Central and group works councils in changing corporate structures

Background and objectives

Central works councils and group works councils are key institutions of German co-determination. Despite their importance, these bodies have received little attention in social science research. Against this background, the project examined the responsibilities, working structures and thematic priorities of central works councils and group works councils and analysed their interaction with local works councils and trade unions.

On the one hand, pooling resources at central levels of employee representation can contribute to the professionalisation of works council activities. On the other hand, the establishment level remains crucial for ensuring legitimacy and employee participation. Strategic decisions by corporate management define framework conditions that are difficult to influence at the level of establishments. This creates a mismatch between corporate decision-making structures and works councils’ co-determination rights, which are anchored at the local level. At the same time, it raises the question of where trade unions should focus their support activities.

The project focused on four questions:

• Coordination and integration of interests: How are responsibilities and decision-making processes distributed between local bodies, central works councils and group works councils?
• Corporate decision-making structures: What challenges does the complexity of management structures pose for employee representation? Does it create decision-making centres that are no longer directly accessible to works councils?
• Relationship between centralised and decentralised processes: How are local works council bodies involved in decision-making and communication processes? How are employees involved?
• Trade union policy at company level: What does the complexity of works council structures mean for the relationship between works councils and trade unions? What requirements does it create for trade union support?

Methods

The analysis was based on two methods: 16 company case studies and a survey of IG Metall trade union officials. The case studies provided in-depth insights into the responsibilities, working structures and thematic priorities of central works councils and group works councils and their interaction with local works councils. They also yielded differentiated insights into the challenges arising from corporate decision-making structures, as well as into trade union support practices. The study focused on manufacturing but also included contrasting cases from the service sector. The case studies were complemented by an online survey of IG Metall trade union officials to provide broader insights into trade union support and co-determination practices within the multi-level system of employee representation.

Findings

Central works councils and group works councils are becoming increasingly important. This development is driven by shifts in the location of corporate decision-making, the need for standardised arrangements across companies or corporate groups – particularly in relation to IT – and works councils’ own strategies. Addressing co-determination issues at the level of central works councils and group works councils enables works councils, among other things, to improve their access to information and decision-makers, prevent individual works council bodies from being played off against each other, and support works council bodies with fewer resources. However, centralisation is neither uniform nor free of conflict. It is shaped by corporate structures, employer strategies and the different interests within works council bodies. Further challenges include developing shared interests and interpretations and ensuring the involvement of local works councils and employees. Trade union officials provide advice, help with coordination and provide support for the professionalisation of works council activities but have only limited time available for these tasks.