Employment security: the new big issue at establishment level

In the 1990s, measures to secure employment have become an increasingly prominent topic for the bodies which represent employee interests at establishment level in Germany - works and staff councils. A recent survey by WSI documents this trend and shows that in winter 1997/8, agreements on employment security existed in 24% of private sector establishments covered by works councils and in 12% of public sector establishments covered by staff councils.

In times of high unemployment, increasing competition in the private sector and public budget constraints, employees tend to experience considerable worry about their jobs. The threat of workforce reductions and redundancies, mostly felt at shopfloor level, very much affects and influences the work of workforce representatives and the bodies which represent employee interests at establishment level. In Germany, as in other European countries (TN9710201S and UK9810153F), measures to increase employment security, sometimes in the form of collective agreements or works agreement s between employee representatives and management, have become increasingly prominent during the 1990s, stipulating provisions relating to the job security of employees.

Survey of works councils and staff councils

In winter 1997/8 the Institute for Economic and Social Research (Wirtschafts- und Sozialwissenschaftliches Institut, WSI) conducted a survey of (private sector) works councils (Betriebsräte) and (public sector) staff councils (Personalräte). The survey covers eastern and western German works and staff councils in establishments of 20 or more employees in all sectors except for agriculture, mining, chemicals and energy. The response to a random sample of 42,000 private sector establishments and 8,000 public sector establishments was more than 3,000 completed questionnaires. Of these, 2,956 questionnaires - 1,931 completed by works councils and 1,025 by staff councils - were entered into a database and laid the foundation for analysis. A selection of those results of the survey ("Ausgewählte Ergebnisse der WSI-Befragung von Betriebs- und Personalräten 1997/98", WSI-Projektgruppe, in: WSI-Mitteilungen 51 (10): 653-667 (1998)) which relate to job security are presented below.

The most pressing problem: Personnel reductions

The survey reveals that the five most pressing problems and developments that works councils have had to deal with since 1994 are personnel reductions (reported by 67.4% of respondents), increases in workload and performance pressure (58.4%), the introduction of new working time arrangements (53.9%), changes in work organisation (49.9%) and the introduction of new technology (38.8%). For staff councils, the five most important issues since 1994 have been personnel reductions (58.6%), changes in work organisation (48.6%), the introduction of new technology (46.0%), increases in workload and performance pressure (45.8%), and the modernisation of public administration (42.7%).

When asked for a ranking of the biggest problems for establishment-level interest representation bodies, more than 52% of works councils and 45% of staff councils put "the reduction of personnel numbers" first. There was no substantial difference between eastern and western German establishments, across industries and across establishments of different size.

Closely connected to this issue, although not in the "top five ranking of problematic issues", was the negotiation of social plans s and other questions dealing with redundancies. The bigger the establishment, the more likely was the works council to be involved in the negotiation of social plans.

With regard to redundancies in the public sector, there is a striking difference between eastern and western Germany. The fact that eastern German staff councils had to deal with redundancies more often (23.5%) than their western colleagues (5.5%) may stem from the fact that a significantly higher proportion of western German employees are civil public servants who enjoy a lifetime employment guarantee.

When the works and staff councils were asked about the success of their representation of employees' interests in the area of "workforce reduction", the self-perception was quite negative: 52% of the works councils and 36% of the staff councils responded that they could only "avoid the worst"; while 23% of the works councils and 45% of the staff councils answered that their efforts had little effect. By contrast, in the area of social plans, 50% of the works councils stated that they had achieved "a lot".

Measures to secure employment

Against the background of continuing workforce reductions in many establishments, works councils and staff councils have sought to enforce measures to secure employment. Almost two-thirds of works councils and nearly one-third of staff councils report that their establishment is subject to measures aiming at maintaining employment. Table 1 summarises the extent to which different measures are used.

Measures to maintain employment reported by works councils
. Works councils (%) Staff councils (%)
. total west east total west east
. Are there measures/policies being implemented which aim at securing employment?
Yes 62.1 62.3 60.1 29.7 27.2 39.0
No 31.6 32.2 29.2 63.8 67.1 51.5
No answer 6.3 5.3 10.6 6.4 5.6 9.4
. What kind of measures/policies are there being implemented?*
Leisure time in exchange for overtime 49.9 50.2 46.2 53.0 58.0 40.1
Introduction of working time accounts 39.0 39.7 35.0 29.2 27.0 35.1
Reduction of overtime 26.3 27.1 21.9 17.1 18.8 12.4
Introduction of partial retirement 15.6 16.5 12.1 34.4 30.4 45.0
Creation of part-time jobs 15.2 15.7 12.9 61.9 62.1 61.2
Overtime without bonus 14.7 13.7 18.2 6.6 7.7 3.8
Additional Saturday work 11.1 10.6 14.0 1.4 1.9 0.0
Reduction of bonuses 10.5 10.3 11.3 5.6 6.2 0.0
Reduction of "wages above collective contracts" 7.0 6.8 7.3 0.1 0.2 0.0
Increase in working time 6.9 6.3 10.0 - - -
Downgrading 6.4 6.0 7.4 4.8 3.3 8.7
Short-time working 6.2 5.3 10.7 0.0 0.0 0.0
Working time reductions to maintain employment 5.9 6.1 5.3 10.2 2.9 29.6
Suspension of collectively agreed wage increases 4.9 3.3 12.9 0.3 0.0 1.1
Extra holidays 4.8 4.9 4.1 20.2 23.9 10.5
Other measures 4.8 5.0 4.1 12.0 12.4 10.9
Additional Sunday work 3.9 4.1 3.4 0.0 0.0 0.0
Reduction of compensation for trainees 1.4 1.3 2.2 5.0 5.0 4.9

* More than one answer possible.

Source:"Ausgewählte Ergebnisse der WSI-Befragung von Betriebs- und Personalräten 1997/98", WSI-Projektgruppe, in: WSI-Mitteilungen 51 (10): 653-667 (1998).

The new big issue: Works agreements on employment security

The conclusion of works agreements to secure employment is a relatively new field of activity for bodies representing employees at establishment level. According to the WSI survey, such agreements exist in 24% of establishments covered by works councils and 12% of establishments covered by staff councils. As regards their sectoral distribution, they are most frequent in telecommunications, postal services, insurance, furniture, and the metalworking industry. Most works agreements on securing employment include temporary guarantees on employment, such as the employer ruling out redundancies. Employment guarantees are more frequent in larger establishments, and more likely to be found in western than in eastern Germany.

When asked about the substantive issues regulated by collective agreements which they consider important, 72% of works councils named securing employment, closely followed by securing income (70%) and partial retirement (63%). All other issues - like reduction of overtime, company pension schemes, further training, individual compensation for workers and better job security for peripheral employees - followed at a distance. At the bottom of the scale can be found such issues as pay for performance and "opening" and "hardship" clauses.

The WSI survey also included questions covering the relationship between works councils or staff councils on the one side and the trade unions on the other. When asked for the area where help and support by the trade unions was wanted most, securing employment ranked top among the works councils (55.4%) and second, after wages, among staff councils (44.6%).


The value of the WSI survey is that it shows fundamental changes at establishment level and documents the related challenges for establishment-level bodies representing employees.

During the 1990s, against the background of persistently high levels of unemployment and threats of personnel reductions, the efforts of works and staff councils have very much focused on achieving employment security. This trend has serious implications for German industrial relations.

First, it affects the role that the institutions of establishment-level employee representation play in the German industrial relations system: they have increasingly taken on the task of forging deals on job security and the maintenance of employment.

Second, this increase in importance of bargaining on job security represents a challenge for German trade union organisations. Most importantly, as the demands by the works and staff councils for more support in securing employment show, the unions will have to adjust their collective bargaining policy in such a way that they focus not only on wage increases, but also on employment security - two issues which are very likely to be interrelated.

Third, one should not forget that the employment security provisions in most cases provide shelter only for the "core workforce" regulated by collective bargaining. By contrast, "peripheral" employees are in most cases not covered by the protection and so do not enjoy whatever job security the employment pacts might offer.

Another set of questions addresses the overall employment effects of such employment security agreements. As WSI states, the empirical evidence does not allow any direct conclusions. However, at first glance it seems difficult to establish a link between the employment security provisions for those who are in paid employment and the issue of getting unemployed people off the dole. WSI rightly demands more quantitative and qualitative research in this area. (Stefan Zagelmeyer, IW Köln)

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