Thomas Haipeter
Works Councils as Actors of Collective
Bargaining. Derogations and the
Development of Codetermination in the
German Chemical and Metalworking
Industries
Introduction
German codetermination and the institution of works councils have been a topic of interest for
comparative research in industrial relations for a long time. Works councils in the sense of the
German Works Constitution Act originating from 1952 seem to mark a key institutional difference
compared to other systems of workplace representations for at least three reasons: first, because
works councils are formally independent from unions as worker representatives; second, because
they are entitled with a differentiated system of codetermination rights and third, because they do
negotiate company based agreements not interfering with the collective bargaining agreements
negotiated by the trade unions (Rogers/Streeck 1994). Taken together, these characteristics of works
councils constitute the cornerstones of the dual system of industrial relations in Germany. The dual
system differs from de-central systems of company unions like in Japan, from company level
collective bargaining prevailing in the Anglo-Saxon countries and from centralised systems of
collective bargaining with union representations at the workplace like in the Scandinavian countries.
In the course of the 1990s, a broader trend of industrial relations towards decentralisation was
observed, and the German dual system did not make an exception from this development
(Ferner/Hyman 1994 and 1998). On the contrary, Germany seemed to be on the forefront of the
development (Jacobi/Keller/Müller-Jentsch 1998). In the case of the German dual system,
decentralisation proceeded by shifting responsibilities from the level of collective bargaining to the
level of plant level bargaining between works councils and management. Stimulated by working time
flexibilisation, decentralisation started in the 1980s when compensation periods for fluctuations in
the distribution of working times had been fixed in the collective bargaining agreements, and the
responsibility for negotiating agreements on flexible working time regulations was addressed to the
plant level. Although in the first instance little happened in the plants, from the 1990s onwards works
councils and management negotiated plant level agreements on flexible working times in many
plants (Haipeter/Lehndorff 2005). This development was regarded as little problematic for works
councils. On the contrary, some authors stressed the point that the existence of works councils was a
comparative institutional advantage in coping with decentralisation. The existence of competent
actors endowed with codetermination rights on company levels seemed to fit well with
decentralisation, making the system flexible to react on shifts between the levels of negotiations
(Wever 1995).
In the 1990s new forms of decentralisation emerged. On the one hand, decentralisation developed
beyond the control of the collective bargaining actors. A growing number of firms opted out of the
employers’ associations. Additionally, in more and more plants management negotiated plant
agreements with the works councils not compatible with the norms of the collective bargaining
agreements as a form of ‘wild’ decentralisation. On the other hand, a process of ‘organised’
decentralisation (Traxler 1995) was put in train by the collective bargaining actors. Organised
decentralisation both rested on collective bargaining agreements for employment protection and on
derogation clauses. In the agreements on employment protection plant level actors were enabled to
agree on temporary working time reductions in exchange for employment guarantees. Whereas
according to these agreements the hourly wages of the employees have to remain constant,
according to the derogation clauses changes in working times or wages are possible beyond that in
the form of working time extensions without compensatory wage increases or of wage reductions
without reductions in working times.
In the light of the new developments decentralisation was re-assessed, but a new consensus could
not be found. The interpretations ranged from resiliency to erosion. There is little doubt that the
non-organised forms of decentralisation have to be regarded as an indicator of erosion of collective
bargaining because the actors of the system seemed to be unable to control and to stop the
development. But the organised forms of decentralisation are much more difficult to assess. There
are three interpretations prevailing: First, organised decentralisation disturbs the fine tuning
between macro-economic steering and cooperative workplace industrial relations because conflict
could spill over or because works could form alliances with management against the unions (Hassel
1999); second, organised decentralisation will stabilise the industrial relations’ system in a slowly
shrinking core where unions can remain strong (Thelen/Kume 2003); third, collective bargaining will
be boosted by organised decentralisation because the growing room of manoeuvre makes collective
bargaining agreements more attractive for employers (Jacobi 2003).
However, what can be said for sure is that organised decentralisation poses new challenges for
workers representatives on both levels of the industrial relations’ system. The main problem for the
unions seems to be that decentralisation does not become organised just by stipulating collective
bargaining agreements that delegate bargaining responsibility to lower levels of the system.
Organisation has to be regarded as an active task of controlling de-central processes and of
preserving the binding power of collective bargaining agreements. For instance, if most of the
companies of an industry make use of derogations, the norms of the collective bargaining
agreements concerning working times and wages have ceased to have real consequences. Therefore
the union has to ensure that the number of companies using derogations and the deviations from
collective bargaining norms remain limited.
Derogations also put a screw on works councils. Works councils, formally actors of codetermination
and not of collective bargaining, are becoming actors of collective bargaining. Employers address
demands for derogations to their works councils, works councils take part in negotiations about
derogations, they have to coordinate interpretations and strategies with the trade unions, they have
to organise the support of the employees and they have to control the implementation of
derogations in their plants. Works councils have a crucial role to play in organised decentralisation,
and it depends to a large extent on their practices if organised decentralisation will in fact be
organised or not. Moreover, derogations could be an impact for severe changes in the position of
works councils in relation to management, employees and their unions. At least three problems have
to be mentioned in this respect. Problems of integration with management could occur by
negotiating topics of conflict like wages and working times; problems of solidarity with the union
could arise if works councils build new coalitions with management to protect employment and
therefore are more willing to make concessions than the unions; finally, problems of legitimacy could
develop if works councils get into trouble with the employees because material concessions are too
far-ranging or because employees refuse derogations at all.
However, up to now little is known about how works councils cope with these challenges. This article
will try to shed some light on what happens in the plants if derogations are negotiated. My analysis
rests on the findings of a research project I finished in 2009 about the new roles of works councils
and plant level relationships in derogations. In the project I made case studies in twelve firms, six of
them in the chemical industry, six in the metalworking industry. I was supported by the trade unions
in identifying and contacting interesting cases. Case study research was supplemented by interviews
with experts from the unions and the employers’ associations of the two industries.
Derogations and Coordination
Before analysing works councils in detail I will give some information on the spread of derogations in
the chemical and metalworking industry and on the attempts of the unions to coordinate the
processes – which could also be interpreted as attempts to organise organised decentralisation.
Historically, both industries were on forefront of the development of derogations. In both industries,
first collective bargaining agreements on derogations were stipulated already in the early 1990s, the
hardship clause for East German regions in the metalworking industry (allowing companies in
economic troubles to fall short of collective bargaining agreements) in 1993, the “corridor” for
working times (extensions or reductions of weekly working times up to 2.5 hours) in the chemical
industry in 1994. In both industries, the room of manoeuvre for derogations was extended stepwise
in the following years. In the chemical industry, derogations from wage norms and the single
payments were made possible, and it was allowed to make derogations for service activities within
the firms. In the metalworking industries, some agreements were made to open derogations in
Western Germany in the 1990s, and in 2004 the Pforzheim Agreement rearranged the whole topic of
derogations by allowing derogations under two conditions: that they are contributing to the
safeguarding or creation of jobs and that they are improving the competitiveness, the investment
conditions and the innovation capacities of the firms.
At first sight, the differences between the industries could merely be bigger. In the chemical industry,
collective agreements on derogations were regarded as a social partnership project by the collective
bargaining actors. Derogations were to make the collective bargaining agreements more attractive
and, thereby, to strengthen the coverage of the agreements. They are negotiated on plant level in
the form of plant level agreements. In the metalworking industry, negotiations about opening clauses
were full of conflicts. The situation was made even more complicated for the union by the fact that in
2004 the union was threatened by the federal government which announced to make legal
provisions for derogations if there will be no regulation made by the collective bargaining actors. The
Pforzheim agreement to a certain extent was enforced by government. In contrast to the chemical
industry, according to the agreement of Pforzheim derogations have to be negotiated in the form of
‘additive’ collective bargaining agreements and therefore are part of the collective bargaining arena
and not of the arena of codetermination.
Despite these differences, problems and practices of derogations took a rather similar development.
In both industries the number of derogations has shown powerful increases in the years 2004 and
2005 (Figure 1). These increases were tightly coupled with the widespread demand of the employers
and their associations to extend the working times (without pay compensation of course).
Figure 1: Number of additive collective bargaining agreements (metalworking industry) and
agreements on working times, wages and single payments (chemical industry), own calculations
In the eyes of both unions, this was a critical development and a real threat for the collective
bargaining agreements. And both unions reacted in a rather similar way and tried to regain – or
better to gain – control over the number and contents of local agreements on derogations. Both the
chemical workers’ union, the IG BCE, and the metalworkers’ union, the IG Metall, developed and
implemented ‘rules of coordination’ for dealing with derogations. They were to standardise the
processes and to improve the control of the unions’ headquarters. Important points in this respect
are the detailed check of the economic situation of the firms demanding derogations and of the
effects of derogations on other firms or locations within one company, the duty to inform the
headquarters about demands and the right of the headquarters to make the final decision about
accepting a derogation or not. Both unions also wanted to integrate their local members. In the IG
BCE, integration was to be organised via meetings of members, in the IG Metall, however, members
were to participate in decision making in form of ballots about the beginning of negotiations and the
acceptance of an agreement. This difference is somehow preformed in the legal status of the
agreements on derogations. Participation in the form of ballots for union members is only possible if
the agreement is a collective bargaining agreement. Only in this case the union is able to define the
proceedings and only in this case other employees can be excluded (because the agreement in a
formal way only applies to its members), whereas in the case of plant level agreements the works
councils are the organisers of the process and the agreement formally covers all employees of a
plant.
The coordination rules have proven to be rather successful. The decrease of the number of
derogations from 2006 onwards has stabilised the situation. In both industries the share of
companies with derogations settled down at a stable level of about 10%. Another indicator for the
improvements of control is the raising quality of derogations, especially concerning the concessions
that are made by the companies on a broad range of topics from employment protection to
investments and extended rights of codetermination (Figure 2).
Figure 2: Share of counter-concessions in the metalworking industry by issue in all derogation
agreements from 2004 to 2006, own calculations
Relation to Management
Do local negotiations about derogations have consequences for the relations between works councils
and management? Do they give an impetus for a process of change? Or do the relationship patterns
remain stable? First of all it can be said that the impetus for negotiations in all the cases of the study
was given by management. It was management who addressed demands for negotiations to the
works councils. The motives given by management ranged from economic hardship to threats of
dismissals, outsourcing or offshoring to rate of return goals. Of course the threats have been rhetoric
to a certain extent. But there were two real organisational developments that gave them a certain
dynamic and persuasiveness, the globalisation of the enterprises and the dangers of whipsawing on
the one hand and the financialisation of corporate governance on the other hand.
Taking threats and organisational developments into account the demand for derogations can be
regarded as a dual construction of management. The first construction is reorganisation along the
lines mentioned above. And the second construction is the deduction of inherent necessities that
make derogations from collective bargaining agreements unavoidable. In most cases the necessities
are accompanied by concrete threats of high symbolic relevance. In one of the cases the top
management presented photos of a new productions site in Poland during an employee meeting to
stress a threat of production relocation. This was the reason for the works councils to ask
management if the relocation can be avoided somehow by negotiating derogations.
The construction of threats by management was a structural constraint for the works councils. It was
impossible for them to ignore the demand of management. The threat in each case has been
interpreted as a real and concrete one so that negotiations could hardly be evaded. In this way
management has gained hegemony in the definition of the situation and was able to enforce
negotiations. By constructing necessities management was able to shift the distribution of power to
its own advantage. This interpretation is closely line with other findings that stress the relocation of
power in labour relations produced by globalisation and financialisation (Dörre 2002; Kädtler 2006).
But this is not the end of the story. The works councils faced up the challenges of negotiating
derogations. And in this way they have developed new competencies and a new capacity to act. By
showing a new capacity to act they were able to regain a great deal of the power loss caused by the
structural constraints management was able to impose on them. One of the main preconditions was
the active support by the unions. Works Councils and their unions have produced new and common
definitions of the situation and they have developed common strategies and demands for the
negotiations with management. This, and the fact that in most of the cases they were able to enforce
a lot of their demands in the negotiations, strengthened their self-confidence and their position vis-àvis management. Supported by the unions the works councils were able to negotiate with their
management at eye level. The works councils were not helpless victims of structural constraints; on
the contrary, they actively tried to restructure the situation to their own favour.
Only in two of the twelve case studies the works councils have not been able to improve their power
position. In both cases codetermination by the works councils has been highly deficient (Kotthoff
1981) already prior to the negotiations on derogations, either because the works council was rather
passive or because he was repressed by a patriarchic management. But even in these cases the
negotiations on derogations had some positive effects. In both cases the old relationship patterns
between works councils and management and within the works councils broke up. In one case, the
works council was activated and tried to formulate new demands on codetermination in the course
of the negotiations. And in the other case during the negotiations a new opposition emerged within
the works council that was union friendly and criticised the high degree of integration the chairman
of the works councils has shown towards management.
Relation to the unions
The development of common definitions of the situation between the works councils and the unions
was rather harmonious and free from conflict. Problems of solidarity did not come up.
Hypothetically, an origin of solidarity problems could have been that on the one hand the works
councils have an interest to make concessions in order to safeguard jobs or sites whereas on the
other the union hand has an interest to preserve the collective bargaining agreements and therefore
to avoid concessions as far as possible. Nevertheless, real interests have been different from
hypothetical interests, and conflicts between unions and works councils about the scope of material
concessions were the exception.
The main explanation is the fact that within the negotiations the works councils defined themselves
as junior partners in the labour coalition with the unions. This finding is independent from the status
of the agreement; it does not matter whether the agreement was a plant level agreement (where de
jure the works council is the signatory) or a collective bargaining agreement (where the union is the
signatory). The common interpretation of the works councils was that derogations are dealing with
collective bargaining topics and that therefore the unions are the “born” actors to negotiate them.
Furthermore, both works councils and unions have shown the same interest in limiting material
concessions and in enforcing concessions by the employers like investments or a protection of
locations and jobs. Instead of solidarity problems, the relations between the unions and the works
councils improved, either because works councils appreciated the support by the unions in general or
because new personal relationships developed between works councils and the union officials
responsible for the negotiations.
Furthermore, also the shop stewards of the unions were strengthened in the course of derogations.
Shop stewards played an important role in spreading information they got from the works councils in
the plants and in reflecting the atmosphere and interpretations prevailing in the workforce to the
works councils. They worked as a linkage between works councils and workforce. In two cases, their
role was even more important than that. In one case the shop stewards have been involved directly
in the negotiations with management. They have drawn a rather sceptical picture about the critical
attitudes prevailing in the workforce and were able to convince management that an imposition of
the 40-hours-week would lead to conflicts with the employees. In the other case the shop stewards
have organised a spontaneous strike and went, together with the whole workforce, to the
management building where the negotiations took place at that moment. As I was told, the effects
on the employers have been impressive.
Another important aspect of the relation between works councils and unions in derogations is the
development of unions’ organisational power in the plants. The sample of cases was dominated by
well organised plants with a union density of about 50% or more. Only two plants had a density
lower than this. In general, membership recruitment is a task of the works councils, and most of the
works councils said that they are dealing actively with the problem, sometimes with more and
sometimes with less success. However, derogations set the recruitment issue in motion. First, the
union was able to improve its legitimacy and to boost union density in the plants. And second, the
union itself became an actor of membership recruitment, at least temporarily for the process of
negotiations. Both developments were based on a new union strategy of involvement and
integration of the employees in negotiations.
Relation to the employees
The problem of legitimacy was the by far most important problem the works councils had to deal
with. In all the cases a critical attitude towards derogations and negotiations prevailed in the
workforces. The employees did not demand for derogations in order to safeguard their jobs; on the
contrary, derogations were rejected because they were interpreted as unfair. They were regarded as
violations of the norms of distributional justice. This interpretation was fed by the experiences of
wage restraint the employees have suffered since the 1990s, which have produced feelings of being
treated in an unjust way, and the derogations have been regarded as a further step in that direction.
In this situation works councils and unions had to canvass for support and for the negotiations they
were enforced to by management. The labour representatives developed two strategies to deal with
the problem. One of them was the strategy of integration which stressed the necessity of the
derogation as an act of solidarity with those employees who would loose their job without
derogation. This strategy is directed mainly to the employees, appealing to common interests in a
situation of a common threat on employees, works councils and management. Derogations are
interpreted as a cooperative strategy to safeguard jobs and are therefore canvassed cooperatively
and often together (mainly on employees meetings) by works councils and management. By contrast,
the strategy of conflict underlines the conflict of material interests with management and tries to
bundle the interests of the employees on a common adversary. Employees are to be convinced by
unifying them in confrontation to management.
Both strategies are made popular by different instruments. Maybe the main forum for the
transportation of strategies is the employees meetings, either to demonstrate unity between works
councils and management or to demonstrate opposition to management. Besides that, instruments
of communication like flyers, notice boards, e-mails or face-to-face communication are broadly used
by the works councils. This practice of intensified information was common and it was quite
successful in bringing the employees in line with the works councils, because in this way the works
councils not only disseminated information but also their own interpretations. In this respect they
were able to gain the hegemony of defining the situation in relation to the employees.
In some cases the works councils did more than that. In five of the twelve cases they mobilised the
employees for short term strikes. Mobilisation was tightly connected to strategies of conflict the
works councils pursued in the negotiations. The feedback on mobilisation by the employees was very
positive. The works councils could build on a broadly spread fighting spirit among the employees that
in most cases exceeded the short term actions the works councils had planned. The employees
would have liked to intensify the strikes. However, mobilisation proved to be a rather effective
instrument in canalising the critical attitude towards derogations into a broad support for the works
councils in their negotiations with management. Critics were attributed to management, not to the
works councils (for the role of attributions Kelly 1998).
Rank-and-file participation is the third form of involvement of employees. It was also practiced in five
of the twelve cases. Participation is different from information and from mobilisation in involving
employees systematically in the process of decision making. This was done by organising ballots to
decide about the start of negotiations and the acceptance of an agreement. Not for accident all the
five cases of rank-and-file participation were located in the metalworking industry. There are three
reasons to mention. First, rank-and-file participation was promoted by the unions only. The works
councils alone have not promoted participation. According to their definition, they are
representatives elected by the employees. Being elected by the employees gives them a legitimacy to
act that has not to be accomplished by participation. The only thing some of them did was to try to
identify the mood of the employees on employees meetings. Second, only the metalworkers’ union,
the IG Metall, has developed a strategy of ‘plant related collective bargaining’. This strategy was to
increase the organisational power by negotiating local collective bargaining agreements. In local
conflicts the perception of the relevance the union has for enforcing and guaranteeing labour
standards is to be strengthened, and participation is to make the union more attractive for existing
and potential members. Prior to derogations, plant related collective bargaining was supported only
by a minority within the union, but in the course of derogations it was regarded more and more as a
strategy for regaining the initiative in local conflicts. It even became part of the coordination rules
implemented in 2005. Third, the status of collective bargaining agreements that derogations have in
the metalworking industry is important because negotiations on collective bargaining agreements
are organised by the unions and not by the works councils. This gives the union – in contrast to the
chemical industry - the opportunity to define participatory processes.
In fact, a direct relation between strategies of participation and the quality of the derogation
agreements cannot be observed. The quality of agreements is influenced by a broad range of factors
like the strategies of management or the position of a plant within the company or in the value
chain. Furthermore it has been shown by the case studies that the veto-position the unions have
concerning the acceptance of an agreement gives them bargaining power enough to support the
works councils effectively and to have a positive influence on the results of the negotiations.
However, the fact remains that there are significant differences in the organisational effects of
negotiations for the unions. In the cases with conflict-oriented and, especially, participatory
strategies of negotiation, the legitimacy of the unions could be improved. In all of these cases either
membership losses could be compensated or union density could be raised, sometimes to a lesser,
sometimes to a greater extent. In one case union density even doubled during the negotiations, and
the union was able to build up a shop steward organisation in the plant that has not existed before.
Participatory strategies have been proven to be a powerful instrument of revitalisation for the union.
Membership motivation of union members increased, and the union became more attractive for
non-members.
Practice of codetermination and the organisation of the works
councils
The cases of derogations analysed give only little hints for the discussion in the German literature
about the tendency of works councils to develop a strategy of co-management (Müller-Jentsch
2003). The term co-management is to indicate a certain practice of codetermination that is
characterised by the acceptance of economic necessities of companies and plants and attempts of
works councils to influence management strategies especially concerning plant-level reorganisation
and work organisation. It is argued that in this way the influence of codeterminations could be
exceeded beyond the codetermination rights defined in the Works Constitution Act. In the sample of
cases this study relies on, such a practice could be found only in one case. Of course in all the cases
the works councils accepted economic necessities or threats defined by management. To have an
“economic conscience” can be regarded as one of the conditions for works councils to negotiate
derogations. But to influence management strategies actively and to try to be ‘the better managers’
is a practice only rarely shown in the cases. Therefore it seems to make little sense to characterise
derogations or other forms of local employments pacts as examples of co-management per se (as in
Rehder 2006), because this would blur the difference between an active co-management in the
sense defined above and the passive ‘economism’ prevailing in the case studied here.
In contrast to co-management, the controlling of derogations is a task actively performed by all the
works councils studied. In five of the twelve cases the works councils could detect defaults in the
implementation of the concessions made by management like investments or other points of the
agreements. On the one hand the defaults concerned only minor points like the question what kind
of investment should be made, given an investment budget. But on the other hand also more severe
shortcomings of management could be laid open. In these cases investment budgets have been
reduced ex post, quotas for temporary workers have been exceeded or a reduction of management
salaries promised in the agreements was ignored. Partly the works councils accepted the defaults
because they did not interpret them as serious or just because they did not want to deteriorate their
relations with management, but partly the shortcomings have been the reason for the works councils
to say no to the demand of management for new derogations or, in one case, to demand the union
to recall the agreement with the company (what did not happen because the company became
insolvent before).
In the works council committees, derogations were far away from being undisputed. On the contrary,
the interpretations of the works council members have been rather heterogeneous. Therefore, in
most committees hot discussions took place about the question whether to negotiate with
management or not. But in all the cases, the chairmen were able to bring the positions together in
favour of negotiations. They did not do this by authority but by discourse and arguments. Then
chairmen did not enforce their positions but convinced the others that negotiations would be the
best way to cope with the problem posed by management. The coordination between works councils
of different plants within one company has proven to be much moiré difficult. On company level, the
differences of interpretations are aggravated by different interests of the plant. The works councils
have been overburdened by the task to coordinate plant interests; therefore, the coordination
efforts by the union have been vital in balancing the interests of different plants and in developing a
common strategy.
The union has also played an important role in compensating problems of competencies or resources
the works councils have shown in the process of negotiation. The works councils benefited much
from the examination of the economic reasons the companies had to give for their demands on
derogations. In both industries the companies had to hand out a report about the economic situation
to the union, and the unions checked these reports with respect to their viability and to the
consequences derogations would have for the competition within the industry. On this base the
unions gave recommendations how to handle the demand. The recommendations have been an
important support for the works councils and helped them to legitimise negotiations within the
committees and vis-á-vis the employees. Union support was also indispensable during the
negotiations. The works councils appreciated the bargaining power and the bargaining routine of the
unions, and they said that without union support they would not have been able to negotiate
successfully.
Conclusions
Works councils have proven to be rather effective in playing their new role as collective bargaining
actor in derogations. Two points are of importance in this respect. On the one hand, they were able
to assure their position vis-á-vis management and even to develop new competencies and capacities
to act. In fact, management was able to gain hegemony in the definition of the situation and thereby
to enhance its power. But at the same time the works councils were able to close their ranks, to
develop bargaining strategies and to negotiate effectively. On the other hand, the works councils
were able to convince the sceptical employees and to achieve their support. The more the works
councils have mobilised the employees and the more they have opened ways for participation, the
more successful they have been in doing this.
Both the improvement of the power position and of the legitimacy of works council are depending to
a large extent on the tight relations they have with their unions. The unions have proven to be an
indispensable supporter of the works councils in negotiations. Together they defined common
interests and common strategies and developed the bargaining power that was necessary to
negotiate effectively. Moreover, the unions also have been indispensable in implementing processes
of mobilisation and participation which would not have been implemented without them. Especially
the strategy of plant oriented collective bargaining has proven to be an effective instrument to
strengthen the position of the union in the plants in a difficult situation of defensive.
Although problems of legitimacy vis-á-vis the employees and problems of solidarity vis-á-vis the
unions occurred, these problems could be solved during the negotiations. Works councils were able
to overcome, or better to absorb, the grievances of the employees, and possible conflicts with the
union did not reveal because the works councils defined themselves a junior partners in the
negotiations. What remains are problems of integration with the management. The relations with
management became more conflict-oriented in style in those cases where the works councils have
chosen conflict strategies in negotiations. Social partnership mutated into conflict partnership or into
conflict relationships without partnership. By demanding derogations and constructing threats it was
management who left the road of partnership, and if works councils reacted with conflict strategies
management was rarely surprised. Works councils did not loose their strength by doing this; on the
contrary, works councils who reacted this way gained in status and power, both vis-á-vis
management and vis-á-vis the employees. So derogations in some cases brought more conflict into
the labour relations, but the works councils have benefited from this development.
The changes in labour relations that can be observed in negotiations on derogations are hardly to
describe in terms of resiliency or of erosion. Resiliency, on the one hand, would mean that despite
new challenges the former logic of industrial relations can be preserved. The analysis has shown that
derogations go along with a changing balance of power in favour of management and that the most
effective reaction of works councils and unions is to mobilise employees and to develop participatory
processes. However, local mobilisation and participation are new elements in German industrial
relations that have not been common before; insofar the logic of industrial relations has changed to
a certain degree, and this change seems to be a presupposition for a new balance of power. Erosion,
on the other hand, would mean that the works councils are not able to negotiate derogations
effectively or that they make alliances with management against the unions and the collective
bargaining agreements which would lead to an erosion of collective bargaining norms. Both
developments did not take place; the works councils have been rather effective in playing their role
as actors of collective bargaining, and they even strengthened the ties of their labour coalitions with
unions. Therefore, derogations are neither an indicator of resiliency nor of erosion; rather they show
new developments of industrial relations not covered by these terms.
One aspect is to be stressed finally. Participation in local collective bargaining has proven to be an
instrument of union renewal. Keeping this result in mind, one of the most important questions for
the future of industrial relations in Germany seems to be whether this experience of derogations will
be transferred to other fields of action or not. In derogations, union renewal by rank-and-file
participation will, even if its dissemination could be enhanced within the metalworking industry and
in other industries, always be limited to the small segment of companies who try to fall short of the
collective bargaining norms. In the rest of the companies covered by collective bargaining
agreements rank-and-file participation is not accepted as a strategy of renewal. The positive
experiences of derogations would suggest the extension of plant oriented collective bargaining
beyond the limits of derogations. This could be done by defining topics in the collective bargaining
agreements to be negotiated in form of collective bargaining agreements on local level. Some of
these topics could be long-term working time accounts or single payments and the form they are
paid. By broadening the scope for plant oriented collective bargaining the strategy could be used in a
more systematic way, and also its sustainability could be improved. Local collective bargaining would
become more continuous and would be no longer restricted to the singular experiences of
derogations. But whether the development will take this direction or not depends on the strategies
and the learning processes of unions and works councils.
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