Works councils in Germany: what a Betriebsrat means for employers

A Betriebsrat is a works council, an elected group of employees that represents the workforce to the employer at a particular workplace. It operates under the Betriebsverfassungsgesetz, the law on workplace co-determination, and it is separate from any trade union. Its job is to represent the staff of that business, not an industry.

Where a works council exists, the employer cannot simply decide certain things on its own. The council has to be informed, consulted, or in some areas agree, before the employer acts. It is a standing partner in how the workplace is run.

A works council is not automatic, and an employer does not create one. Employees have the right to set one up in any workplace that normally has at least five permanent staff, of whom a few must be eligible to stand. Whether they do is up to them.

Many small workplaces never form a council, simply because the staff do not initiate one. As a business grows, the likelihood rises, and once employees start the process the employer cannot block it. Planning for the possibility is wiser than being surprised by it.

A works council’s powers vary by the type of decision. On some matters it has genuine co-determination, meaning the employer needs its agreement. On others it has weaker information and consultation rights. Knowing which is which avoids missteps.

The dismissal point is the sharp one: an employer has to hear the works council before dismissing someone, and a dismissal made without that step is void.

A works council is a duty to cooperate, not an obstacle. The employer has to work with it in good faith, share the information it is entitled to, and get its agreement where co-determination applies. The employer also bears the reasonable costs of the council doing its job, including time off for its members.

Handled well, a works council can make change smoother, because agreement reached with it tends to stick. Handled badly, it can stall decisions and lead to disputes. For a foreign employer, the key is to respect the process rather than treat it as red tape.

For a company making its first one or two hires in Germany, a works council is unlikely, because it takes a workforce to form one and staff have to initiate it. So a small foreign employer usually will not meet a Betriebsrat early on. It becomes relevant as the German team grows.

As an employer of record, we help you understand where you stand and keep your employment practices compliant with co-determination rules as they start to apply. If your German presence grows to the point where a works council is on the horizon, we can help you prepare rather than be caught out.