The Fabian Society’s Recommendations for British Industrial Democracy

I’ve put up a number of pieces recently advocating various forms of industrial democracy, from the German and Austrian works councils, to the Guild Socialist version in Britain. The Labour Party was also considering introducing industrial democracy into British firms in the 1970s. This would have been extremely radical, and made up to about 50 per cent of the members of the boards of directors workers elected through the trade unions. The issue was further discussed in the Fabian Society’s pamphlet, Workers in the Boardroom: Fabian Evidence to the Bullock Committee on Industrial Democracy. In ‘Appendix 1: Conclusions of Fabian Tract “Working Power”‘, the Society laid out its recommendations for its introduction into British industry.

The Appendix states

There is now a strong case for more industrial democracy all the way up from the shop floor to the boardroom. Evidence of substantial support amongst employees and their representatives for such a development suggests that new democratic structures would have firm foundations. It is essential, however, if democratic change is to be more than a façade, that it must be backed by trade union machinery and also build on existing collective bargaining systems.

Though there are problems to be overcome in the introduction of employee participation in management, some of the fears about trade union independence lose their validity if, as has been suggested, such participation is seen as an extension of the principles of collective bargaining (if not its actual form) to areas and levels which are now the subject of managerial prerogative. What is proposed is, in face, a system of dual power (employees and management) throughout industry, including the private sector.

Labour’s strategy to promote industrial democracy should be based on the following principles:

1. A single channel of representation.

2. Strengthening, extending and building on collective bargaining.

3. A multi-dimensional approach, capable of affecting managerial decision making at all levels from shop floor to boardroom.

4. Advancing democracy in the private sector as much as the public sector.

A programme to increase industrial democracy should include the following elements.

1. The Increase of trade union membership by establishing the right to join a union, by enabling trade unions, in difficulty over recognition, to use the ACAS and, in the last resort, unilateral arbitration facilities through the court, by reforming wages councils, and by much more vigorous trade union recruitment.

2. The extension of shop floor bargaining giving shop floor representatives minimum facilities as of right, by encouraging the codification of agreements, by widening their scope to include manpower planning, safety and work design (backed by government supported experiments) and by the statutory provision of information as of right.

3. The development of company and group bargaining to fill the missing gap between shop floor bargaining and employee representation on boards.

4. The introduction of employee representatives on boards by, as a first priority, introducing 50 per cent trade union representation on nationalised industry boards and, in the private sector, by setting up a two tier board structure, which a supreme supervisory board on which 50 per cent are trade union representatives, and by changing company obligations to take account of employee interests. In the private sector, employees should be given a choice as whether they want representation on the boards or not-in organised firms through trade union machinery and in non-organised firms, under ACAS supervision. The case for an independent chairman, elected by both sides of the supervisory board, ought to be considered.

5 The recognition of trade union responsibility for a major recruitment and educational effort, and also for a close watch against arbitrary exclusion and improper use of trade union machinery. Case for an independent tribunal as final court of appeal for aggrieved individuals to be considered.

If all, or even some, of the proposals suggested are implemented, they would result in a dramatic improvement in industrial democracy. We accept that they fall short of workers’ self-management. However, they are not a barrier to the achievement of such a goal. On the contrary, they represent an important step towards its. We should always remember democratic change is a movement towards rather than a final arrival.

These are certainly radical proposals, and something like 50 per cent trade union representation may be too much for some people. but we certainly need a system like this, and improved trade union power, to protect British working people from the utter poverty and precarity now imposed by employers through zero hours contracts and so on.

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