SAP moves to create non-union workers' council

SAP AG has taken steps to form a workers' council comprised of non-union employees in an effort to fend off what the German software vendor views as the harmful influence of unions on its "start-up" company culture.

SAP issued a statement late Tuesday announcing the decision by eight employee representatives, who currently sit on the company's supervisory board, to organize a workers' council election themselves.

"If SAP is to have a workers' council, then it should be a works council that is representative of the heart of the company," Chief Executive Officer Henning Kagermann said in a statement. "We have a duty to maintain our unique company culture and values."

The move follows an attempt by three SAP employees who are members of Germany's IG Metall union to establish a workers' council at the company. The move was denounced by Dietmar Hopp and Hasso Plattner, who are cofounders and major shareholders of SAP, as potentially damaging to its culture, and by 91 percent of SAP's employees who voted against such a move on March 2.

The IG Metall employees turned to a German court to help win support for their efforts. A petition to install an election committee for selecting candidates was lodged with the Mannheim Labor Court, which is scheduled to announce a ruling April 11.

SAP evaluated the legal situation in Germany and concluded that it could not prevent the union employees from setting up an election committee, the company said in a statement.

"SAP took the initiative to facilitate the swift formation of an election committee run by the elected staff employees, rather then waiting for an enforced election committee," analyst company Ovum Ltd. said in a research note Wednesday.

"Since the employees vote in the members of the workers' council, and as the vast majority of them are not in favor of trade union interference, they stand a good chance of keeping this unique culture intact," Ovum said.

SAP is the largest company in Germany to be without a workers' council. Earlier attempts to establish such a representative body have failed, lacking majority support from employees.

Currently, SAP employees are represented by the eight employee representatives elected to the company's supervisory board. They represent SAP's worldwide workforce of nearly 36,000 people.

Following IG Metall's attempts to get a foot in the door at SAP, Hopp warned last month that SAP could be forced to relocate its German headquarters if the union should have a say at the software vendor.

The Germany's Workers' Council Constitution Act, which supports the establishment of an employee representation body, was established at a time when "globalization was either an unknown concept or regarded predominately as a derogative term," Plattner, who is also chairman of the supervisory board at SAP, wrote in an internal e-mail circulated to employees last week. In some areas, SAP has aligned itself to the Act, "but there are some areas that simply do not fit a global high-tech company with more than 80 percent of its employees being college graduates," he said.

In his e-mail, Plattner praised SAP's company culture, noting that it has allowed conflicts of any type to be discussed and solved "during the late nights, on weekends, over beer and on the soccer field."