Swimming with the tide Democratising the places where we work

Chris Ward and Zoe Williams

Southbank House, Black Prince Road, London SE1 7SJ T: +44 (0) 207 463 0632 [email protected] www.compassonline.org.uk Swimming with the tide Democratising the places where we work

Chris Ward and Zoe Williams ‘We seek democratic development in which citizens participate in making the decisions that affect their lives’ Gordon Brown 1

Published by Compass Southbank House, Black Prince Road, London SE1 7SJ T: +44 (0) 20 7463 0633 , E: [email protected] www.compassonline.org.uk

Designed by SoapBox, www.soapboxcommunications.co.uk

1. Speech at the Oxfam Gilbert Murray Memorial Lecture, 2000. Contents

Acknowledgements 4

Executive summary 5

Introduction: the case for workplace democracy 7

Defining workplace democracy: the existing legislative frameworks 10

The instrumental benefits of workplace democracy 14

Trade union renewal 18

The European experience of workplace democracy 22

Winning through democracy: case studies on workplace democracy 25

What is to be done? 28 Acknowledgements About the authors

The authors would like to thank Neal Lawson Chris Ward has recently completed an MPhil (Compass), Sue Ferns (Prospect) and Adrian in Political Theory at New College, Oxford, and Askew (Connect) for their editorial work; has worked on a number of Compass research David Coats (Work Foundation), John Earls projects. (Unite, Amicus Section), Nina Fishman (Westminster University) and Paul Thompson Zoe Williams is former Campaigns Officer at for their helpful comments and contributions; Compass. Dave Fitzgerald (BT) and Jamie Major (Unite) for information for the case studies; and Tim Martinez (Syracuse University) for his help in researching this paper. We are grateful for the help and support of those who attended a seminar on workplace democracy in the House of Commons and/or made comments on a draft of this paper:

 Stephen Bell, Communication Workers Union  Patrick Burns, the Employee Ownership Association  Paul Callaghan, Taylor Wessing  Jon Cruddas, MP for Barking and Dagenham  Chris Degg, EDF Energy  Frances O’Grady and Hannah Reed, Trades Union Congress  Peter Hunt, The Co-operative Group  Aleyne Johnson, Orange  Martin McIvor, UNISON  Stephen Pearse, Connect  Neil Sherlock, KPMG  Tania Stevenson, Clifford Chance Partnership  Chuka Umunna, Compass and Rochman Landau.

This report prepared with the kind support of Prospect and Connect Executive summary

There is a growing divide between our role as But there are problems with the regulations, self-assertive consumers, the emphasis being which are limiting their impact: placed by government on the need for us to become active citizens, and our lack of voice or  The flexible nature of the regulations power at work. It seems we can be the masters provides the space for less enthusiastic of our destiny in all aspects of our lives except employers to push for only weak consulta - in terms of our relationship with our tion standards, when they tend to hold all employers. the cards of information and resources. This is unacceptable. Work is not just the  Often the emphasis is on providing infor - place where we earn a living but should be a mation not on consultation, as decisions key site in our lives where we are socialised, are made before employees are involved. develop notions of worth and esteem, and  The employees themselves often don’t have learn to be creative and innovative. We cannot the resources or the skills to make best use be expected to switch these needs and traits on of the regulations. or off as we clock in and out of work. We will  The sanctions against non-complying never have a truly active citizenship while the forms are weak. workplace remains a site in which people must in effect be silent. British citizens are not only finding a The case for democracy in the workplace is mismatch between having a voice as not just about productivity and efficiency. It is consumers and democratic citizens compared also about the right thing to do, and now is the with the vow of silence that operates in many right time to do it. Every workplace would workplaces. They are also being left behind by benefit from employees who are more actively their fellow workers on the continent. In the engaged in the creation of the products and Scandinavian countries, and Germany in services they make and deliver. Companies and particular, there is a culture of engagement organisations would be more agile and which produces a rich mix of involved workers creative, and would perform better if workers and high performing companies that are had a voice and therefore greater engagement competitive in a global economy. and loyalty to the firm. Such participation The workplace democracy agenda should be should be offered actively and freely rather at the heart of trade union renewal. Unions are than forced. moving beyond negotiations around terms and Our rights as citizens underpin the demand conduction, vital as they are, to a ‘good work’ for a voice that must be listened to in the agenda, which values the quality of work not workplace, a voice that is formalised, heeded just the quantity. The assertion of a democratic and responded to. In short, workplace voice must be at the heart of the good work democracy is part of the set of rights that agenda. define a modern society and a modern Unions can play a vital and pivotal role in economy. putting in place structures for effective The legal and statutory basis for effective workplace democracy. They have the right workplace democracy exists in the shape of democratic culture and the knowledge and existing EU directives and UK law – the experience of works councils and other bodies Information and Consultations of Employees both in the UK and across Europe. (ICE) Regulations. These provide the Developing the structures and processes for framework for the necessary information and effective workplace democracy is neither quick response structures for employees to make nor easy – but is the right thing to do in their views known and for employers to practice and in principle. The case studies respond. highlighted in this report on BT, EDF and 6 | Swimming with the tide

Macmillan demonstrate how different every demonstrate that if there can be a minimum workplace is and how tough the process can be, wage there can be a minimum standard for but also the essential role that effective legisla - democracy in the workplace. tion plays in underpinning workers’ rights to The government should look to increase be heard and responded to. The case studies funds for unions and employees to ensure also show a willingness among managers to representatives are properly trained and engage in the process constructively because resourced. These would need to be sufficient ultimately it benefits their organisation. and provided over enough time to ensure there Government must signal the importance of was effective representation on behalf of all workplace democracy – not just on economic employees. grounds but by making the democratic case for The government should set up a commission it. The wider constitutional and governance to report on the benefits of workplace agenda for Britain is unlikely to succeed without democracy and the steps required to spread the change in culture a greater emphasis on best practice as widely as possible. workplace democracy would bring. The trade unions must not just wait for the The government should take a lead in devel - government to act, but should commit time, oping best workplace democracy in the public energy and resources to show that workplace services. They should lead by example and democracy is both effective and popular. 1

Introduction: the case for workplace democracy

Most of us, most of the time, clock into and out in any meaningful economic sphere is in direct of work with very little formal say about what conflict with a comprehensive theory of happens there. Despite ‘flexi-time’ and ‘work– justice, which values liberty, equality and life balance’ being adopted as new buzz words democracy. 3 for some employers, we are largely still treated as worker bees. We are told what to do and are Why workplace democracy is measured and monitored along the way. Too important many British workplaces remain bastions of Work is too important to our lives and to the hierarchical authority and democratic fabric of society for us to remain ambivalent inequality. Workers are spoken to rather than about how employers treat employees. being encouraged to express opinions and raise Not only does work take up much of our grievances. Domination and control rather adult life but, as Hodgson reminds us, it is than fairness and empowerment continue to ‘from work [that] people derive a sense of self- characterise most workplaces. For most of us esteem; it is a source of self-identity and self- freedom comes at the end of the working day. actualisation’. 4 Work is more than simply a This means that our emotional and cultural means of monetary remuneration: It is a place experience of work is out of kilter with the rest of complex human interaction, where we can of our lives. As consumers and citizens it is develop our social skills and personal narrative more and more accepted that we should have about our place in the world. It is the site in power in terms of influencing the institutions which we derive our sense of personal worth. that shape and affect our lives. Why should this Our experiences at work have a profound not be the case at work? impact on our emotional, psychological and There is a growing body of evidence that social development. Work helps make us what suggests workers are increasingly concerned we are. If, as employees, we are treated as mere about controlling their working environment. appendages to the production process then the 2. Coats, D. (2006), ‘No going back to the 1970s?: the case for a Workplace Employment Relations Surveys workplace ceases to be an avenue of personal revival of industrial democracy’, show, for example, that only a third of development and becomes a place of thwarted New Economy , Vol. 13, Issue 4; see www.employersforwork-lifebal - employees are satisfied with their involvement ambition and unfulfilled potential. How, when ance.org.uk/business/recruit.htm. in decision making in the workplace, and a and where we work can be the source of great See also Jones, A. (2003), About Time for Change , The Work 2002 Department of Trade and Industry (DTI) satisfaction and personal fulfillment but, Foundation and Employers for survey revealed that 70 per cent of job seekers equally, it can be the cause of considerable Work-life Balance, and Bevan, S. (2004), The Ethical Employee , The express a desire to have greater control of their stress, disenchantment and alienation. Work Foundation and The Future working hours. 2 Increasingly it is not just the quantity of Foundation. This is the space in which a new debate goods and services we consume that matters to 3. Rawls, J. (1999), A Theory of Justice (rev ed), Oxford University about workplace democracy can take shape. us but the quality of our lives. People are rightly Press.

Workplace democracy is not just about struc - searching for meaning in their lives. The 4. Hodgson, G. (1984), The tures and processes. The absence of democracy emerging happiness agenda is predicated on the Democratic Economy , Penguin, p132. 8 | Swimming with the tide

fact that increases in wealth matters enor - democracy has a central role to play in the mously to those on the bottom of the income development of a good work agenda. Until ladder, but for many further up the economic workplaces cease to be no-go areas for demo - and social scale more money does not bring cratic principles, we will remain empowered as with it a corresponding increase in fulfillment. consumers and increasingly as citizens, but disempowered as workers. A rights based case for workplace This absurdly contradictory position is democracy subject to dual pressures and is ultimately It is clear that the absence of democratic prin - unsustainable. On one hand, citizens who are ciples in the workplace is at odds with many of deemed sufficiently competent to decide the values we hold most dear in civil society. If matters of national and local governance will we value the liberal tenets of liberty, equality, inevitably question their exclusion from solidarity and democracy, then we must also decision-making processes in the workplace. be concerned about how citizens are treated in Equally, if people continue to be denied the the workplace. opportunity to participate in decision making The founding principle of modern liberal at work, they are likely to be less willing and society is that all men and women are born and less prepared to participate in other societal remain free and equal. 5 Through the universal decisions. The danger is that the latter of these notion of citizenship we enjoy certain legally alternatives prevails and the participatory protected freedoms such as freedom of associ - nature of society is compromised. ation, expression, movement and conscience, The workplace should not be seen as and we are also ensured equal respect before external to democratic society. Indeed, the the law and an equal stake in society. opportunity to participate in decisions at one’s Democracy is a direct descendant of these place of work is of crucial significance to the core liberal principles. Democracy demands development of a participatory civic culture. 8 freedom of association and freedom of J.S. Mill also emphasised that although conscience; it provides an avenue for free national elections were a remote political act expression; and it confirms equality of citizen - that ‘leaves [man’s] intellect and his moral ship through universal suffrage. 6 Democracy is dispositions very much as it found them’, the one of the defining characteristics of modern intense and repetitive nature of low-level

5. Article I, ‘Declaration of the liberal society and one we would be singularly workplace participation could ‘teach’ workers Rights of Man and Citizens’, unwilling to do without. how to participate in wider societal issues. For approved by the National Assembly of France, 1789. And yet we appear to have few qualms about Mill the real value of workplace democracy lay

6. See Lawson, N. (2004), Dare democratic principles being excluded from the in the proximity of the employee to the demo - More Democracy , Compass, workplace. We routinely accept that employers cratic process. ‘It is only by practising popular http://clients.squareeye.com/uploa ds/compass/documents/dare_more dictate our working hours, our pay, when and government on a limited scale’, Mill wrote, _democracy.pdf. for how long we can take holidays, as well as ‘that the people will ever learn how to exercise 7. Rawls, Theory of Justice . See also 9 Cole, G.D.H. (1919), Self-govern - determining company policy and strategy. Free it on a larger scale.’ ment in Industry , G. Bell & Sons, speech is sidelined by the threat of dismissal or It is no coincidence that the high point of the p182. career regression, and the notion that all growth in trade union membership in the late 8. See Pateman, C. (1970), Participation and Democratic Theory , citizens should be treated with equal respect 1950s and early 1960s coincided with the high Cambridge University Press, carries little if any weight. point in turnout for elections in Britain. A pp45–47; Almond, G.A. and Verba, S. (1965), The Civic Culture , Boston, The absence of free speech and personal sense of empowerment in the workplace feeds Little Brown & Co.; Cole, Self- government in Industry ; and autonomy in the economic sphere is thus in into a hunger and desire for a chance to partic - Rousseau, J. (1762), The Social direct conflict with a comprehensive theory of ipate elsewhere in our lives. 10 In one sense, this Contract. justice that values liberty, equality and ‘reason - justifies the link between the trade union and 9. Mill, J.S. (1963), Essays on Politics 7 and Culture , Anchor Books, p183. able pluralism’. This can have a profound political party wings of the labour movement. See also Mill, J.S. (1875), impact on both individual workers and wider G.D.H. Cole considered industrial demo- Considerations on Representative Government , Longmans Green. civil society. cracy to be of particular importance because 10. Pateman, C. (1970) Participation By empowering employees with the the proximity of workers to the production and Democratic Theory , pp30 and 45. autonomy to control their lives, workplace process exposed them to exploitation and Introduction | 9

hierarchy at close quarters. Cole accordingly Compass is soon to publish a report on co- saw great potential for workplace democracy production in public services and the democ - to develop political consciousness but he also ratisation of the NHS. All of this work is cautioned that ‘a servile system of industry centred on the progressive belief that people inevitably reflects itself in political servility’. 11 have within them enormous creative potential The workplace can, therefore, act as an to shape rich and diverse lives and that it is the ‘academy of citizenship’, training workers in job of politics to work with them to help create the intricacies and pitfalls of participation and, the structures, processes and institutions to more importantly, conditioning them to feel make self-management a reality. The danger part of the democratic process. 12 Or, if there is and the worry is that the world of work is being little or no democratic input, the workplace left behind. can act as barrier to wider participation as a social and political citizen. Workplace democracy is fundamental to the ‘Democracy demands a holistic approach and work is kind of society we want to live in. If we seek to promote and foster political and social too central to our lives and too important to individual equality and public-spirited participation in and societal development to remain outside the fabric of democratic politics, then we cannot ignore domination and hierarchy in the economic the democratic society.’ sphere. 13 Democracy demands a holistic approach and work is too central to our lives and too important to individual and societal development to remain outside the fabric of This publication will show that there is a the democratic society. Indeed, it is hard to strong business case as well as an overwhelming argue that we live in a democracy while the ethical argument for workplace democracy. imbalance between the workplace and the rest Empowering workers with the freedom to shape of our lives remains so out of kilter. the conditions of their labour is not only of In the recent ‘Programme for Renewal’ potential benefit to employers but it is also the Compass stressed the need for ‘a new debate right thing to do. Right in terms of equality, about the future of work and business organi - right for individual liberty and right for the sation’. 14 In The Good Society we set out the development of participatory civic culture. ‘We parameters of this debate; emphasising a believe in workplace democracy’, the world- ‘caring economy’ and a ‘good work agenda’ renowned global economist Joseph Stiglitz where the nature and experience of work contends, ‘regardless of whether it increases 11. Cole, quoted in Pateman , matters as much as the existence of work itself. economic efficiency or not… [because] Participation and Democratic Theory , pp37–8, and p45. ‘The good economy’, we contended, ‘is a economic democracy is an essential part of a 12. Coats, ‘No going back to the 18 democratised and accountable economy. It democratic society.’ The notion of democracy 1970s?’, p6. See also Pateman , Participation and Democratic Theory , promotes good working conditions, demo - in the workplace must become part of the p50. cratic workplaces, more work–time flexibility centre-left’s vision of the good society. 13. White, S. ‘Is civic republicanism 15 and more employee control over work.’ The aim of this pamphlet is to get workplace the left’s big idea?’, Renewal , Vol. 15 In A New Political Economy we further democracy back on the political map, not just No.1. 14. Shah, H. and Goss, S. (eds) outlined our commitment to ‘greater levels of because it is the right thing to do, but because (2007), Democracy in the Public choice, flexibility and control for workers’ so now is the right time to do it. The pamphlet Realm , Compass, p49. that employees have ‘autonomy and control makes both the intrinsic and instrumental case 15. Rutherford, J. and Shah, H. (eds) (2006), The Good Society , over the pace of work and the working envi - for workplace democracy before examining the Compass, p22. 16 ronment’. We also asserted that ‘there needs European experience and some examples of 16. McIvor, M. and Shah, H. (eds) to be voice for workers in the critical democracy at work. Finally it discusses (2006), A New Political Economy , Compass, p.68. decisions that affect their futures’, a point we workplace democracy and trade union renewal, 17. Shah and Goss, Democracy in elaborated further in the final part of the before setting out what needs to be done to get the Public Realm , pp48–53.

‘Programme for Renewal’, Democracy and the the issue moving again. First though we need to 18. Quoted in Coats, ‘No going Public Realm .17 establish what workplace democracy means. back to the 1970s?’, p4. II

Defining workplace democracy: the existing legislative frameworks

In essence the legislative framework for As its title suggests, the Framework workplace democracy exists in European and Directive, which came into force in March 2002, UK law in terms of regulations for information sets out minimum requirements for the right and consultation. The general consensus is that to information and consultation of employees to be able to fulfil their rights, workers need to within the EU. The Directive covers companies know what situations, plans and potential with at least 50 employees or establishments problems the company or organisation faces with at least 20 – member states can choose (information), as well as have recourse to a which threshold should apply to them. corresponding structure through which they Article 4 of the Directive outlines the type of can make their opinions known to their information employers are expected to employers, and have them considered and provide for their employees; the situations in responded to (consultation). which consultation with employees is required; and key principles that should The European Union (EU) and govern the consultation. Under the Directive, workplace democracy workers should be entitled to information The European Union sought for many years to about the operations, financial situation and introduce legislation that would set Europe- future directions that the company or organi - wide minimum standards for companies with sation they work in is undertaking or facing, regard to providing information to employees as well as be consulted on any decisions that and consulting employees on decisions. would affect these things. Consultation should Over a decade ago, through the European be undertaken within an appropriate tim- Works Council Directive (Directive 94/45/EC), escale, include opportunities for employees to the EU legislated to promote greater representa - meet employers to get a response to their tion of employees in companies that straddled submissions, and with a view to reaching the national borders of the EU member states. agreement on decisions. Directives have also been passed that relate to specific situations, for example in transfer of Information and consultation must cover: undertakings – take-overs or mergers 19 and  Information on the recent and probable collective redundancy, 20 but this led to frag - development of the undertaking’s or the mented legislation, not a coherent set of establishment’s activities and economic

19. Directive 77/187/EEC, ‘the standards for all workers. After much negotia - situation Acquired Rights Directive’, and tion Directive 2002/14/EC, ‘the Framework  Information and consultation on the Directive 2001/23/EC of 12 March 2001. Directive’, established a general framework for situation, structure and probably develo -

20. Directive 98/59/EC, 20 July informing and consulting employees in the ment of employment within the under - 1998. European Community. taking or establishment and on any antic - Defining workplace democracy | 11

patory measures envisaged, in particular The Regulations have been introduced in where there is a threat to employment phases – when first introduced in April 2005,  Information and consultation on decisions the Regulations only applied to companies likely to lead to substantial changes in work employing more than 150 workers. By April organisation or in contractual relations. 2008 the Regulations will apply to all companies or organisations employing 50 or The Directive stipulates that consultations more people. must take place: The ICE Regulations allow employers and  While ensuring that the timing, method employees to come to a negotiated agreement and content thereof are appropriate on practical arrangements for information and  At the relevant level of management and consultation but set out ‘standard provisions’ representation (Part 4) that are to be enacted if no other  On the basis of information supplied by the agreement is reached. employer and the opinions which the employees’ representatives are entitled to Under the ICE Regulations, employers must formulate provide three categories of information to  In such a way as to enable employees’ repre - employee representatives: sentatives to meet the employer and obtain  The recent and probable development of a response, and the reasons for that the undertaking’s activities and economic response, to any option they might formulate situation  With a view to reaching an agreement on  The situation, structure and probable decisions within the scope of the employer’s development of employment within the powers. undertaking  Decisions likely to lead to substantial Employers are not required to communicate changes in work organisation or contrac - information or undertake consultations if to tual relations. do so would ‘seriously harm the functioning of the undertaking or establishment or would be The information timing and quality of the prejudicial to it’ according to ‘objective information is also covered in the Regulations. criteria’ (Article 6). Part 5 states the information ‘must be given at The Directive offers protection of employees’ such time, in such fashion and with such representatives carrying out their functions content as [is] appropriate to enable, in partic - under the Directive (Article 7) and obliges mem- ular, the information and consultation repre - ber states to stipulate enforcement provisions sentatives to conduct an adequate study and, that are ‘effective, proportionate and dissuasive’ where necessary, to prepare for consultation’. if employers or employees representatives in- fringe the provisions of the Directive (Article 8). Similarly on consultation, the Regulations state that the employer must ensure consultations The United Kingdom and workplace are conducted: democracy  In such a way as to ensure that the timing, The Information and Consultation of method and content of the consultation are Employees Regulations 2004 (the ICE appropriate Regulations) were intended to implement the  On the basis of the information supplied by EU Framework Directive at a national level and the employer to the information and set out a framework in law for information and consultation representatives and of any consultation expectations on employers in the opinion which those representatives UK. Like the EU Framework Directive, the ICE express to the employer Regulations compel employers to establish a  In such a way as to enable the information framework in which they will provide informa - and consultation representatives to meet tion to their employees and consult on the employer at the relevant level of decisions with a view to reaching agreements. management depending on the subject 12 | Swimming with the tide

under discussion and to obtain a reasoned nature of the information or document is such response from the employer to any such that, according to objective criteria, the disclo - opinion. sure of the information or document would seriously harm the functioning of, or would be Importantly, the ICE Regulations are under - prejudicial to, the undertaking.’ pinned by a duty of co-operation, recognising that rights go hand-in-hand with responsibili - Criticisms of the legislative framework ties. Part 5 of the Regulations states: The legislative frameworks for information and consultation undoubtedly give employees The parties are under a duty, when the right to be informed and, importantly, negotiating or implementing a negoti - consulted with a view to reaching an ated agreement or when implementing agreement on key issues and decisions. the standard information and consulta - However, there are a number of practical weak - tion provisions, to work in a spirit of co- nesses, which makes the framework very tough operation and with due regard for their to implement for workers who want a demo - reciprocal rights and obligations, taking cratic voice. Hence the gap between the legal into account the interests of both the position and the lack of progress in terms of undertaking and the employees. 21 more widespread democratic workplaces. For unions, the introduction of the Regulations creates a structure for information “There is little value in having a body of poorly trained and consultation in the workplace that is not dependent on union activity or involvement. representatives who are unable to ask searching Some union representatives feared the new questions about the information they have received or structures would threaten the idea of collective bargaining and that the new Regulations would frame a sophisticated response to the employer’s be used as a way to sideline union representa - proposals…” tives or play them off against non-union repre - sentatives. Indeed, the Regulations were engineered to provide for flexibility in implementation so The ICE Regulations provide a framework of each organisation or business could design the rights and protections for employees who act most suitable framework for information and as negotiating representatives or information consultation for their workplace. However, this and consultation representatives under the flexibility is exploited by employers who are legislation. Part 8 of the Regulations outlines less than enthusiastic about information and the right for employees in these positions to consultation rights. paid time off in order to fulfil their roles as well In a detailed study of two businesses that as protection against unfair dismissal and had begun to implement the Regulations, detrimental treatment based on their activities Koukiadaki concluded that ‘the influence of the in relation to their information and consulta - minimalist approach adopted in the institu - tion roles. The Regulations stipulate recourse tional framework of the ICER in conjunction for employees who believe their rights under with the fact that the resulting arrangements this section of the Regulation have been for employee voice were largely determined by 21. See www.opsi.gov.uk/si/si2004/200434 breached. management apprehension to the concept of 26.htm. As in the EU Framework Directive, there are employee representative participation meant 22. Koukiadaki, A ‘The establish - some exemptions to the obligation on that the extent to which the ICE arrangements ment and operation of informa - tion and consultation of employers to provide information to could develop capabilities for employee voice employees arrangements in the 22 UK: case study evidence’, employees. Part 7 of the Regulations states: were, to some extent, constrained’. Because presented at Cornell-Warwick ‘The employer is not required to disclose any information and consultation arrangements are Doctoral Symposium, Cornell University, May 2007; Coats, ‘No information or document to a person for the negotiated, if employers are able to persuade going back to the 1970s?’, p15. purposes of these Regulations where the employees of the merits of their proposals, Defining workplace democracy | 13

arrangements can fall well below minimum the most of the existing legislative framework standards outlined in the Regulations. for workplace democracy requires legal and On the coming into force of the EU Directive negotiating skills over a sustained period of and in anticipation of national legislation to time. How is this to be funded? implement the Directive in the UK, David Finally, for companies that refuse to adhere Coats pointed out that employees and to the legislative framework there is a fine that employers alike might not have the skills and can be imposed. But once again, this requires experience to make effective use of the infor - experience and skills that many workers’ mation and consultation minimum standards. representatives simply do not have, or they In Speaking Up! , Coates says: ‘There is little lack the time to pursue what is inevitably a value in having a body of poorly trained repre - long legal procedure. Even if companies are sentatives who are unable to ask searching found guilty the range of fines is so low (at questions about the information they have around £50,000) that big multinationals have received or frame a sophisticated response to no incentive to play the democracy process the employer’s proposals… There may be a fairly and constructively. case for public intervention to ensure that all This, as we shall now see, hinders the 23. Coats, D. Speaking Up!: voice, industrial democracy and organisa - participants have the capabilities they need to progress of the company, the individual and tional performance , The Work make the best of the new institutions.’ 23 Making the nation. Foundation, 1994, p43. III

The instrumental benefits of workplace democracy

The authentic voice of Marxist class struggle ‘durable and continually expanding’ nature of decrees the interests of capital and labour to be many democratic workplace initiatives. 27 diametrically and irrevocably opposed: the While this analysis is perhaps insufficiently former ruthlessly exploits the latter in order to nuanced to reflect the multiplicity of reasons maximise profits and maintain social that lead employers to adopt participatory hierarchy. On this reading, one should dismiss workplace initiatives, it would be naïve to the notion that employers might seek to assume that all are driven by an appreciation consult workers on even the most trivial of of the ethical inadequacies of hierarchical issues. management techniques. Some companies do But what might have been true of nine - indeed find their motivation in a profound teenth-century Britain is clearly not an ethical conviction but it is the instrumental accurate representation of industrial relations benefits of workplace democracy that continue 24. See, for example, Turban, D. in the modern, globalised era. Employers are to be most appealing for many businesses. and Greening D. (1996), ‘Corporate social performance becoming increasingly aware of the value of Indeed, a number of recent studies have and organisational attractiveness corporate social responsibility (CSR), work– suggested that by valuing what the celebrated to prospective employees’, Academy of Management Journal , life balance and the value of their reputation US psychologist Abraham Maslow refers to as Vol. 40, No. 3, pp658–672. with all stakeholders. 24 Indeed, it is one of the the ‘human element’ in business, it is possible 25. Harley, B., Hyman J. and paradoxes of participation that although to increase efficiency, productivity and Thompson, P. (2005), ‘The 28 paradoxes of participation’, in workplace democracy has virtually dropped employee satisfaction. Harley B. et al. (eds), Participation and Democracy at Work , Macmillan, off the political and trade union radar in recent Lynda Gratton, for example, has shown that p2. years, there has been a marked growth in democratic structures can enable a company to 26. Ramsey, H. (1977), ‘Cycles of employer-driven workplace participation; but become more agile, better able to integrate new control: worker participation in sociological and historical most of this is individual ‘participation’ and workers and more responsive to changing perspective’, Sociology , Vol. 11, has little do with independent collective circumstances. 29 It is thus no coincidence that pp481–506. voice. 25 ‘the most democratic companies’ in Gratton’s 27. Harley et al., ‘Paradoxes of participation’, pp2–5. See also This phenomenon is open to differing inter - sample ‘were also among the highest Pendleton, A. (2005), ‘Employee 30 share ownership, employment pretation. Some analyses suggest this recent performing’. relationships and corporate surge in top-down workplace consultation is In this sense we can identify two models of government’, in Harley et al. (eds), Participation and Democracy at nothing more than a cynical attempt by workplace flexibility. The first is the freedom Work , pp76–78. employers to retain workers’ acquiescence in a to ‘hire and fire’ in a flexible labour market that 28. Maslow, A.H. (1943), ‘A theory period where, for various reasons, managerial is really no more than a race to the bottom in of human understanding’, Psychological Review, Vol. 50, pp370– authority is threatened or it represents a terms of standards, quality, prices and pay. The 376. See also Maslow, A.H. (1970), Motivation and Personality , Harper necessary response to the retreat of trade second model of flexibility is an adaptive and and Row. unions – employers therefore have to intensify innovative enterprise based on the empower - 29. Gratton, L. (2004), The their efforts to communicate with individual ment and participation of workers who play a Democratic Enterprise , Pearson. employees because the union is not there as a leading role in developing new services and 30. Ibid., p200 and pp206–212. channel. 26 But this fails to take account of the products through their empowerment and Instrumental benefits of workplace democracy | 15

engagement at the workplace. The first we ensure employers and employees have a could call ‘forced flexibility’, the second – ‘shared purpose’ in the enterprise’s success. 36 based on workplace democracy and the active A more content and fulfilled staff are also consent and involvement of the workforce more likely to provide the dynamism that through democratic structures – could be businesses need to flourish in increasingly termed ‘constructive flexibility’. competitive markets. Indeed, in the words of Crucially this second and decisively Gratton, it is through the creativity of one’s different model of labour flexibility is contin - staff that businesses ‘uncover new opportuni - gent on a different concept of management. No ties, and breach old assumptions’, and the longer is the firm a hierarchical entity based scope for this kind of innovative thinking is on the efforts and insights of an all-powerful considerably diminished if management treats and all-controlling management team or a workers as passive automata. 37 heroic CEO figure, rather it is a social entity The interests of the firm are, of course, whose success is based on the efforts and essential. But so too are those of the workers. inputs of all employees. There is also growing evidence that employees And Gratton is not alone in equating are increasingly inclined to consider the workplace democracy with increased prof - democratic credentials and corporate reputa - itability. A recent Work Foundation survey tion of potential employers. A recent Work concluded that ‘an arrangement that suits Foundation report found, for example, that the employee will often be the one that although wage levels remain extremely creates higher productivity and loyalty to the important, employees also value a variety of organisation’; 31 Hannah Reed has also shown other issues – including the nature of their that workplaces that consult staff are 33 per work and workplace consultation. 38 Indeed, cent more likely to have above-average the same report concluded that ‘in a tight financial performance 32 and, as Coats labour market, a positive employer brand can contends, ‘the best research suggests that make a real difference’ and act as a ‘way of 31. Jones, About Time for Change . genuinely giving employees control differentiating one organisation from another 32. Reed, H. ‘Britain: Inform! Consult! Organise!’, in Coats, D. et generates higher levels of job satisfaction [by] creating a strong, distinctive and attrac - al., (2005), Towards a and higher productivity’. 33 tive identity’. 39 Europeanisation of Industrial Relations: a summary of the fourth Empirical evidence therefore seems to This is, perhaps, the inevitable result of a UK–German Trades Union Forum , p4; see support the notion exemplified by Mill that more highly educated and skilled workforce www.agf.org.uk/pubs/pdfs/1509we ‘when people are engaged in the resolution of competing in a relatively stable employment b.pdf. problems affecting themselves or the whole market. It is one of New Labour’s greatest 33. Coats, ‘No going back to the collectively, energies are unleashed which achievements that widespread unemployment 1970s?’, p5. 34. Mill (1875). See also Cole enhance the likelihood of creation of imagina - – once the great issue of the day – is, for now, (1919), as quoted in Pateman , tive solutions and successful strategies’. 34 a thing of the past. And with this newfound Participation and Democratic Theory , p108. And it is not difficult to see why this relative security, workers are no longer 35. Gratton, Democratic Enterprise , arrangement can deliver considerable grateful for simply having any job. Rather they esp. ppxvi–xviii. Payne, J. and Keep, financial benefits for business. By empowering feel entitled to a good job; a job where they are E. (2005), ‘Promoting workplace development’ in Harley et al. (eds), workers to have a greater stake in the future of valued as dynamic contributors in a collective Participation and Democracy at Work , p149. See also Shah and their company, employers increase the likeli - enterprise; a job where employers are as Goss, Democracy in the Public hood that staff will be more committed, co- grateful for having a highly skilled workforce Realm , p48. operative and loyal. Crucially, workplace as employees are for having the opportunity to 36. Gratton, Democratic Enterprise , pxvi. consultation can also foster relations of trust work. 40 between employer and employee, thereby Work Foundation research has shown that 37. Ibid., p200. avoiding a culture of disengagement where the age group which is most likely to value CSR 38. Bevan, Ethical Employee . managers rely on bureaucracy and supervi - and ethical workplace practices are those aged 39. Ibid., pp7–10. sion to ensure workers carry out their (often between 18 and 24. 41 Prominent among this 40. Speech by Tony Blair, ‘Our Nation’s Future – the role of 35 monotonous) tasks. Democratic workplace age cohort are a growing number of newly work’, 29 March 2007. practices cut out the ‘organisational waste’ of qualified and highly employable graduates 41. Bevan, Ethical Employee , pp18– hierarchical management techniques and whose skills and dynamism are vital for 19. 16 | Swimming with the tide

ensuring the long-term economic success of tives it is well to remember that, in the words forward-thinking businesses. It is thus no coin - of Bevan, there is ‘an element of self-interest cidence that graduate recruitment literature of operating under the overall umbrella of companies such as KPMG now repeatedly expressed altruism’. 48 Business proceeds from emphasise CSR, work–life balance and chari - essentially profit-driven motives and, as Coats table initiatives. 42 contends, it is not easy ‘to see how [business] And enlightened workplace initiatives not objectives can be achieved if workers are disaf - only play an important role in recruiting a high fected, alienated and willing to adopt the calibre of employee, but they can also increase sabotage of the productive process of their retention rates and reduce absence. 43 The mission’. 49 Again, the important point here is challenge now is to build on voluntary and that workers must have effective rights to individual improvements and make the leap initiate a process of information and consulta - into collective and legally binding forms of tion, with some guarantee that the employer consultation. will comply – this is the purpose of the ICE The CBI is among the organisations that regulations, which assume that employers will have condemned the UK’s high absence levels – not inform and consult unless they are which they estimate cost the UK economy compelled to do so. around £11.6 billion a year. 44 Recent research By increasing worker commitment, content - has confirmed the instinctive truism that ment, loyalty and trust, employers are better absence levels are reduced when workers feel able to free the latent potential of their more in control of their working hours and workforce and thereby reduce absence, staff conditions and, indeed, companies such as BT turnover and wider inefficiencies. The net have reported a marked decline in levels of result is businesses that are more competitive, absence since introducing flexible working more productive and more profitable. 50 hours and home working initiatives. 45 But should we be concerned that at least High staff turnover and the inability to some employers pursue these ‘enlightened’ retain well-trained and experienced employees employment practices primarily out of naked are a further thorn in the side of many busi - self-interest? Is this not the capitalist wolf in nesses. A 2002 DTI report showed, for example, democratic clothing? Or should we look that two-thirds of organisations considered instead at the results of these employer-led staff turnover was having a negative impact on initiatives and rest assured that while their business. 46 The costs of staff turnover employers’ hearts might not always be in the vary, with the amount of time and training a right place, the by-product of this process is a company has invested in its staff, but research more content and empowered workforce? by the Work Foundation and Employers for We should remain sceptical of employers’ 42. See www.kpmgcareers.co.uk. Work-life Balance estimate that ‘replacement motives and cautious of encouraging any form 43. See, for example, Gratton, Democratic Enterprise , p211. staff can cost [a company] anything from of nominally consultative workplace initiative. 47 44. Jones, About Time For Change. £5,000 to £10,000’ per person. But if the result of management-led participa -

45. Ibid. See also Gratton, It is thus perhaps no surprise that com - tive programmes is sustained and meaningful Democratic Enterprise , pp209–211. panies like KPMG – which invest heavily in consultative arrangements that involve a shift 46. See www.employersforwork- training their graduate intake and have a staff in workplace power relations, then we should lifebalance.org.uk/business/recruit. htm; see also Bevan, Ethical turnover of around 25 per cent per year – have welcome them. But the next step is to say that Employee , pp4–5. proved particularly willing to adopt consulta - all employers should be compelled to inform 47. See www.employersforwork- tive workplace practices and work–life balance and consult like the best do. lifebalance.org.uk/business/recruit. htm. initiatives. But what legislation ensures is that That successful companies might become

48. Bevan, Ethical Employee, p10. there is no ‘rhetoric reality gap’. It’s all very more profitable as a result of these initiatives

49. Coats, ‘No going back to the well having a policy, but quite another thing should not obscure the benefits for workers: 1970s?’, p6. for employees to believe that they can make greater control over their working environ - 50. See, for example, the ‘5 use of the policy without detriment. ment, a greater sense of self-worth, improved reasons to become a democratic enterprise’, in Gratton, Democratic When considering the qualitative merits of working conditions and exposure to demo - Enterprise , pp206–218. employer-led workplace consultation initia - cratic principles and procedures. Work can Instrumental benefits of workplace democracy | 17

and should be as much of a liberating experi - name of the eternal class struggle. It is not ence for workers in all types of jobs. Of course about reducing profitability and preventing some jobs are much more routinised than managers from managing. Rather it is about others. But even the most prescribed work ensuring that the principles of liberty, equality processes need to be refined and restructured and democracy are extended to the economic and should allow the scope for employee voice. sphere in a way that empowers workers and And where work is less stimulating and thereby increases productivity and efficiency. creative, the demand for some democracy over The democratic enterprise, as Gratton pay and conditions is likely to be even more contends, is one ‘where individual benefits are welcome. not at the expense of the organisation Workplace democracy is not about scoring and…organisational benefits are not at the points against the business community in the expense of the individual’. 51 51. Ibid., p.xviii. IV

Trade union renewal

Information and consultation provides demonstrating trade unions can, and do, unions with a golden opportunity to make a real difference in workplaces. In this, increase their presence in workplaces, unions have a crucial opportunity to stand up particularly those where there are for better work life and to begin to re-build union members but where the boss has their membership bases. until now been refusing to engage collectively with staff. Theoretical basis

Brendan Barber, TUC General Secretary, on the ICE The good work agenda: a ‘holistic approach’ Regulations coming into force, 6 April 2005 to good work should include workplace democracy The trade union movement is the largest and David Coats of the Work Foundation recently one of the longest surviving workers’ organi - argued: sational forces in the UK. While other workers’ groups have proved transitory, Work organisation and job design may trade unions have been fighting for the main - not be traditional trade union issues tenance or improvement of workers’ rights but, as we can see, they are the source of for almost 150 years. 52 No political organisa - much discontent in today’s workplaces. tion could have survived so long without Making the promotion of ‘good work’ a adapting and evolving to suit its surround - priority in both organising and ings. And as the modern globalised economy bargaining strategies could lead to a drives through rapid social, cultural and rapid growth in membership and the political change, as well as fundamental ability to make more of a difference to changes in types of jobs and the way those people’s working lives. With trade unions jobs are done, trade unions face new chal - in the lead British workplaces could be lenges. healthier, happier and more produc - Not least of these is the steady decline in tive .54 union membership. Figures from National Statistics show the current rate of union ‘Good jobs’ are still the exception rather than 52. Pelling, H. (1976), A History of Trade Unionism , Macmillan. membership among all workers is now only the rule. Monotony and frustration are far

53. See 25.8 per cent. At the last count (December more prevalent than attainment and fulfil - www.statistics.gov.uk/CCI/nugget.a 2006) union membership had declined by the ment. A recent study by the Health and Safety sp?ID=4&Pos=4&ColRank=2&Ran k=448. largest annual percentage since 1998. In the Executive found, for example, that 500,000 UK

54. Coats, D. (2007), ‘Good work quarter ending December 2006, the rate of workers experience work-related stress that for all? Job quality, health and well- union membership for employees in the UK makes them ill, and a further five million being in British workplaces’, in Unions 21, ForeFront , Issue 8, p3. fell by 0.6 percentage points to 28.4 per cent, people feel ‘very’ or ‘extremely’ stressed while 53 55 55. Jones, pp5–12. See also London from 29.0 per cent in autumn 2005. at work. School of Economics/Policy Studies Institute (2002), Working This chapter will explore the theoretical The Work Foundation – one of the great In Britain Survey, and Reeves, R basis for trade unions to take up the champions of the ‘good work agenda’ – also (2002), Dad’s Army: the case for father-friendly workplaces , The Work workplace democracy agenda and argues that offers the sobering assessment that while UK Foundation. there are compelling practical factors employment numbers are higher than ever, Trade union renewal | 19

‘the quality of working life has fallen over the The concept of employees’ right to have a say last decade. Employees report less satisfac - and influence in decisions that affect their tion with working hours, difficulties in recon - working conditions and the operation of their ciling work and their caring responsibili - organisation should be at the very centre of ties…fewer opportunities to influence their trade union agendas in improving people’s working environment, more stress and more working lives. As Neal Lawson put it, ‘this pressure.’ 56 A survey by the Organisation for agenda takes unions beyond terms and condi - Economic Co-operation and Development tions to adding real value to people’s working (OECD) also found that 41 per cent of workers lives through personal development plans in the UK feel unsure about the future of their and the myriad forms of economic citizen - job even when performing well, and the 2004 ship’. 61 Workplace Employment Relations Survey (WERS) also found that just 63 per cent of employees are satisfied with their job ‘A survey by the Organisation for Economic security. 57 The Monday morning feeling is no longer confined to Mondays or, indeed, Co-operation and Development (OECD) also found that mornings. 41 per cent of workers in the UK feel unsure about the Some unions have taken up the baton of workplace democracy, recognising that having future of their job even when performing well.’ a say and your views listened to, considered and responded to by managers in the workplace is a fundamental part of a good work experience. Workplace democracy and trade unions as Last year, the Amicus section of Unite set out academies of citizenship its Agenda for Better Jobs, identifying five key Earlier in this publication we demonstrated the elements to improve the quality of people’s link between democracy at work and wider working lives. These were: a safe and healthy participation in society. The history of trade workplace; control over the working environ - unions as vital civic institutions is a proud one ment; secure and interesting work; fairness and workplace democracy offers a compelling and dignity at work; and a trade union voice. 58 opportunity to revitalise this pillar of trade The Agenda for Better Jobs states that unionism. 62 ‘improving the quality of people’s working Trade union rule books enshrine democratic lives not only enhances individuals’ personal mechanisms to ensure members have collec - well-being but it helps to lead better, more tive control over the organisation. For many, successful organisations and a more produc - participation in trade union activity in the tive economy. Trade unions make a differ - workplace has served as an introduction to 56. D. Coats (2006), An Agenda for Work: The Work Foundation’s ence, particularly where there are effective democracy – sometimes a person has never challenge to policy makers , The Work Foundation, www.thework - relationships with employers and govern - voted in an election before. Indeed, trade foundation.com/Assets/PDFs/Agen ment’. 59 unions derive much of their authority from da_for_work.pdf. In a survey undertaken as part of their Good their democratic credentials, and that of their 57. Reported in Amicus (2006), Good Work: an Amicus agenda for Work campaign and to support the Agenda for representatives. better jobs , Amicus, p11.

Better Jobs, Amicus found that ‘the areas where It is interesting to note that UK trade unions 58. Ibid. respondents’ work experiences are most falling act in an international context and have for 59. Ibid., p6. short are job security, control of the work envi - many years seen their mission as not only 60. Amicus, (2006), Unions and ronment and being treated with fairness and getting fair deals for people in the UK but also Good Work: results of an Amicus 60 survey on the quality of people’s dignity at work’. showing solidarity with unionists abroad who work experience , Amicus, p3.

There are clear indicators linking unhappi - are fighting for fair deals and better conditions 61. Curran, C. (2006), Organising to ness and frustration at work with being in their own countries. A fundamental belief in Win: a programme for trade union renewal , Compass, p5. disenfranchised and not able to have any say fairness and democracy has not stopped at the 62. See Cole, as summarised in or control over ways of working or ways of trade unions’ territorial boundaries. In fact, Pateman, Participation and dealing with challenges the company faces. the TUC’s tagline proudly states, ‘With Democratic Theory , pp36–38. 20 | Swimming with the tide

member unions representing over six and a that they were treated with fairness and half million working people, we campaign for a dignity at work compared with 44 per cent of fair deal at work and for social justice at home those without a trade union voice. Although and abroad.’ 63 Many unions work hard to build just less than 48 per cent of those with a trade links with trade unions in countries where union voice in the workplace said that they feel democracy is developing or threatened, inter - in control of their working environment, this ventions that they hope will help promote was considerably more than the proportion of democracy, fairness and freedom. Recently, the those without a trade union voice (39 per TUC has been vocal in supporting pro- cent). 66 democracy and human rights campaigners in There are many identifiable advantages Burma, Zimbabwe and Colombia, among other trade unions can bring in campaigns for places. Importantly, the TUC receives substan - greater workplace democracy, particularly in tial government funding for its work overseas. the implementation of the information and At the heart of trade union agendas should consultation framework enshrined in statute. be the transposition of their founding ethos of bringing democratic decision making and The practicalities of upholding, collective voice into the workplace. Campaigns promoting and protecting rights on information and consultation arrangements Under the current information and consulta - in the workplace would be a key driver in this, tion legislation, responsibility lies with encouraging and training employees to employees to ask their employers to enter exercise their democratic rights and to negotiations on new information and consulta - consider matters from a collective angle, as tion arrangements. Effectively, it is trade well as encouraging employers to consider unions which are tasked with policing the their wider potential to promote citizenship in legislation, for the following reasons: communities they operate through corporate Employees often do not have experience of social responsibility. interpreting legislation or information and consultation proposals that their employers Practical basis – trade unions working put on the table. Trade unions are a key in a modern workplace resource of legal expertise and are experienced Trade unions really do make a difference. The in identifying key points and implications of Amicus Good Work survey concluded: proposals. Trade unions can also play a key role in training workplace information and On every indicator used in the question - consultation representatives to ensure they are naire to consider respondents’ quality of able to make the most out of their position and working life, those who have a trade the information and consultation arrange - union voice in the workplace report a ments. more positive experience than those who Employees often do not have a bench-mark do not. For two areas in particular – with which to compare the information and fairness and dignity at work, and consultation arrangement in their work - control of the environment – the differ - places and so to judge whether or not it is a ences are significant. 64 fair deal. Trade unions are uniquely placed to provide models for information and consul - There is a strong correlation between tation that are effective and reflect the spirit people having a trade union voice in the of the legislation. This is particularly workplace and reporting positive experi - important given the flexibility of implemen - ences in respect of being treated fairly at tation that is afforded to companies by the 63. See www.tuc.org.uk/. work, and feeling in control of their legislation. 65 64. Amicus, Unions and Good Work , working environment. Legislation requires at least 10 per cent of p5. the workforce to request negotiations on infor - 65. Ibid., p6. The survey showed that 63 per cent of those mation and consultation arrangements for 66. Ibid., p5. with a trade union voice in the workplace said management to be compelled to oblige. Trade Trade union renewal | 21

unions have experience and resources to Trade unions clearly have an important role mobilise workforces and provide people with to play in re-balancing the employment rela - compelling information to ensure they sign up tionship. Unions remain the most effective to requests. voice mechanisms for employees. They can If 10 per cent of the workforce does not foster ‘strength in numbers’ as well as provide request negotiations, employers can claim legal and financial assistance to put employees ‘pre-existing arrangements’, which become on a better footing to challenges employers, more difficult for individuals or small groups who have the resources of the company at of employees to challenge. Trade union hand. expertise and resources can be key to Bargaining primarily on terms and condi - mounting successful challenges, which require tions leaves the unions isolated around the costly and specific legal representation. symptoms of bad work rather than addressing Importantly, if a company is found not to be the causes of good work. Taking an active role fulfilling its obligations under the information in shaping the well-being of their own and consultation regulations and fined, the members and other workers, alongside a money does not go to the employees, leaving process that could lead to increases in produc - employees with individual liability for legal tivity and efficiency, is a recipe for trade union costs. renewal on an impressive scale. V

The European experience of workplace democracy

Functioning models of workplace democracy ciency, dynamism and innovation have been using enlightened employment practices and accomplished against the backdrop of an dynamic trade unions can be found much extensive welfare state that values high-quality more prominently across the rest of Europe public services, invests in human capital and and Scandinavia than the UK. The focus in this provides generously for those unfortunate section is on both the Scandinavian experience enough to be outside the labour market. and European works councils as examples of The Scandinavian models represent how workplace democracy has been imple - something of a contradiction to the neo-liberal mented effectively and how these models can notion that a solely minimalist state with act as archetypes for the UK to follow. deregulated markets can achieve any economic productivity. 69 Scandinavia has shown that The Scandinavian models there are alternatives. First, the Scandinavian and wider Nordic However, neo-liberalism in the UK has not economies are unlikely success stories that are only ensured that public services and employ - scarcely repeated but deserve some analysis ment practices are inferior to European states, and consideration. Countries like Sweden, but it has also failed to produce the produc - Denmark and Norway are not usually expected tivity gains its proponents promised. The neo- to be found among Europe’s most competitive liberal approach has proved to be quite the and productive markets, because they have not contrary as productivity has remained been blessed with raw materials, industrial stagnant and below the EU average when bases, demographics or a climactic advantage measured as output per hours worked. 70 like other European states. Despite this Scandinavian economic and social success 67. Taylor, R. (2005), Sweden’s New challenge, these states have enjoyed ‘open, has been based on what the Swedish govern - Social Democratic Model , Compass, p17. thriving and efficient economies operating on ment describes as ‘a spirit of consensus’ between 67 68. Ibid., pp12–17. global markets’. progressive employers, empowered trade unions 71 69. Ibid., p30. Even with their different social, historical, and an enlightened and enabling state.

70. See Excell, R. Union political and cultural heritages, Scandinavian In his Compass pamphlet Robert Taylor Representatives and Company countries retain low interest rates, low demonstrated that employers in Sweden ‘not Performances , TUC. ‘If we look at labour productivity as measured inflation, low unemployment, high levels of only preach the virtues of flat hierarchies, by output per hour worked, in 2003 the UK’s productivity stood growth, large balance of payment surpluses workplace diversity, informal team working, at 95.2% of the average for the and considerable inward investment. 68 With direct communication and commitment but then 15 member states of the European Union, behind Belgium, booming telecommunications and export they apply such human resource management Denmark, Germany, France, industries, the Scandinavian economies have techniques in a coherent and holistic way with Ireland, the Netherlands and 72 Sweden.’ also proved sufficiently durable to withstand positive effect’. These democratic employment 71. Taylor, Sweden’s New Social and harness the energies of globalisation. practices are not a product of a coercive state, Democratic Model , pp18–19. The greatest achievement of the but of a widespread appreciation of its economic 72. Ibid., p20. Scandinavian models is that economic effi - and social benefits by Swedish employers. European experience of workplace democracy | 23

By pursuing socially responsible corporate buoyant economy that protects and supports policies and ensuring workers are equal workers. As Taylor emphasises, ‘There is an citizens in the workplace, Scandinavian obvious and imaginative symbiosis between employers have been able to enjoy the kind of progressive unionism and modernising financial benefits outlined in section III. The management in the emergence of such an most successful Scandinavian companies are innovative and dynamic approach to the those that have ‘employment retention policies organisation of work.’ 76 in place, regulate their turnover and appreciate The spirit of co-operation, mutual concern experience’. 73 In short, the Scandinavian and respect consecrates the democratic economy is driven by those who invest in process and civic engagement found in human capital and value their employees as Scandinavia. Directly conflicting is that the equal participants in a communal project. lack of democratic participation at work in the However, it is not simply the internal UK serves as a barrier to the widening of composition and democratic principles of democracy at every level. Scandinavian companies that explain their The Scandinavian model demonstrates that success. It is also their consensual willingness a consensual approach to economic and social to work together across the labour movement, development along with the belief in mutual business and local communities and national prosperity establishes a better economy with political organisations. integrated employers. These same principles Trade unions are also a significant factor in have been developed in the European Union workplace involvement since pragmatism through the European works councils, which alone in the business community would not aim to promote greater involvement of significantly bolster productivity. In Sweden, employees in the workplace. for example, trade unions have persisted through the Europe-wide decline in member - European works councils ship and have remained at the heart of European works councils (EWCs) have gently economic modernisation. ‘Swedish trade slipped into the legislation of countries across unions’, as Taylor reminds us, ‘have always Europe under the Works Council Directive, believed in open markets, private and public which was first adopted in 1994. The councils investment in research and development’ and were designed to enable more representation ‘continue to embrace technological change and in the workplace in companies that operate in co-operate in the restructuring of companies member states of the EU through wide use of and the promotion of worker empowerment’. 74 information and consultation to involve The positive, pro-active approach of Swedish employees in important company decisions. trade unions is mirrored across Scandinavia The Directive states that its purpose ‘is to and the wider Nordic region. ‘During most of improve the right of employees in Community- the twentieth century the trade union scale undertakings and Community-scale movements of all four Nordic countries were’, groups of undertakings to be informed and as Taylor contends, ‘unapologetic modern - consulted’. 77 isers…they were self confident and secure The Directive obliges employers of large enough in their legitimacy to welcome indus - companies (those with over 1,000 employees in trial and workplace change rather than resist at least two member states) to develop works 73. Auer, P. and Cazes, S. (2003), or obstruct what needed to be done to ensure councils as a tool to increase employee partici - Employment Stability in an Age of business success.’ 75 pation, providing employees with information Flexibility , International Labour Organisation. Quoted in Taylor, This tendency to look beyond narrow self- about the company’s situation as well as Sweden’s New Social Democratic interest and consider the wider interests of consulting employees on strategic decisions. Model , p21. society has defined the Scandinavian models. Individual employees are represented by 74. Taylor, Sweden’s New Social Democratic Model , p19. The Scandinavian experience illustrates that elected colleagues who take up places on the 75. Ibid. when progressive, socially responsible council. 76. Ibid., p20. employers work alongside dynamic, Member states were given time and flexi - 77. Council Directive 94/45/EC. empowered trade unions, the result is a bility to integrate the EWC Directive into their 24 | Swimming with the tide

own national legislation as they saw fit. This company converted to a Societas Europaea led to the creation and development of (SE) after merging with the Italian company different arrangements for works councils in RAS. An SE is a transnational, public limited- different member states – for example, Italian liability company in the EU that must follow works councils have a different system of European Community regulations to ensure worker representation than French works employees’ participation. The Allianz SE councils. Works Council has a combination of regional and country reps with supervisory boards in Allianz Germany and the UK; they meet semi-annually German group Allianz is an example of to exercise their rights to negotiate and be effective development of works council. With informed. over 100,000 employees worldwide, Allianz is This example of co-determination and one of the most prominent insurance and workplace democracy through the use of banking companies in the world. In 1996, the works councils illustrates the possibility of establishment of the Allianz European involving employees effectively, even in Committee (AEC) under the EWC Directive large organisations that straddle national brought a range of measures to foster workplace borders. democracy based on increased employees’ However, not all companies in the EU to rights to information and consultation. which the Works Council Directive is appli - Under the AEC, the Allianz Group held cable have made progress towards developing annual meetings for employee representatives formal information and consultation frame - to learn about and discuss the current works. The European Trade Union situation and future challenges facing the Confederation (ETUC) reported this year that company. Employee representatives are able to of the estimated 2,204 companies covered maintain constant communication with the under the EWC Directive, only 772 actually had central EWC office, providing easy communi - operating works councils. cation channels for employees’ concerns to be The difficulties in implementing and estab - made known by management. lishing a commitment to a democratic work - Worker participation mechanisms were place are now explored through a number of developed further by Allianz in 2006 when the short case studies. VI

Winning through democracy: case studies on workplac e democracy

BT and European works councils BT employees elect representatives to a BT has grown from an offshoot of the post office national works council either directly or through to become a world leader in communications. the recognised unions. National works councils Today BT operates in 170 countries worldwide discuss matters affecting the operation specifi - and employs 104,000 people from engineering, cally in their own country. Employees in each customer service to software development. In the European country also elect representatives to the UK alone BT employs 93,000 people and manages BT European Consultative Committee (BTECC), a 21 million customers undertaking 12 million works council operating on a Europe-wide level. transactions every day. The BTECC tackles issues on a strategic level, The overwhelming majority of workers are considering questions of what the company will union members, belonging to either the look like in the mid and long term and the issues Communication Workers Union (CWU; front- this would raise for resources and re-skilling. line workers) or Connect (managers and profes - National works councils work out how best to sionals). implement the decisions and principles outlined The way people communicate is constantly at the BTECC according to their individual changing – communication is no longer just circumstances. about picking up a telephone. For BT, survival in Central to the functioning of works councils a constantly developing industry is only possible are employee relations managers in each country. if operations can adapt to industry demands by Employee relations managers process informa - pioneering and securing operations in adjacent tion about the challenges and circumstances businesses, like broadband and software devel - facing BT operations and plan the most effective opment, and reconfiguring their workforce way of providing information to and consulting accordingly. employees. This is of particular importance when Following the burst of the dotcom bubble in BT needs to consult on information that if the late 1990s, questions over the viability of BT’s released could affect the operation of the operations in Europe were raised in the UK and business. the company faced calls to jettison entirely their A key principle for BT is that the BTECC and European operations. BT placed great impor - work councils are included as part of the tance on getting information to employees in decision-making process, and are not in existence Europe and consulting them as part of the just to rubber-stamp changes. Effective informa - process of putting together a strategy for the tion and consultation procedures have meant that future of European operations – considering employees have an honest and realistic picture of which bits were to be sold-off or merged and the circumstances and challenges the company what resources would be needed, including faces and are able to contribute to decisions staffing. BT had mechanisms in place for the affecting the future structure and operation of the election and functioning of works councils over company. The information and consultation 18 months before the legislation was passed arrangements have enabled employees to have a requiring it. say in re-skilling programmes and to take 26 | Swimming with the tide

decisions about their future with genuine options to industry demands, as well as to enhance their on the table for them. reputation with present and future clients. BT’s experience is that the effectiveness of information and consultation arrangements EDF depends on both managerial and employee EDF is the French-owned, former state-run commitment. utilities company that operates in the UK as EDF BT’s CEO has a history of working in works Energy. Here it bought London Electricity from councils and understands the benefit effective the Americans and then Seaboard and Eastern workplace democracy can bring. He spends time Electricity and now covers most of the southern talking to the BTECC and works councils and half of England. opens channels for employees to contact him Being a French-based company – and therefore directly. BT has worked with a trade union to steeped in the politics of a social Europe – and provide training to its managers on information formerly state owned, the company is culturally and consultation methods and importance. sympathetic to workplace democracy and has an BT’s experience is that the efficacy of infor - EU-wide works council. French workers are con- mation and consultation arrangements very sulted at a very early stage on all issues that relate much depends on staff taking up the idea and to them; they are provided with lots of informa - working at it – building good working relation - tion about the company’s performance. Having ships with counterpart reps, other employees access to information before decisions are made and management – as well as commitment from by management is essential if the workers’ voice is management. to have any impact. The unions bring in account - BT says that the difference in activity levels of ants and other experts to help them understand works councils across European countries is the information and determine their response. indicative of different national approaches to UK unions, including Prospect, Unite and the information and consultation, as well as the GMB, were therefore pushing at something of an nature of the challenges being faced. In countries open door when they started to structure a UK where BT has (or had) smaller or embryonic works council around three years ago. It was operations, interest in works councils and repre - based on the agreement for the EU works council. sentation is low compared with countries that The EU body itself had helped design and have bigger BT employee numbers and wider, negotiate a global agreement on CSR for EDF as a more established operations. BT noted that joint management–worker initiative, which all different situations affect different countries in the union have signed up to. Even the monitoring different ways; similarly, BT operations work of the agreement involves the unions. within different challenges, customs and legal In the UK there have been factors that have frameworks from country to country. It is for this both hindered and helped the establishment of reason that BT continues to make sure that strong the new works council. The unions have found it information and consultation mechanisms are in hard to reach agreement on the allocation of seats place in individual countries as well as to make around the table and in particular whether they effective use of the over-arching European-wide should be allocated pro rata, according to the committee. union’s membership strength. This issue is still to Importantly, BT noted that staff interest in and be resolved and means the Council operates more commitment to works councils has been spurred informally, through a secretariat. EDF has on by the presence of active and organising trade insisted on there being non-union representa - unions. Currently Italian trade unions are tives on the Council and four places have been working with BT employees in Italy to build the taken from directly elected EU Council members. works council. In addition, although workplace democracy is Managers at BT see information and consulta - accepted and supported at the top of the tion as a key component of the company’s company, there is a cultural lag as the US system corporate social responsibility programme and of the ‘right to manage’ still dominates many as an investment not a cost. BT believes that aspects of the business and will take time to shift. involving employees in decision making has But after US ownership of London Electricity, enabled the company to respond more effectively which saw the fragmentation of the business, Winning through democracy | 27

personal contracts and cost cutting, EDF is keen employers and employees cannot reach voluntary to reintegrate the company. The US management agreement on information and consultation had effectively banned unions from call centre frameworks; it has lodged a further two operations and relations with the unions in complaints since. All three complaints were general were not good. But EDF wanted to prove upheld by the CAC. to their workers in France and elsewhere that The first CAC ruling gave workers in Swansea energy liberalisation doesn’t necessarily harm the collective bargaining rights in an attempt to interests of the workers. As the UK has taken a persuade Macmillan to negotiate a voluntary lead on energy liberalisation the management felt agreement on information and consultation with it was important they were seen to treat British employees. During this campaign, membership workers well. So the unions have made consider - of Amicus among Macmillan employees in able headway in terms of recognition in calls Swansea rose from 2 to 147. The second ruling centres, and 350 professionals and managers have forced Macmillan to establish an employee- moved back onto collective terms from indi - elected information and consultation body; the vidual personal contracts. third ruled that the company had failed Overall the works council is part of a process of adequately to respond to a request for negotia - prioritising integration over fragmentation. It tions for a new information and consultation provides feedback on the company’s accounts framework from Amicus. and developing approaches to working time and Despite these favourable rulings, employees drugs and alcohol policies. In the future they will remained frustrated at the lack of progress be dealing with the further harmonisation of towards negotiations for new frameworks for terms and conditions and wider collective information and consultation. In July 2007 bargain issues. Amicus representatives took their case to the Employment Appeals Tribunal, which took 20 Macmillan minutes to rule that Macmillan had failed in their Macmillan is a global publishing company obligation to implement the Information and employing over 1,300 people in the UK at sites in Consultation Regulations and fined the company London, Oxford, Basingstoke and Swansea. £55,000. Managers at Macmillan maintain there have Macmillan has not been the only target in this been formal staff consultation arrangements in sector for Amicus-led campaigns for proper and place for over three decades but trade union effective implementation of legislation relating to Amicus, representing publishing and warehouse information and consultation. Amicus is in staff employed at different Macmillan sites, discussions with other large companies in the argued, according to Tony Burke, Assistant printing and paper industry and has brokered an General Secretary, that existing arrangements agreement with the British Printing Industries were not sufficient and that Macmillan had ‘not Federation. entered into the spirit of the [information and This case demonstrates the legal recourse that consultation] legislation’. Under the Information employees have when they are not satisfied with and Consultation Regulations, employees have a their employer’s implementation of the limited amount of time to request negotiations on Information and Consultation Regulations. It also processes for information and consultation. If shows how crucial a union’s role can be in mobil - pre-existing agreements are confirmed, that is if ising employees to demand fulfilment of their employees agree that arrangements for informa - rights collectively and also in providing the tion and consultation are already sufficient, 40 organisation and legal resources necessary to per cent of the workforce must call for reform in make use of legal recourse available. The order for the arrangements to be challenged at a continued lack of action by Macmillan casts later time. doubt over the weight legal decisions have. In After negotiations with Macmillan broke particular, employees felt that the fine of £55,000 down, in November 2005 Amicus lodged a attached to the Employment Appeals Tribunal complaint with the Central Arbitration decision that Macmillan was not fulfilling its obli - Committee (CAC), set up under the Information gations was not a sufficient deterrent to a global and Consultation Regulations to step in when company. VII

What is to be done?

Extending democratic principles to workplaces tisation of the economic sphere can be across the UK is a vast and potentially achieved. In short, argument and rhetoric daunting project. To date the issue has barely must be accompanied by practical policy been on the political or union radar. But things development and implementation. Govern- should and could change quickly. This report ment clearly has a central role to play in this has attempted to argue not just that there are process. instrumental asnd intrinsic benefits to be First, government can show sustained public gained from extending workplace democracy support for the principles of workplace but that the sprit of the age, defined by growing democracy and exhort good corporate practice demands for autonomy and consent, coupled wherever possible. By lending its considerable with the competitive demand for greater flexi - moral and political authority, government can bility, suggest a rich vein for the workplace ensure that workplace democracy not only democracy agenda in the future. returns to the political agenda but that it is As ever the issue will boil down to hard guaranteed serious parliamentary considera - political choices. Does Britain respond with tion. Furthermore, by identifying and extolling forced flexibility or constructive flexibility the virtues of those who already adopt good based on workplace democracy? Politicians employment practices, government can tend to take the path of least resistance and, provide a powerful incentive for other busi - encouragingly, there is growing evidence that nesses to follow suit. the tide is turning towards a context that could Coats has thus called on government to favour a renewed interest in workplace promote democratic workplace practices with democracy. ‘enthusiasm’. 79 But this should be the minimum The contributions from a younger genera - we expect. Government can and must go tion of Labour politicians such as Natascha further, and should start by putting its own Engel, Ed Balls and Kitty Ussher, with Balls house in order. calling for ‘a new deal for people at work’ is The government employs hundreds of testament to this development. 78 With the thousands of UK citizens; if it is to promote ‘choice’ and ‘empowerment’ agenda already workplace democracy effectively, then it is occupying a central position among members imperative that its own employment practices of both major UK political parties, and the are beyond reproach. Accusations of democratisation and decentralisation of the hypocrisy on this issue would not only further public realm becoming progressively reduce public trust in government but also important political and social issues, hierar - fatally undermine the government’s case for chical workplace practices look increasingly implementing a wide-ranging extension of anachronistic in the modern globalised democratic principles to the workplace. economy. Government departments and the wider To further this process it is essential to public sector must become repositories of develop and sustain the intellectual case for the best practice with hierarchy and domination 78. IPPR extension of democratic principles to the replaced by autonomy and equality. Indeed, 79. Coats, ‘No going back to the workplace, but it is only through concerted the growing interest in the ‘co-production’ of 1970s?’, p7. action by a variety of agents that the democra - public services through the frontline interac - What is to be done? | 29

tion of producers and users will demand at citizens in the workplace, and that wider some stage the democratisation of these rela - society is reassured that the government values tionships. the liberal principles of freedom, equality and This would indeed be a major step for democracy. In short, legislation changes government to take, but it is not all govern - behaviour and opinion. If there is a minimum ment can do to encourage the dissemination of amount paid for wages, can the ICE democratic principles to the workplace. Regulations ensure a minimum amount of During their decade in power, New Labour democracy in the workplace? have been prolific legislators and orchestrators of innumerable initiatives and strategies. They have, however, been somewhat reluctant to ‘Companies need to fear the sanction of meaningful introduce far-reaching and meaningful action fines if they fail to obey the letter and spirit on workplace organisation. Legislation such as the European Social Chapter (1997), the of the law.’ Employment Relations Act (1999), the EU Information and Consultation Directive (2001) and the much-trumpeted Warwick Agreement The government should seriously consider (2004) are long overdue and warmly welcomed, allocating public money to train and resource but (with the possible exception of the Social workplace representatives. Financial assistance Chapter) the government has failed to is already provided to independent trade implement this legislation with sufficient vigour. unions and their federations through the It is now the role that information and BERR’s Trade Union Modernisation Fund, but consultation regulations have to play that must consideration should be given to extending be vigorously pursued, as they provide an this provision significantly and explicitly for adequate legislative framework for workplace workplace democracy representatives. There is democracy but need to be toughened up and a clear public interest in ensuring that made easier to implement. Workers and their workplace representatives are skilled, knowl - representatives need the resources to get edgeable and trusted by employers. Weak through the legal and negotiating minefield of workplace representation can fatally the regulations, and companies need to fear undermine effective democratic institutions the sanction of meaningful fines if they fail to and therefore warrants government attention. obey the letter and spirit of the law. It would not be an unreasonable expectation This is not to say that legislation alone can that if the right arguments are made and create a lasting foundation for a wide-ranging support is built, the government itself would be programme of workplace democracy. ‘The committed to a review of workplace democracy legal right to consultation’, as Noon reminds to test the boundaries for legal and regulatory us, ‘does not lead to effective consultation’ support for the concept. It could, at the very (emphasis added). 80 Indeed, in Democracy in least, fully examine the comparative experi - the Public Realm Compass emphasised that ‘it ences of workplace democracy through a tripar - is impossible to legislate high quality jobs into tite commission of experts, managers and trade existence, require that all workers trust their unionists in the same way that pay and structure employers or guarantee that all managers are were dealt with in the NHS through the much able to make the best use out of a highly respected Agenda for Change initiative. skilled, well-motivated workforce’. 81 But the flourishing of workplace democracy Regulation is a necessary but insufficient cannot be the sole responsibility of govern - step. Legislation not only provides minimum ment. Indeed, far from it. Democracy at every standards and safeguards for workers but it level and in every way is something that has can also help focus the mind. It is through to be struggled and fought for. And given the 80. Noon, P. in Coats, Towards A Europeanisation of Industrial regulation that employers are compelled to way in which the issue is likely to be contested Relations , pp10–11. modify their management style, that by at least some employers and their repre - 81. Shah and Goss, Democracy in employees are made aware of their rights as sentatives in the media and elsewhere, the the Public Realm , p70. 30 | Swimming with the tide

establishment of the conditions for workplace tive framework set out by stronger information democracy would seem to be classic territory and consultation regulations. for progressives outside parliament to build, There are thus numerous obstacles and establish and maintain a consensus. If such a pitfalls facing proponents of a wide-ranging progressive consensus is established then the extension of democratic principles to the hope and expectation would be that the work place. But these hurdles are not insur - government moves into the space and mountable. bolsters it through regulatory, legal and moral For more than two decades workplace backing. But it will be the actions of unions, democracy has either been pilloried or ignored academics, progressive employers and in equal measure. But as New Labour embarks sections of the media and politicians outside on its own programme for renewal they have a the executive that will determine whether valuable opportunity to put workplace momentum can be gained. democracy at the centre of a progressive Surveys show that with an increasingly political programme. skilled and qualified workforce competing in a The stakes are too high, the costs of inaction more open employment market, employees are are too substantial and the potential gains are able to attribute greater importance to too vast to ignore workplace democracy for questions of work–life balance and workplace any longer. If Tony Blair can argue that it is organisation. 82 Power dynamics are shifting; ‘time to put work back at the centre of the employees are no longer content with ‘any old political debate’ then it is up to us to ensure job’ and employers are increasingly aware of that Gordon Brown has the ideas, policies and the value of having high-quality staff. But support to make it happen. 83 relying on prevailing employment trends to The final word goes to the Harvard philoso - 82. Bevan, Ethical Employee , pp7– bring about increased workplace democracy is pher Peter Koestenbaum, who states that ‘insti - 26. patently insufficient. Workers need to show tutions are transformed the moment we decide 83. Blair, ‘Our Nation’s Future’. courage and persistence, pushing and they are ours to create’. 84 It is the transforma - 84. Peter Koestenbaum, Freedom and Accountability at Work , Jossey prodding employers, trade unions and govern - tion of our experience of work to which we Wiley, 2003. ment wherever possible but within the legisla - must now aspire.

Swimming with the tide Democratising the places where we work

Chris Ward and Zoe Williams

Southbank House, Black Prince Road, London SE1 7SJ T: +44 (0) 207 463 0632 [email protected] www.compassonline.org.uk