Practical Example

Systematic organization of labour relations to increase competitiveness.

The German Works Constitution Act, which regulates employee co-determination and cooperation between employer, workforce, works council and trade union, is a major achievement in Germany that enables social partnerships between employers and works council, and thus secures social stability within companies. Accordingly, labour relations in Germany are characterized by the democratic principle of co-determination, and the development of labour relations between the employer and the various employee groups as well as the co-determination bodies is one of the key responsibilities of HR managers.

Requirements of the client:

The German Works Constitution Act is based on the prevailing type of production of a stable industrial society. Today, however, the working environment looks different in many places, which means that large numbers of employees work in a flexible information society, where there is more and more often no clear separation between the different employee groups, as agile companies work without rigid management structures.

Globalization, digitalization and the increasing predominance of know-how based products and services force the companies we work with to develop dynamically, which is often in conflict with existing legal rules. In times of great need for innovation and flexibility, the rigid legal framework of the German Works Constitution Act is problematic for many of our clients, as the Act makes it increasingly difficult to react quickly to changing market conditions.

Our approach:

No one wants to do without employee co-determination and therefore it should remain a crucial element of the social market economy in the future. So what can companies do under the given conditions? One of our answers to this question is to see Labour Relations Management as a challenge for business policy and to systematically develop and modernize labour relations.

The focus of professional Labour Relations Management is on the management of relations, because the mutual acceptance among the company's social partners is a decisive success factor. Actions that can be implemented within the current legal framework include, for example, a credible information policy, early and regular exchange of information, constructive dialogue and innovative agreements. The aim should be to create a climate of openness, credibility, reliability and trust, which also includes the qualification, digitalization and involvement of the works council.

The result:

HR management has taken its duties seriously, and the successful Labour Relations Management achieves good working relations, which are reflected, among other things, in smooth and rapid negotiation processes, satisfied employees, a good working atmosphere and a corporate image with which employees identify. Above all, however, the labour relations prove to be functioning in a constructive cooperation in uncertain times, difficult situations, transformation processes as well as during the implementation of innovative concepts. This clearly proves that efficient Labour Relations Management can make a significant contribution to the success of a company.

No company should miss out on the opportunities offered by Labour Relations Management when it is an integral part of the HR strategy, and is thus systematically designed and regularly evaluated. In large companies it makes sense to create a separate area within HR management which is responsible for the organization of the planning, implementation and evaluation of the activities pertaining to Labour Relations Management.