The German system of Industrial relations is characterised by, according to, an IZA discussion paper (July 2001), a dual structure of employee representation through works councils and unions. Co-determination laws govern the workplace and workers councils and unions. Codetermination is a situation where German workers or their representatives sit on the governing boards or the factory councils .
Works Councils in Germany are regulated by the Workplace Labour Relations Act (Betriebsverfassungsgesetz) 1972. This legislation allows the employees to have a say in certain decisions made by the business. Thus, under works councils employees can have a great impact on the direction a business takes, far more than in Australia. There is an extreemly high works council presence in manufacturing in West Germany (Addison et al 2002). This could create a problem for an Australian firm in decision making because they must allow for decisions to be made in part by works councils and allow for employee input into the direction of the overall business and not just the line of work they are involved in. .
The Australian employer must consider the following points of possible problems with establishing a firm in Munich. Firstly, members of the works council have the power to raise issues with the employer without fear of dismissal. The members usually raise issues that other employees have, however doing so will not jeopardise their employment. Secondly, the employer also has to bear the costs of the council's activities, which include meetings during work hours, and company resources. Thirdly, the employer is also liable for the council's actions. These extra costs to the Australian firm vary and can be hard to estimate. This environment can cause an atmosphere ofus vs them? between employees and employers which the Australian manufacturing industry is not used to.
West Germany's work ethic revolves around employee advantage.
