How employees in start-ups can set up a works council

Flat hierarchies, a foosball table and some beer in the fridge are all very nice - but if you want to take the concerns of your employees seriously, you need a works council in the long term. Start-ups need to pay attention to this.

With the smartphone bank N26 and the drinks delivery service Flaschenpost, two major start-ups have recently demonstrated how not to do it: in both companies, employees wanted to set up a works council, and in both they met with resistance. N26, for example, made negative headlines when founder Valentin Stalf wanted to prevent the ambitions of some employees. A works council would "go against almost all the values we believe in at N26," management allegedly wrote in internal emails, according to a Finance Forward

report. A few days later, Stalf apologized, but the two parties still argued fiercely over whether such a vote was possible in the midst of the Corona pandemic. N26 argued it was too dangerous and sought to prevent works council elections via court. The employees, on the other hand, saw the Corona pandemic as just an excuse to prevent their plans. In the end, the staff prevailed and elected a works council in November - officially with the founders' blessing.

Another company, same game: at the beverage supplier Flaschenpost, the management at the Düsseldorf site initially resisted a works council and went to court. However, the regional labour court rejected the claim and the employees elected their representation in April.

But why exactly do employees want to set up a works council even in start-ups, in which cases is this possible and what may it then decide? A look at the most important points.

Why should employees set up a works council?

"People who care about the company also want to set up a works council," says Oliver Hauser, for example, from his experience as an advisory ver.di secretary for start-ups. Because this demonstrably improves the atmosphere, fluctuation decreases and the reconciliation of interests is integrated into formal structures, he adds. "It's important for companies to really take a feedback culture seriously and listen."

However, Hauser says they should avoid forcing a startup if possible. Only from 21 permanent employees, for example, a works council becomes three-member. Before that it consists of only one person. Alone, she can quickly get between the fronts of employer and employees.

Who is allowed to establish a works council?

Employees in all companies with at least five permanent employees can set up such a representation of interests - the legal basis for this can be found in the Works Constitution Act. The costs for the works council are always borne by the company.

Who can vote or be elected?

Any employee over the age of 18 may vote, regardless of position or job. Senior employees are exempt. "That's difficult for startups because they would have to define who exactly is an executive," Hauser says. As a rough guide, he says, "Senior executives are, for example, the people in the company who can hire or fire a person on their own without consultation, or have great financial influence."

Who gets to vote in the end is decided by the election committee, which is set up before the works council election and is responsible for running the elections. It consists of at least three employees entitled to vote and is elected for the first time in a works meeting by a majority of the employees present. It may also be appointed by the labour court or by a trade union represented in the establishment.

What are the tasks of a works council?

Especially the working hours in start-ups often call the works council to the scene: When it comes to weekend work and overtime, the committee has to approve them. The works council can also have a say in the furnishing of the premises, working hours and breaks, shift schedules or holidays. When it comes to employee data protection, it can also have a say, for example, when it comes to tracking or the installation of surveillance cameras and who has access to the data.

What are the limits of a works council?

In Hauser's experience, the issues that concern start-ups are often the hiring and firing of employees. Here, the works council cannot reverse or have a say in employers' decisions, but it does have the right to a hearing to present arguments in favor of an individual. Pay is not an issue for the works council. Nor are employment contracts something works councils deal with, he said. "Of course, the works council can support personal demands on the employer, but it cannot enforce them," explains Hauser.

What do the trade unions have to do with the works council?

Formally, unions have no points of contact with works councils. "Works councils can be set up without a union," says Hauser. However, especially the elections to the works council are exposed to many stumbling blocks that can lead to invalidity. This is where support makes sense, he says. "Usually, the employees of the start-ups approach us," he says. Hauser then advises the election committee, for example, but he also sets limits on his help: "We don't support the election of works councils that serve as vendettas for individual employees."