Codetermination

Codetermination (also "copartnership" or "worker participation") is the practice of workers of an enterprise having the right to vote for representatives on the board of directors in a company. It also refers to staff have binding rights in work councils on issues in their workplace. The practice of board level representation is widespread in developed democracies. The first laws requiring worker voting rights include the Oxford University Act 1854 and the Port of London Act 1908 in the United Kingdom, a voluntary Act on Manufacturing Companies of 1919 in Massachusetts in the United States, and the Supervisory Board Act 1922 (Aufsichtsratgesetz 1922) in Germany, which codified collective agreement from 1918. Most countries with codetermination laws have single-tier board of directors in their corporate law (such as Sweden, France or the Netherlands), while a number in central Europe (particularly Germany and Austria) have two-tier boards. Most laws apply to companies over a certain size, from Denmark at 20 employees, to Germany over 500 (for one-third representation) and 2000 (for just under one half), to France over 5000 employees.

In economies with codetermination, workers in large companies may form special bodies known as works councils. In smaller companies they may elect worker representatives who act as intermediaries in exercising the workers rights of being informed or consulted on decisions concerning employee status and rights. They also elect or select worker representatives in managerial and supervisory organs of companies.

In codetermination systems the employees are given seats on a board of directors in one-tier management systems, or seats in a supervisory board and sometimes management board in two-tier management systems.

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