German and International Perspectives of the German Model of Codetermination

Abstract:

The German model of codetermination by the employees of a company bears two idiosyncrasies: Its extremely complicated nature and its uniqueness in the international setting. In this paper it is pointed out that in a comparative context, no other nation has a statute or statutes allowing for more codetermination by employees than the statutes just referred to.

The German system of codetermination has some definite advantages and disadvantages, not only viewed form a German point of view, but also in an international context. Strikes occur less often in Germany than in other countries where codetermination is less prominent. During the global and European economic financial crisis of 2007-2012, codetermination facilitated cooperation between management and employees to overcome difficulties. On the other hand, employee representatives have abused their powers at times and the management of many companies feels constrained by codetermination when hard decisions which are desperately required for the economic success of their companies have to be taken, but these decisions are blocked by employee representatives.

The paper considers these advantages and disadvantages before turning to the question of whether anything could be changed in the future. The conclusion is that change is hardly to be expected. For many decades, German trade unions have, for example, prevented SEs (Societas Europaea) from coming into existence. Now they flex their muscles to hinder the formation of SPEs (Societies Privata Europaea). They planned their strategy for decades and seem determined not to give away any of their powers. It is predicted that the situation will remain stagnate for the foreseeable future.