for institutions of workplace democracy

by Gregor Gall, Professor of Industrial Relations, University of Hertfordshire

Workers in Britain experience and are subject to a fundamental lack of democracy in the places where they work (and where they spend a considerable period of their lives). While there are some limited forms of political democracy through indirect representative institutions such as parliament, there are no corresponding bodies for providing for ‘industrial democracy’. Moreover, those representative political institutions do not exercise much influence over the workplace – they choose not to because of the voluntaristic tradition of industrial relations in Britain and because of the way that parliament was fashioned to leave the economy essentially under private control and in private ownership. Consequently there is no workplace democracy (traditionally referred to as ‘industrial democracy’). Moreover, because there is a lack of democracy at work, where goods and services are produced, distributed and exchanged and decisions are made over these matters, there is also an absence of economic democracy. Consequently, there is a sizable democratic deficit. Of course, workers have traditionally sought interest representation directly at work through collective bodies – labour unions – but unions are heavily dependent upon others parties, namely employers and the state, for acceptance, legitimacy and recognition, so workers have no automatic, inalienable or inviolable rights for exercising some form of control over their working lives at work. Furthermore, labour union power ebbs and flows because of movements in labour and product markets as well as union strategies.

Nonetheless, it is generally conceded in the liberal democratic thought that workers should have a right to participate in the making of decisions that affect their working lives. What prevent the realisation of this are two phenomena. First, there is the sense in which only token appreciation is given to this part of the liberal democratic worldview (which of course is not the only worldview of the ruling class to hold sway). Second, and more importantly, is the imbalance in power between labour and capital (with the state being far more a creature of capital than labour) where there is a fundamental antagonism of interests between the two. Indeed, it is the fundamental reason why token appreciation seldom leads to any action of substance in this area.

In Britain, this imbalance has historically taken the predominant form of ‘voluntarism’ or ‘collective laissez-faire’ in the employment relationship, where capital and labour are left, largely unhindered, to regulate their own affairs and their interaction with each other. This occurs as a result of the employers’ and state’s wishes. Employers, given their superiority in power and resources and the interests they have, are happy to be able to manage their organisations, and to regulate their relationship with their workforces, as they see fit. In general, they oppose state intervention in industrial relations. Concomitant, the perspective dominating state thought is keen to support this choice of non-regulation as a result of the belief that interfering with the managerial prerogative is detrimental to economic efficiency and wealth creation. Traditionally, many unions have also favoured this system, fearing the consequences for their freedom to act as they choose from the actions of the capitalist state, particularly in periods of union strength. Of course, there are a number of important provisos to this characterisation of union perspective concerning overturning the Taff Vale judgement of 1901 through the Trade Disputes Act 1906 and the demand since the late 1980s for a positive right to strike. Nonetheless, the general picture remains true – of voluntarism dominating the manner under which industrial relations and the employment relationship are organised in Britain. In essence, employers, with the consent of the state, are given a free hand in how to determine their employment relations. This can be mostly easily seen if a comparison is made with the corresponding situations of other nation-based capitalisms in Germany, the Netherlands or Sweden (but that is not to suggest that state intervention in industrial relations is necessarily progressive for the motivation and nature of the intervention are critical in determining the outcomes).

What has brought this issue of the abject lack of institutional workplace democracy back into sharper relief than at any time in the last few years has been the de facto full or partial nationalisation of some large financial institutions as a result of ‘new’ Labour’s response to the financial crisis of capitalism. Given the nature of nationalisation as part of the post-war settlement and Labour’s critical part in establishing this, a number of aspects come into view. Because of Labour’s historical association with the labour movement and unions, it has often been assumed that i) nationalisation was – or should have been – an aid to creating the institutions of workplace democracy, and ii) subsequently Labour was predisposed to the creation and extension of workplace democracy through action to establish new institutions in the workplace and enterprise. This was not the case in terms of worker directors – with only the Post Office and British Steel witnessing these in a mild form. Neither was it the case with the Royal Commission on Industrial Democracy (the Bullock Report) established while Labour was in office between 1974 and 1979. Party policy may have said one thing but party leadership in government did another. But it was the case in terms of party policy from 1979 until the early 1990s when the opportunity of opposition more easily afforded radicalism in policy and there was relative move to the left with the rise of Bennism. The upshot of this is that for some there is latent sense that these nationalisations by a nominally Labour government should be accompanied by the setting up of instances of the institutions of workplace democracy. In other words, state control and state run units of capitalism are not assumed to be value neutral because the state is held to be a tool to regulate capitalism under a popular common sense version of social democracy.

That they have not happened should come as no great surprise to the socialist left but that does not mean the issue has no wider significance for the left and workers. The first point that needs a wider airing is that Brown and Darling’s terms for the bailouts have not been not stringent no matter how much the bankers howl, testifying to the underlying rationale for them – saving capitalists and capitalism from themselves rather than workers from capitalists and capitalism. (That does imply that the state should not have acted to prevent financial turmoil and economic contraction because workers do suffer from these when capitalists also suffer from them.) So the bailouts have not been ‘socialism for the rich’ as some of the media and left have described the actions but state intervention to support and defend markets and neo-liberalism which in some ways has been not dissimilar to the fundamental basis for the nationalisation of post-war settlement. The difference has been that there has been no need to respond to organised popular social demands of the kind that led to the establishment of the welfare state back then.

The second point is that the absence of demands from the union movement for industrial democracy to be instituted as part of the wider quid pro quo terms of the bail outs is marked. Unions like Unite and the GMB have only called for no redundancies or repossessions and an end to the bonus culture and offshoring (although Unite has been happy to support bonuses for all staff upon the repayment of the Northern Rock loan money). Unite then went on to launch a Social Contract for financial services by which is preposed that it must be recognised as a key stakeholder, job security for finance workers, limiting outsourcing and offshoring, protecting finance workers’ terms and conditions of employment, and giving the union a role in a new regulatory regime via regulatory bodies. Other unions have called for financial aid to the poor and more money for public services. While appropriate in terms of marking out a wider agenda and for the constituencies of particular unions (finance sector/non-finance sector), their timidity reflect both ideological drift and tactical considerations – making demands from within ‘the tent’ that are not to extreme to be dismissed. So not one union has said, for example: ‘Our price for supporting the bailouts are worker directors or public representatives on the board in each bank that takes public money’. But underlying both ideological drift and tactical considerations must surely be the implicit recognition that unions within and without Labour are in little position to enforce their demands.

Yet if both union and left renewal are to begin, then such demands for workplace democracy cannot be junked – only to be introduced at some later, more favourable date in the future. This would be an abdication of responsibility and indicate a poor understanding of the role of unions as forms of agency. At a time of political flux, and with talk of the need amongst the ruling classes of a new financial regulatory settlement, now is the time for demands to start circulating. But the essence of the demand for industrial democracy must be fashioned in a way that takes account of the legacy of discredited past nationalisation – vis-à-vis
economic inefficiency, poor service provision, control by civil servants and the like – and links into popular mass consciousness by being ahead of it but not too far ahead of it. If this balance of both leading and following – that is articulating, focusing and organising ideas and sentiments – is not struck then progress will not be made. The left would do well here to study the experience of the RMT union as the leading union which has successfully championed the demand for a return of the railways to public ownership with debate on what form this should take.

So in terms of what ideas and demands to advance we have a few to choose from. At the bottom end, we have the continental European version of compulsory consultation, where management is obliged to engage with workforce representative on issues outside the normal ambit of collective bargaining. But consultation is not negotiation and it is not a serious positive infringement on the right to manage in the workplace or make executive decisions on investment and strategy. Next come co-determination or workers’ participation where workers have a stronger say in how businesses are run at all levels. But having a say is not tantamount to having parity of influence and power. Decisions may be vetoed but this is vetoing decisions of capitalists rather than taking the initiative to take pro-active decisions on socialising the purpose and outcomes of the enterprise’s activities. After that the next levels would be workers’ control where managers are fully accountable to workers or where workers become the managers through self-management. In any of these cases, it would be wise to consider what role the citizens and consumers of these goods and services should play so that potential conflict between consumers and producers is productively and consensually managed.

For workers’ participation to be effective and meaningful, its scope must be both of considerable depth and breadth. Depth concerns the degree or extent of influence over any one issue while breadth refers to the array of issues that are subject to participation. Not only must this be true at the shopfloor workplace level but it must also be true at the higher internal levels within organisations such divisional, headquarter and parent levels. If it is not, then workers will find that in attempting to exercise joint control over issues at the shopfloor level, they are acting within a framework already set out by senior management, thus reducing their ability to act as they wish. Another pre-requisite is that participation for workers is based on their collective involvement organised through permanent, independent and democratic collective associations. This is because it is only through workers combining with each other that they can increase their power resources to represent their interests.

Although making the choice of what to demand must be a matter for of democratic and collective discussion within the labour movement, two points would seem to be incontrovertible. First, whatever goal is chosen, it should be allied in the first instance to the extension of collective bargaining where in the banks that have been give bail outs, collective bargaining has been narrowed down through the use of performance-related pay and eroded and superseded by consultation through partnership deals. Second, more time was spent on examining participation because while problematic in many ways, it would seem to be the level at which such demands could be pegged at the moment. The issues concerning what type of participation is preferable should focus on those which maximize depth and breadth, support rather than undermine collective bargaining and which are not self-limiting. This last point is very significant for the left must favour those that raise the collective aspirations and capacities of workers to go beyond where they currently are in order to make headway towards the creation of a socialist society. In this sense, the mechanism would have a transitional capability. Finally, for the demand for industrial democracy to strike as deep a chord with as many workers as possible, it should be part of a wider vision of socialising and democratising the economy through some kind of alternative economic strategy.

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