The effectiveness of codetermination laws in cooperative and adversarial employment relations: When does regulation have bite?

Abstract

The German Codetermination Law grants workers of establishments with 200 or more employees the right to have a works councillor who is fully exempted from his or her regular job duties while still paid a regular salary. This article analyses theoretically and empirically how this de jure right to exemption translates into de facto practice, and explicitly takes into account the nature of the employment relations participation regime. It is found that the right of exemption has no effect in cooperative employment relations because exemptions are granted even in the absence of legal rights, but does make a difference in adversarial relations when exemptions are only granted above the threshold where legal rights force employers to do so, i.e. legal rights do make a decisive difference in exactly those situations where the legislators’ intent would not be realized without the right to legal enforcement.

Owner‐Managers and the Failure of Newly Adopted Works Councils

“…However, case studies (Frege ) and a handful of recent econometric examinations (Backes‐Gellner et al . ; Dilger ; Jirjahn ; Jirjahn and Smith ; Jirjahn et al . ; Pfeifer , ) show that the functioning of co‐determination crucially depends on the managerial environment.…”

“…A reading of the WCA might suggest that the employer has no or little influence on the introduction or dissolution of a works council. However, case studies (Frege 2002) and a handful of recent econometric examinations (Backes-Gellner et al 2015;Dilger 2002;Jirjahn 2003a;Jirjahn and Smith 2006;Jirjahn et al 2011;Pfeifer 2011aPfeifer , 2014 show that the functioning of co-determination crucially depends on the managerial environment. In some establishments, works council and management are indeed able to build cooperative and trustful employer-employee relationships.…”

Nonunion Employee Representation: Theory and the German Experience With Mandated Works Councils

“…While a reading of the WCA might suggest that the employer has no or little influence on the functioning of works councils, case studies (Frege ) and econometric examinations (Backes‐Gellner et al. , Jirjahn and Smith ) show that in practice the functioning of works councils crucially depends on the managerial environment. In some establishments, managers with positive attitudes toward employee participation build cooperative and trustful employer–employee relationships and encourage the works council to participate in wide range of decisions.…”

Using the endowment effect to explain managerial resistance towards codetermination: Implications for employment relations from the German case

“…The Works Constitution Act 1976 entitles employees in all German establishments with five or more employees to have a works council on employee request. However, works councils in Germany critically depend on employer support to succeed, but that support is frequently absent, especially in the early stages (Backes-Gellner et al 2015;Jirjahn 2003;Jirjahn and Smith 2005;Pfeifer 2011Pfeifer , 2014. The country's Works Constitution Act 1976 officially prohibits managers from obstructing works councils, harassing, intimidating, or dismissing councillors, and interfering with elections, but studies show that managerial hostility is common and can discourage employees from establishing a new works council and compel them to withdraw from, and/or dissolve, an existing one.…”