Labor Laws

Keeping Workers Away From the Boardroom

Opel workers_Oliver Berg-dpa
Workers, wait outside please.
  • Why it matters

    Why it matters

    Cooperation between workers and management has been at the heart of German economic growth, but as more and more companies find ways to keep worker representatives out of the boardroom, this model could break, leading to more strikes and tensions.

  • Facts

    Facts

    • The codetermination law of 1976  requires companies with more than 500 employees to ensure that a third of their supervisory boards consist of labor representatives.
    • The number of companies with codetermination has been shrinking in the last decade.
    • A study by the Hans Böckler Foundation concludes that companies are using legal tricks to deprive a total of 800,000 employees of equal representation.
  • Audio

    Audio

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Companies are finding ways to undermine the concept of codetermination, which gives workers the right to sit on non-executive boards and influence management, according to a new study.

The Hans Böckler Foundation, a think tank aligned with trade unions, said companies are exploiting loopholes in the 40-year-old law to keep workers out of the boardroom.

Unions, predictably, feel that the law on codetermination is the backbone of the German economy. Reiner Hoffmann, head of the German Confederation of Trade Unions, or the DGB, said: “The strength of the German economy is based in large part on the fact that employees contribute their knowledge and their commitment to corporate policy.”

But not everyone feels the same.

Under the 1976 law, labor representatives must make up one-third of the supervisory boards in companies with more than 500 employees, while half of all supervisory board members must represent labor in companies with 2,000 or more employees. In 2002, there were 767 companies with equal representation on their supervisory boards, but that number had declined to 635 by 2014, according to a Hans Böckler study seen by Handelsblatt.

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