Understanding leadershipNovember 9, 2017
Industrial relations and co-determination
Industrial relations are the foundation
Managers need to understand the rights and duties arising from employment contracts, collective agreements and co-determination law. Only then can they understand and classify certain behaviours of employees and worker representatives. The starting point is understanding institutional relations between employers and employees, called "industrial relations" or "labour relations". Trust and commitment are fundamental. This is also summarised as the "psychological contract". Labour law formalises these relations. It contains important provisions that directly influence leadership processes at company level.Catch-up needed among managers
For managers, labour law at company level is most important. Here employees with their contracts and worker representation with co-determination rights meet managers directly. In practice, managers often cause friction and significant costs through ignorance of relevant rules. Managers should broadly know employee rights and works council co-determination rights. They should know that a works council negotiates on equal terms with management, must be informed "in good time and comprehensively" in certain cases, and can stop a project by interim injunction if co-determination rights are not respected. They should know the damage from ignoring employee rights and the cost of a reconciliation board.Respect enforceable co-determination!
Some co-determination rights are "enforceable" and include an injunction claim. In the relatively few areas where the works council has enforceable rights, the employer may act only with works council consent. In such cases, e.g. introducing IT systems, works agreements are often concluded. Figure 1 shows the typical regulatory path when the works council exercises enforceable co-determination.
Figure 1: Typical regulatory path for enforceable co-determination by the works council (Source: Berger, P. Praxiswissen Führung – Grundlagen, Reflexion, Haltung, Springer Gabler, Berlin 2018, p. 312)
More insight in my book...
An overview of industrial relations and co-determination is in my book Praxiswissen Führung – Grundlagen, Reflexion, Haltung, Springer Gabler, Berlin 2018. Chapter 12 covers- industrial relations,
- the "psychological contract"
- and regulation through labour law — employment contracts, occupational safety, collective agreements and works co-determination from a leadership and management perspective.
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