Trade Unions and Works Councils in Britain and the Continent

I’ve posted up a number of pieces describing and arguing for a system of works councils in Britain similar to those in Germany, Austria and Sweden, which give workers in companies representation on the boardroom and at other levels, including the factory floor. I found a description of them and how they work in Colin Crouch’s Trade Unions: The Logic of Collective Action, published by Fontana in 1982. Crouch’s book is a sociological study of trade unions, which amongst other issues examines the question of when and how trade unionists decide to go on strike and the entire decision-making process around industrial disputes, trade union membership – why some people join unions while others don’t, government policies towards the unions and so on. Of workers’ councils, he writes

But some industrial relations take a different form. Instead of confronting each other ‘across the table’ with demands and threats of sanctions, seeing their interests in conflict, managers and union representatives may tackle what they see as common problems, with a mutual interest at stake. The belief that such an arrangement can provide either a supplement or an alternative to bargaining has often led various social actors to establish joint committees, works councils and other devices for consultation and worker participation which will embody the idea. After the First world War a committee of the House of Commons chaired by the Speaker, Mr Whitley, proposed the establishment of consultative committees on these lines throughout Britain in order to reduce the prevailing intense conflict between employers and workers. The plan collapsed as, during the depression, most employers decided that they need not bother with such devices since high unemployment was doing enough to make their workers forget conflict. However, the idea persisted within the public services, where ‘Whitley councils’ still exist today, though they have become normal collective-bargaining channels. A similar initiative followed the Second World War; committees for ‘joint consultation’ were established in many industries and it was generally agreed that this provided a second limb of British industrial relations, equal in importance to, but quite distinct from collective bargaining. This gradually faded in importance as shop stewards in an increasing range of firms and industries extended collective bargaining to cover many of the issues supposed to be dealt with by joint consultation, though there has been some evidence of a revival during the current recession, signification as shop stewards’ movements have been weakened (Department of Employment Gazette, 1981).

Elaborate consultation schemes involving representatives of management of employees, usually called works councils, exist in some British firms, most noticeably in ICI Ltd, but in most Western European countries these exist as a legal requirement in factories over a certain size, and employers are required to consult the workforce within this forum on certain prescribed issues. More ambitious schemes for involving workers’ representatives in non-conflictual participation are those involving worker-representation on company boards, such as was proposed for Britain, though without practical effect, in the report of the Bullock Committee (Bullock, 1977). In West Germany such a scheme has existed since the 1950s, being strengthened in 1976: worker-representatives comprise up to 50 per cent of the supervisory boards of all companies over a certain size. In that country and in Austria there are also work councils (Betreibsrate) which differ from those found elsewhere in Europe in that they comprise worker-representatives alone, not workers and managers; these councils have some signification powers of veto over aspects of management policy, and rights to consultation the receipt of information over many others.

In each case these participative or consultative forums, to which I shall refer generally as concertation, exist alongside normal collective bargaining. While the latter deals with wages and conditions and is assumed to involve conflict, the former tackle various issues of company policy, especially those affecting employment and workers’ welfare, and are supposed to be free of conflict.

It is an interesting issue of debate whether concertation constitutes a further step along the road towards even more institutionalization of conflict. In terms of Dahrendorf’s theory, I think one has to answer no; rather than institutionalizing conflict, these devices try to exclude it, at least from those areas which are seen ripe for consultation or participation rather than bargaining. Worker-representatives with a works council are not empowered to back their demands by strike threats; German Betriebsrate are required by law to co-operate with management and are not permitted to call strikes. In Dahrendorf’s study of German (1965), which is largely a criticism of that country for its continued fear of conflict, he used the preference for Mitbestimmung (that is, co-determination, the principle embodied in both Betriebsrate and worker membership of supervisory boards) as evidence of devices for conflict avoidance rather than institutionalization.
(Pp. 109-111).

He provides a few further details of the responsibilities of these councils on page 150, where he writes

A more formalized sharing in control is found in German industry. There, works councils consisting entirely of worker-representatives have a legal veto over several areas of plant- and company-level decision-making (such as overtime working, dismissals, certain working conditions) and a right to share control with management over other issues (such as redundancies and future employment policy). Further, in larger German companies workers have up to one half representation on the supervisory board of the company, with the same rights as other directors to information and decision-making. On a different model again, it is possible for workers to own and control firms themselves, without either a capitalist entrepreneur or the state intervening. This form of ownership is called producers’ co-operatives, and is found in many different countries, though usually only as a very small component of the total pattern of employment. (P. 150).

So instead of opting for confrontation, the Germans chose to include workers in factory management, though hedged about with certain legal restrictions against calling strike action. My guess is that such councils have probably played a part in the ‘social peace’ that has contributed to the German wirtschaftswunder. It also contrasts very strongly with the Thatcherite desire to remove as many rights as possible from workers, and grind them down as far as possible in order to have a compliant, and fearful workforce.

And I wonder how far the existence of such councils and similar power-sharing organisations and arrangements across Europe have stoked the fears about Europe underlying the Brexit campaign. Despite Farage’s rhetoric about immigration, one of the major unspoken cause of Tory hostility to the EU is the Social Charter. This grants European workers some basic rights. One Tory politico, who appeared on Wogan back in the 1980s openly stated that he liked the EU when it was the ‘Common Market’. This was a good thing. But the drafting of the Social Charter was a Bad Thing that should be got rid of. UKIP and the Tories hope that by leaving Europe, they can force an already prostrate working class to accept further degradation and impoverishment that would be unacceptable in the European Union, in order to make us a sweatshop economy like those in the Developing World.

Tags: 'Trade Unions: The Logic of Collective Action', Bullock Committee, Co-operatives, Colin Crouch, Developing World, First World War, ICI, Immigration, Management, Margaret Thatcher, Mitbestimmung, Nigel Farage, Shop Stewards, Social Charter, Strikes, Terry Wogan, Whitley, Whitley Councils, Worker's Councils, Working Class