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Employees can elect a person or a group of persons from their company to represent their interests towards the employer. At private companies, this representation of employees is called the works council, and in the public sector the staff council.

In a company with a works council or staff council, employees have more rights and have more influence on decisions.

The law stipulates that a works council must be elected in all companies with 5 or more employees. The more employees a company has, the more people there are on the works council. Employees must become active themselves if they wish to establish a works council.

A staff council is elected in all agencies with 5 or more employees. The more employees there are, the more people are on the staff council. The rules that apply to a staff council are similar to those for a works council.

The tasks, rights and duties of a works council are governed by the Works Constitution Act (Betriebsverfassungsgesetz). The works council and the employer are obliged by law to cooperate in a spirit of trust in the interests of the employees of a company. The employer must inform the works council about many things and must also make documents available.

The employer must consult the works council beforehand on some matters, for example in the case of a dismissal. The employer must inform the works council about the person to be dismissed and the reasons for dismissal.

The works council has a right of co-determination on some issues. This means that the employer may not make a decision without the works council. This applies, for example, to the question of when the daily working time begins and ends.

The works council ensures, for example:

• that all employees are classified in the right wage group,
• that breaks and working hours are observed and
• that occupational safety and accident prevention regulations are observed (for example, that employees wear helmets or safety shoes at work).

The works council holds consultation hours for employees and conducts works meetings. It can also negotiate company agreements. Furthermore, it should also support the integration of foreign employees into the company.

The works council may not divulge confidential information.

A staff council represents the interests of employees in the public sector. The rights of staff councils are governed by the Staff Representation Act (Personalvertretungsgesetz) and the Federal Staff Representation Act (Bundespersonalvertretungsgesetz). The tasks and duties of staff councils are similar to those of works councils.

A works agreement is an agreement between the works council and the employer. There are therefore no works agreements without a works council. Negotiating works agreements is one of the main tasks of a works council.

Works agreements are binding for the employer and the employees and apply in the same way as laws or collective agreements. However, a works agreement may not infringe higher-ranking rights. These rights include collective agreements, laws, regulations or EU law.

Works agreements can be used to regulate many matters in the company. This applies especially to matters in which the works council has a say. A works agreement can, for example, regulate working time models, occupational health and safety or the use of the internet, e-mails and social media in the company.

In the public sector, the agreements between the agency and the staff council are called “service agreements”.

Trade unions are made up of employees as well as other persons (such as pensioners, students, job seekers, etc.). A trade union is made up of all its members. Trade unions are not only active in one company, but in one or more entire sectors. Trade unions are collective bargaining parties and negotiate collective agreements with individual employers or the employers' association of an industry.

Works councils and staff councils represent the employees of a company. For this purpose, employees elect colleagues from their company to the works council or staff council. It then champions the rights of all employees in the company and negotiates, for example, works agreements.

Trade unions often actively support the establishment of a works council. Trade unions offer seminars for elected works councils on all important issues relating to the work of works councils. They also support the works councils with information and advice.

Works councils and staff councils are often trade union members. However, this is not mandatory.