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Employers Associations and Trade Unions in Germany

1. Brief Description of Employees’ and Employers’ Organizations

In general, the main function of trade unions is to conclude collective bargaining agreements. Trade union representatives also support employees or the works council (e.g. by giving legal advice and representing employees before the court), but do not have participation rights within a company. Employers’ associations are mostly organized by industrial sectors as well as by region, with national and state boards.

2. Rights and Importance of Trade Unions

The formation, function and the internal democratic structures of trade unions are protected by constitutional law. Trade unions can conclude collective bargaining agreements with either a single employer or an employers’ association. Collective bargaining agreements are contracts that have immediate and binding effect on the individual employment relationship in the same manner as statutory law.

3. Types of Representation

The main representation of employees in Germany is guaranteed by the works council (Betriebsrat). This works council, however, is only built upon the initiative of the employees or a union, which is represented in the company.

In any company generally employing at least 5 employees entitled to vote for a works council (i.e., all employees over 18 years of age, including temporary workers if they have been with the company for more than 3 months) and at least 3 employees eligible for election to a works council (i.e. employees with the entitlement to vote and a seniority of at least 6 months), a works council can – by election – be constituted by the employees.

4. Number of Representatives

The size of the works council depends on the regular number of employees in the business site and ranges from one up to 35 works council members for companies with over 7,000 regular employees and may be even larger in companies with over 9,000 regular employees. If a company has more than 100 employees and a works council exists, an economic committee for the works council must be formed. If there are generally more than 10 executives in a company, a representative body for executive staff can be established. The number of their representatives varies between 1 and 7 representatives.

5. Appointment of Representatives

The works council election is initiated and carried out by an electoral board. Where no works council exists, a union represented within the company or three employees eligible to vote have the right to call an employees’ meeting at which an electoral board is elected.

6. Tasks and Obligations of Representatives

The works council represents all employees of a business site, except executive employees, and has initiative, participation and co-determination rights in personnel matters (recruitment, transfers, dismissal), social matters (working time, remuneration schemes, use of IT systems) and economical matters (operational changes).

7. Employees’ Representation in Management

In stock corporations, partnerships limited by shares and limited liability companies with more than 500 employees, one third of the members of the supervisory board must consist of employee representatives who are directly elected by the employees. If such companies employ more than 2,000 employees, the Codetermination Act (MitbestG) applies.

8. Other Types of Employee Representative Bodies

If a business site has at least five employees, who are below the age of 18 or are trainees with an age below 25, a representation body for young employees and trainees can be established.

Furthermore, in companies with more than 100 employees, an economic committee will be established, if a works council exists. Such economic committee will discuss economical issues with the employer and inform the works council.

In companies with more than ten executives, an executive committee can be established. Such an executive committee is comparable to a works council, but with limited rights and possibilities.

In any company with more than ten disabled persons, a representation body for disabled employees can be established.

For more information on these articles or any other issues involving labour and employment matters in Germany, please contact Tobias Pusch, Partner at Pusch Wahlig Legal (www.pwlegal.net) at pusch@pwlegal.net