Proliferation of works councils and the desire for interest representation

In many companies alternative bodies of interest representation exist or employees are directly involved in decision-making processes that affect their own relevant interests.

Implementing a works council requires the initiative of the employees. The empirical analysis based on the IW Employee Survey 2024 shows that the desire to be represented by a works council correlates negatively with the level of job satisfaction. Therefore, the consistently high level of job satisfaction in Germany may explain why employees in many places refrain from electing a body that represents the collective interests of staff members.

Works councils are often established when times are turbulent or when conflicts occur. This evidence is supported by the IW Employee Survey 2024 in some way, too. The desire for being represented by a works council is more likely if employees have experienced a reorganisation. It is also significantly affected by the employees‘ perception how the transformation evolved. The desire declines if employees understand why a change is necessary, can bring in own ideas, know about the objectives of the management, and feel being appropriately respected.   

In this regard, there is no need for a legislation that makes the implementation of works councils mandatory. If a government wants to effectively promote the coverage of works councils, co-determination has to be attractive for employers, too. Then, the management would have an incentive to actively support or even initiate the election of such a body. Thus, the benefits of a works council for the employer has to be increased and the costs of applying the Works Constitution Act has to be reduced. The possibility of adjusting committee sizes and digitally running works council elections and works council work can contribute to decrease the direct costs of applying the Works Constitution Act without jeopardising effective co-determination at the workplace. Appropriate deadline rules can speed up processes and reduce the indirect costs of co-determination.