Under Section 94 of the Works Constitution Act, an employer who wants to set general principles for appraising staff needs the consent of the works council. If the two sides cannot agree, an arbitration board decides.
In 2014 the Federal Labor Court explained the purpose of the rule. Such principles are meant to make the assessment of conduct or performance objective or uniform. The co-determination right is to ensure that an employee is judged nur nach seiner Arbeitsleistung, only by his work performance, and by his personal suitability for development in the company. The case concerned staff appraisals at a rehabilitation clinic.