1. Introduction 

Works Councils (WCs) occupy a unique place in industrial relations. They have constitutionally defined rights to participate in decisions in how an organisation is managed and run. From a data protection perspective, WCs in Europe add new responsibilities for organisations when processing personal employee data, which will be unfamiliar to companies based in the United States or other jurisdictions. To help navigate the complexities of the WC relationship in certain European jurisdictions, HewardMills has drafted a few key guidelines. 

2. Procedures 

This section relates to the formation of WCs, minimum number of employees, terms of office, dismissals and so on. 

2.1 Austria 

In Austria, employees of companies (where at least five are regularly employed) can establish a WC. Members are elected by the whole workforce. The term of office is currently five years. However, there is practically no sanction if no WC is established and in practice, many small businesses do not have one – employees must take the initiative as there is no obligation for the employer to do so.  

2.2 Germany  

A WC in Germany is elected every four years by the employees in an operation comprising at least five employees during the time period from 1 March to 31 May. Only if a WC does not exist, can elections take place outside this time period. Whether a WC should be elected in an operation is decided exclusively by the employees and preventing an election is punishable under criminal law. The size of the WC to be elected depends on the number of employees in the company and can consist of up to 35 members.   If there are multiple operations in one company, a joint Works Council (or a group WC in a corporate group) can be installed.   Dismissal: Members of the WC have special protection against dismissal. This means their employment relationships can only be terminated for an important reason and with the consent of the WC committee. If the WC committee does not consent to the intended dismissal of the WC member, the employer is obligated to replace the consent of the WC with a court decision. The WC is entitled to hold meetings during which topics of concern for the WC are discussed. Such meetings are generally conducted once a week. 

2.3 France 

In France, a WC is known as a Social and Economic Committee (CSE) and is a joint body consisting of the employer (who serves as chair), up to three colleagues and elected representatives of the employees. The number of employee representatives is set out precisely in the legislation, starting with a single representative in companies with between 11 and 24 employees, rising in stages to 35 in a company with 10,000 employees.   Employee members of the CSE are elected by the whole workforce with the procedure giving an important role to unions. It is, however, the employer who is responsible for initiating the process, although the union can step in if the employer fails to act. Candidates must be over 18 and have worked in the company for at least a year. Close relatives of the employer (such as spouse, partner, parents, children, brother or sister) cannot stand. The lists of candidates being proposed, both full members and their replacements, should reflect the gender balance of the employees represented. CSE members are normally elected for four years, but collective agreements can provide for a shorter period, down to two years.  

2.4 Netherlands 

In the Netherlands, it is mandatory for any enterprise with at least 50 employees to establish a WC. Failure to do so can have serious impacts on the company. However, if the company has 50 or more employees only for a short period of time, there is no immediate obligation to establish a WC. Likewise, if fewer than 50 persons are employed within the company for a short period, the WC can continue to operate. If a company owns multiple entities, each company with 50 employees or more has its own WC obligation. A joint WC is possible when those companies each employ less than 50 people, but the total amount of employees is 50 or exceeds this number.   For companies with 11-49 employees, a WC can be set in place at the request of the majority of employees. In this case, there is an obligation to set up an employee representative body (Personeelsvereniging). An employee representative body is not the same as a WC. If an employee representative body is established, staff meetings need to take place and are entitled to prior consultation. 

3. Co-determination 

This section relates to matters that require WC consent prior to the employer acting. 

3.1 Austria 

In the following areas, employers are required to obtain consent from the WC before:  

  • the introduction of a workplace disciplinary procedure 
  • the introduction of detailed staff questionnaires that go beyond questions collecting general information on individuals and their technical skills 
  • the introduction of monitoring and surveillance systems where they affect human dignity. For example, the Austrian Supreme Court ruled that alcohol breath tests and GPS trackers affect human dignity and thus cannot be implemented without consent of the WC or an employee if the WC does not exist. Otherwise they are unlawful and employees might be entitled to damages 
  • the introduction of payment systems, based on piece rates or some other form of performance measurement, which can be statistically assessed.  

In all these areas, if the WC does not agree, the company cannot act. It is not possible to take the issue to arbitration.   Where personal data is automatically collected and where data is used for personal evaluation, the agreement of the WC must again be sought. However, in these cases, if the WC does not agree, the employer can take the issue to arbitration – a decision by the arbitration body has the same effect as an agreement with the WC.  There are also a series of social areas, where the employer can act without the agreement of the WC. However, the WC may ask for arbitration in the event it does not agree with the employer's exercise of its powers. Please refer to the Consultation and participation section for more information.  

3.2 Germany  

In Germany, the WC has a right of co-determination in the following matters insofar as they are not prescribed by legislation or collective agreement:  

  • matters relating to the rules of operation of the establishment and the conduct of employees in the establishment 
  • the commencement and termination of the daily working hours including breaks and the distribution of working hours among the days of the week 
  • any temporary reduction or extension of the hours normally worked in the establishment 
  • the time and place for and the form of payment of remuneration 
  • the establishment of general principles for leave arrangements and the preparation of the leave schedule as well as fixing the time at which the leave is to be taken by individual employees, if no agreement is reached between the employer and the employees concerned 
  • the introduction and use of technical devices designed to monitor the behaviour or performance of employees 
  • arrangements for the prevention of accidents at work and occupational diseases and for the protection of health on the basis of legislation or safety regulations 
  • the form, structuring and administration of social services whose scope is limited to the establishment, company or a combination of the two 
  • the assignment of and notice to vacate accommodation that is rented to employees in view of their employment relationship as well as the general fixing of the conditions for the use of such accommodation 
  • questions related to remuneration arrangements in the establishment, including in particular the establishment of principles of remuneration and the introduction and application of new remuneration methods or modification of existing methods
  • the fixing of job and bonus rates and comparable performance-related remuneration including cash coefficients
  • principles for suggestion schemes in the establishment
  • principles governing the performance of group work; group work within the meaning of this provision is defined as a group of employees performing a complex task within the establishment’s workflows, which has been assigned to it and is executed in a largely autonomous way
  • rights for technology matters in the workplace e.g., if a given technology can be used to supervise or monitor employees, the WC must be involved. This applies to all technical equipment, such as software or any IT mechanism collecting or recording personal data such as a time recording system. Therefore, an employer must conclude an agreement with the WC before launching monitoring software. The agreement sets out the technical system and the legitimate purpose of the software's data collection. If the parties fail to reach an agreement, a conciliation board must help settle the matter. If there is no works agreement, the Works Council may seek a preliminary cease and desist injunction to block the use of the technology.  

If no agreement can be reached on a matter covered by the preceding subsection, the conciliation committee shall make a decision. The award of the conciliation committee shall take the place of an agreement between the employer and the WC.  

3.3 France 

In France, a negative opinion from the CSE is not binding on an employer decision-making. However, there are still matters that require CSE consultation (please see the Consultation and participation section below). 

3.4 Netherlands 

Consent of the WC is required for every proposed decision on the part of the organisation to lay down, amend or withdraw regulations relating to:  

  • a pension insurance scheme 
  • a profit-sharing scheme or a savings scheme 
  • regulations relating to working hours or holidays 
  • pay or job-grading systems 
  • working conditions, sick leave or reintegration 
  • policy on appointments, dismissals or promotion 
  • staff training 
  • staff appraisals 
  • industrial social work 
  • job coordination meetings 
  • complaints procedures 
  • the handling and protection of personal information of persons working in the organisation 
  • measures aimed at or suitable for monitoring or checking the attendance, behaviour or performance of persons working in the organisation 
  • procedure for dealing with a report of a suspected abuse, as mentioned in Article 2, paragraph (1) of the Whistleblowers Authority Act [Wet Huis voor klokkenluiders], 

All the above matters only insofar as they relate to all the persons working in the organisation or to a group thereof. 

4. Consultation and participation 

This section relates to matters that require WC consultation and participation prior to an employer’s action. 

4.1 Austria 

The participation right is asserted at least four times a year on general issues via consultation meetings, and prior to every intended dismissal or demotion. The WC may invite Chamber of Labour or union representatives to attend.   The most important participation right of a WC is that the employer is obliged to inform the WC seven days in advance of any proposed notice of termination. 

4.2 Germany  

The employer shall consult the WC in good time on the action envisaged and its effects on the employees, taking particular account of its impact on the nature of their work and the resultant demands on the employees so that suggestions and objections on the part of the WC can be taken into account in the plans. In their consultations, the employer and the WC shall bear in mind the established findings of ergonomics relating to the tailoring of jobs to meet human requirements.   WCs have the right of participation in the following areas:  

  • in the implementation of surveillance systems 
  • in the general rules of conduct or regulations in operation 
  • in staff questionnaires and personnel evaluation systems (Section 94 of the Works Constitution Act) 

4.3 France 

In many instances, the consultation of the CSE must be held prior to a decision being taken by the employer. It is an opportunity for the members of the CSE to make requests, to obtain answers to their questions and to express their views. To enable the CSE to issue a motivated opinion, the employer shall provide the CSE in due time with precise and written information, and with the employer's substantiated response to its comments and observations.   The CSE must be consulted regarding:  

  • strategic orientation 
  • economic and financial situation 
  • social policy, working conditions and employment 
  • new working practices 
  • restructurings 
  • redundancies 
  • introduction of new technology 
  • significant adjustments that affect health and safety conditions or working condition 
  • implementation of any means aimed at monitoring or controlling the employees’ activities 
  • any decision dealing with employees' compensation rules 
  • any declaration of default of payment 
  • any mergers, scissions, transfers, significant changes in the company's production structures, acquisition or sale of subsidiaries within the meaning of Article L. 233-1 of the French Commercial Code 
  • any acquisition of a stake in another company 

Consultation process: employers must consult and inform the CSE of three areas on a regular basis:  

  • the strategic direction of the company; 
  • the company’s economic and financial situation; and  
  • the company’s social policy as well as working conditions and employment. The employer must consult with the WC at least once a year regarding the company’s strategy. 

4.4 Netherlands 

Employers must provide WCs an opportunity to render advice on any decision regarding: 

  • transfer of control of the enterprise or any part thereof 
  • the establishment, take-over or relinquishment of control of another enterprise, or entering into, making a major modification to or severing a continuing collaboration with another enterprise, including the entering into, effecting of major changes to or severing of an important financial holding on account of or for the benefit of such an enterprise 
  • termination of operations of the enterprise or a significant part thereof 
  • any significant reduction, expansion or other change in the enterprise’s activities 
  • major changes to the organisation or to the distribution of powers within the enterprise 
  • any change in the location of the enterprise’s operations 
  • recruitment or borrowing of labour on a group basis 
  • making major investments on behalf of the enterprise 
  • taking out major loans for the enterprise 
  • granting substantial credit to or giving security for substantial debts of another entrepreneur, unless this is normal practice and part of the activities of the enterprise, 
  • the introduction or alteration of an important technological provision 
  • taking an important measure regarding the management of the natural environment by the enterprise, including the taking or changing of policy-related, organisational or administrative measures relating to the natural environment 
  • adopting a provision relating to the bearing of financial risks as mentioned in Article 75, paragraph 1 of the Disablement Benefits Act 
  • commissioning an expert from outside the enterprise to advise on any of the matters referred to above and formulating his terms of reference

5. Conclusion

At HewardMills, our team of data protection experts have developed a range of solutions that can help your enterprise facilitate a smooth and efficient relationship with your WCs.