West German Labor Unrest: Are Unions Losing Ground to Worker Councils?

By Hobson, Charles J.; Dworkin, James B. | Monthly Labor Review, February 1986 | Go to article overview

West German Labor Unrest: Are Unions Losing Ground to Worker Councils?


Hobson, Charles J., Dworkin, James B., Monthly Labor Review


West German labor unrest: are unions losing ground to worker councils? In the years following World War II, West Germany has emerged as one of the world's strongest industrial powers. Traditionally, the German economy has enjoyed a strong rate of economic growth and high levels of productivity, coupled with low inflation and unemployment.

A great deal of the credit for this "economic miracle" has often been attributed to the cooperative labor relations system in West Germany. Rejecting the adversarial industrial relations framework which has evolved in the United States, the Germans have relied on a cooperative partnership between government, labor unions, and employers to foster a strong shared commitment to economic growth. Labor conflicts have been minimized and days lost to strike activity are among the lowest in the world.

Components of the system

By law, industrial relations in West Germany is practiced within the framework of two separate sub-systems. On the one hand, national legislation has provided for a comprehensive and participatory structure for representing worker interests at the company or plant level, which is specifically referred to as codetermination and uniquely characterizes the German approach. At the industry level, on the other hand, a system of collective bargaining exists which is similar yet reduced in scope to that found in the United states.

The legislated codetermination structure provides for representation of worker interest at three distinct levels: worker councils, labor directors, and worker-elected members on the board of directors. In practice, the German system functions as follows. Worker councils are required in all plants having five employees or more, with the size of the council based upon the number of employees. These councils have rather broad, far-reaching powers, which include an equal say with management in (1) job evaluation, (2) overtime, breaks, and holiday schedules, (3) recruitment, selection, and dismissal, and (4) training and safety. Strikes over these matters are prohibited by law, and disputes are equally resolved through binding arbitration.

The second level of the codetermination structure involves the labor director who, as a member of the company's management team, is in charge of day-to-day operations. As a representative of the interests of the workers, the labor director is responsible for the personnel and social policies and practices of the company.

Finally, the third level of representation in the codetermination structure consists of worker-elected members of the company's board of directors. In many instances, boards are made up of an equal number of worker and stockholder representatives. Boards are charged with electing a chairperson who, in the event of a tie, votes twice. If the board is deadlocked on the choice of a chairperson, a simple majority of the stockholders' representatives is sufficient for election. Thus, while parity board representation is often championed as an important feature of the German system, the provisions for electing a chairperson and breaking ties effectively ensure that stockholders' interests will prevail even when the board as a whole is deadlocked.

The second major component of the German industrial relations framework is the collective bargaining system, which takes place primarily at the state and national or industry-wide level. Labor-management negotiations are concerned exclusively with two issues, wage levels and a rather nebulous area called "general conditions of employment." Only for disputes relating directly to these two negotiable issues can strikes legally be called. While relatively influential at the national level, German unions are by comparison very weak at the plant level. In fact, unions have no legal right to represent workers locally and thus defer power and control over plant issues to worker councils.

In summary, in terms of formal structure, industrial relations in West Germany is conducted in two seemingly separate spheres, with unions playing a far less influential role than they do in the United States.

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