Edited by Adrian Wilkinson, Jimmy Donaghey, Tony Dundon and Richard B. Freeman
Chapter 15: Works councils
Works councils are an instrument with which to represent employee interests to management and a means for furthering industrial and societal democracy. For a long time, these functions were at the forefront of the academic debate. Today, the debate is receiving fresh impetus, partly because in many countries we find a growing representation gap through decreasing union density and works councils are being discussed as a possible means of compensating the diminished power of employee representation (Buchanan and Briggs, 2002: 69). At the same time, however, a relatively new element has joined the debate. Employee 'voice' is increasingly being seen as a factor of growing importance from the perspective of efficiency and management interests (Markey, 2007: 188). It is assumed that participation, also in the form of a works council, involves employees in reorganization processes, which in turn raises commitment and ultimately economic efficiency. Two hypotheses on the effects of participation in general and also of works councils come under discussion particularly frequently. The debate is informed to a very great extent by economic theories (compare, in summary, Dilger, 2002; Keller, 2006; see also Addison et al., 2004), which were initially applied to the functions assumed by unions (Freeman and Medoff, 1984) and later (Freeman and Lazear, 1995) to the effects of works councils.
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