In no other country is co-determination as comprehensively regulated by law as in Germany. Four different acts of parliament provide the basis for the involvement of the workforce in their company’s decisions.
A works council can be established in businesses with more than 5 employees. This is known as ”works co-determination” and such a council exists in every tenth company. The co-operation which it requires between works council and management offers many opportunities but also gives rise to high costs, as the employer pays for everything the works council needs: from voting slips to office equipment, from training courses to the cost of releasing staff for works council business. For this reason, management and workforce often seek alternative ways to involve the latter in the business’s decision-making.
In public limited companies, what is known as ”corporate co-determination” entitles the workforce to up to half of the seats on the supervisory, or non-executive, board. Where such large companies exceed a certain size, at least two seats are reserved for external union representatives. One disadvantage of this is the prescribed size of the board, which, with up to 20 members, is too unwieldy to be able to consult effectively. As a result, many decisions are delayed as the necessary compromises are only gradually hammered out.