According to Section 87 (1) No. 10 Works Constitution Act (WCA), the remuneration system is subject to co-determination, meaning that the works council can actively participate in its design. Modern remuneration systems with a focus on performance management are becoming increasingly relevant, particularly as a result of new personnel information systems. This is often associated with far-reaching changes to existing remuneration regulations, salary structure and performance measurements. Our consultation can help the works council in navigating these changes and ensuring fair and transparent remuneration systems.
In order to successfully shape this process, the works council can call in external expertise in accordance with Section 80 (3) WCA. A transparent and fair company salary regulation requires a comprehensive analysis of the existing conditions, vested interests and impact of the planned changes. Criteria for performance evaluation and the definition of standards for performance-related pay also play a decisive role.
Co-determination rights and duties of the works council regarding remuneration systems
The works council is responsible for a designing fair and comprehensible remuneration systems in the company. Its tasks include, among other things:
- Participating in the development and negotiation of company agreements on salary structures and remuneration systems.
- Monitoring and evaluationg planned changes by the employer
- Ensuring compliance with collective bargaining requirements and fair salary structures
- Advising employees on remuneration issues and their impact on individual salaries
A transparent and well-structured remuneration system not only promotes fairness within the company but also increases employee motivation and satisfaction.
Performance and fair remuneration
Performance evaluation and its influence on the remuneration system are often key issues in negotiations between the works council and the employer. Important aspects are:
- Analysis of the requirements and classification structure: Transparent criteria for job evaluation and classification into salary levels or job families
- Differentiation of the base salary: Assessment of the fairness and appropriateness of existing salary structures, like number of groups and levels in the company
- Examination of employer proposals: Critical analysis and adaptation to the interests of employees
- Development of transition rules: Ensuring vested rights and socially acceptable adjustments
- Assessing performance characteristics: Definition and weighting of relevant performance criteria for performance-related pay
Training and advice for works councils on all aspects of a remuneration system
A sound knowledge of the legal framework and economic contexts is essential to successfully enter negotiations on a remuneration system as a works council. We offer practical training and advice on the following topics:
- Development of company remuneration systems
- Design of performance appraisals, target agreements and bonus systems
- Analysis on the economic feasibility of new pay systems
- Drafting and negotiation of works agreements
- Implementation of collective bargaining regulations
- Development of alternatives to employer planning
- Workshops for the joint development of objectives with employee representatives and employees
Our aim is to provide comprehensive support to works councils so that fair, transparent and performance-enhancing salary systems can be successfully designed. Ensure your works council is equipped to navigate the complexities of remuneration systems effectively. Our consultation and training services provide the knowledge and strategies needed to create fair, transparent, and legally compliant salary structures. Contact us for professional advice and basic trainings.