Brief Description of Employees’ and Employers’ Associations
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 organised by industrial sectors as well as by region, with national and state boards. They are generally the counterpart of trade unions when negotiating and concluding collective bargaining agreements.
Rights and Importance of Trade Unions
Trade unions can conclude collective bargaining agreements with either a single employer or an employers’ association. Although the unionisation rate in Germany is low with about 20 percent of the employees organised, the collective bargaining coverage usually is around 80 percent.
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 Co-determination Act applies. With very few exceptions, these companies must install a supervisory board consisting of an equal number of representatives of employees and shareholders and the deputy chairperson must be a representative of the employees.
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 economic 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 five disabled persons or disabled persons with equivalent status on a long-term basis, a representation body for disabled employees can be established.