Germany?

Types of collective agreements:

• Industry collective agreement: Applies to an entire industry (e.g. metal industry, care, construction industry).
• Company collective agreement: Only applies to a single company.

Important contents of collective agreements:
Minimum wages and salary structures
Working hours, shift models and overtime regulations
Notice periods
Special payments (e.g. Christmas bonus, vacation pay)

– Advantages for EU employers:
1. Planning security through fixed wage and working time regulations.
2.Avoidance of labor disputesif companies adhere to the applicable collective agreements.

2 Works councils in Germany: When do employers have to involve them?

2.1 Works council election: When is a works council mandatory?

According to Works Constitution Act (BetrVG) employees in Germany have the right to request a Works Council to choose.

– Obligation to elect a works council:

1. At least 5 permanent employees in the company: Possibility to establish a works council.
2. From 50 employees: Works Council must be involved in economic decisions.
3. From 200 employees: Works Council can have a representative released from duties.Practical example:
   A French logistics company operates a warehouse in Germany with 60 employees. The employees decide to elect a works council. The company must now involve the works council in decisions on working hours and social plans.

2.2 What rights does a works council have in Germany?

In Germany, a works council has far-reaching Co-determination rights. Employers from the EU must be prepared for the fact that many decisions can only be made with the consent of the works council.

Issues subject to co-determination (employer needs the consent of the works council!):

• Working hours: Introduction of shift models or overtime regulations.
• Vacation plans: Regulations on vacation planning.
• Use of monitoring systems: Introduction of time recording or video surveillance.
  
  -topics with consultation and information obligations (works council must be involved):
• Hiring and dismissals: Works Council can object to dismissals in certain cases.
• Planned restructuring: Companies must inform the works council.
• Introduction of new technologies: If these influence the way you work.

Practical example:
A Dutch transport company wants to introduce a GPS monitoring system for drivers at its German site. As this represents a control of the employees, must be approved by the works council.

2.2 What rights does a works council have in Germany?

In Germany, a works council has far-reaching Co-determination rights. Employers from the EU must be prepared for the fact that many decisions can only be made with the consent of the works council.

Issues subject to co-determination (employer requires the consent of the -

• works council!):Working hours: Introduction of shift models or overtime regulations.
• Vacation plans: Regulations on vacation planning.
• Use of monitoring systems: Introduction of time recording or video surveillance.–Topics requiring consultation and information (works council must be involved):
  
• Hiring and dismissals: Works Council can object to dismissals in certain cases.
• Planned restructuring: Companies must inform the works council.
• Introduction of new technologies: If these influence the way you work.

Practical example:
A Dutch transport company wants to introduce a GPS monitoring system for drivers at its German site. As this represents a control of the employees, must be approved by the works council.

3. dismissal and works council: special hurdles for employers

-Special protection against dismissal in Germany:The works council must be

• termination must be heard.
• In companies with more than 10 employees: Dismissals must be socially justified.
• Works council members enjoy special protection against dismissal.

Practical example:
A Polish production company wants to lay off employees in Germany. The dismissal can be contested without the consent of the works council.

Tip for employers:
Anyone planning redundancies for operational reasons should discuss a solution (e.g. social plan or severance pay) with the works council at an early stage.

4 What obligations do EU employers have towards the works council?

-Employers must make it possible for the works council to

1. Participation in works council training
2. Use of a works council office or room
3. Release of works council members for meetings- Sanctions for failure to comply with co-determination:
   Fines of up to €10,000if the employer ignores the works council.
   Labor court proceedingsif the works council blocks a dismissal or measure.

Practical example:
A Belgian company transfers employees in Germany without the consent of the works council. The works council takes legal action and forces a reversal of the decision.

5. strategies for EU employers in dealing with trade unions & works councils

• Communicate at an early stage: Works councils and trade unions should be involved in major decisions from the outset.
  Check collective agreements: If the company is bound by collective agreements, these must be observed.
  Obtain legal advice: Advice from a specialist employment lawyer is particularly advisable in the event of dismissals or restructuring.
  Cooperative collaboration: A works council can help to improve working conditions and avoid conflicts.