The rejection of the EU Constitution in France and the Netherlands was not only a clear reaction against the pace of integration and enlargement, which was rushed and poorly communicated. The disastrous ‘No’ vote also shows that the usual silent acquiescence and the traditional reasons for that acquiescence (peace, prosperity, security) have faded away. Not only did Europe’s so-called political elite recognise this fact too late, but it also failed to provide any justifications other than the repetition of known truths. If European enlargement and globalisation create uncertainty above all else, then the European Union and the Constitution in particular are unable to provide convincing answers.
If whole populations are told that they cannot control or even discuss key elements in their lives – wages and work – it will inevitably give rise to a whole range of dysfunctionalities. New forms of social control of capital are essential in order to fulfil the promise of democracy.
- Norman Birnbaum, in ‘Die Zeit’ 44/1997
Paragon?
The superficial nature of the response to fears and uncertainties is shown by the European social model’s mantra of protecting and defending against liberalised markets, portraying itself as a paragon in comparison to Anglo-Saxon capitalism. Just as there is no fully-fledged Anglo-Saxon model, so the continental social model is very weak. Given that social security systems are developed and determined nationally, the 70 or so EU directives produced over the last 30 years on health and safety at work, working conditions, non-discrimination and equal opportunities do not really constitute a socio-political bonanza. In the section on ‘solidarity’, the draft Constitution itself merely reiterates the universal human rights that have long been established under the International Labour Organisation (ILO), namely the core labour standards.
Powerlessness
When criticising capitalism, it has become very popular in Germany to (gratuitously) champion worker participation as a winning socio-political export product both inside and beyond the European Union. In actual fact, the state and the trade unions are operating with tools that are no longer appropriate for the new realities of the information revolution, the loss of solidarity, the eastward enlargement of the European Union and globalisation. The result is a sense of powerlessness, leading to a sense of being under duress, of losing the ability to shape decision-making.
Productivity
More specifically, the German worker participation debate revolves around the question of a model for success versus location risks. The argument goes that not only does worker participation not bring any competitive disadvantages, it actually contributes significantly to industrial peace, structural change and cost-cutting by virtue of its co-operative nature. This argument has been confirmed by various surveys that indicate record levels of support. The reasoning is, as K. Blessing put it in Die Mitbestimmung (Worker participation) 6/1998, that ‘worker participation is a future-proof opportunity, but only if it proves that it is both more humane and also economically more productive.’ So the simple question is: surely, from a trade union point of view, the distinctive feature of worker participation must be its efficient networking of employees?
Island model
The broad consensus on worker participation, even in sections of the political and business world, and its high level of legal and institutional structures and ‘agents’ (legislation, jurisprudence, institutes, training institutions, consultancy firms, journals, etc.) raise the question of why so much effort goes into establishing its legitimacy. The battery of arguments indicates that we need to defend an island model against hostile attacks – from Anglo-American corporate (non-) culture, the European Union, globalisation and neoliberalism. This is the reason behind the trade unions’ defensive stance, whereby the employers are told that continuing with worker participation will work to their advantage, and what is more, that worker participation is not fundamentally incompatible with the shareholders’ desire for higher returns. See also the publication Mitbestimmung für die Zukunft (The future of worker participation) by the Hans Böckler Foundation and the Bertelsmann Foundation from 2004.
History
In historical terms, worker participation is one of the last remaining trade union concepts of society: the call for industrial democracy. From 1945 onwards (if not before), it was clear that the German participation model had clearly decided in favour of involvement and co-determination and against control by industrial domination from outside. Elsewhere in Europe (and of course in other significant portions of the world) other, often conflict-based management models and participation policies have been developed. The main reason for the German corporate model was the failure to undertake the necessary reforms and the increasingly repressive position of the state in the 19th and early 20th century. As the trade unions became more radical and powerful, the state was ever more interested in complying with their demands. This was particularly true for legislation (worker participation and legally defined industrial relations) in Germany after both world wars. Thus we find a monist management structure in Great Britain (management board vs. shop stewards as trade union representatives in the company) as opposed to the German dualist model (management board and supervisory board vs. works council and trade unions). The German structure provides a suitable foundation for both a works constitution and worker participation through the supervisory board.
No export product
The first interim conclusion is that it is hard to see how the German worker participation model could be exported. In addition to the historical diversity of working conditions in the European Union of 15, there are two further factors. Firstly, the creation of European Works Councils in the mid-1990s has not led to harmonisation of the various European situations. We cannot reasonably speak of extending European Works Councils to other parts of the world. Secondly, not only has the eastward enlargement brought in completely marginalised trade unions, it has also introduced countries which either have no - or only rudimentary forms of - bilateral industrial relations. It has also become apparent that trade unions in these countries often see works councils as competition and a loss of power, and are either not interested in establishing dual industrial relations and/or are not capable of doing so. The experience of the transformation countries has demonstrated that the state-dominated tripartite system in place for the last 15 years was not conducive to establishing bilateral industrial relations and, if anything, the trend towards corporate syndicalism has been strengthened. Simply copying European Works Councils in the Central and Eastern European countries would exacerbate that trend and further weaken the trade unions.
Erosion
In international terms, there is another question. What can be done to respond to the increasing importance of financial markets, the global emergence of transnational companies, the reduced scope for national welfare states and for them to develop into national competition states (wages, taxes, welfare systems, etc.) and constantly rising unemployment rates? In short, given the development of global markets, how can national or European influence be used to establish democratic industrial relations? This question can be refined to produce the second interim conclusion. How could the participation model help counter the lack of international industrial relations and the erosion of regional and national systems? This would certainly only be possible if there were evidence that the instrument was capable of breaking the spiral of rocketing profits and falling employment.
Necessities
In this context, a realistic analysis is needed when looking into the national benefits and the Eurocrats’ political alternatives. Discussing democracy in the world and revival of the western democracies must inevitably include a discussion of the economic ‘constitution’. Instead of tentatively defending a so-called European social model or holding technical discussions about the niceties of revising the ‘Directive on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees’, what is needed is:
* a debate at the national level about how we want to live and what citizens, the government and the economy can contribute to shared values;
* a clarification at the European level of the extent to which existing instruments have strengthened or weakened the trade unions and the representation of workers’ interests;
* the recognition in international terms that the wave of national deregulation now has to be followed by transnational regulation, and that governments and transnational companies must recognise and respect universal human rights around the world, i.e. the ILO core labour standards.
Key factors
Such a strategy has far-reaching operational, structural, political and organisational consequences. The lack of international industrial relations and the truly derisory enforcement of minimum social standards have put massive pressure on existing national systems and EU legislation in a globalised world. This has been exacerbated by European eastward enlargement, as the European Works Council and the European Limited Company require legal and institutional structures and systems which do not actually exist in the new member states. Both the German/Austrian/Dutch and the European participation models will only survive, within their own limits, if national trade unions become more European and more international. In the future, key factors will be:
* how European companies act in the rest of the world, i.e. whether corporate social responsibility is more than a PR exercise;
* whether the structural divide between trade unions in the European Union of 25 can be bridged;
* how effectively mobilisation campaigns can attract new members in key strategic companies and industries;
* whether the European Works Council can develop the tools and political will to counter wage dumping, outsourcing and offshoring within companies;
* how campaigning potential can be developed through effective social alliances, which make the trade unions more socially relevant and also initiate a forward-looking, pro-active debate.
Tools
In view of the drastic organisational changes and membership losses experienced by most European trade unions, this will not be a purely academic exercise. When taking stock, the central question has to be whether, and to what extent, the worker participation instruments – which in Europe means social dialogue and European Works Councils – have contributed to strengthening the trade unions and worker representation in companies. There is no way around this question, because first and foremost these tools have to improve the organisations’ clout and representational powers. A great deal of time has already been lost, which is extremely dangerous. It is not so much the European social model that is in jeopardy, but rather the very existence of the European trade unions. Any solutions to the crisis must be able to be implemented fairly promptly, but will inevitably entail political discussions and a change of direction.
Questions
The key elements in such a strategic shift can be summarised by the following questions. Are the European Trade Union Confederation (ETUC) and its affiliated trade unions ready to undertake a critical review of the results of the social dialogue and of European Works Councils? Can we identify the political will within the European trade unions to move towards active integration in the international trade union movement? Do trade unions in Western Europe understand the danger of the trade union malaise in the new member states and will they be able to agree on joint mobilisation campaigns? Can European Works Councils be used to devise practical measures and effects to counter wage and social dumping within companies? Could reasonable measures be identified with a view to developing a European collective bargaining policy that would establish directives, basic conditions and standards both at company (European Works Council) and industry (social dialogue) level? Could this lead to synchronised and co-ordinated Europe-wide collective bargaining in certain sectors and/or companies? Is it really feasible for a European Works Council to see and deal with the individual company in its global context, i.e. will companies’ actions outside the EU be put on the agenda?
Globalisation
Any future-proof participation model must be measured in terms of whether and how it contributes to the development of international industrial relations and meets global challenges. This effectively means that the European trade unions need to rediscover their ability to fight, to mobilise and to engage politically. In other words, Europe and the European trade unions have to forget the special role that they used to have, and which has long since been lost in practical terms. They are now part of globalisation, and no longer just onlookers. If old or revised European instruments can help, so much the better. But a European social model capable of responding to these challenges has yet to be developed.
Wolfgang Weinz, IUF*, Geneva
* The International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers’ Associations (IUF) is an international trade union federation composed of 359 trade unions in 125 countries with an affiliated membership of over 2.8 million members. It is based in Geneva, Switzerland.
This article was puclished in Politeia Newsletter 41 - March 2006