Co-determination: its practice and applicability to the U.S.

Co-determination, as broadly defined and used in Germany, provides for worker participation in the management process through works councils and representation on the supervisory boards of private and, to a lesser extent, public organizations. As practiced in the Federal Republic of Germany, Scandinavia, Austria, and Luxembourg, it was much in the news a few years ago with the passage of the German Co-determination Act of 1976. American management was especially concerned whether co-determination could indicate how labor-management relations might be carried out in the future.|1~

This subject is even more significant today, when viewed as a part of the movement toward greater worker participation and evidenced by the introduction of programs in the U.S. and other countries such as labor-management cooperation, quality of work-life, quality circles, and the like.

To gain some insight on co-determination in Germany today, informal discussions were held with knowledgeable individuals to reveal issues and concerns that might be hard to detect through more formalized approaches. Meetings were held with representatives of three major German employers and unions: two private sector industries (broad-based electrical/electronics and instrumentation/control for transportation and other industries); a municipal employer for the public sector; and unions which were among the largest in Germany and represented blue collar, hourly paid workers and white collar, professional and technical, salaried staff, including civil service. Since the individuals interviewed were speaking from their own experiences and not as official representatives of their organizations, they are not further identified here.

The interview portion of this study is not presented as a scientifically-based one from which rigorous conclusions might be drawn, but it does shed light on how co-determination is viewed by labor and management officials in Germany today, its applicability to the U.S., and its role in the broader participative management movement.|2~ The presentation includes a brief review of the legal requirements, essential to understanding the effects of the laws in the workplace.

Legal Requirements

Co-determination (Mitbestimmung in Germany) is covered by different laws pertaining to works councils and employee representation on supervisory boards, and the two elements are easier to understand if examined separately. Both apply to subsidiaries of American multinational organizations.