According to theoretical arguments and previous empirical studies, works councils reduce personnel turnover. This result is confirmed by an empirical examination of the NIFA-Panel containing information on the production area of German mechanical engineering plants. Futhermore the effects of the introduction or closure of a works council are considered for the first time. The same is true for different types of works councils. In particular, cooperative relations between management and works council foster a lower personnel turnover. Thus, this lowered turnover has to be in the common interest of employees and employers.