do we have employee participation or a works council arranged

Employee involvement: no works council needed to answer

This question is not about whether you are required to establish a works council — that is governed by the Works Council Act, not the questionnaire you are now completing. The question in a sustainability questionnaire concerns something broader: whether staff have some form of input, consultation or representation in decisions that affect them. This could be a works council, but also staff representation, a formal consultation structure with a trade union, or simply a structured work meeting in which staff matters are discussed. The answer "no, no employee involvement" is therefore less readily given than it might seem, especially in a smaller company.

If you have documented nothing — no works council, no staff representation, no formal consultation arrangement — then "no" or "not applicable" is the honest answer, and that is not a problem: in smaller enterprises, that is the practice. If you are unsure whether your informal consultation arrangement counts, it is better to choose "to be determined" than an overly firm "yes". This question often appears in the same section as whether the staff is covered by a collective labour agreement, and the two are frequently confused — a collective agreement is not employee involvement, even if a collective agreement sometimes also regulates consultation rights.

Where this comes from: the VSME base module

The VSME standard of EFRAG includes employment conditions and personnel policy in the basic module, and employee involvement falls under this as part of the social information that a smaller enterprise can report; the underlying CSRD directive (2022/2464) is the EU rule that has set this supply chain reporting in motion, even though you as a supplier do not yourself prepare a CSRD report. If you lack certainty on this, this question belongs in the same category as the policy on health and safety at work: something to check internally first before you complete the supply chain file.