As the form of institutionalized representation of interests for employees within an establishment , the works council is an organ of the works constitution . It serves the establishment and the workforce . The means it has at its disposal for fulfilling this function are its rights of participation, i.e. the information , consultation and co-determination rights of the works council . It is empowered to conclude works agreements for the establishment, and is authorized to institute legal actions under the "Beschluss" procedure if its rights are disregarded. Its relationship to the workforce is governed by the duty to conduct its business impartially, without regard to race, religion and creed, nationality, origin, political or union activity, sex, or age. Consequently, manual workers and white-collar workers and (in principle) both sexes, as well as the individual departments of the establishment, must have representation on the council proportional to their presence among the workforce. The council is elected in accordance with the provisions on works council elections . It is not bound by the decisions of works meetings and cannot be voted out of office. It can, however, be removed from office by the Labour Court for gross violation of its duties. It must observe the principles of the peace obligation and co-operation in good faith towards the employer, and is also required to co-operate with those trade unions which have a presence in the establishment and with the relevant employers' association .
The requirement for setting up a works council is that the establishment in question should regularly employ at least five employees who are eligible to vote. The term of office is four years. The size of the council depends on the number of employees in the establishment who are eligible to vote; provided that it has several members, the council elects two of them as its chairperson and vice-chairperson. Council members enjoy special protection against dismissal . Membership ends after expiry of the term of office, resignation, termination of the employment relationship , loss of eligibility, expulsion, or dissolution of the council by court decision. The works council is not capable of possessing assets and cannot be held liable under the law. The employer bears the costs of the council's activities and in this respect is also liable for the council's actions. In companies where there are several works councils, a company works council must also be formed. In a group (of companies) , a group works council is formed in addition to this, if the company works councils of the member companies so decide. The interests of executive staff are protected not by the works council but by a separate representative body for executive staff .
In a number of companies which operate branch establishments or subsidiaries in various EC Member States, special "works councils" have been set up for the purpose of voicing the interests of employees in all their establishments throughout the Community. These bodies do not, however, have institutional backing comparable to that of the German-style works council, nor corresponding rights.