German Works Councils Face Dual Overhaul: National Reform and EU AI Rules Reshape Workplace Rights
Published on 07/23/2026 at 21:52 | Redaktion boerse-global.de
German works councils and employee representatives are bracing for a sweeping transformation of their responsibilities as a national labour reform package converges with new European Union artificial intelligence regulations. The changes, set to take effect over the next two years, will demand entirely new competencies from the bodies that represent millions of workers.
The coalition government of CDU/CSU and SPD presented its "Programme for Recovery and Employment" in early July, containing far-reaching amendments to labour law that directly affect employee representation. Among the most significant changes, fixed-term contracts without a specific reason will be allowed for up to 48 months — a provision initially valid until 31 December 2030. Starting 1 January 2027, the written-form requirement for such contracts will be eliminated entirely.
For works councils, the government's push to accelerate co-determination rights around artificial intelligence stands out as a major shift. The package also aims to block the use of shelf SE companies, a move that targets corporate co-determination structures.
Additional elements of the reform include abolishing telephone sick notes, introducing a proof-of-work-incapacity requirement from the first day of illness, and tax incentives for severance payments tied to rapid job changes. High earners with annual salaries above €177,450 would gain expanded dissolution rights under dismissal law.
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EU AI Act Adds Urgency
The national reforms are not the only challenge. The EU AI Act has required works councils to demonstrate AI competency since February 2025, with additional obligations arriving in August. Industry experts project that a substantial portion of core workplace skills will shift by 2030 as a result of these regulatory changes.
On 22 July, the Federal Ministry for Family Affairs published the funding guideline "Strengthening Digital Competencies of Low-Skilled Employees in the Work Process" (DiKAp). Companies and training providers can submit project outlines until 30 September.
A new professional handbook released today offers methods for analysing human, technical and organisational factors in AI projects, aiming to produce a socio-technical specification sheet.
Court Cases Highlight Tensions
A hearing at the Ravensburg Labour Court on 28 July underscores the current friction around co-determination. The case involves proceedings to remove Achim Dietrich, chair of the ZF group works council, on allegations of obstruction and misuse of office linked to planned cuts in above-tariff bonuses scheduled for mid-2027.
The Federal Labour Court will deliver key rulings on 5 August, addressing the forwarding of sick-leave notifications by the representative body for severely disabled employees, as well as the conduct of works meetings during working hours.
Training Demand Surges
Specialised training programmes are gaining traction. The SKZ Plastics Centre received renewed certification under the Accreditation and Admission Ordinance for Labour Promotion (AZAV) today, a prerequisite for publicly funded continuing education.
New courses scheduled for September will cover obligations under the NIS-2 Implementation Act, focusing on liability risks and reporting duties in IT security.
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The German Society for Economic Cooperation is offering combined online and in-person seminars starting September for qualification as an electrical skilled person for defined activities, reflecting growing demand for technical expertise.
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