What's the difference between a works council, trade union, and employee trustee?

Employee representatives are more than just a formality required by the Labor Code; they are vital for ensuring dialogue between employees and employers, promoting staff involvement in decision-making, and promptly resolving labor relations issues. Rasa Ruibė, a senior specialist at the State Labor Inspectorate (VDI) Labor Law Department, emphasizes that well-functioning social partnerships often prevent conflicts and labor disputes.

Companies with an average of 20 or more employees are mandated to establish a works council. This requirement is waived if a trade union at the employer level unites more than one-third of all employees, in which case the union assumes the works council's functions. For businesses with fewer than 20 employees, an employee trustee is elected for a three-year term, possessing essentially the same rights, duties, and guarantees as a works council.

While both works councils and trade unions represent employee interests, their roles differ. Trade unions primarily defend the labor, economic, and social interests of their members, engaging in collective bargaining and concluding collective agreements. Works councils, on the other hand, represent all employees and focus on information, consultation, and procedures for employee participation in employer decisions. A key function for all employee representatives is ensuring the right to be informed and consulted.

Employers must provide works councils with timely, free information on matters affecting employees' labor, social, and economic interests. During consultations, employers should aim for dialogue and mutually agreeable solutions. Upon request, employers must also present information annually on the company's economic situation, labor relations, potential employment changes, work time organization, wage adjustments, and other data specified in the Labor Code. These information and consultation procedures are also required before decisions significantly impacting employees, such as mass layoffs or business transfers, are made. If no works council exists, these procedures are conducted with the relevant trade union.

Ruibė stresses that informing and consulting go beyond mere information delivery. "The goal of consultations is to create real opportunities for employee representatives to voice their opinions before decisions affecting employees' working conditions are made," she notes. "Such dialogue helps in making more informed decisions and strengthens trust within the organization." Additionally, amendments to the Labor Code strengthening collective labor relations will take effect on November 1, 2026, allowing for agreements between employers and works councils.