Workers’ Participation at Plant Level in Germany: Combining Industrial Democracy and Economic Innovation?

Abstract

Workers’ participation at plant level is of crucial importance in Germany. Works councils exist in almost half of all firms with a number of salaried workers between 51 and 500. In plants with more than 500 workers, almost 9 out of 10 companies have a Works Council. There exists a vast literature on the structural variables that correlate with the probability of a Works Council existing in a shop. There are also many studies on typical working methods, roles, and functions of Works Councils. Many scholars also try to measure the economic and political impact of Works Councils on companies and societies. This chapter presents some crucial findings of the scientific literature related to Works Councils in Germany. The first section sketches out some important historical factors that could explain the founding and stabilization of the system of participation and co-determination and the dual structure of collective bargaining and of workers’ direct participation. The second section presents current structures and types of workers’ participation in the economy. The third section then integrates this ‘pillar’ or workers’ participation in the broader context of labor regulation in Germany. Finally, some crucial trends of economic and societal development and the corresponding challenges for labor regulation in Germany will be sketched out.