Works Councils in Germany are regulated by the Workplace Labour Relations Act (Betriebsverfassungsgesetz) 1972. This legislation allows the employees to have a say in certain decisions made by the business. Thus, under works councils employees can have a great impact on the direction a business takes, far more than in Australia. There is an extreemly high works council presence in manufacturing in West Germany (Addison et al 2002). This could create a problem for an Australian firm in decision making because they must allow for decisions to be made in part by works councils and allow for employee input into the direction of the overall business and not just the line of work they are involved in.

The Australian employer must consider the following points of possible problems with establishing a firm in Munich. Firstly, members of the

In Germany if an agreement cannot be made between employees and employers through a works council, the union steps in and have been notoriously known to create major disruptions to the workplace, mainly in the form of strikes.

If, for example, a single union representing everyone working with metal decides to call for a general strike, a substantial part of the German economy stands still. If they win, it will usually be adopted nation wide and will then apply to all employers in the same field. This indicates that even if the firm is not involved in the dispute the outcomes affect the operations of the firm in question. This could work as a disadvantage to employers, in the form of higher labour costs or more flexible working conditions.

According to Sennholz (1981) in West Germany, ?labor unions are enjoying unprecedented power through equal representation on corporate boards of directors.?

Trade unions in West Germany are characterised mainly by industry. The manufacturing union in Germany has negotiated very generous wages for the industry, in fact total hourly labour costs in the German manufacturing sector were 28% above the average for the 20 industrialised countries examined in a research paper by the Cologne Insti

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