or (Industrial Democracy) as they say in Germany
By Pascal Ranaghan
In fact “Die Mitbestimmung” translates more accurately as “Co-determination” and is the form of Industrial Democracy which has been operable in Germany one way or another since the end of World War Two. It is also the title given to the journal of the Hans Badder Foundation, an organisation which exists to provide research and educational support to workers representatives who serve on supervisory boards and works committees in both the public and private sector. The journal appears monthly in German but a special Edition was produced in English for the first time last year in conjunction With the Jim Conway Foundation and with the support of John Edmonds and Bill Jordan, both of whom also contributed articles.
The topics included in the 1992 issue range from historical overviews of the changing British approaches to the question of Industrial Democracy (ie whether?) to various considerations of how the German or some other model might be applied given the widening and deepening of the social dimensions of the European Community (ie whither?). Given that discussion of both questions has been all but taboo within the British Labour movement for the last ten years it is refreshing to see that two such substantial characters as Edmonds and Jordan can see the importance of moving the issue nearer to the centre stage of politics. In this it has to be said they are streets ahead of the Labour Party itself. Both emphasise in their contributions the changed nature of work and stress the need for trade unions to adapt accordingly, Edmonds going so far as to recommend the establishment here of works councils based on the German model.
The two other British contributors to the journal are Denis MacShane of the International Metalworkers Federation and Colin Crouch of Trinity College, Oxford. MacShane’s piece entitled “Industrial Democracy in Britain-100 years of suspicion” is an apparently straightforward account of the historical antipathy of British labour towards forms of worker participation which were seen as collaborating with capital. He goes into some detail on the way powerful craft-based unions sought to preserve their independent status in the post-war workplace to the detriment of the wartime Joint Production Committees. This is a point worth making but it is also worth emphasising that British industry tended to focus more on the state as both producer and consumer of goods and services after the War and to the extent that it did the unions which governed the state through the Labour Party were inclined to be to be less concerned about company centred schemes of industrial democracy.
MacShane’s analysis is quite inadequate when it comes to explaining the defeat of the single most determined attempt to introduce workplace or company-based industrial democracy, the Bullock proposals. Introducing Jack Jones as the “main union advocate of Bullock”, he continues; “But while Jones advocated his version of industrial democracy, and was dismayed at its rejection by his fellow union leaders, he failed to place the proposals in a wider European context. Jones had fought in the Spanish Civil War and considered himself an internationalist, yet he was virulently hostile to Europe. He had crossed swords with Otto Brenner, the left-wing president of the German union, IG Metall, over Mitbestirnmung. Jones, like many British Labour leaders of the 1970s considered Mitbestimmung to be a form of corporatist subordination of workers and union interest to the dominance of capital and employers.”
What he doesn’t make clear here is that the Bullock proposals went much farther down the road of workers control than the German system, particularly given the fact that a far greater proportion of British industry was already under a form of democratic control through nationalisation. What was undoubtedly missing in Britain was a sense of social responsibility for production to accompany this existing social control. The British ‘left’, that is to say the Communist Party of Great Britain and its sundry Far Left, Broad Left and New Left spawn, proved itself to be literally ‘irresponsible’ in its rejection of Bullock. It declared itself to be incapable of participating in the management of industry since that was the function of ‘management’. Small wonder that the electorate subsequently declared Labour to be also incapable of government.
MacShane simply glosses over this. Bullock failed because of Jack Jones’ mysteriously lapsed’ internationalism’ and that’s that. Since many British readers of ‘Die Mitbestimrnung’ could reasonably be expected to be aware that this is nonsense, the failure to provide any more plausible explanation of the rejection of Bullock in this case is perhaps not so grave. One must shudder however at the thought of the ‘British disease’ being explained in this way to a wider European audience used to elementary notions of cause and effect
In his piece, ‘The changing appearance of German Co-determination – a British view“, Colin Crouch comments mainly on industrial developments since the end of the 1970s. He argues technological changes which have taken place, the German model of ‘works councils’ directly elected by the workforce and not necessarily based upon the unions but rather supplementary to them, offers a tested way of introducing some measure of industrial democracy on a European basis.
This aspect of the German system contrasts sharply with what was on offer in Britain under the Bullock proposals. Under Bullock it was proposed that “workers should elect as many members of company boards as the owners, with the balance held by neutral members. The worker directors were to be elected only by those employees who were union members.” On the other hand “there would be no move towards German two-tier boards” (which were seen as a device for cutting worker directors off from the important day to day decisions).
The German system incorporates a supervisory board at company level and a works council at plant or shop floor level. In both cases the rights and duties of the employer and worker representatives are strictly codified by law. In addition, collective agreements between unions and employers are legally binding whereas in Britain they have traditionally had no more than the status of a gentleman’s agreement.
The relationship between the unions and the membership of the supervisory boards/works councils is interesting. Whereas Bullock envisaged worker directors being elected by the unions from among their own membership the German system allows non-union members to serve. This absolves unions of the charge that they exert undue power or influence over and above the wishes of their members, yet at the same time some 80% of board members are in fact also union members and in practice the unions are relied upon to provide much of the necessary back up.
This has interesting implications. If a similar system were to operate in Britain many sectors of the economy which have become de-unionised or which have grown up outside the influence of the traditional union structures would because of the necessity for research and educational support undoubtedly be drawn back towards existing union structures. The fear, real or imagined, that directly elected worker representatives would disrupt the traditional influence of full-time officials was one of the factors which influenced many to oppose Bullock. · In the new situation faced by the unions in Britain where they are often seen as both irrelevant and powerless in the face of management, the institution of a system of works councils which could not in practice function effectively without the unions would herald an industrial relations breakthrough particularly in non-unionised and under-unionised sectors of the economy.
The contrast between the British and German contributions to this issue of Die Mitbestimmung is striking. The difficulties which have faced both countries in the wake of new production methods and investment patterns during the last decade have produced among the German commentators a cautious optimism coupled with a determination to preserve and enhance the social gains that greater industrial productivity brings in its train.
A practical example is in the move towards European Works Councils linking workers representatives from different plants in different countries who share the same employer. It is axiomatic that multi-national corporations will seek to maximise their returns by playing on the differentials between wages and working conditions in the various countries of the community. Until recently the fact that workers could turn only to their national unions for protection and support meant that the threat to close a plant and move production elsewhere in the community was an effective means of assuring compliance among the workforce. Information about what was happening in the company’s other European plants was difficult if not impossible to obtain since for obvious historical reasons there is no homogeneous cross-border system of union organisation.
Two accounts are given by Cologne based journalist Thomas Gesterkamp of attempts to combat the problem. The first deals with the efforts of European employee representatives of Gillette, the American multi-national to set up a “Euro works council” in the teeth of opposition from management. The company has some 3000 workers in Europe out of a worldwide total of 35000 and they are based in four plants, one each in Britain, Germany, France and Spain. There is in addition a distribution centre in Italy while London hosts the European head office.
Problems arose initially in Germany over a dispute about the introduction of Saturday working. Management claimed that other plants had agreed to it and the union, IG Metall, was not in a position to dispute this since no links, either formal or informal, existed between them and employee representatives elsewhere. Finally through a German body called the Evangelical Youth Association in Industry, “Evangelische lndustriejugend”, contact was made with representatives from the Spanish plant in Seville and eventually also with a retired worker from the London plant. It transpired that the non-unionised workforce in London was under pressure to accept seven day working as a result of the six day week introduced in Germany. Further, rumours then surfaced that the French plant at Annecy was under threat of closure. It was not difficult to make the connection between this and the drive for increased production in Britain and Germany. Meetings were eventually held between representatives from the German, French and Spanish plants. The London plant was not capable of being represented initially since it lacked any formal works council or union organisation of its own. A European wide inter union liaison group was finally set up however despite the hostility and lack of co-operation of the management, and this group is now in a position to exchange information on shift patterns, financial statistics and productivity. There has not as yet apparently been any sign that the American management of the company would be willing to recognise any representative body other than those already established on national lines.
A distinctly different attitude has been developed by one of Europe’s largest companies, Volkswagen. Because of its particular history as the corporatist flagship of German Industry, the company has always practised a form of social partnership with the workforce and when its workers requested that a European-wide body be set up for employee representation the company not only agreed to recognise it but paid the costs of administration, travel, accommodation, interpreters etc. This involvement of the workforce in decision-making is rationalised as being part of the company’s overall competitive strategy and represents a philosophical viewpoint diametrically opposed to that found among most British and American companies.
It is more than a little ironic that a company born out of German National Socialism should be seen by its employees throughout Europe as a largely benign employer with whom it is possible to co-operate whilst the crudest forms of economic authoritarianism remain the stock in trade of the historically liberal-democratic Anglo-Saxon bloc.
The lessons for the British labour and trade union movement and indeed employers should be obvious. The trends towards worker participation in European industry are democratic trends which not only enhance the productive capabilities of the workers, but empower them. A publication like Die Mitbestimmung which gives such a revealing insight into European “best practice” is therefore extremely welcome and should be studied by all those responsible for policy. It might go some way towards curing the island mentality which currently afflicts us.
[Die Mitbestimmung, the journal of the Hans-Bockler Foundation, is available from the Jim Conway Foundation, 8 Y arm Road, Stockton-on-Tees, Cleveland, TS 18 3NA. Tel: 0642-613541, Fax: 0642- 618408.]
This article appeared in January 1993, in Issue 33 of Labour and Trade Union Review, now Labour Affairs. You can find more from the era at https://labouraffairsmagazine.com/very-old-issues-images/ and https://labouraffairsmagazine.com/very-old-issues-images/m-articles-by-topic/.