Unions present detailed proposals for renewal of Works Constitution Act

In February 1998, after several years of discussion, the federal executive of Germany's DGB trade union confederation concluded detailed proposals for a renewal of the 1972 Works Constitution Act. The proposals were approved by the DGB federal congress in June 1998 and published in a brochure. Referring to radical economic, technological and organisational changes at the workplace and in production processes, the DGB sees a great need for a modernisation and extension of co-determination rights at the level of the establishment.

The idea of having a "works constitution" (Betriebsverfassung) at the level of the establishment, ensuring employees an institutionalised interest representation in the form of works councils, has a long tradition in Germany and represents a major pillar of the country's industrial relations. Political demands for a legally binding system of employee representation go back to the mid-19th century and a breakthrough was reached with the adoption of the Works Council Act of 1920 (Betriebsrätegesetz) which required the constitution of a works council and, for the first time, provided statutory participation and co-determination rights on a number of social and staff matters. After the Second World War, co-determination at the level of the establishment was newly regulated by the Works Constitution Act of 1952 (Betriebsverfassungsgesetz) which repeated various provisions of the 1920 Act but enlarged the area of application and particularly the participation rights of the works council. A major renewal of the 1952 Act was implemented through the adoption of the new Works Constitution Act of 1972, which led to a further expansion of co-determination rights. Except for some relatively small revisions concerning individual provisions, the 1972 Act still determines the legal framework for co-determination at the level of the establishment in the private sector.

As there had been no major renewals of the Works Constitution Act for more than 20 years, in the mid-1990s the German Federation of Trade Unions (Deutscher Gewerkschaftsbund, DGB) set up a number of working groups composed of representatives from its affiliated trade unions, with the aim of analysing current problems of co-determination and developing concrete proposals for a revision of the existing law. After more than two years of discussion within the unions, in February 1998 the DGB federal executive finally adopted a document which contains numerous detailed proposals for a comprehensive renewal of the existing Works Constitution Act. The proposals were further supported by a large majority of the union delegates at the DGB federal congress in June 1998 and were subsequently been published in a small brochure ("Novellierungsvorschläge zum Betriebsverfassungsgesetz 1972", DGB (ed), Düsseldorf (1998)).

Reform proposals in detail

According to the DGB, major reforms of the existing legal framework for co-determination are necessary because many provisions of the 1972 Act do not correspond to the employment environment of the 1990s. Referring to rapid changes in the economic and social context, as well as radical transformations in the organisation of work and production, the DGB sees a great need for a modernisation of the current law on a number of points. These are set out below.

The meaning of establishment

The DGB calls for a redefinition of the meaning of the term "establishment". Under the current works constitution provisions, an establishment is formally defined as a legal entity. Current restructuring strategies, however, often split companies into various business units, project groups and product groups etc, and transform the company in a kind of network organisation including various decentralised and legally independent establishments. As a result, established co-determination structures might be undermined. The DGB, therefore, demands an extension of the meaning of establishment which takes into consideration a company's real social and economic relations.

The meaning of employee

Since the employment relationship has become much more flexible in recent years, including an increasing number of "atypical" forms of employment such as teleworking, homeworking, contract work or marginal part-time work. The DGB calls for an extension of the meaning of "employee" within the Works Constitution Act. At present, the law's definition of "employee" is mainly restricted to directly employed workers.

Modernisation of co-determination rights for works councillors

Rapid changes in economic conditions and the organisation of work and production have created many new tasks for the works council which are not adequately regulated in the current Works Constitution Act. Therefore, the DGB would like to modernise and extend the works councillors' co-determination rights - in particular in areas which are related to modern forms of work organisation (team and group working, new remuneration systems etc).

In addition, the DGB wants to give the works council more rights to influence the company's economic decisions, in particular when the issue of employment is concerned. The DGB proposes the introduction of a new "co-determination right for safeguarding and creating employment" which should give the works council the opportunity to make its own proposals for employment-safeguarding measures such as modernisation of the work process, further training programmes or special promotion programmes for female, foreign or disabled workers.

Extension of direct employee participation

Since the ongoing modernisation of the work process often gives more responsibility to the individual worker or groups of workers, the DGB wants to strength the direct participation rights of the employee.

Improvement of facilities for works councillors

Since the overall tasks of the works council are increasing, the DGB sees a great need for a further improvement of their facilities - such as more time off for works councillors, more and better training possibilities and modern office equipment including full access to modern information and communication technologies (e-mail, internet, company intranet, etc).

Increasing the number of female works councillors

Since the number of female works councillors is still rather low (DE9806270N), the DGB demands a binding provision determining that the proportion of female works councillors should at least correspond with proportion of female employees in the workforce as a whole.

Better cooperation between works councillors and trade unions

Although works councils in Germany are representatives of the whole workforce and are not a trade union body, the Works Constitution Act gives the unions some rights as an adviser to the works councillors. The DGB now wants to extend these rights, in particular in the field of controlling the adaptation at company level of collective agreements.

Commentary

Given the rapid organisational and technological change within companies and at the workplace, it seems obvious that the legal provisions for co-determination need to be in accordance with the reality of modern working life. The DGB has now presented a comprehensive package to reform the Works Constitution Act, which is more than 25 years old. Regardless of the usefulness of each individual proposal, it should be hoped that the DGB document will lead to a broad public debate on a modernisation of co-determination rights at the level of the establishment, a debate which should include the employers' camp, which has made no official comment so far. (Thorsten Schulten, Institute for Economic and Social Research (WSI)

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