German Works Council: Everything Global Employers Need to Know

You’ve set your sights on Germany. Smart move—it’s Europe’s economic powerhouse, packed with talent and opportunity. You’re probably already imagining your new German team member starting next month.

Then someone mentions “works councils,” and that stops you in your tracks because you think, “Here’s another complex labor law.”

So, you look into it and brace yourself. You realize you thought you understood German hiring until you discover that employees have the right to form councils that get a say in workplace decisions. Not just feedback—actual decision-making power on things like work schedules, office relocations, and even some hiring choices.

If this sounds intimidating, you’re not alone. The good news is that works councils aren’t obstacles to avoid. They’re part of what makes German workplaces collaborative and productive. The key is understanding how they work so you can build that into your expansion plans from day one.

This guide breaks down everything you need to know about German works councils: what they do, when they matter for your business, and how to work with them successfully. Because when you’re expanding into Germany, getting the employee relations piece right isn’t just about compliance—it’s about building a foundation for long-term success.

What does a German Works Council do?

A German works council, or “Betriebsrat,” is a group of elected employees who collaborate with management on behalf of the company’s workforce. A works council helps reduce workplace conflict, increase employees’ bargaining power, fix market failures through public policy, and give workers more of a voice in key decisions within the company.

Although they sound similar, works councils differ from unions. A union makes general labor and collective bargaining agreements on the national or industry level, whereas works councils represent employees at the company level. Works councils do not have to include union members, and companies can form works councils without being part of a union.

Why does Germany need a works council?

A German works council makes sure workplace laws and safety rules work for employees—and that companies follow them properly. Think of them as the employee voice in conversations with management about working conditions that affect everyone.

When decisions get made about things like work schedules or office policies, the works council and employer hash it out together until they reach an agreement that applies across the company.

A German works council also has the following rights:

• Right to information. The works council is informed of all discussions related to matters within the Works Constitution Act, which outlines personnel, social, and economic rights.
• Right to consultation. The works council is consulted about specific issues and can make proposals to management. The employer must listen to the views of each elected member.
• Right to negotiation. The works council negotiates matters related to the Works Constitution Act before they become official company processes, policies, or actions. Sometimes, an employer’s decision may be considered legally invalid if the works council does not agree.
• Right to co-determination. The works council has co-determination rights on issues related to employee hiring, transfers, termination, employee conduct policies, working hours, pay schemes, and restructuring measures.

Do you need a works council in Germany?

A German works council is mandatory for companies with five or more fully employed employees. However, works councils form only at the request of the employees, so companies can operate without a works council until the workforce formally requests one.

Explore more information on employment law in Germany.

Who are the members of a German Works Council?

German works council members are elected by their co-workers through a formal vote. An eligible member must be a current employee, at least 18 years old, and employed with the company for at least six months. The size of the works council depends on the number of employees at the company. German works council members serve a four-year term.

How are German works council members elected?

In Germany, all applicable businesses hold works council elections every four years from March 1 to May 31. If a company that does not have a works council receives a request to establish one, it must organize an election as soon as possible, regardless of the election cycle.

An election committee of at least three employees oversees and carries out the election. The employer must provide information about each eligible employee for consideration and cover all costs involved in holding the election.

What are the advantages and disadvantages of German Works Councils?

German works councils provide many benefits, but there are also some disadvantages for global employers.

Advantages of German Works Councils

German works councils have many benefits for both employees and employers. These advantages include:

• Protection of employee rights. German works councils oversee top-level decision-making and ensure all company decisions support employees’ rights.
• Increased wages. German works councils promote higher wages for their fellow employees and increase the likelihood of better overall working conditions.
• Increased productivity. Workers employed at a company with a works council feel like their opinions matter. As a result, employees are more productive and content with management.
• A unified voice for negotiation. With a direct line of communication to management, German works councils ensure all voices are heard and have the right to negotiate any decisions affecting employees.
• Improved relationships. German works councils create positive, coordinated relationships between management and employees, leading to strong unions, low strike rates, and fewer layoffs.

Disadvantages of German Works Councils

There are also some disadvantages to German works councils, which often place more burden on the employer. Some common challenges with German works councils include:

• More costs for the employer. Employers must cover all works council costs, including offices, equipment, communication technology, and election expenses.
• Decrease in profitability. Works councils typically advocate for higher employee wages, adding more cost to the employer. This drawback is especially significant for smaller companies.
• Longer turnaround for decisions. Works councils add more people and opinions to decision-making processes, which results in a longer turnaround for resolutions.
• Difficulty in terminating employees. German employers typically must consult with the works council for all termination proceedings. This process makes terminating employees difficult and often leads to severance payments and long notice periods.
• Removal of some employee freedoms. Decisions agreed upon by the works council and the employer often impact all employees, even if some employees do not agree with the final result.

Ready to hire in Germany? Let Pebl take care of the legal side

Works councils are just one piece of the German employment puzzle. The good news? You don’t need to become an expert in German labor law to build an amazing team there.

That’s why employers like you partner with Pebl. As an employer of record, we handle all the complex stuff—from works council requirements to payroll intricacies—so you can focus on finding great people and growing your business. No need to set up a German entity or navigate employment regulations on your own.

We take care of onboarding, payroll, and benefits while making sure you stay on the right side of German labor laws. Our team knows the ins and outs of works councils and everything else that comes with hiring in Germany.

Want to dive deeper? Check out our Germany hiring guide for global employers.

Ready to start building your German team? Get in touch to see how we can make expanding into Germany straightforward instead of stressful.

This information does not, and is not intended to, constitute legal or tax advice and is for general informational purposes only. The intent of this document is solely to provide general and preliminary information for private use. Do not rely on it as an alternative to legal, financial, taxation, or accountancy advice from an appropriately qualified professional. The content in this guide is provided “as is,” and no representations are made that the content is error-free.

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