A works agreement is a company-wide agreement between the employer and the works council, which sets out the rights and obligations of both parties (“Betriebsparteien”) and defines binding standards for the company, § 77 BetrVG.

Yes. Company agreements have a direct and binding effect on the employment relationships of the employees they cover (normative effect / “Normative Wirkung”).

Unlike a works agreement, a regulatory agreement (“Regelungsabrede” or “bestriebliche Absprache”) has no normative effect. It is not directly or mandatorily binding and therefore does not change the employment contracts of the employees affected. Regulatory agreements are informal and are typically only concluded for a short period between the employer and the works council.

Section 77 of the Works Constitution Act (BetrVG) stipulates that works agreements must be in writing. This means that the works agreement negotiated between the employer and the works council must be recorded in writing and signed by both parties. This does not apply if the works agreement is based on a decision of the conciliation board.

A distinction must be made between legally enforceable works agreements (“Erzwingbare Betriebsvereinbarung”) and voluntary works agreements (“Freiwillige Betriebsvereinbarung”). In the case of legally enforceable works agreements, a decision by the conciliation board can replace an agreement between the employer and the works council. Legally enforceable works agreements can therefore be implemented against the will of the other party.

Voluntary works agreements, on the other hand, can only be adopted with the consent of the employer or the works council.

The content of works agreements covers matters that fall within the statutory remit of the works council. The limits of its regulatory powers are set in particular by higher-ranking law and the principles of works constitution law.

• works agreement on gate and bag checks
• works agreement on protection against bullying
• works agreement on anti-discrimination, complaints office pursuant to Section 13 AGG
• works agreement on addictive substances and intoxicants (e.g., nicotine, alcohol, cannabis)
• works agreement on dress code, uniforms
• works agreement on working hours
• works agreement on shift work
• works agreement on on-call duty
• works agreement on short-time work
• works agreement on vacation, works agreement on on-call duty
• works agreement on video surveillance
• works agreement on electronic time recording
• works agreement on health protection
• works agreement on BEM procedures (Occupational Integration Management)
• works agreement on the canteen
• works agreement on the company daycare center
• works agreement on remuneration
• works agreement on mobile working / home office

The following works agreements are also enforceable:

• on personnel questionnaires and general assessment principles pursuant to Section 94 BetrVG;
• on personnel selection guidelines pursuant to Section 95 BetrVG;
• on the implementation of company training measures pursuant to Section 97 and 98 Paragraph 1 and 4 BetrVG;
• on the establishment of a social plan pursuant to Section 112 Paragraph 1 and 4 BetrVG, taking into account Section 112a BetrVG.

Voluntary company agreements can be concluded on almost any topic, provided an agreement can be reached between the employer and the works council (Section 88 of the Works Constitution Act / BetrVG)). Examples include:

• Works agreement on diversity
• Works agreement on family support
• Works agreement on environmental protection

There are cases in which the works council’s right of co-determination is excluded. The works council has no right of co-determination if a mandatory statutory or collective bargaining agreement (“tarifvertragliche Regelung”) already exists on precisely this subject matter. However, the preclusive effect of collective bargaining agreements only applies insofar as the collective bargaining agreement actually regulates the relevant working condition (Section 77, Paragraph 3 of the Works Constitution Act / BetrVG).

A company agreement is negotiated between the employer and the works council. Both sides are usually supported by lawyers from the outset.

According to Section 80 Paragraph 3 Sentence 1 of the Works Constitution Act (BetrVG), the works council may seek legal counsel if this is necessary for the performance of its duties. This is regularly the case when drafting and negotiating works agreements. The employer must bear the costs, as stipulated in Section 40 Paragraph 1 of the Works Constitution Act (BetrVG).

The employer is required to publish the works agreements in a suitable location within the company, as stipulated in Section 77, Paragraph 2, Sentence 4 of the German Works Constitution Act (BetrVG). This means the works agreements must be accessible to all employees. Company agreements are typically posted on the company notice board or intranet.