A few thoughts about Works Councils

It may come as a surprise to learn that the English Trade Union movement was closely involved in the rebuilding of post-war industrial Germany, in particular in establishing the framework of employer/employee relations. In contrast to the UK which now has a wide range of somewhat complicated employment legislation, the German legal framework is relatively straight forward, especially concerning the duties and responsibilities of Works Councils, the bodies that are charged with ensuring harmonious working relationships within organisations. The role of the Works Council is to “safeguard the interests of the employees in dealing with the employer. The Works Council and the employer shall work together in a spirit of mutual trust and co-operation with the trade unions and employers’ associations for the good of the employees and of the establishment.” German employment legislation also lays down, for example, those business issues where the company is required only to inform the employees of its plans; those where consultation is necessary, and those where negotiation is called for.

• What are the differences between informing, consulting and negotiating with a workforce.
• What are the advantages and disadvantages of a relatively simple employment legislation framework, both for the employer and the employee?
• What are the benefits and drawbacks for a company in being required by law to have to inform, consult and negotiate with employees on a range of issues?
• The legislation referred to above essentially applies to all companies with a head office in Germany. Why might an English or US firm that is merging with a German company wish to set up its new head office outside Germany?