Worker_representation_on_corporate_boards_of_directors

Worker representation on corporate boards of directors

Worker representation on corporate boards of directors

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Worker representation on corporate boards of directors, also known as board-level employee representation (BLER)[1] refers to the right of workers to vote for representatives on a board of directors in corporate law. In 2018, a majority of Organisation for Economic Co-operation and Development, and a majority of countries in the European Union, had some form of law guaranteeing the right of workers to vote for board representation. Together with a right to elect work councils, this is often called "codetermination".

Overview

The following is a list of 35 countries in the Organisation for Economic Co-operation and Development and their practices of worker representation on corporate boards of directors.[2]

More information Country, Law ...

History

Some of the first codetermination laws emerged in universities in the UK during the 19th century, such as the Oxford University Act 1854 and the Cambridge University Act 1856. Further acts included the South Metropolitan Gas Act 1896 (59 & 60 Vict. c. ccxxvi) and the Port of London Act 1908.[12] In Germany, there were experiments with worker representation through work councils over the late 19th century, after the first attempts to introduce worker voice by an ex-member of the Frankfurt Parliament named Carl Degenkolb.[13] At the end of World War I, the German trade unions made an historic collective agreement with representatives of German business for full partnership in economic management throughout the country. This was put into the Weimar Constitution article 165, and resulted in a work council law in 1920,[14] and a board representation law in 1922.[15] The fascist government abolished codetermination in 1934, but after World War II, German unions again made collective agreements to resurrect work councils and board representation. These agreements were codified in law in 1951 and 1952.[16]

In most countries around Europe, different forms board representation law spread slowly, especially from the 1970s. In the UK there were repeated experiments from iron and steel[17] to the post office,[18] with worker directors.[19] However, after the Bullock Report of 1977 failed to pass and Margaret Thatcher won the 1979 election, almost all worker participation was ended.[20] Germany recast and extended its laws in 1972 and 1976.[21] The European Commission did propose a Draft Fifth Company Law Directive, but it did not complete passage. In the United States, growing interest in worker "involvement" through Scanlon plans led to unions such as the United Steelworkers at Chrysler, or at United Airlines to negotiate board representation, although usually this was forcibly linked to employee share schemes. Notably, the share scheme at Enron failed in 2003. Almost all modern worker representation laws enable votes without any requirement to invest money. In 2013, France became the largest country to create a modern board representation law to mandate workers with equal rights to all other directors to be on boards.

See also

Notes

  1. [1]
    Gold, Michael; Waddington, Jeremy (2019-09-01). "Introduction: Board-level employee representation in Europe: State of play". European Journal of Industrial Relations. 25 (3): 205–218. doi:10.1177/0959680119830556. ISSN 0959-6801. S2CID 159358979.
  2. [2]
    See worker-participation.eu and Z Adams, L Bishop and S Deakin, CBR Labour Regulation Index (Dataset of 117 Countries) (Cambridge: Centre for Business Research 2016))
  3. [3]
    "Federal Act on the Labour Constitution and freedom of association (BGBl. 1974/22). Text 9" (PDF). Rechtsinformationssystem (RIS). Retrieved 2021-03-10.
  4. [4]
    See I Ferreras, Firms as Political Entities: Saving Democracy through Economic Bicameralism (2017)
  5. [5]
    "Co-operation Act (1333/2021)" (PDF). Government of Finland. Retrieved 2024-01-14.
  6. [6]
    "DrittelbG - Gesetz über die Drittelbeteiligung der Arbeitnehmer im Aufsichtsrat". www.gesetze-im-internet.de. Retrieved 2021-03-25.
  7. [7]
    "MitbestG - Gesetz über die Mitbestimmung der Arbeitnehmer". www.gesetze-im-internet.de. Retrieved 2021-03-25.
  8. [8]
    "MontanMitbestG - nichtamtliches Inhaltsverzeichnis". www.gesetze-im-internet.de. Retrieved 2021-03-25.
  9. [9]
    "Worker Participation (State Enterprises) Act, 1977". electronic Irish Statute Book (eISB). Retrieved 2021-03-10.
  10. [10]
    "Board Representation (Private Sector Employees) Act". Government of Sweden. Retrieved 2024-01-14.
  11. [11]
    "Cambridge University Act 1856". Government of the United Kingdom. Retrieved 2021-03-30.
  12. [12]
    E McGaughey, 'Votes at Work in Britain: Shareholder Monopolisation and the ‘Single Channel’' (2017) 46(4) Industrial Law Journal 444. See also JS Mill, Principles of Political Economy (1870) discussing, albeit very different, Henry Briggs & Son Co, incorporated 1865, which had an employee share plan and a worker director. South Metropolitan Gas Act 1896 extract in the London Gazette, abolished by the Gas Act 1948.
  13. [13]
    HJ Teuteberg, ‘Zur Entstehungsgeschichte der ersten betrieblichen Arbeitervertretungen in Deutschland’ (1960) 11 Soziale Welt 69. See the Arbeitsverordnung 1890, the first law enabling worker councils, but only on a voluntary basis. The Hilfsdienstgesetz 1916 was a war time requirement for worker councils in some industries.
  14. [14]
    Betriebsrätegesetz 1920
  15. [15]
    Aufsichtsratsgesetz 1922. E McGaughey, 'The Codetermination Bargains: The History of German Corporate and Labour Law' (2016) 23(1) Columbia Journal of European Law 135
  16. [16]
    E McGaughey, 'The Codetermination Bargains: The History of German Corporate and Labour Law' (2016) 23(1) Columbia Journal of European Law 135. See the Montan-mitbestimmungsgesetz 1951, the Betriesbrätegesetz 1952 and the Mitbestimmungsergänzungsgesetz 1956.
  17. [17]
    Iron and Steel Act 1967 Sch 4, Part V, created a negotiation process with trade unions in British Steel Corporation to introduce workers, put into effect from 1968. For its implementation, see: Bank, John, and Jones, Ken, Worker Directors Speak: The British Steel Corporation Employee Directors (Gower Press, Farnborough, 1977)
  18. [18]
    Post Office Act 1977 s 1(2) created worker directors for the Post Office by amending the Post Office Act 1969.
  19. [19]
    The Transport Act 1968 allowed the secretary of state to appoint members of the British Railways Board. In 1997, John Prescott appointed a worker director overseeing some aspects of the now privatised industry.
  20. [20]
    Transport Act 1985, privatised the bus networks. Employee share ownership plans were created by Labour councils as this happened, as a way to protect workers, though shares were quickly bought up by ordinary business owners.
  21. [21]
    The Betriebsverfassungsgesetz 1972, standardised law for one third employees on company boards with over 500 staff. The Codetermination Act 1976 required one half in large companies, but with the upper hand for shareholders. Now, the Drittelbeteiligungsgesetz 2004, BGBl. I S. 974, in German codified again, one third worker directors in companies with over 500 staff.

References

  • Bank, John, and Jones, Ken, Worker Directors Speak: The British Steel Corporation Employee Directors (Gower Press, Farnborough, 1977)
  • I Ferreras, Firms as Political Entities: Saving Democracy through Economic Bicameralism (2017)
  • TH Hammer, SC Currall and RN Stern, ‘Worker Representation on Boards of Directors: A Study of Competing Roles’ (1991) 44(4) Industrial and Labor Relations Review 661–680
  • LW Hunter, ‘Can Strategic Participation be Institutionalized? Union Representation on American Corporate Boards’ (1998) 51(4) Industrial and Labor Relations Review 557–578
  • E McGaughey, 'Democracy in America at Work: The History of Labor's Vote in Corporate Governance' (2019) 42 Seattle University Law Review 697
  • E McGaughey, 'The Codetermination Bargains: The History of German Corporate and Labour Law' (2016) 23(1) Columbia Journal of European Law 135
  • E McGaughey, 'Votes at Work in Britain: Shareholder Monopolisation and the ‘Single Channel’' (2017) 46(4) Industrial Law Journal 444
  • RB McKersie, ‘Union-Nominated Directors: A New Voice in Corporate Governance’ (1 April 1999) MIT Working Paper
  • RB McKersie, ‘Labor's voice at the strategic level of the firm’ (2001) 7 Transfer: European Review of Labour and Research 480
  • HJ Teuteberg, ‘Zur Entstehungsgeschichte der ersten betrieblichen Arbeitervertretungen in Deutschland’ (1960) 11 Soziale Welt 69
  • HJ Teuteberg, Geschichte der Industriellen Mitbestimmung in Deutschland (1961)
  • J Waddington (ed.), 'European board-level employee representation: national variations in influence and power' (2018), Kluwer Law international editions
  • J Waddington, A Conchon, 'Board-level employee representation in Europe: priorities, power and articulation' (2016), Routledge edition
  • S Webb and B Webb, Industrial Democracy (1920)
  • S Webb and B Webb, The History of Trade Unionism (1920) Appendix VIII
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