Works councils (singular: '
, plural: ') in Germany have a long history, with their origins in the early 1920s in the post
World War I Weimar Republic, established by the Works Councils Act (
Betriebsrätegesetz), later updated in 1952 with the establishment of the
Works Constitution Act in
West Germany. Initially, unions were very skeptical of works councils, seeing them as a way for management to negotiate with employees without
collective bargaining, but eventually they developed clearly defined responsibilities with works councils forbidden from calling for
strikes or negotiating wage increase. In recent years with a decline in union membership, works councils have come to be seen as a way for unions to recruit members, specifically by having works councils campaign for people to join them. In 2019, depending on sector, between 16% and 86% of employees worked at an employer with a works council. While membership in a trade union is explicitly not required, according to the
Hans Boeckler Stiftung analysis of year 2014 Works Council elections, depending on
sector; between 60 and 80% of Works Councillors elected were members of affiliated trade unions in the
German Trade Union Confederation. Unions can offer protections to works council members. For example, unions provide training courses to ensure legally compliant works council elections, which can preempt attacks from management bodies who are hostile to the founding of a works council. In Germany, they serve two functions. The first is called
co-determination, through which works councils elect members of the board of directors of German companies. The second is called participation, and means that works councils must be consulted about specific issues and have the right to make proposals to management. One of the characteristics of works councils is producing harmonious relations between management and workers, leading to a situation with strong unions and a relatively-low
strike rates. Works councils in Germany have been correlated with a number of positive effects. They promote higher wages, even more than
collective bargaining does, and workplaces with both works councils and trade unions promote the highest wages. They are also associated with firm productivity, and do not inhibit investment or innovation. Works councils have also been shown to benefit women,
East German, and foreign workers.
History Workers’ rights to codetermine working conditions in Germany began at least as far back as 1850, when four social-liberal entrepreneurs, led by
Carl Degenkolb, joined forces in Eilenburg to introduce workers committees to their factories, in part to mitigate worker unrest and inoculate against socialist and union agitation. Statutory workers' committees (
Arbeiterausschüsse) were first introduced in Germany in mining companies in Bavaria in 1900 and in Prussia in 1905. The
Auxiliary Service Act of 1916, passed during the First World War, provided for the introduction of permanent workers' committees in all companies important to the war economy with at least 50 employees. These workers' committees only had advisory and consultation rights, but they could appeal to an arbitration committee with equal representation and a neutral chairman, to whose decision the employer had to submit. The current structure and mandate of works councils can be traced to the
soviet movement that swept through Europe in the early twentieth century. In Germany, self-governing workers’ (
Arbeiter-) and soldiers’ councils (
Soldatenräte) formed in 1918 in the November Revolution. Demands for a soviet-led German republic were eventually neutralized by the Social Democratic Party (SPD), with the
Works Constitution Act (
Betriebsrätegesetz) of 1920 emerging as a concession to the movement. This Act made works councils compulsory for all companies with over 20 employees. In the Weimar Republic, the
ADGB unions discussed expanding the powers of the works councils to include production control in the name of
economic democracy, thus initiating socialist transformation. However, this concept failed in the global economic crisis that began in 1929. The rise of fascism brought a “revised, anti-Marxist version of socialism.” The Nazis launched ambitious “corporatist” policies that “rejected class struggle and replaced it with the idea of cooperation between employers and workers.” Works councils were banned by the 1934
Work Order Act and replaced by so-called councils of confidence (
Vertrauensräte). With the Allied
Control Council Law No. 22 of April 10, 1946, works councils were permitted again in Germany. The first Works Constitution Act (BetrVG 1952) was passed on October 11, 1952. It followed the tradition of the Works Council Act of 1920, whose basic ideas were largely adopted. In 1972, after a controversial social debate, the Works Constitution Act (BetrVG 1972) was fundamentally revised, and it was reformed again in 2001. Among other things, the working and organizational principles of the works councils were changed. The election procedure was simplified, an "equality quota" (minimum seats for the gender in the minority, see electoral regulations Works Constitution Act § 15 WO) was introduced, the separation between blue-collar and white-collar workers was abolished, the exemption thresholds for works council members were lowered and the works council's involvement in the introduction of group work was made possible, as was the involvement of consultants in the event of operational changes. == See also ==