Working Under Different Rules

4. Workplace Representation Overseas: The Works Councils Story

4 WORKPLACE REPRESENTATION OVERSEAS: THE WORKS COUNCILS STORY Joel Rogers and Wolfgang Streeck In the labor relations systems of most advanced countries, unions or other mechanisms of wage regulation and collective bargaining are supplemented by a "second channel" of industrial relations. This second channel consists of workplace-based institutions for worker representation and labor-management communication that have status and functions distinct from, though not necessarily in competition with, those of unions. Typically, second channel institutions benefit from statutory supports that define their rights and obligations and, not incidentally, extend their reach beyond the unionized sector. The purpose of second channel institutions is to give workers a voice in the governance of the shop floor and the firm, and to facilitate communication and cooperation between management and labor on production-related matters, more or less free of direct distributive conflicts over wages. Where there are workplace-based unions, as in Japan, employees articulate their interests through the union, and second channel arrangements take the form of labormanagement consultation committees. Where unions and collective bargaining are centralized at the national or sectoral level, outside the firm-as in the Netherlands and Germany-or where unions are weak and not widely present at the workplace-as in France and Spain-second channel functions are usually performed by what are known as works councils.1 97 98 WORKING UNDER DIFFERENT RULES Works councils are representative bodies elected by all workers at a particular workplace, regardless of union membership and inclusive of white-collar and many supervisory employees. They are typically statutorily "mandated" for a given class of firms, and they enjoy presumptions against their discontinuance once established .2 The councils institutionalize rights of collective worker participation, including rights to information and consultation on the organization of production and, in some cases, formal codetermination in decision making.3 Commonly, in addition to thus institutionalizing worker power-sharing in firm governance, works councils monitor and help enforce state regulation of the workplace in such areas as occupational safety and health. The United States and United Kingdom are exceptions to this pattern of dual channels for worker representation. Apart from direct state regulation of the workplace, the formal labor relations systems in the United States and United Kingdom consist entirely of unions and collective bargaining. But while the United Kingdom still has a sizable union movement, unionism in the United States is in an advanced and possibly irreversible state of decline. Approaching the twenty-first century, the United States effectively stands alone among the developed nations, on the verge of having no effective system of worker representation and consultation. There are reasons to be concerned about this. First, basic democratic ideals are compromised by the absence ofcollective representation for those workers who want it. Survey data indicate that some 30 to 40 million American workers without union representation desire such representation, and some 80 million workers, many of whom do not approve of unions, desire some independent collective voice in their workplace.4 These numbers dwarf the 16 million or so members of organized labor and point to a large "representation gap" in the American workplace (Weiler, 1990; Freeman and Rogers, 1993). Second, there is good evidence that this gap harms the economy. Many studies show the critical role of effective labor relations in economic performance and the dependence of effective labor relations on worker representation.sThird, in many areas of public regulatory concern in the workplaceoccupational safety and health, wages and hours, and work force training among them-an effective system of workplace representation appears vital to the achievement of social goals. In this context, this chapter presents the findings of a nine- WORKPLACE REPRESENTATION OVERSEAS 99 country comparative research project on works councils, the dominant second channel organization in the developed world. The discussion has two main parts. First, we provide an overview of councils, indicating their incidence and general powers, organizational character, and contributions to democracy, efficiency, and state regulation. Second, we review the experience of councils in a number of European countries and in North America. A brief conclusion follows, summarizing the cross-national findings and pointing to a striking convergence among developed nations (the United States and United Kingdom excepted) in the importance they attach to their council systems. WORKS COUNCILS: WHERE THEY ARE, HOW THEY WORK, WHAT THEY DO Incidence and Powers All Western European countries, except Ireland and the United Kingdom, have legislatively mandated works councils.6...