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10 August, 2005ICEM News release No. 50/2001
Changes to Germany's industrial democracy laws took effect this Saturday.
The new measures update the "workplace constitution", a pillar of Germany's co-determination system (Mitbestimmung). The reforms will strengthen the country's works councils by bringing them more into line with present-day industrial realities. The changes, which had faced stiff opposition from employers at various stages, have been largely welcomed by the unions.
The updated law is "an important step towards more co-determination, even though not all of the unions' wishes were fulfilled," said Hubertus Schmoldt. He is the President of the German mining, chemical and energy union IG BCE. Co-determination has helped to ensure "social peace and economic success" in Germany, he pointed out. It has thus become "a substantial advantage for the Federal Republic as an industrial location."
Works councillors, who are elected by all employees of a workplace, are one of two complementary types of worker representative in Germany. The other is the union reps, who are elected by union members only. The trade unions conclude regional collective agreements for each industry and decide on any industrial action. The works councils have strong information and co-determination rights within each enterprise. This means that their agreement is needed for a range of important decisions. They are responsible for supervising the implementation of the unions' collective agreements in the workplace. This can cover various issues, such as the way in which worktime cuts are applied, or the payment of certain bonuses. Unions put up their own lists of candidates for the works councils. In practice, most works councillors have been, or are, union reps. Once elected, they remain in close touch with the union.
The legislation on works councils dates back to 1972. In the meantime, German industry has seen a number of far-reaching changes. New technologies have altered working patterns, and the number of "white-collar" employees now exceeds the "blue-collars". Mergers, hive-offs and outsourcing have drastically altered the structures of many big German firms. Globalisation and European integration have changed the context in which German industry operates. For all these reasons, workplace-level co-determination was being eroded and the legislation needed an overhaul. In fact, some of the legal changes reflect what was already happening in practice in the better workplaces.
The main changes under the new law are:
- More scope for negotiating the creation of works councils at the level where decisions are actually taken. According to circumstances, works councils can be company-wide, or based on a company subdisiary or product division.
- Provisions to ensure that, when firms merge or demerge, the works councils based on the old company structure can continue to function, for a maximum of six months, until new ones are elected.
- Removal of various bureaucratic hindrances to the creation of works councils.
- Involvement of temporary or subcontracted workers in the election and running of works councils.
- More works councillors. The number of works councillors entitled to paid full-time or part-time leave to carry out their duties depends on the number of employees in the firm. The new law lowers many of the thresholds. For instance, a firm with 500 employees was previously required to have 9 works councillors. Now, it will have 11.
- Improved information and decision-making rights for the works councils on employment protection and skills formation. Works councils will have the right to propose employment promotion measures.
- Tighter obligations on employers to place experts at the works councils' disposal for information purposes.
- Stronger job security for works councillors. To dismiss a works councillor, an employer already needed the permission of the works council. Similar provisions now apply to the transfer of employees who are works councillors.
- Environmental protection at the workplace level is now included in the list of tasks for works councils. This implies wide-ranging rights of information and consultation on a firm's environmental policies.
- Greater sexual equality. From now on, whichever sex is in the minority in the workplace must legally have a proportion of works councillors at least equal to the percentage of workers of that gender within the workforce. This rule is expected to increase the number of women works councillors, and measures are being taken to reduce the out-of-hours work commitments required of works councillors. Works councils have now also been given the right to propose career promotion plans for women and to have these incorporated into companies' personnel policies.
- More involvement of young workers and apprentices in works councils. From now on, works councils can apply for apprentices to be given full employment contracts.
- Combating racism and xenophobia in the workplace is added to works councils' tasks. They receive the right to oppose the hiring or transfer of employees who incite race hatred, and to apply for the removal of employees who engage in such activities.
"Globalisation makes it all the more necessary to strengthen co-determination," IG BCE President Hubertus Schmoldt pointed out. He is also Vice-President of the 20-million-strong International Federation of Chemical, Energy, Mine and General Workers' Unions (ICEM).
"The globalisation process offers great opportunities," Schmoldt said. "But structural disruption has to be cushioned and overcome in a socially acceptable way. For this, co-determination is a vital prerequisite."
The new measures update the "workplace constitution", a pillar of Germany's co-determination system (Mitbestimmung). The reforms will strengthen the country's works councils by bringing them more into line with present-day industrial realities. The changes, which had faced stiff opposition from employers at various stages, have been largely welcomed by the unions.
The updated law is "an important step towards more co-determination, even though not all of the unions' wishes were fulfilled," said Hubertus Schmoldt. He is the President of the German mining, chemical and energy union IG BCE. Co-determination has helped to ensure "social peace and economic success" in Germany, he pointed out. It has thus become "a substantial advantage for the Federal Republic as an industrial location."
Works councillors, who are elected by all employees of a workplace, are one of two complementary types of worker representative in Germany. The other is the union reps, who are elected by union members only. The trade unions conclude regional collective agreements for each industry and decide on any industrial action. The works councils have strong information and co-determination rights within each enterprise. This means that their agreement is needed for a range of important decisions. They are responsible for supervising the implementation of the unions' collective agreements in the workplace. This can cover various issues, such as the way in which worktime cuts are applied, or the payment of certain bonuses. Unions put up their own lists of candidates for the works councils. In practice, most works councillors have been, or are, union reps. Once elected, they remain in close touch with the union.
The legislation on works councils dates back to 1972. In the meantime, German industry has seen a number of far-reaching changes. New technologies have altered working patterns, and the number of "white-collar" employees now exceeds the "blue-collars". Mergers, hive-offs and outsourcing have drastically altered the structures of many big German firms. Globalisation and European integration have changed the context in which German industry operates. For all these reasons, workplace-level co-determination was being eroded and the legislation needed an overhaul. In fact, some of the legal changes reflect what was already happening in practice in the better workplaces.
The main changes under the new law are:
- More scope for negotiating the creation of works councils at the level where decisions are actually taken. According to circumstances, works councils can be company-wide, or based on a company subdisiary or product division.
- Provisions to ensure that, when firms merge or demerge, the works councils based on the old company structure can continue to function, for a maximum of six months, until new ones are elected.
- Removal of various bureaucratic hindrances to the creation of works councils.
- Involvement of temporary or subcontracted workers in the election and running of works councils.
- More works councillors. The number of works councillors entitled to paid full-time or part-time leave to carry out their duties depends on the number of employees in the firm. The new law lowers many of the thresholds. For instance, a firm with 500 employees was previously required to have 9 works councillors. Now, it will have 11.
- Improved information and decision-making rights for the works councils on employment protection and skills formation. Works councils will have the right to propose employment promotion measures.
- Tighter obligations on employers to place experts at the works councils' disposal for information purposes.
- Stronger job security for works councillors. To dismiss a works councillor, an employer already needed the permission of the works council. Similar provisions now apply to the transfer of employees who are works councillors.
- Environmental protection at the workplace level is now included in the list of tasks for works councils. This implies wide-ranging rights of information and consultation on a firm's environmental policies.
- Greater sexual equality. From now on, whichever sex is in the minority in the workplace must legally have a proportion of works councillors at least equal to the percentage of workers of that gender within the workforce. This rule is expected to increase the number of women works councillors, and measures are being taken to reduce the out-of-hours work commitments required of works councillors. Works councils have now also been given the right to propose career promotion plans for women and to have these incorporated into companies' personnel policies.
- More involvement of young workers and apprentices in works councils. From now on, works councils can apply for apprentices to be given full employment contracts.
- Combating racism and xenophobia in the workplace is added to works councils' tasks. They receive the right to oppose the hiring or transfer of employees who incite race hatred, and to apply for the removal of employees who engage in such activities.
"Globalisation makes it all the more necessary to strengthen co-determination," IG BCE President Hubertus Schmoldt pointed out. He is also Vice-President of the 20-million-strong International Federation of Chemical, Energy, Mine and General Workers' Unions (ICEM).
"The globalisation process offers great opportunities," Schmoldt said. "But structural disruption has to be cushioned and overcome in a socially acceptable way. For this, co-determination is a vital prerequisite."