Works councils impact severance pay after dismissals, favoring plant closings.
Works councils in Germany impact severance payments differently depending on the reason for dismissal. When employees are laid off due to plant closings, works councils are linked to higher severance payments. However, when individuals are individually laid off, works councils are associated with lower severance payments. Additionally, higher chances of finding a new job decrease the amount of severance pay received. The study also looked at gender and job type differences in severance payments.