Lack of Respect for Unions by New Kaufhof Owner Could Lead to Strikes, Renowned Labour Lawyer Warns

BONN, Germany, June 2, 2015 /PRNewswire/ --

On the eve of a trans-Atlantic bidding war for Germany's Kaufhof department store chain, a leading labour lawyer has warned that strikes and legal problems await any new owner that doesn't fully respect the role of trade unions in German industry.

Dr Gregor Thüsing, Professor of Law at the University of Bonn, said North American companies in particular must show a deeper understanding of German unions and the role of their works councils, which have board level representation in German firms.

"Every U.S. and Canadian enterprise has to be aware of German union labour and works councils. They (the owners) cannot not simply do what they want," Prof. Thüsing, who is also a member of the Regional Executive Committee of the German-American Lawyers' Association, said.

"If the company does not respect this relationship it may not just lead to strikes, but legal issues if the contract with the union is breached".

Prof. Thüsing singled out potential North American companies that may be lining up to bid for the Kaufhof chain.

Austrian real estate and retail company Signa, the owners of German department store Karstadt, is named as one of the bidders and plans to merge the two chains into a new department store group called Deutsche Warenhaus.

Canada's Hudson's Bay, meantime, was reported Friday to be finalising its bid.

Comparing the rivals, Prof. Thüsing said: "Karstadt has been really successful in getting the unions onside. They changed the union attitude and kept their promise."

"This is knowledge others don't have."

Should the Signa bid prove successful, he added, they would be "dealing with the same union at Kaufhof."

But asked about the Canadian retail giant's imminent attempt to enter German retail he responded: "How familiar is Hudson's Bay with Germany?"

Prof. Thüsing, who has appeared as an industrial relations expert before the German Parliament more than 20 times, said the complexities of German industrial relations to outsiders are matched only by the vagaries of German retail consumers, which have also defied previous foreign takeovers. Both, U.S.-based Walmart and Britain's Marks and Spencer are high-profile casualties of failed attempts to buy their way into German retail.

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SOURCE Betriebs-Berater Germany