Employee participation in company management and the economy

Ramón Górriz Vitalla

President of the Fundación 1º de Mayo

Since the beginning of the labour movement, workers have been committed to challenging the control of power in companies and making progress in participating in managing the production process in workplaces.

The struggle for trade union participation in the management of the economy and the workplaces is an indispensable trade union option.

The dispute over the organisation of work and production, the right to choose the site where the new factory will be set up, the industrial project, the professional classification, the type of products to be manufactured, the role of supervisors and their choice, the volume of employment, the distribution of working time, health all these demands lead to one and only one conclusion: labour does not accept the logic of capital, which is the logic of profit. Workers try to organise work based on other principles based on dignity and solidarity. And this demand for participation also occurs in public employment. The trade union deals with the organisation and functioning of public administrations, and therefore with employment and working conditions, and their effects on the quality of the various public services.

The achievement of trade union participation is a trade union achievement, provided that it is clear that it is not the last and definitive one, that the rights of information and consultation, of participation, must serve to take part in the strategic decisions of companies, to gain supremacy, to increase trade union legitimacy and in this sense, participation is nothing more than a commitment that depends permanently on the correlation of forces.

The participation of workers in company boards of directors has been a step forward, with some positive practices and some less so, but it also has its limits.

Factory councils came into being in the early 1950s in Germany as bodies created by the state to reduce council democracy. Since their creation they have had an ambiguous character: on the one hand, they are bodies for the collective representation of workers’ interests, on the other hand, they are committed to the “common good” of company and workers and should contribute to social peace in the workplace. The conflict between capital and labour is eclipsed.

From a trade union perspective, the law meant the marginalisation of trade unions in companies, the reduction of workers’ representation in supervisory boards, abandoning the previous parity model, and excluding the public sector from normalised labour relations with the right to strike and collective bargaining.

The right to strike was severely restricted as an exclusive right of trade unions for economic demands. During the term of the collective agreement, the obligation of labour peace applies.

It is sometimes said that the German industrial relations system is the model for a socially regulated market economy.

In my view, nothing could be further from the truth. The German co-determination law of 1976 did not satisfy the trade unions because of employers and conservative forces’ concessions.

Even so, German works councils have rights of information on any company decision, rights of consultation on work organisation, rights of co-determination (the employer cannot act without the council’s consent) on working time, wage structure, health and safety and collective redundancy plans, which, if used properly, are levers for advancing workers’ organisation in the trade unions.

Besides, the works council, which appoints and dismisses the board of directors and supervises the company’s management, has a parity composition. However, contrary to trade union criteria, the law reserves posts for technicians and managers. The chairman of the supervisory board is elected by the shareholders’ representatives and has a casting vote in a tie.

It is worth highlighting the difference between the German productive fabric and the productive Spanish fabric.

The German industrial relations model recognises labour representation on the supervisory board in companies with more than 2,000 employees, which implies a significant drawback to transferring this framework of relations beyond large companies.

There is no doubt that this trade union participation has contributed to changing authoritarian models of human resources management for more participatory and transparent ones, based on a new culture of dialogue and negotiation, while also reinforcing the legitimacy and effectiveness of trade union intervention, provided that the “moral” identification of workers’ representatives with the interests of companies has been avoided.

The European directive 2001/86/EC was an essential step in regulating trade union participation in companies. However, its translation into national regulations and its subsequent application have had serious shortcomings, as has occurred in Spain with Law 31/2006.

Today in Spain, the current regulatory framework only recognises information rights for collective bargaining in the company. The only regulatory basis for the right to information linked to collective bargaining beyond the company is found in Art. 7.2a of Recommendation 163 of the International Labour Organisation (ILO).

For participation to be a real tool for increasing the correlation of forces in the workplace, it is important to analyse the concepts of collaboration, co-determination and co-determination, and to see whether their meaning does not hide more than a tool for developing the corporatism of competitiveness and is an instrument for promoting flexibility and efficiency with the initiative of the workers.

There is a big difference between co-determination as it is enshrined in German law and a genuine trade union participation. The trade union is not an integral part of the way the system works. The integration of the trade union into the system may necessarily imply the degeneration of the organisation’s function for the defence of workers’ interests or its conversion into an instrument of conciliation of interests. Trade union representatives on participation commissions, boards of directors and supervisory committees cannot be involved in job destruction measures in the interests of company rationalisation.

Trade union participation in the management of the company, in each case, must assess whether its action serves to legitimise and strengthen trade union intervention and membership or, on the contrary, accompanies the directives of capital.

In my opinion, trade union participation must be achieved at all strategic levels (industrial plans, investments, results, work organisation, relocations, the volume of employment, etc.).

Collective bargaining in the sector, in the workplace and the territory, is the way to extend rights.

I end by paraphrasing a reflection by Umberto Romagnoli, an Italian scholar, a connoisseur of the trade union movement and an intellectual who has enriched legal and trade union culture:

“The world of work is an uncomfortable path; it endures the terrible contradiction of having to speak of democracy in spaces such as the factory, the workplace or the workshop, which constitute impassable cells of authoritarianism that, at best, have been softened in such a way as to have whitened the face of corporate power.

The enterprise is at best republican, but it can never be democratic because while the government-opposition dialectic presupposes alternation, in the workplace, the reversal of roles is inadmissible”.

Just as it is absurd to think that democracy can eliminate power relations in the political sphere, it is also ridiculous to believe that democracy in business can prevent power relations and the emergence of elites, hierarchies and exclusions in decision-making.