Collective employee representation in German companies

Abstract

Purpose -The purpose of this paper is to analyse the distribution and the contextual conditions of statutory and non-statutory forms of employee representation in Germany (works councils and nonstatutory employee representation (NSRs) respectively). It aims to contribute to the debate by proposing a theoretical model which improves our understanding of why works councils and NSRs exist in companies and by presenting an empirical analysis of the explanatory factors based on representative data. Design/methodology/approach -Based on a representative survey of 3,254 German private-sector companies, descriptive statistics and regression models are calculated in order to identify the contextual conditions which promote or prevent the establishment of the different forms of employee representation. Findings -The data show that the distribution of works councils and NSRs differs considerably between industries. Works councils are more likely to be found in large and relatively old traditionalsector companies with a high union density, while NSRs have a stronghold in (new) service sectors and smaller companies. NSRs are also more likely to be found in companies where management has a positive attitude towards employee involvement. Research limitations/implications -Although case studies indicate that there is a huge variety of NSRs, this study could only use a relatively broad category. Future survey research should analyse the various types of NSRs and works councils. Social implications -Works councils are still the main form of employee representation and the German model of industrial relations appears to be stable in terms of firm-level employee representation. However, with new service sectors becoming increasingly important (due to socio-economic development), this model may be in jeopardy. Originality/value -This paper extends previous research on the distribution and contextual conditions of works councils by providing a comprehensive analysis of works councils and NSRs, based on a representative survey that includes a variety of variables which have strong effects, but have not previously been examined in other studies.

What determines the presence of works councils in Polish companies?

“…The Polish study also showed a strong positive relationship between trade union density and the presence of works councils in companies. A similar pattern was also detected in the latest study conducted by Hauser-Ditz et al (2013) in German companies, but the German study used a dummy variable for trade union density (1 if it was higher than 50 percent), in contrast to the continuous measure used in the present paper. The Polish results confirm the persistent influence of trade unions on works councils, although the former no longer hold a monopoly on electing the latter in unionized companies.…”

“…Moreover, it turned out that firm size and its square are jointly significant. The number of statistically significant variables is relatively small compared to German studies (see: Addison et al, 1997;Addison et al, 2003;Mohrenweiser et al, 2011;Hauser-Ditz et al, 2013). Such results may be due to the fact that works councils have been operating in Poland for only a decade, and their presence in companies has not yet become dependent on a specific pattern of determinants.…”

“…In turn, in contrast to a former German study (see Addison et al, 1997), the research in Polish companies has found a positive association between direct participation and the presence of works councils. However, the latest German study (see Hauser-Ditz et al, 2013) has showed that there is no contradiction between group/project work and employee representation by a works council.…”

“…The councils may mitigate transaction costs by decreasing information asymmetry in larger companies where the need for communication between employers and workers is likely to be higher ( Jirjahn and Mohrenweiser, 2016;Bednarski, 2010, p. 246). In turn, for employees works councils may offer some degree of protection in highly routinized work settings characterized by considerable conflict density and little interpersonal relationship with the management, as is commonly the case in larger companies (Addison et al, 1997;Hauser-Ditz et al, 2013). Additionally, in Germany the rights of works councils increase with company size, which gives workers greater incentives to establish them.…”

Holding the Shop Together: German Industrial Relations in the Postwar Era by S. J. Silvia

“…With relatively few pages discussing legal and political regulation or unions and employer organizations as compared to a book on just one of those aspects, Silvia lacks the space to immerse readers in contradictory developments within those parts as well as to systematically address the relations between them. Thus, he only mentions what current empirical research indicates, namely, that “stability” and “erosion” may go hand in hand within industries and even within companies, leading to a pluralization and dualization of industrial relations in Germany (Artus, 2013; Doellgast & Greer, 2007; Hauser-Dietz, Hertwig, & Pries, 2013; Palier & Thelen, 2010).…”