The Works Council

The permanent proxy of Software AG employees in Germany

The Works Constitution Act regulates employee participation (also: codetermination) as it applies in Germany. This law was passed in 1919 and has been updated several times since and many essential employee rights are based on it. These rights can be split into:

  • Information rights
  • Advisory rights
  • Codetermination rights

The simplest and at the same time most comprehensive right is the right to information: the works council has a right to information on all matters that may affect an employee.

The next level covers the advisory rights: It establishes the right to give advice by the works council, for example, in matters of personnel planning at department level, design of workplaces, or technical changes (e.g. implementation of MS 365). Another very important committee in larger companies is the economic committee. There, the employer must provide the works council with full information on all economic matters. The committee has an advisory function and is made up of members delegated by the local bodies of the works council and an employer representative. The information obtained there must not be communicated to the workforce or to the outside world.

Codetermination is the highest good in employee representation. A personnel measure must be submitted to the works council who can object to it in case of important reasons. Such a reason may be, for example, that an employee is threatened with dismissal and at the same time a vacancy is to be assigned to an external person. At Software AG, there is a company agreement that applies in such cases. Company agreements are the “laws” of companies and an employee must never be placed in a worse position than was settled in a company agreement. There is codetermination in matters relating to working hours and place of work (also regarding hybrid working), distribution of salary increases and many other points.

The works council is obliged to give employees an account of their work. For this purpose, company meetings are hosted regularly and every employee can attend them during working hours. Furthermore, the employer must not hinder works council members in doing their work. That means that a works council member decides how much time s/he needs for committee work – whether the employee representatives has been released for this work or not. Also, their council activities may not be used against employees in their regular job, and to this effect a works council member enjoys extended protection against dismissal.

Software AG is a company with around 1,500 employees in Germany. According to the Works Constitution Act, a works council can be set up in companies with five or more employees (who are entitled to vote). A works council is a local body, so a separate works council is established for each branch offices. The decision whether there should be a works council is made by the employees of each individual branch independently.

Some decisions that can be made under the law affect several or all branches. Here there is the possibility of forming a general works council, as all three German Software AG companies (Software AG, Software AG Germany, Software AG Consulting Services) have decided jointly. The general works council decides, for example, on the technologies used such as MS 365, the local works councils on the recruitment for a position at their own location. A group works council could also be set up on top of this, but this is not reflected in this way at Software AG.

A works council must be re-elected every four years. There are two options for voting, person voting (the employees with the most votes are elected to the committee) and list voting (here, the seats are distributed according to the proportion of votes in each list). The minority gender is always represented in the committee with the same percentage as it is represented in the company. At Software AG Darmstadt HQ there are around 30% female employees, correspondingly 30% of the works council members are women. The works council then elects the chairman and his/her deputy from among its members, regardless of the individual election results. All works council members are bound to secrecy.

The size of the individual works councils depends on the size of the individual branch. For example, there are works councils with one member, Darmstadt as the largest branch (with more than 640 employees entitled to vote) has 11 members. The Darmstadt works council there was set up in 1993. There, two employees are now released from their actual work and can devote themselves entirely to works council activities. The work in the council is divided among the members; There are committees, which are described by law, and self-chosen committees or working groups.

Individual groups in the company also have their own representatives, which are chosen by the participants themselves. This is intended to provide better support to groups in particular need of protection. That is why there is the JAV, the Young Employees’ Association, for young people and trainees and an association representing severely disabled people. Both are accessible for employees at Software AG and its subsidiaries.

There are also other options for codetermination in Germany. Software AG is a stock-market listed corporation with a supervisory board. Due to the size of Software AG, the law of one-third participation applies, so two of the six supervisory board members are recruited from among the workforce. These are elected every four years by all employees of Software AG and its subsidiaries and represent the interests of the employees on the supervisory board.