On the face of it, Theresa May’s warm words on workers on company boards is encouraging. We need to defer judgement until we see the precise detail. What will not suffice, if offered, is the discredited works council approach, which has proven to be a charter for careerists. Drawing upon interviews conducted in Sweden (see link to report below), I make this argument by examining the practice of workers on boards that has existed there since the 1970s. Thus, I examine the concept of workplace democracy, and focus in particular on the inclusion of elected employee representatives on company boards.
My starting point is two-fold. In Britain, it is clear that employees must be given a stronger voice in the strategic direction of our businesses, and no one can deny there has been a significant decline in democracy in the workplace, itself brought about by decades of decimation of the union movement, the employment rights of the people it represents, and the collective bargaining structures established to ensure a collective voice at work. Indeed, I believe we have reached a decisive moment, with public opinion turning against companies that grossly exploit their workers. For example, BHS is just one of the many accused of the sharp practices of asset stripping and effectively raiding workers’ pension funds.
With some cross-party consensus on the inclusion of employee representatives on company boards, there is now scope to re-open some of the discussions around this issue that took place in the 1970s.
As a proud trade unionist, I do not want to see another generation believing that zero hour contracts and poor workplace rights are the norm of working life. We need a change, and I believe this Swedish experience of a more transparent and cooperative approach between management and employees is the way forward.
I have been an active trade unionist for decades and have lived through some of the darkest times. But I have been truly saddened over the recent past by the distrust that continues to exist between management and employees. The 2013 Grangemouth dispute, at the most important manufacturing site in Scotland, was a true dark mark on industrial relations in this country. Employees were held to ransom over decisions that were made by those who had nothing to lose.
The confrontational approach taken by Grangemouth’s Ineos chairman, Jim Ratcliffe, towards employees left no room for negotiation. Workers were eventually forced to accept a pay freeze, a reduction in their pensions and agree not to hold strikes for three years. There were very few concessions on the part of the employer. The attitude of the company towards employees and unions, rather than seeking collaborative solutions for a sustainable future in the interests of all, created a crisis where the only beneficiary would be Ratcliffe.
Most countries in the EU have mandatory systems in place to give employee representatives a place on company boards. It is a system that is, in principle, good for business, good for consumers and most of all, fair for employees – and it could help to avoid behaviour like that experienced at Grangemouth. Even Ratcliffe has said that what happened there would not have happened in Germany, praising the good working relationship between unions and management because, like Sweden, in Germany decisions would have been made in consultation with union elected worker directors right from the very beginning. He neglected to mention that the better relations are imposed on him in other countries by legislation.
Board-level decisions have a huge impact on employees. It is obvious that they should have a say in the decision-making process. This, in turn, would help employers to make good decisions that work for everyone. Negotiations would take place before it is too late, and profit-obsessed directors may stop to think about employees as well as shareholders when signing on the dotted line.
Turning to Sweden, there is a lot to learn. Sweden has had a law in place since 1973 which promotes employee representatives on boards. Aspects from its system can be taken and applied to Britain. To test the most appropriate system for the UK ahead of legislation, a pilot, whereby representatives were elected by trade unions in each workplace, would ensure the most effective methods could be introduced. If this works for companies in the pilot, it could be rolled out to companies across Britain. However none of this is achievable if we are to continue discriminating against those who choose to speak up, whether it be on health and safety issues or any other employment issue for that matter. In order to foster such a system, union representative need legal protection from victimisation.
Jim Sheridan is a former MP and chair of the Unite union parliamentary group. He is author of ‘Securing a decent deal for workers: Employee representatives on boards’ (http://classonline.org.uk/pubs/item/securing-a-decent-deal-for-workers)