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A Works Council (OR) is legally mandatory for companies with 50 or more employees (Works Councils Act, WOR). For 10-50 employees: “employee representation” is optional. The Works Council represents employees and has advisory and consent rights regarding important decisions — mergers, reorganization, employment conditions, GDPR policy. A good Works Council relationship accelerates decision-making and strengthens employership. Below are Works Council rights, how to establish one, and how Tessa (12 employees) operates without a Works Council.
The short answer
- Mandatory: from 50 employees (Works Council Act, Art. 2).
- Optional: from 10 employees (employee representation).
- Right of advice:regarding important economic decisions (merger, reorganization).
- Right of consent: regarding social decisions (working hours, GDPR, performance appraisal system).
- Works Council members: elected by employees, exempt from Works Council hours.
Who needs a Works Council?
- 50+ employees: legally required Works Council (Art. 2 WOR).
- 10-50 employees: employee representation possible (Art. 35c Works Councils Act).
- Fewer than 10 employees: no obligation, but direct consultation with staff.
Number of employees measured as an average over the calendar year.
Works Council powers
1. Right of advice (Art. 25 Works Councils Act)
For important economic decisions. The director must seek advice before making a decision:
- Acquisition, merger, split.
- Reorganization (significant change).
- Important investment decisions.
- Change of control.
- Purchase/sale of property.
In the event of a negative recommendation: the director can still make a decision, but the Works Council can appeal to the Enterprise Chamber.
2. Right of consent (Art. 27 Works Councils Act)
For social decisions. No decision without Works Council consent:
- Working hours, holiday arrangements.
- Evaluation system.
- Complaints procedure.
- GDPR policy for employee data.
- Safety and health (RI&E).
- Staff training plan.
In the event of refusal of consent: the director may request substitute consent from the subdistrict court judge.
3. Right to information (Art. 31 Works Councils Act)
- Annual accounts, budget.
- Annual social plans.
- General economic developments.
- Personnel development.
4. Right to consultation (Art. 23 Works Councils Act)
At least twice a year, a formal Works Council meeting with the Board.
OR institution
- Election: employees elect Works Council members from among themselves.
- Number of members: 3-25 depending on staff size.
- Term of office: 3 years, eligible for re-election.
- Works Council regulations: established by the Works Council itself, describes the working method.
- Facilities: meeting room, administrative support, training.
Costs of OR
- Works Council hours: 60+ hours per Works Council member per year exempt (employer pays).
- Training: €1,000-€3,000 per member per year.
- Works Council advice: external lawyer or Works Council advisor €5,000-€25,000 per year for major cases.
- Administration: secretariat, meeting room.
Total Works Council costs for SMEs with 60-100 employees: €25,000-€75,000/year.
Tessa's situation
Tessa has 12 employees — no Works Council obligation. Options:
- No formal representation — direct consultation with the team.
- Employee Representation (PVT) — voluntary, less stringent than Works Council.
- Staff meeting (PV) — formal consultation without a permanent structure.
Tessa opts for monthly team meetings and an annual staff meeting — formal but lightweight.
Honest recommendation
For employees of 50+: view the Works Council not as a burden, but as a partner. A good Works Council relationship accelerates decision-making, prevents conflicts, and strengthens employership. Invest in Works Council training and good communication. For 10-50 employees: employee representation is optional — consider it with strong growth towards 50. For fewer than 10: direct communication suffices. With growth towards 50: prepare for the Works Council mindset.
For other topics: employment contract, dismissing an employee and SWOT analysis.
Frequently Asked Questions
From 50 employees (Works Councils Act, Art. 2). Average over the calendar year. For 10-50 employees: employee representation possible (optional). Below 10: no obligation.
Right of advice on economic decisions (merger, reorganization, investments). Right of consent on social decisions (working hours, GDPR, performance appraisal system). Right to information (annual accounts, annual social plan) and consultation.
Regarding the right of advice: the director can still make decisions — the Works Council can appeal to the Enterprise Chamber. Regarding the right of consent: the director can request substitute consent from the sub-district court judge — must demonstrate sound substantiation.
3-25 depending on staff size. With 50 employees: 3 members. With 100: 5-7. With 1,000+: 25 members. Elected by employees from within the ranks for a 3-year term.
Works Council hours (60+ per member per year), training (€1,000-€3,000 per member), external advice (€5,000-€25,000 for major cases), administration. For SMEs with 60-100 employees: €25,000-€75,000 per year total.
Employee representation (PVT) is less structured than Works Council (OR): fewer rights, smaller number of members, lower costs. Often practical for 10-50 employees. As the number grows towards 50: prepare for the establishment of a Works Council.
Informing early on major decisions, allocating training and time for Works Council members, providing facilities, and constructive dialogue. A good Works Council is a partner rather than an obstacle — accelerating long-term decision-making.
