Co-determination Act for the Coal and Steel Industries of 1951
In companies in the coal and steel industry—including mining, iron, and steel companies with more than 1,000 employees—so-called parity-based co-determination applies. This means that half of the supervisory board must consist of employees. In addition, there must be at least one neutral supervisory board member who breaks ties in votes. Furthermore, labor unions have the right to nominate a labor director as an equal member of the company’s executive board.
Works Constitution Act of 1952 and One-Third Participation Act of 2004
The Works Constitution Act governs employees’ participation rights within the company and the cooperation between their elected works councils and the employer. The Works Constitution Act of 1952 also contained provisions on employee co-determination in corporations not covered by the Coal and Steel Co-determination Act, which were significantly weaker: employees are allocated only one-third of the seats on the supervisory board. At the time, the trade unions viewed the provisions on co-determination in the 1952 Works Constitution Act as a major step backward—compared to the far-reaching co-determination, including on economic matters, that had existed in the postwar years. In 2004, the co-determination rights were removed from the Works Constitution Act and transferred , with minor changes, to the One-Third Participation Act . The One-Third Participation Act applies to corporations (AG, GmbH, KGaA, VVaG) with more than 500 employees.
Co-Determination Act of 1976
The 1976 Employee Co-determination Act applies to corporations (such as AG, KGaA, and GmbH) with more than 2,000 employees that are not subject to the Coal and Steel Co-determination Act. Under the 1976 Co-Determination Act, parity-based co-determination applies. This means that half of the seats on the supervisory board are filled by elected employee representatives. However, management appoints the chair of the supervisory board, who has a double vote . As a result, in the event of a tie, the shareholders always have one more vote.
We explain what co-determination is and how it helps employees
We explain how co-determination works in the workplace
We explain how co-determination works on the supervisory board
