Germany-Codetermination

Codetermination (Mitbestimmung) , under which German workers or their representatives sit on the governing boards or the factory councils of most German firms, is a classic example of how the German system reconciles apparent opposites and points them to a common purpose and in a common direction. Codetermination did not come about in West Germany in a single step. It evolved and expanded through five different West German laws, beginning in 1951 and continuing in 1952, 1954, 1972, and 1976. The first three laws were passed by CDU-led coalition governments, the last two by SPD-led governments. All the codetermination statutes were applied to eastern Germany after unification. Through the combination of those laws, 85 percent of all German employees are included in some form of codetermination.

Codetermination takes place through two structures, the Aufsichtsrat (supervisory board) in a large enterprise and/or the Betriebsrat (factory council) in most companies. Over two-thirds of all German firms have a Betriebsrat . Only about one-fourth have an Aufsichtsrat . Many large firms have both. If a firm is large enough to have both, the workers are twice represented. Depending on the size of the firm, the Aufsichtsrat must have between one-third and one-half worker membership. The Betriebsrat is composed entirely of employee representatives.

The result of forty years of codetermination is the kind of bargain typical of the way the German economy is managed. Management can largely direct the functioning of the company. It makes investment, financial, operational, and market decisions, but it makes those decisions through a mechanism in which labor can have a voice. Labor can make certain that the conditions under which the workers operate are socially acceptable. It can also make certain that the workers benefit from the company's well-being. But labor in turn has a stake in ensuring that the demands and actions of the workers do not jeopardize the firm itself.

In addition to their participation in company management, German workers are also represented in trade unions. The principal organization is the Federation of German Trade Unions (Deutscher Gewerkschaftsbund--DGB), an umbrella organization that joins seventeen trade unions along industry lines that match those of the BDA (see Labor Unions, ch. 7). Trade union membership is not obligatory in Germany. Less than one-half of all West German workers belonged to the trade unions in 1989, but German unification has led to a rise in trade union membership in absolute and percentage terms because the East German workers were accustomed to union membership.

Data as of August 1995