“Herewith the establishment of works councils is permitted within all of Germany.”
German Mitbestimmung – co-determination, employee participation in high-level company decision making – is a tradition, law and an institution which most certainly is a source of headaches for American business partners and investors. At the same time the works councils are a source of great pride and self-understanding for all German labor unions as well as for many German citizens.
And although German Mitbestimmung had had a long tradition in Germany, it was the Western Allies, primarily the Americans and the British, who insisted immediately after World War II that the newly established West German state reinstitute it.
After their takeover of power in January 1933 the National Socialists had outlawed the Mitbestimmung, and forced all labor unions to be unified within the so-called Deutsche Arbeitsfront – literally German Workers Front. The goal was to prevent any potential resistance to the regime from among the working class.
With strikes in 1905 in the coal mining Ruhr region the unions had won the right to establish works councils. In the years thereafter the councils gain increasing influence. During the Weimar Republic these gains were written into law.
The works councils represented the economic and social interests of the workers over and against management. It was no surprise, therefore, that the Nazis saw in them potential opposition to their demand for absolute power. In 1934 the Nazis banned all independent unions and works councils.
It was no surprise, therefore, that what had been a thorn in the side of the Nazis was reinstated by the Allies. Kontrollratsgesetz Nr. 22 – Allied Law No. 22 – in the Spring of 1946 put works councils back in business.
Since then there has been no better instrument to prevent total control by management. Those who pick a fight with a works council go against the self-understanding and pride of the German movement for worker rights.