Four institutional settings

Closing a plant is a Betriebsänderung (operational change). In firms above 20 employees the employer must inform and consult the works council and negotiate a balance of interests and a social plan (Sozialplan) that compensates affected workers — the social plan is enforceable. Individual dismissals in firms with more than 10 employees need social justification under the Protection Against Dismissal Act; firms with 10 or fewer regular employees are exempt.

The plant-level works council (Betriebsrat). Germany runs a dual system: industry unions bargain sector-wide wages, while works councils co-determine decisions at the plant.

Strong: works-council co-determination plus an enforceable social plan, and unfair-dismissal claims to the labour courts. Weaker where no works council exists or the firm is below threshold.

At-will employment is the default in nearly every state: an employer may dismiss for any lawful reason, without just cause or notice. For mass layoffs and plant closings, the WARN Act requires covered employers (100+ employees) to give 60 days’ advance written notice (triggered by 50+ affected workers at a single site).

No statutory consultation body. WARN requires notice — to affected workers or their union representative, plus state and local officials — not negotiation.

Limited. Union membership was 10.0% in 2025 (5.9% in the private sector), so most workers rely on anti-discrimination and anti-retaliation statutes and the WARN back-pay remedy (up to 60 days).

Economic redundancy is permitted on defined grounds (Labour Contract Law, Art. 41). Cutting 20+ employees or 10%+ of staff requires explaining the plan to the trade union or all employees 30 days in advance and reporting it to the labour administration. Statutory severance (“economic compensation”) is one month’s pay per year of service.

The enterprise trade union (or all employees where none exists), under the All-China Federation of Trade Unions. The Trade Union Law (amended 2021) tasks unions with representing and safeguarding workers’ rights through equal consultation and collective contracts.

Statutory rights are strong on paper — severance, overtime caps, labour-dispute arbitration. Recourse runs through labour-dispute arbitration and the courts; the union is the consultation counterpart rather than an independent, strike-backed bargainer.

Dismissal without just cause is allowed but costly. Throughout employment, the employer deposits 8% of monthly salary into a mandatory savings account (FGTS) held in the worker’s name. On dismissal without cause, the employer must also pay a 40% penalty on the entire accumulated FGTS balance — so a worker who has been there ten years costs far more to dismiss than one who has been there one year. The longer the tenure, the larger the exit bill. Collective dismissals are also expected to involve the relevant union (following the 2017 labour reform and a 2022 Supreme Court ruling).

Sectoral unions and collective bargaining, rather than a plant-level works council. Mass dismissals are expected to be negotiated with the relevant union.

In Brazil, collective agreements have historically covered whole sectors by law — not just union members — so bargaining coverage (~70%, 2014) runs far ahead of union membership (~13%, 2019). Recourse runs through specialised labour courts. Pay-transparency reporting applies to firms with 100+ employees (Lei 14.611/2023).