The One-Third Participation Act (Drittelbeteiligungsgesetz –
DrittelbG) requires one third of the members of the supervisory
board to be employee representatives in the case of a stock
corporation (AG), a partnership limited by shares (KGaA), a
limited liability company (GmbH), a mutual insurance associa-
tion (Versicherungsverein auf Gegenseitigkeit – VVaG), and a
cooperative (Genossenschaft) with more than 500 employees.
The latter requirement (500 employees) does not apply to stock
corporations (AG) and partnerships limited by shares (KGaA)
which were registered in the commercial register prior to August
10 1994 and are not family-owned.
Co-determination at the operational level is governed by the
German Works Constitution Act (Betriebsverfassungsgesetz
– BetrVG). This law applies irrespectively of the legal form of
the company. In all enterprises with at least fve employees, an
elected works council (Betriebsrat) must be established at the
employees’ request. The main function of the works council is to
monitor all laws (Gesetze), ordinances (Verordnungen), collective
bargaining agreements (Tarifverträge), and works agreements
(Betriebsvereinbarungen) applicable to the employees.
The works council must be involved in social, personnel, and
economic matters as described in the Works Constitution Act
(BetrVG) and even other statutory provisions.