Employee co-determination on the supervisory board

Public limited companies, limited liability companies, partnerships limited by shares, mutual insurance associations and cooperatives with generally more than 500 employees are required by the Third-Party Participation Act to fill one-third of their supervisory boards with employee representatives.

If more than 2,000 employees are employed, the Co-Determination Act applies. In this case, a supervisory board composed of equal numbers of employee and shareholder representatives must be formed.

The Third-Party Participation Act provides for the possibility of attributing employees of companies belonging to a group to the parent company of the group. Unlike under the Co-Determination Act, however, the existence of a group structure alone is not sufficient for this. Rather, it is necessary for a control agreement to exist between the parent company of the group and the subsidiary, or for a case of integration to exist.

The Berlin Court of Appeal (“Kammergericht”, judgment of 17 June 2025 – 14 W 2/25) has now clarified once again that a purely de facto group is not sufficient for the attribution of employees. The legal provision is not based on an editorial error. If several group companies operate a joint venture, this alone is also not sufficient for the attribution of employees. Without the attribution of employees, each group company is considered separately with regard to exceeding the thresholds.

However, if the threshold of 2,000 employees is exceeded in total and the Co-Determination Act therefore applies, a group structure is generally sufficient for attribution. A control agreement is then no longer necessary.

Summary of the key facts

• A company may be subject to one-third parity co-determination if it has more than 500 employees
• Employees of subsidiaries may also be taken into account when determining the number of employees
• However, this requires a control agreement or integration; a de facto group is not sufficient