Klaus Volkert, who headed the council for 15 years, faces charges that include 48 counts of inciting breach of trust.
Also on trial at the state court in Braunschweig, near VW's Wolfsburg headquarters, is former personnel executive Klaus-Joachim Gebauer, who faces 40 counts of breach of trust as well as charges of incitement to fraud.
Volkert is a key figure in an investigation revolving around whether VW employee representatives received illegal privileges, including lavish foreign trips paid for by the company. The probe started after Volkswagen alerted prosecutors to possible wrongdoing.
He testified that he had arranged a lucrative contract for his former girlfriend but denied any impropriety.
Gebauer, meanwhile, stressed that he always acted on behalf of superiors and management, but admitted that the indictment against him was "largely accurate."
In the first trial in the scandal, former VW personnel chief Peter Hartz admitted in January having awarded "special bonuses" worth some Ђ1.9 million (US$2.8 million) in VW funds to Volkert in an effort to curry favor.
Prosecutors allege that the lover of Volkert received another Ђ390,000 (US$572,000) in company money; and that company officials spent Ђ290,000 (US$425,000) on non-work-related expenses for Volkert and his lover.
Gebauer, who was responsible for employee council expenses, is accused of clearing Ђ1.26 million (US$1.8 million) in costs for non-work trips and other privileges.
The case hints at a seamy side to the close partnership between Volkswagen and its labor representatives, who under German law sit on the board of directors and must be consulted on major new initiatives.
Hartz was given a two-year suspended prison sentence and fined Ђ576,000 (US$844,000) for his role.
A verdict in the trial of Volkert and Gebauer is expected in late January.