Private Eye on the Connections between the Independent Group, Progress Centre and New Labour

This fortnight’s Private Eye for 8th -21st March 2019 has an article on the connections between Chuka Umunna’s Independent Group, the Blairite think tank Progress Centre and Gordon Brown and Peter Mandelson. It suggests that Paul Myners, who sits on the think tank’s advisory board, could be funding it. The article on page 7 runs

MYNERS STRIKE

AS WELL as launching “The Independent Group” (TIG) of MPs, Chuka Umunna also chairs a think-tank called Progressive Centre UK. Last August this “next generation ideas lab” gave him a £65,000-a-year (for 12 hours a month) chairing its advisory board.

As TIG launched, the Progressive Centre paid for polling that “shows real appetite for new party” – which was handy for TIG, as its PR people admitted it did not yet have the cash to fund its own polling. The Progressive Centre also published work by academic Steven Fielding arguing that “despite what many believe, the future of the Independent Group might be very bright indeed”.

The most heavyweight member of the Progressive Centre’s advisory board is Lord (Paul) Myners, Gordon Brown’s City minister from 2008 to 2010, and deeply involved in the bank bailouts during the financial crisis. Indeed, the Commons treasury committee criticised Myners over his “City background and naivety” for allowing the disgraced Fred Goodwin to escape from the bailed-out RBS with an £8m pension top-up.

Myners, who also chairs PR firm Edelman and is vice-chair of Peter Mandelson’s lobbying firm Global Counsel, gave Umunna £9,000 for office costs in 2016-17. This was when Umunna was believed to be raising funds for a leadership bid, which was called off when Jeremy Corbyn failed to crash adn burn in the 2017 election.

Could Myers be funding the Progressive Centre itself? The think-tank doesn’t say who funds it – but if he is backing it, it could at least get his name right. On its “People” page its website lists him as “Peter Myners”.

The Progress Centre sounds like a standard Blairite political faction. Myners is a banker and the head of a PR firm, and New Labour was notorious for its insistence on a light regulatory touch for the financial sector, as well as its connections to industry and banking. It was also notorious for PR and spin, instead of real policies. And like the Blairite faction in the Labour party, it’s trying to sound progressive and forward-thinking while in fact it’s just more of the same, shop-worn Thatcherism.

And the Progress Centre and the Independent Group also have another feature in common: they’re heading their financial backers.

As for the Independent Group’s prospects for the future, I think Fielding and his pollsters are being wildly optimistic. The mood of the public is moving left. Labour’s policies are massively popular with the public, unlike those of the Tories and Blairites, who aren’t offering anything except more privatisation and austerity.

As they are now, both the Progress Centre and the Independent Group are also a positive threat to democracy. They won’t reveal who their backers are, but following standard Blairite practice, it’s more than likely that they represent those backers’ interests, rather than that of the British public. They represent more Blairite and Conservative corporatism. And as six out of the eight Labour founders were members of Labour Friends of Israel, including Joan Ryan and her connections with Masot and the Israeli embassy, it’s likely that they’re also receiving money from them. And so they’ll also represent Israeli interests, rather than those of the constituents, who elected them.

Shirley Williams on the Industrial Democracy

Before she left with other members of the Labour right to form the SDP, it seems that Shirley Williams did have some genuinely interesting views on socialist issues some would associated more with the Labour left. Like industrial democracy.

The ’70s were the decade of the Bullock Report, which recommended putting workers on the management boards of Britain’s major industries, and this was still an issue a couple of years later. In her 1981 book, Politics Is For People, Williams discusses some of the problems of industrial democracy. She acknowledges that the trade unions were divided on the issue and management positively feared it. She also recognized that there were problems about how it could be achieved, given the complexities of the representation of the different trade unions in British workplaces on management boards. But she supported its introduction in Britain’s businesses, and suggested that it would be made easier through the information and computer technology that was then also appearing. She wrote

Through the need for participation in the introduction of new technologies, management and unions are having to establish consultative machinery where none exists. Those firms who want to move ahead quickly will achieve trade union cooperation if they offer participation in exchange; otherwise they will face resistance and obstruction. The new technologies offer an opportunity to widen industrial democracy at the plant and office level, where it matters most. Whether joint consultation at that level leads on to participation in the boardroom is a matter that can be left to each company and its unions to decide.

More difficult is the question of how the workforce in each firm should be represented. In the Cabinet committee which drew up the 1979 White Paper on industrial democracy, there were differing views on whether workers should elect their representatives to plant and company committees or whether they should be nominated by the trade unions (the ‘single channel’). The issue is far from simple. In Sweden and the Federal Republic of Germany most firms have only one trade union,, so there is no need to secure agreement among them before candidates for election can be put forward. In Britain, as many as twenty unions may represent the employees of large firms, and four or five unions in a firm are commonplace. In these circumstances, a straightforward election would be likely to lead all the representatives coming from the biggest unions, the rest being unrepresented.

But the nomination of a single list by agreement between the unions in a plant or firm offends the principle of democratic choice. The workers may object to one or more of the people selected to represent them, yet they would have no power to reject him or her other than by the rejecting the whole slate and jeopardizing participation itself. One way out of this dilemma would be for the unions in a multi-union plant to agree on constituencies representing each union on a weighted basis, with an election based on a secret ballot between candidates who were members of the appropriate union, some of whom might carry official endorsement.

Industrial democracy has not attracted consistent support from most trade unions, and the trade unions themselves are profoundly divided on the form it should take, many preferring a consultative structure to one statutory participation on the lines proposed in the Bullock Report. If the unions are divided, however, much of management feels threatened by the idea of industrial democracy. So for years there has been a stalemate on the subject, and government intervenes at their peril. Yet, if only beca8use there has to be effective consultation on technological change, the position cannot be left where it is. Indeed, in my view industrial democracy could usher in much better relations in industry, greater cooperation in improving the productivity of all factors of production and a better understanding of the need for voluntary incomes and prices policies to combat inflation. Many of Britain’s economic problems are rooted in institutional rigidities or, as in this case, institution conservatism. This one reform could bring in its wake a long-delayed rejuvenation. We should not be daunted by the difficulties, but rather invigorated by the possibilities.

Shirley Williams, Politics Is For People (Harmondsworth: Penguin 1981) 139-40.

Some of the issues Williams talks about here are very dated. Inflation is no longer the critical issue it was in the ’70s. It’s now very low, and this has caused problems in its turn. Profits and management pay have risen immensely, but this is not reflected in the salaries of ordinary workers. Quite the opposite. Their pay is still below inflation, and the result is that many of the quarter of a million people using food banks are actually in work. Mike has also today posted up a piece about how parents are starving themselves in the week because there isn’t enough to feed both them and their children on their wages. And this is not a recent development. Mike has published a number of articles about this over the past few years since the Tories took power under Cameron.

And the new technology to which Williams looked forward also hasn’t been an entirely liberating force. Some businesses instead are using to restrict and spy on their workers. Private Eye in their ‘Street of Shame’ column printed a story about how the weirdo Barclay Twins, who own the Torygraph, tried to fit the motion detectors used in call centres to monitor the movements of staff there to check to see if there hacks were leaving the desks. Other firms are fitting devices to their workers ankles to monitor their movements. And the spectre of Big Brother-style surveillance loomed even larger a month or so ago, when the I reported that a Swedish firm had developed an implantable chip that could be inserted into a firm’s staff.

British workers also don’t have the strong unions they enjoyed in the 1970s, which have left British workers vulnerable to low pay, the removal of employment rights and job insecurity.

However, Williams is right in that industrial democracy offers a genuine opportunity to empower working people, and benefit industry through proper cooperation between workers and management. It’s proper implementation won’t come from Williams and her fellows, who are now part of the Lib Dems, and who seem to have thoroughly forgotten it. It will only from Jeremy Corbyn and the Labour party.

Fabian Pamphlet on the Future of Industrial Democracy : Part 1

The Future of Industrial Democracy, by William McCarthy (London: Fabian Society 1988).

A few days ago I put up a piece about a Fabian Society pamphlet on Workers’ Control in Yugoslavia, by Frederick Singleton and Anthony Topham. This discussed the system of workers’ self-management of industry introduced by Tito in Communist Yugoslavia, based on the idea of Edvard Kardelj and Milovan Djilas, and what lessons could be learnt from it for industrial democracy in Britain.

William McCarthy, the author of the above pamphlet, was a fellow of Nuffield College and lecturer in industrial relations at Oxford University. From 1979 onwards he was the Labour party spokesman on employment in the House of Lords. He was the author of another Fabian pamphlet, Freedom at Work: towards the reform of Tory employment law.

The pamphlet followed the Bullock report advocating the election of workers to the management board, critiquing it and advocating that the system should be extended to firms employing fewer than the thousands of employees that were the subject of reforms suggested by Bullock. The blurb for the pamphlet on the back page runs

The notion of industrial democracy – the involvement of employees in managerial decisions – has been around at least since the time of the Guild Socialists. However, there has been little new thinking on the subject since the Bullock Committee reported in the 1970s. This pamphlet redresses this by re-examining the Bullock proposals and looking at the experience of other European countries.

William McCarthy outlines the three main arguments for industrial democracy:
* it improves business efficiency and performance;
* most workers want a greater say in their work environment;
* a political democracy which is not accompanied by some form of industrial power sharing is incomplete and potentially unstable.

He believes, however, that the emphasis should no longer be on putting “workers in the boardroom.” Instead, he argues that workers ought to be involved below the level of the board, through elected joint councils at both plant and enterprise levels. These councils would have the right to be informed about a wide range of subjects such as on redundancies and closures. Management would also be obliged to provide worker representatives with a full picture of the economic and financial position of the firm.

William McCarthy argues that Bullock’s plan to limit worker directors to unionised firms with over 2,000 workers is out of date. it would exclude over two thirds of the work force and would apply only to a steadily shrinking and increasingly atypical fraction of the total labour force. As the aim should be to cover the widest possible number, he advocates the setting up of the joint councils in all private and public companies, unionised or otherwise, that employ more than 500 workers.

In all cases a majority of the work force would need to vote in favour of a joint council. This vote would be binding on the employer and suitable sanctions would be available to ensure enforcement.

Finally, he believes that this frame of industrial democracy would allow unions an opportunity to challenge their negative and reactionary image and would demonstrate the contribution to better industrial relations and greater economic efficiency which can be made by an alliance between management, workers and unions.

The contents consist of an introduction, with a section of statutory rights, and then the following chapters.

1: The Objectives of Industrial Democracy, with sections on syndicalism, Job Satisfaction and Economic and Social Benefits;

2: Powers and Functions, with sections on information, consultation, areas of joint decision, union objection, and co-determination;

3: Composition and Principles of Representation, with sections on selectivity, the European experience, ideas and legal framework.

Chapter 4: is a summary and conclusion.

The section on Syndicalism gives a brief history of the idea of industrial democracy in Britain from the 17th century Diggers during the British Civil War onwards. It says

The first of these [arguments for industrial democracy – employee rights] is as old as socialism. During the seventeenth century, Winstanley and the Diggers advocated the abolition of landlords and a system of production based on the common ownership of land. During the first half o the 19th century, Marx developed his doctrine that the capitalist system both exploited and “alienated” the industrial workers, subjecting them to the domination of the bourgeoisie who owned the means of production. Under capitalism, said Marx, workers lost all control over the product of their labour and “work became a means to an end, rather than an end to itself” (see Philosophy and Myth in Karl Marx, R. Tucker, Cambridge University Press, 1961). During the latter half of the nineteenth century, Sorel and his followers developed the notion of “revolutionary syndicalism” – a form of socialism under which the workers, rather than the state, would take over the productive resources of industry. Syndicalists were influential in Europe and America in the years before the First World War. They advocated industrial action, rather than the use of the ballot box, as a means of advancing to socialism (see The Wobblies, P. Renshaw, Eyre & Spottiswoode, 1967).

In Britain, syndicalism came to adopt a more constitutionalist form with the formation of the guild socialists. They did not reject the use of parliamentary action, but argued that a political democracy which was not accompanied by some form of industrial power sharing was incomplete and potentially unstable. This was the basic argument of their most distinguished theoretician, G.D.H. Cole. In more recent times a trenchant restatement of this point of view can be found in Carole Pateman’s Participation and Democratic Theory (Cambridge: Cambridge University Press, 1970).

In his earliest writing Cole went as far as to argue that socialism required that that “the workers must election and control their managers”. As he put it “In politics, we do not call democratic a system in which the proletatiat has the right to organise and exercise what pressure it can on an irresponsible body of rulers: we call it a modified aristocracy; and the same name adequately describes a similar industrial structure” (The World of Labour,Bell, 1913).

Subsequently Cole came to feel that continued existence of a private sector, plus the growth of collective bargaining, required some modification of the syndicalist doctrine behind Guild Socialism. By 1957, he was arguing for workers to be given “a partnership status in private firms, “sharing decisions” with the appropriate level of management C The Case for Industrial Partnership, MacMillan, 1957. This is very much the position advanced by Carole Pateman after her critique of more limited theories of democracy-eg those advanced by Schumpeter and others. These “minimalist” democrats took the view that in the context of the modern state, the most one could demand of a democracy was that it should provide a periodic electoral contest between two competing political elites. After reviewing examples of industrial democracy at work in a number of countries Pateman concluded “…it becomes clear that neither the demands for more participation, not the theory of participatory democracy itself, are based, as is so frequently claimed, on dangerous illusions or on an outmoded and unrealistic theoretical foundation. We can still have a modern, viable theory of democracy which retains the notion of participation at its heart.” (op. cit.)

Continued in Part 2, which will cover the sections on the pamphlet ‘Ideas’ and ‘Legal Framework’.

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.

Factory Councils and Workers’ Co-Determination in Austria: Part

I’ve just finished translating a pamphlet I got thirty years ago from the Austrian embassy on the system of factory councils and co-determination there. Like Germany, Austria has a system where much of the work of the trade unions in individual factories is performed by factory councils, rather than shop stewards. The number of members in a council vary according to the size of the factory, and most members of these councils, as a rule, tend to be members of the trade union. These call meetings of the factory staff, and negotiate with the management about pay and conditions, as well as changes to working practices, closures and the like. There’s also a system of Youth Trust Councils, for employees, who are too young to vote for the factory councils. In joint-stock companies, the factory councils may, I think, also nominate some of the members of the supervisory councils, which may appoint up to a third of the members of the board of directors. As with Britain before Maggie started trashing such arrangements, there was also a mediator in the State Economic Commission, which would step in to make an award if no agreement could be reached between the employers and the factory council and trade unions. There was also parity commission, which was the Austrian counterpart to the British Wages and Prices Commission in the 1970s.

This is not an official translation, and I’m sure I’ve made any number of real howlers. It’s also nearly thirty years old, so please don’t take it as a guide to present Austrian employment legislation. I wanted to translate it, as a way of showing one of the forms workers’ control/ management representation has taken, and which could be a model for better industrial relations over here.

Co-Determination in the Workplace

The Constitutional Law on Work

(Vienna: Federal Press Service 1983)

“In the Interest of the Employee and of the Factory…”

The Austrian parliament unanimously passed the Constitutional Law on Work on 14th December 1973, which came into power on 1st July 1974. it is one of the significant sociopolitical laws of the Second Republic, as Austria has been since 1945. With this legislation the regulation of the collective rights of the workers, which were valid up to then, were thoroughly standardised, their present scope broadened and their basic principles improved as well as their details. The law has already been in force for several years. Up to now, the experience has led to further improvements reaching their goal, especially with the recent effort to put in motion reforms of the representation of employees.

Austria can thank the good cooperation of the employees’ and employers’ representatives for social peace and prosperity. Conflict is settled at the official table. It hardly ever comes to strikes.

One of the most important of this good collaboration’s assumptions is a worker’s right, whose principles are respected by both sides. The employment right has a considerable tradition, it was further continually developed and finally adjusted in a comprehensive manner to the challenge of our day with the passage of the new Constitutional Law on Work.

The factory constitution is regulated in the second part of the Constitutional Law on Work. It means to express here in a programmatic statement, that the declared goal of the factory constitution is to bring about an equalization of the interests of the employees and the factory. This is the guiding principle for the whole law. The legislator expresses with that, that there exists a natural opposition between the interests of the staff and those of the plant owners. Its execution should however, follow the regulated paths. The new regulations encountered offer the right instrument for that.

The Constitutional Law on Work is the first part of an entire codification of Austrian employment rights. It contains the decision on collective employment rights, as well as the employees’ organisations and their relationship to the employer. The second part of the codification will include individual employment rights, as well as perhaps the decisions about working hours, holidays, days off, protection of service, and the employment of women and children. It has been realised in sections. Up to now the regulations about leave were in force, further regulations, e.g., about the termination of employment contracts and compensation security will follow. The whole codification should combine the rights of the employee in a single work of legislation.

The negotiations about the Constitutional Law on Work has extended over more than a decade. It especially came to vehement arguments in the last, decisive phase between the employers’ organisations and the unions. The control of factory co-determination and employee co-operation repeatedly stood in the foreground, as it dealt here with very recent innovations opposed to the earlier legal position. Finally it succeeded in arriving at a compromise, which all those taking part could agree. The agreement reached amends to the passed legislation, that the Constitutional Law on Work finds in practice, not just according to the letter, but also in its spirit, according to application.

Collective Rights at Work

The Constitutional Law on Work is in force for all Austrian employees with the exception of officials in public service and employees in agriculture and forestry. The collective employment rights in force in the Constitutional Law on Work cover five great areas of rights above all.

* Agreements between employees and employers above factory level.
* Employees’ organisation in the factory and their rights.
* The role of the unions in the workplace – as far as these have been mainly regulated by law.
* Agreements between employers and employees at workplace level.
* The employees’ right to co-determination in the enterprise’s organs.
* Co-determination in social concerns.

Agreement above Factory Level

Agreements between the organisations of the employees and employers are concluded n the form of so-called collective agreements. Such collective agreements can only be agreed according to the determination of the law between the parties capable of collective agreement. The employers’ side as well as the side of the employees automatically possess the constituted legal representation of their interests (with compulsory membership) for the capability for collective agreements. On the side of the employers this is dealt with by the Chamber of Industrial Economy (Chambers of Trade); on the employees’ side, the chambers for workers and employees.

At the same time those organisations are awarded the capacity for collective agreements by the authorities on the basis of legal prescriptions, resting on voluntary membership and which, among many other things, the number of their members and the extent of their activity have decisive economic significance.

In practice no collective agreements are decided by the chamber for workers and employees on the employees’ side. This function falls to the Austrian Federation of Trade Unions and its 15 unions, which possess the capacity for collective agreements for all groups of employees. On the side of the employers collective agreements are as a rule decided by the Chambers of Industrial Economy and their sub-divisions, but there are also professional associations, which were awarded the capacity for collective agreements and which themselves make use of the possibilities resulting from this.

The Chambers of Industrial Economy

The Chamber of Industrial Economy are the corporate bodies of the public right, and represent the interests of industrial economy. All enterprises of industrial economy must belong to it on the basis of legal decisions and accordingly have to render a large membership fee.

There is a federal Chamber of Industrial Economy for the whole federal area, and a chamber of industrial economy for the land in question, in each of the federal lands of Austria. As well as the Federal Chamber of Industrial Economy, the chambers in the lands are also arranged in sections: industry, business, trade, foreign commerce, finance and commerce.

The functionaries of the chambers are elected by the members of the chamber in secret ballots, in which there an indirect electoral system from the smallest specialised groups at the level of the lands to the top of the federal chamber. The elections are made according to lists, which are as a rule arranged by the industrialists’ organisations of the political parties. The overwhelming majority in almost all organs of the chambers of commerce in all the federal lands is placed by that list, which is connected to the Austrian People’s Party.

The Trade Union Federation

The Austrian Federation of Trade Unions is an organisation of employees resting on voluntary membership. It is divided into 15 specialist trade unions, which are basically organised on the principle of the individual group. This principle has only penetrated, , when apart from the trade union for the workers in private industry there is also its own union for the staff. As a rule through this only two trade unions are represented in a workplace (one for the workers and one for the staff).

The Austrian Trade Union Federation is relatively centrally organised. As well as financial sovereignty, legal personality falls exclusively to the central institution. The individual trade unions are nevertheless responsible for the policy of collective agreements. The trade union federation has a comparatively high density of organisation. Out of 2.8 million employees, 1.7 million are members of trade unions. In many workplaces there is a hundred per cent organisation. Apart from the Austrian federation of trade unions any greater such unions, only similar to trade unions, exist neither in private industry or public service.

Within the Austrian Federation of Trade Unions itself there are, however, political groupings (factions), in which the trade unions members may meet the individual political parties. The organs of the Trade Union Federation and the trade unions are largely constituted on the basis of the political strength of the particular parties within the trade union membership. Accordingly the top functionaries of the Austrian trade union federation and almost all the trade unions come from the Austrian Socialist Party.

Collective Agreements

Laying down the area of validity of a collective agreement is basically the duty of the free agreement of the agreeing parties, which are concluded for ‘branches’, in which only one particular enterprise is active as employer, there are also general collective agreements, which comprise almost the entire Austrian economy.

The collective agreements are basically valid for all employers and employees, which belong to the bodies capable of collective agreements, which have concluded an agreement. On that point the collective agreement is also valid for those employees, which do not belong to the employees’ voluntary organisations, but are employed by an employer, who belong to the concluding employers’ organisation. As the collective agreements on the employers’ side as a rule are concluded by the interested parties’ legal representatives (with compulsory membership) and almost all the professional groups are covered, it is almost not possible for an enterprise to operate in a space free of collective agreements.

The present content of the collective agreement is naturally regulation of salaries. Austrian collective agreements respectively contain for everyone the minimum wage of their underlying employees’ group. This minimum wage can be changed through agreements at the level of the workplace or between the particular employee and the employer – though solely in the favour of the employee. Apart from that, in many cases agreements are concluded between the parties capable of collective agreements, that the wage paid to the individual employee at the time of the conclusion of the collective agreement – independent of its relationship to the minimum wage in the collective agreement – are raise by a certain percentage. These agreements in Austria are called wage rises, established by collective agreement. Regulations about the permissible system of performance wages and the method of their execution are often contained in the collective agreements.

Apart from regulations for wages, the collective agreements as a rule also contain decisions on the type of work and welfare rights. So most certain working conditions, regulations about working hours, free time, are concluded through collective agreements. Where these matters are also regulated legally (which today is almost the case in many cases and should be developed in the frame of the second part of the codification of employment rights), the collective agreements’ regulations can only vary in favour of the the employee, however, never to their disadvantage by law. According to the Constitutional Law on Work it is also possible, that agreements about the humanisation of the workplace and agreements about the common arrangements of the parties to the collective agreements, are secured in the sense of the protection of the employee from the consequences of rationalisation.

The Parity Commission

There are also agreements over price and wage policies in the frame of the very widely developed collaboration between the trade unions and the chambers of commerce in all areas of the politics of the social economy. The parity commission constitutes the institution for equalizing the interests in this sector for prices and wages. This institution, which has in no way legal anchorage, meets monthly under the chairmanship of the federal chancellor of the Austrian republic. Apart from members of the federal government the top functionaries of the employers’ and employees’ organisations take part in its conferences.

The trade unions have bound themselves to raise wage demands only if the parity commission opens negotiations. If a trade union wants to carry on negotiations by this about a new collective agreement, it must carry this wish above the Austrian federation of trade unions to the parity commission, that means, to the competent wages committee for it. There will commonly be consultations between chambers and the trade union federation, whether new negotiations should be permitted on the grounds of the terms of the collective agreement and the general economic situation.

The judgments of this system must nevertheless be clear, that the decision of the parity commission is practically never refused; the influence of the commission in practice merely extends, to that it can delay the point in time of the wage negotiations.

The Employees’ Representative at the Workplace

The most important employees’ organ in the workplace is the factory council. A factory council can be elected by the employees in every workplace, in which at least five people are employed. When at least five workers and five staff are employed at the same time, so in almost all cases separate factory councils for the workers and the staff are elected. There is, however, also the possibility, under certain conditions, of electing common factory council in such factories. Where there exist separate factory councils for workers and staff, these commonly form the factory council. In such councils a worker can be elected in the staff factory council, and a member of staff in the workers’ factory council.

The number of members in the factory council is set down by law. For five up to nine employees, a single member of the factory council is to be elected; from ten to 19, it is two, from twenty to 50, three members of the factory council, from 51 up to a hundred, four factory council members, and so on. In factories with 500 employees there are eight, with a thousand, thirteen, and with 5,000 employees 22 factory council members.

The factory councils are elected in a written and secret ballot of all employees of a factory for a duration of service of three years. Basically the system of proportional representation is used; in the smallest workplaces voting takes place solely for persons. To tender a candidate list for the factory council elections – varying according to the size of the factory – a number of signatures of those entitled to vote is required. In practice standing as a candidate is either through a list of names or lists ov candidates, who declare themselves for a particular political part. Lists drawn up by the trade unions are not usual.

Foreigners Also Vote

Foreign employees (of which at the moment about seven per cent of the employees active in Austria are foreign citizens) possess a fully active right to vote in elections to the factory council. There have no right to a passive right to vote.

As workers in the sense of the Constitutional Law on Work, employees belonging to middle management are also valid. Only managing and work directors of a factory and executive employees with similar wide-ranging powers do not fall under the conception of a worker and are from this neither active nor passive in the frame of the entitlement to vote in the employees’ organisation.

The execution of elections to the factory council is a duty of the electoral board, which is to be elected in a factory meeting. The factory council is also duty bound to render accounts of its activity regularly to the workforce in the frame of factory meetings (at least once a half-year). It can be recalled by the factory meeting with a qualified majority under certain conditions. All employees (i.e., the workers or staff) of the factory concerned take part in the factory meeting. The factory meeting can also be held during working time, if the factory owner is agreeable to this. It can be agreed in collective negotiations or at the factory level, that salaries will be fully paid for the time of the factory meeting; this is the rule in the most cases.

If an enterprise consists of several factories, a central factory council is to be established. The central factory council is elected on the basis of proportional representation by all the factory councils of the respective enterprise from their midst. It represents the whole staff opposed to the enterprise management in all questions, which go beyond the sphere of action of a particular factory. It reports to a meeting of factory councils, to which all the factory councils of a particular company belong.

The employer is bound to place at the disposal of the factory council space and working material, which it needs to exercise its activity. It is usual in Austria, for the factory councils to have in middle, and in many cases, also in small enterprises to have at their disposal at least its own room and corresponding office materials. In larger factories it falls to the share of the factory councils to have a clerk, whose cost is born by the enterprise. The factory councils also have at their further disposal financial means in the form of factory council funds. These funds are fed by a distribution of cost, the height of which is established by the factory meeting. It can amount to half a percent of the salary, that means, of the pay, and is deducted by the employer from the salary’s payment and transferred to the factory council. Apart from the organisation’s cost, social contributions are also paid from these funds.

The employer has to grant the members of the factory council the free time necessary, with the further payment of their wages, for the fulfillment of their duties.

Free Opinion Without Disadvantage

At the offer of the factory council, in factories with more than a hundred and fifty workers, one, in factories with more than seven hundred workers, two, and in factories with more than three thousand employees three members of the factory council (for the further three thousand employees yet another member of the factory council is elected) are to be exempted from the stoppage of wages for their capacity to work. The law prescribes, that these exempted members of the factory councils, who fully dedicate themselves to representing the interests of their colleagues, are in no way allowed to accrue to themselves disadvantages in pay or promotion.

Every member of the factory council is entitled to an exemption from work to take part in training and educational events, up to a maximum of two weeks in their three year term. In factories with more than twenty workers during this period the full wage is to be paid. In factories with more than two hundred employees a member of the factory council on the factory council’s application is exempt during the term of the factory council for a maximum period of up to a year in order to take part in training and education events – at any rate, without stoppage of pay. These decisions serve to give the members of the factory council the opportunity to acquire those perceptions, that they require for the better exercise of their functions. This stands to them as a rich offer to have at their disposal the employees’ organisation’s educational event.

The members of the factory council choose from their midst a factory council chairman. The members of the central factory council elect the central factory council chairman. The factory council chairman represents the factory council to those outside and convenes its sessions at least once a month. In the larger factories the factory council chairman is, as a rule, identical to the exempted members of the factory council.

Rights of the Factory Council

Apart from its common powers of representing the staff, the factory council is entitled to precisely defined rights in social, staff, and economic questions.

It has as part of its usual powers, the right to supervise compliance with legal prescriptions and collective agreements in the factory. For this goal the factory council is granted the right to inspect payrolls and lists of salaries. If staff actions are conducted in a factory, the factory council can take judgment through an agreement of the employees for the actions of the staff.

The factory council has the right, in all matters, which affect the interests of the workers, to propose appropriate measures to the factory owners or his competent co-worker and, if need be, the responsible agencies outside the factory. The factory owner is obliged to listen to the demands of the factory council, in all matters, which concern the interests of the factory’s employees.

The factory owner is further obliged to give information on all matters, which affect the economic, social, health or cultural interests of the factory’s employees. He has to hold common conferences with the factory council at least quarterly about current matters, general principles of factory management in social, staff, economic and technical respects as well as about the shape of working relations and inform it of important matters with that. Such conferences are carried out monthly at the demand of the factory council.

Co-operation in Training

The factory council also has the right to arrange and administer supporting arrangements for the benefit of the workers and those belonging to their families, as well as other welfare institutions. In the larger factories in many cases there exist such support funds from the factory council; in some cases these are paid in by contributions by the enterprise to these supporting arrangements based on agreements at the factory.

The factory council is further entitled to co-operate in the planning and execution of the factory’s vocational training as well as educational and retraining measures. It has the right to take part in the administration of the factory’s and enterprise’s own training and educational arrangements, as well as the administration of the factory’s and enterprise’s own welfare arrangements.

Yugoslavian Workers’ Factory Councils: The Legal Basis

I’ve blogged recently about the system of Socialist Self-Management, which the Communists set up in Yugoslavia under Tito. As well as the management boards in factories and other enterprises, this also set up a system of workers’ councils, which were given powers to supervise and review the decisions of the managerial board. These councils were co-ordinated at a national level through a chamber set up as part of the National Assembly. The first legislation laying the system’s foundations was the Directive on the Establishment and Work of Workers’ Councils of State Economic Enterprises of December 1949.

One of the objectives of the system was to give workers more experience of management, and to train them up to take their places as members of the executive. Article 1 of the Directive stated

Subject to a proper organization and functioning of workers’ councils, workers will be given an opportunity not only to acquire a better insight into the work and problems of the enterprise but also to exert a direct influence on production and the management of the enterprise. Workers will thus gain enormous experience, and every opportunity will be provided for executive cadres of the enterprise to be drawn from the ranks of the workers.

Article 1, paragraph 3 specified the councils’ duties. They were to

– review the proposed business plan of the enterprise, consider the elaboration of the basic plan of the enterprise for the various plants, and of the basic plan for construction of community amenities and give its opinion on them;

– review the house rules of the enterprise and give its criticisms;

– propose proper measures for the improvement of production, rationalization of production, raising of labour productivity, lowering of production costs, improvement of quality, new production developments, savings, and reduction of waste;

– propose measures for a better functioning of the enterprise and for the elimination of technical and administrative defects;

– discuss the work norms of the enterprise and make its recommendations;

– review the deployment of the work force and make its criticisms and recommendations;

– see to the proper training of technical personnel;

– make recommendations for the classification of administrative posts and the internal organization of the enterprise;

– review the draft rules governing work discipline in the enterprise, consider measures designed to prevent infringements of work discipline, absenteeism and arbitrary resignations, and make its recommendations;

– participate in supervising the utilization of public property, consider cases of vandalism, wastefulness and other cases of an irresponsible attitude towards public property, and recommend measures for the prevention, elimination and uncovering of such incidents;

– see to the proper application of occupational safety programmes.

Paragraph 4 stated that ‘The workers’ council has a special duty to do everything in its power to remove difficulties arising in connection with the fulfilment of planned targets and to combat all forms of indifference or hostility as seen in disparagement of our capabilities’.

The councils were to be elected at the beginning of each year by all the workers and office staff. These would be convened by the trade union chapter executive, but non-union members would also be allowed to vote. The work’s director was an ex officio member of the factory council. One elected, the members of the factory council were to elect a president and secretary from their own ranks. Moreover, if the trade union executive considered that the workers’ council or some of its members were not fulfilling their duties correctly, he had the power to call a meeting of all the workers and elect a new council, or replacements for those council members, who weren’t doing their duties properly.

At first the people voting for the council, or placed on it, seem to have been very small. Article II, paragraph 5 states that ‘The membership of the workers’ council should represent between 1 and 5 per cent of the employed workers and office personnel. Article 10 of the Basic Law on the Management of State Economic Enterprises and Higher Economic Associations by Work Collectivities of June 1950 expanded and clarified this. It stated that the workers’ council of an enterprise shall consist of between 15 and 20 members …. In enterprises which have fewer than 30 workers and office personnel, the entre work collectivity shall make up the workers’ council.’

The workers’ councils were to meet once a month to discuss the enterprise’s monthly business. Decisions were to be made by voting with a show of hands. The enterprise’s director had to be abide by their decisions. If he didn’t agree with them, he had to refer them to an administrative-operational officer. The workers’ council similarly had the right to refer the administrative-operational officers decisions to the higher state executives, if they disagreed with them. Under Article 26 of the 1950 Directive, the management board of each enterprise was to be elected by the worker’s council.

This legislation clearly gave the workers a significant degree of power over the operation of their enterprises through their councils, though I don’t know much power they exercised in practice compared to the demands of the state bureaucracy. The two architects of the system, Milovan Djilas and Edvard Kardelj, later fell from power for ‘Anarcho-Syndicalist deviation’. Nevertheless, this legislation does point the way to how a similar system could be set and adopted elsewhere to give their workers a voice in the management of their enterprises. Similar legislation was introduced in Germany in 1952 and 1976. The Financial Times did a feature on factory councils in Britain back in the 1990s. They estimated that there were 200 or so firms in Britain, which had them. A spokesman for the Conservative Party stated in the article that they did not have any objection to them, they just didn’t feel they should be compulsory. My guess is that with the more aggressive attitudes to management introduced by the Tories, there would be considerable opposition within the Tory part to any such system. The similar German system of Industrial Codetermination was attacked, at least partly, by the employers organisations as an attack on property rights. Nevertheless, the Germans considered their own version of workers’ control as leading to social and industrial stability. It says something for practical common sense of modern, democratic Germany that this was achieved through drawing workers into the system and giving them more rights, rather than the complete suppression of workers’ rights by the Tories.