How Microsoft brought works councils on board with AI

When a company introduces AI tools, employee representatives often have to be consulted. In Germany they are called works councils, and they have co-determination rights in certain areas. Microsoft Digital, the company's own IT department, has described how it works with them. Microsoft has more than 200,000 employees globally.

Partner, not obstacle

According to Microsoft Digital's own account, works councils are seen as strategic partners in the shift to AI and not as an obstacle. According to Microsoft Digital, the German "tolerance phase" for Copilot, Microsoft's AI assistant, ended in the spring of 2025. According to Microsoft Digital, Copilot is now approved for use by Microsoft employees worldwide. This information has not been checked against the specific article.

A quote from Microsoft Digital reads: "We see the works councils as a real partner in the company's shift to AI."

Irina Chemerys, regional experience lead at Microsoft Digital, is said in Microsoft's article to have stated: "Trust matters more than anything else when you want to collaborate effectively with works councils, especially when it comes to AI."

Irina Chemerys, regional experience lead at Microsoft Digital, stresses the pace in the article: "With the speed at which AI is developing today, we can't sit and wait. We need our internal users, including the members of our works councils, to be forward-looking early adopters."

Microsoft's playbook

Microsoft Digital's playbook contains four main points and also recommends viewing the councils as strategic partners, designing scalable governance and communicating proactively:

- Involve works councils early and often. - Build trust through transparency and structured approval processes. - Simplify and consolidate communication globally. - Balance innovation and employee protection through tolerance phases.

The three additional recommendations are:

- View the councils as strategic partners. - Design governance that can scale with low-code and agent tools. - Communicate proactively ahead of rapid AI changes.

This is the company's own description, and the findings have not been verified by independent parties.

What does German law say?

The law firm Orrick wrote in September 2024 that co-determination under Section 87 of the German Betriebsverfassungsgesetz can be triggered when a technical system can objectively record employees' behavior and performance. This could apply, for example, to AI installed on company devices.

In an initial ruling, the labor court in Hamburg found that an employer had not violated co-determination rights by encouraging voluntary use of ChatGPT. The tool was not installed on company devices, the employees used private accounts, and there was an existing agreement on browser use. The ruling cannot be seen as a general legal position, and the legal situation may have changed since 2024.

Orrick recommends that employers inform the works council early and consult it before AI systems are introduced. Companies may also need to set aside a budget for external experts if internal IT expertise is lacking, and the council must agree to this.