2023-08-30
Although Workplace Democracy is a natural fit with our Social Justice Pillar, it’s only given minor reference in our relevant policies. However, there are excellent working examples in Europe and there are compelling reasons why we should advocate more strongly for this worthwhile reform.
By Rob Delves, Green Issue Co-editor
Some early Liberal lessons
My father was a child in World War I, a young insecure worker in the 1930s Depression and a soldier in Europe for nearly six years from 1939. In the early 1950s, like many other parents of his generation (I hope), he drummed into me and my brother the three big lessons he’d learned from those very troubled previous 35 years.
The first is that racism is a cancer that destroys individuals and whole societies – a cancer that requires a commitment to goodwill towards people from different backgrounds and active calling out of racist behaviour.
The second is that violence solves nothing and we must always seek peaceful ways to resolve differences. Therefore, particularly with the destructive weapons now at our disposal, going to war must be rendered obsolete as a possible solution to conflict.
The third lesson is the subject of this article. Our 100-year progress from colonial dictatorship to a strong, healthy democracy is something we should be immensely proud of. However, democracy is a fragile beast, so easily corrupted and taken away, and therefore we need to continually defend our democratic values and institutions against the inevitable attempts to weaken them. The best defence is to seek ways to deepen and extend our democracy.
By the way, my father was a lifelong committed Liberal voter, though his faith wavered towards the end, which coincided with the later Howard years. I never fully understood how he reconciled his three lessons with Liberal Party values, although he did bang on relentlessly about the threat Communism posed to democracy. Maybe the Liberals’ downward journey from Menzies to Morrison was longer, steeper and much nastier than I realised.
Democracy rising
Like my father, I was delighted that the thirty years from 1945 did deliver significant democratic advances, for example, 18 year olds got the vote, while black people and other minorities fought for and gained advances towards full and equal rights in many countries. Workplace democracy ‒ an important advance ‒ was very much on the agenda in the 1970s, aggressively so in progressive circles in the UK where I was living at that time. It was touted as the next big step in the long history of the expansion of democracy. The critique was that there had been too much of a single-minded focus on improving voting rights, which are in fact a very limited part of the full democratic project.
The 20th Century Nationalisation of large critical UK enterprises such as railways and coal was initially touted as a significant democratic advance. However, in the 1970s their democratic credentials were being strongly contested. From the perspective of employees, these new organisations were anything but democratic, as they adopted exactly the same hierarchical structure from the era of private ownership that denied shop-floor workers any meaningful say. Much more promising was the expansion of the cooperative movement. Several struggling British firms were turned into worker cooperatives, which were trumpeted as the biggest and best form of full-on egalitarian democracy in workplaces. Indeed.
Inspiration also came from what happened after the defeat of Germany, when the Allies were determined to bury every vestige of totalitarianism by introducing a wide-ranging suite of democratic institutions, which included very progressive initiatives in worker participation in decision-making in all medium and large firms. These ensured that employees had a real say in decisions about how their workplaces were organised and run. And encouragingly, they were economically successful too.
And falling
In recent decades we have experienced multiple threats to our democracy. To name just a few: the rise of obscene levels of inequality, excessive power of the biggest corporations, weakening of unions (a key foundation of a strong democracy) and recently attacks on the democratic right to protest. From 1980 onwards, advocacy for more democratic workplaces all but disappeared as the Thatcher and Reagan neoliberal reforms ripped away long-established workers’ rights, especially union power. Supposedly progressive leaders such as Clinton and Blair then continued seamlessly with the neoliberal agenda. Progressive politics was reduced to attempting to retain whatever limited remains of union power and other aspects of social democracy they could – and left no vision, time or energy for trying the expand the democratic agenda. Bleak times indeed.
Workplace democracy ‒ why?
Pretty obvious really – work is a hugely important part of life for most individuals and society as a whole. We understand the centrality of work for providing us with our income, our meaning (how we describe ourselves), and for our sense of making a contribution to our society. However, most of these workplaces where we spend this hugely important part of our lives are mini-dictatorships, with all the inevitable and disastrous consequences that flow from that, such as poor wages, anxiety-creating insecure work, degrading conditions, poor health. This is especially true of workplaces with limited or zero union influence, which are about as far as can be possibly imagined from even a tokenistic democracy. Democratic reforms are an essential part of the struggle to reverse these severe problems.
Workplace democracy in practice
Workplace democracy, in the form of the German model, and in similar ways in other European countries, consists of two parts. Together they are described by the German word Mitbestimmung, for which “co-determination” is probably the best English equivalent.
The first is that workers have a legislated right to an agreed number of seats on their board of management. In Germany this is one third of the seats in small-medium firms and one half in large firms with over 2000 employees. This ensures workers a voice in broader or strategic decisions, such as what the company should produce and investments in new machinery.
The second part is about worker involvement in decisions about the day-to-day running of the company, which includes things such as the composition of the workforce, the design of individual jobs and working conditions, plus the often-heated issues around plant closures. The German way of delivering this has been legislated Works Councils with far-reaching powers to represent employees’ interests in discussions and negotiations with their management.
What about unions?
Currently, Greens workplace policies are much stronger than those of other political parties on the crucial role of unions, which are seen as central to improving employees’ lives through issues such as safety, unfair dismissal, holiday and sick pay, fair working hours, parental leave, etc…
However, European Works Councils also work hard on several of these issues at the individual company level, so it’s not an easy relationship. For example, advocates for Works Councils argue that union coverage is patchy and will take years to improve, whereas with Works Councils we could quickly legislate to establish a body in every workplace. And they represent all employees, not just union members. However, there is ample room for both to flourish, supporting each other and by each playing to their natural strengths, doing more to improve workers’ rights than if only one was in place. For example, in Germany, unions play the key role in negotiating industry-wide wage agreements while works councils take care of other aspects of working conditions.
Workplace democracy ‒ how good is it?
Since these European experiments in co-management have been around for many decades, there has been ample time for extensive evaluations. In summary, the findings are mostly very positive, with co-managed companies consistently delivering better working conditions with no negative impact on the company bottom line. Their strongest advantage is delivering much better job security, which was very clear in the 2008-9 recession. In addition, they usually score better on family-friendly policies and better overall job quality (job interest, stress levels, etc…).
There appears to be little effect on average wages, though Mitbestimmung workplaces usually have more equal wage structures, achieved by higher wages for the lowest-paid workers in each firm. Ditto for productivity and investment, with the higher levels of trust and collaboration in co-managed companies seen as a major benefit here. It must also be noted that the traditional hierarchical shareholder-primacy firm has serious drawbacks. For example, shareholders often know very little about the businesses they own and tend to seek short-term profits over the patient investment in productivity that is much better for the long-term health of the company.
What about The Greens?
Obviously our Participatory Democracy Pillar is a natural launching pad for policies to implement Workplace Democracy. It is certainly referenced in our relevant policies but in my opinion, these are glancing references without any urgency or depth. The Preamble of the Australian Greens Employment and Workplace Relations Policy is promising for workplace Democracy boldness: Democracy is about more than just elections. Democracy is about elevating everyone’s voice and building the power of the many. A robust and fair liberal parliamentary democracy is important but democracy in the workplace, economy and community are critical to shifting power from a handful of unelected owners and managers to everyone more equitably.
Spot on. However, there’s not much else in the rest of the policy. There is really only Principle 11: Working people and their representatives are entitled to democratic participation in deciding the direction of the organisation for which they work and should be able to do so without intimidation from employers.
The Victorian Greens tread slightly more boldly with Aim 8 of their Democracy and Integrity Policy: Incentivise the development of workplace democracy and, for major publicly funded projects, include workplace democracy mechanisms as conditions of contract.
So, “Promising, but Could Do Better” I reckon sums us up. My guess is that, as in the USA and UK, talk of Workplace Democracy is so contrary to the entrenched belief in shareholder primacy – the absolute rights of owners of property and workplaces to decide what goes on ‒ that any strong advocacy would be seen as dangerously far-left revolutionary, a step into the unknown, a non-Albo Very Big Target that conservatives would be queueing up to hit with scenarios of economy-wrecking unforeseen negative consequences. Since no-one else is even talking about going there, it probably makes sense to advocate and experiment slowly and gradually at the level of federal and state politics.
So, while there’s no plunge into the deep end, we Greens are gently dipping our toes into the shallow waters of a fairer, more democratic deal for workers. It’s an important social justice issue and I see many similarities to our battles with Labor over housing. In my opinion the reason for heated resistance is that in seeking fairer and more equal workplaces and access to a home, we’re taking on what Thomas Piketty describes as the entrenched common-sense belief in “private ownership rights trump all else.” His thesis is that massive inequality is illegitimate and therefore requires the rich and powerful to develop well-crafted ideologies to justify it, with number one being “the sanctification of private ownership.” At 1150 pages Capital and Ideology is not for the faint-hearted or time-poor, but well-suited to retirees, with abundant curiosity and enough free time to indulge that curiosity.
What about worker cooperatives?
In a Worker Cooperative, the workers really do get to decide how things are done, since formal power and control are shared equally on a ‘one worker, one vote’ basis. However, their history and current challenges are complex, so I’m choosing to leave them to another time.
NOTE: I’ve learned a lot from two excellent books that I’d strongly recommend: Free and Equal, by David Chandler AND Why the Germans Do it Better, by John Kampfner. Of course, both address a wide range of issues, but there are major sections explaining and advocating for more democratic workplaces.
Header photo: US Campaign for a Workplace Democracy Act in 2018. Credit: IAMAW 141
[Opinions expressed are those of the author and not official policy of Greens WA]