Section 74 of the Works Constitution Act sets out how the employer and the works council work together. They should meet at least once a month. On disputed questions they must negotiate “mit dem ernsten Willen zur Einigung,” with the serious will to reach agreement. Both sides must also make proposals for settling their differences.
business
Reasons for Every Dismissal
Before every dismissal, an employer must hear the works council. Section 102 of the Works Constitution Act requires it, and the employer must tell the council the reasons for the dismissal. A dismissal made without this hearing is void.
The rule applies in companies that have a works council. There, a dismissal without stated reasons has no legal effect.
The Bouncer’s Exam
A bouncer at a German discotheque must pass an exam. Section 34a of the Trade Regulation Act covers security work. Staff who guard the entrance of discotheques, patrol public spaces or protect shops against shoplifters must pass a Sachkundeprüfung, a test of expert knowledge, at the Chamber of Industry and Commerce. Other security staff need a certificate from the chamber that they were taught the legal and technical basics. Section 34d sets a similar rule for insurance brokers. Their permit must be refused if they cannot prove the necessary expert knowledge by passing an exam at the chamber.
Contracts Split by Trade
For public contracts above the EU thresholds, the Act against Restraints of Competition requires that they be divided by trade: Leistungen sind in der Menge aufgeteilt (Teillose) und getrennt nach Art oder Fachgebiet (Fachlose) zu vergeben. When a town builds a large school, for example, the shell, the roof, the electrical work and the painting would normally be awarded as separate lots. Each Gewerk, each trade, owns its part. Combining them is allowed only when economic or technical reasons require it. Since 1 July 2026, the law has had a new exception. For large infrastructure projects paid from the special fund for infrastructure and climate neutrality, and for transport infrastructure, contracts may now also be combined when time requires it.
Authority in Front of the Name
A German business letter often shows, in front of the signature, how far the signer’s authority reaches. i. A., im Auftrag, means on instruction. The signer carries out a task but has no power of attorney. i. V., in Vertretung, means acting as a representative, with power of attorney. ppa., per procura, marks a Prokurist, who holds the broad commercial power of attorney of German law. The Commercial Code requires it: the Prokurist must sign with an addition that shows the Prokura.
The Master’s Certificate Returns
In 2004, Germany dropped the requirement of a master’s certificate for more than 50 crafts. On 14 February 2020, it brought the requirement back for twelve of them. The twelve include tilers, screed layers, parquet layers, interior decorators, turners and wooden toy makers, coopers, glass finishers, and organ and harmonium builders. Anyone who wants to open a business in these trades again needs the Meisterbrief. Existing businesses were protected. When the Bundestag voted in December 2019, the stated aim was to improve quality and make training attractive again.
From Age to Experience
Under the old collective agreement for the German public sector, the BAT, pay rose with age, every two years. The new agreements replaced age steps with Erfahrungsstufen, experience steps. In 2011, the European Court of Justice ruled that the old age steps were age discrimination, and that the move to the new system was lawful. In the agreement for the states’ employees, a new hire with no relevant experience starts at step 1. At least one year of relevant experience with the same employer is credited. At least one year of relevant experience with another employer brings entry at step 2 at most, or at step 3 after at least three years. The steps then rise after one, two, three, four and five years of uninterrupted work in the same pay group with the same employer.
The Chief Executive From Inside
In 2019, the headhunting firm Odgers Berndtson studied the boards of the 30 companies in the DAX. Of the chief executives, 80 percent came from inside their own company. Of all board members, 58 percent had spent more than half of their career in the company before their appointment. The trade journal Personalwirtschaft summed it up in its headline: Stallgeruch und Branchen-Know-how zählen immer noch am meisten. The smell of the stable and knowledge of the industry still count most. The pattern differs for women. In 2024, the AllBright Foundation studied the 160 companies in the DAX, MDAX and SDAX. It found that 65 percent of the women newly appointed to their boards had been recruited from outside through headhunters, compared with 42 percent of the men.
No Booking Without a Receipt
Keine Buchung ohne Beleg. No booking without a receipt. It is a basic rule of German bookkeeping. Behind it stands § 238 of the Commercial Code. Every merchant must keep books that follow the principles of proper bookkeeping. The books must allow an expert third party to get an overview of the business within a reasonable time. Die Geschäftsvorfälle müssen sich in ihrer Entstehung und Abwicklung verfolgen lassen. Every transaction must be traceable from its origin to its completion.
A Procedure for Better Ideas
In many German companies, an employee with a better way of working can submit it to the betriebliches Vorschlagswesen, the company suggestion scheme. Experts assess the idea, and a committee decides on it and on the bonus. The works council has a legal right of co-determination over the principles of the scheme, under § 87 of the Works Constitution Act. A study for the Hans Böckler Foundation dates the first such scheme to 1871, at the Krupp company.