The Tories
say that they will protect and extend workers' rights. It is, of
course, nonsense. This is the same Tory Party that decimated
workers' rights in the 1980's, in order to push through a massive
attack on workers' living standards; it is the same Tory Party that
imposed virtual martial law on mining communities during the 1984-5
Miners' Strike; it is the same Tory Party that has introduced further
attacks on workers rights since 2010, and yet still seeks to impose
further restrictions on workers ability to refuse to sell their
labour-power at any price the employer dictates. Moreover, when the
Tories talk about workers' rights, what they mean is the individual
rights of workers as against the collective rights of workers.
Theresa May
when she assumed the position of elected dictator, last year, stood
in Downing Street, and talked about having workers' representatives on
company boards. The rest of the Tory Cabinet soon forced her to drop
that idea. It was, in any case, a meaningless offer. The BullockReport in 1975, proposed having 50% of company boards elected from
the workforce, by the trades unions; Germany's co-determination laws,
also give workers the right to elect 50% of their company board; and
the EU's Draft Fifth Company Law Directive proposed similar
legislation. Even having the right to elect half the board, in
practice, puts workers in a subordinate position, because the
management always retains the casting vote, and it always becomes
possible for the management to divide the worker representatives.
So, having just one workers' representative on boards is mere
tokenism.
But, the
fact that May opened the discussion should give Labour the
opportunity to walk through the door she has opened. The fact is
that all firms that are incorporated are legal entities in their own
right. The shareholders in these companies are only creditors of the
company, no different than a bondholder, a bank that lends money to
the company, or any company that lends equipment to the company, and
so on. That was set out by John Kay and Aubrey Silbertson some time ago .
One of the
first things that Labour should do in government is to pass new
company law on Corporate Governance. It should reduce the rights of
shareholders, in relation to corporate governance to that of any
other creditor. In other words, they should have no right to have
any say over company policy, no right to elect boards of directors,
or to appoint company directors. As a legal entity, the company
itself is socialised capital, and belongs to itself. Decisions on
how that capital should be used belongs to the company, which,
therefore, means all of the workers and managers employed in the
company. It should be for those workers and managers to
democratically elect boards of directors, and to appoint the company
executives, to determine their pay etc.
That would
have several immediate effects. Firstly, it answers the objections
of Tories and the Tory media about how Labour would fund
nationalisation of the water companies, rail companies, energy
companies, Post Office and so on. It would face no problem, because
there would no need to nationalise what, in reality, is already the
property of the workers and managers in those companies. It would
simply be a matter of giving those workers and managers control over
their collective property, which currently is being denied them.
Secondly, it
would mean that questions over fat cat pay would be more adequately
addressed. Once workers in these companies decided what executives
they did or did not require – and experience shows that many of
these executives serve no useful purpose for companies whatsoever –
they would also open up these posts to a much wider circle of people,
outside the tight coterie of self-selecting elites that currently
dominate those positions. It would mean that workers would only pay
salaries to any such executives that they found was justified.
Thirdly, it
would mean that the ability to transform the economy went much wider
than the current modest proposals on utilities.
Shareholders
would, of course, continue to be entitled to receive dividends on
their shares. In effect all shares would become non-voting shares.
Competition for capital would mean that companies would continue to
have to pay market rates of interest in the form of such dividends,
or shareholders would sell shares sending the company's share price lower,
and thereby making it more difficult to raise future capital by share
issuance. But, companies would have the ability also to buy back
shares as they do now. The difference would be that as the company
bought back the shares that would benefit the company, and the
workers and managers within it, not the shareholders and executives
as happens now.
If workers
and managers had such control over companies, then as I have set out
previously, it would be beneficial for these companies not to face
Corporation Tax, which would inhibit their ability to reinvest
profits. The tax should instead fall on the recipients of dividends
and interest, and other non-earned income.
If Labour
introduced this simple and democratic measure it would mean that
workers had the same democratic rights in their place of work as they
have in society in general. It would mean that other trades union
rights would not have to bear the weight of defending workers rights
that they currently are ill equipped to endure. Once workers had
democratic control over their place of work, they would be able to
ensure that many of the inequities, injustices and inequalities they
face would disappear, because they would be running those companies
for their own mutual benefit.
But, there
are still millions of small companies that are privately owned by
small capitalists. These companies, because they usually cannot
compete with the big companies, are often the worst culprits when it
comes to paying low wages, giving workers poor conditions, and
depriving them of rights. Its in these companies where unions are
most needed, but where they are most often lacking. We need to give
every worker not just the right to belong to a trades union, but the
right to have a trades union negotiate on their behalf. In other
words, we should scrap all ability of employers to deny union
recognition. Even one worker in a firm should have the right to be
represented by a trades union, and we should enable unions to
negotiate for members across a number of companies in an area on a
collective basis. That is in line with Labour's proposals to set up
industry wide collective bargaining, which already exists in a number
of European countries.
Alongside
it, Labour should scrap all the anti-union laws, and introduce a
general Trades Union Act, that enshrines a series of trades union
rights on collective bargaining and so on. Labour should also work
with the TUC and Co-operative Movement to establish a Co-operative
Labour Agency that would act as a monopoly supplier of labour to
companies, at guaranteed rates of pay, and minimum sets of working
conditions. This would remove the Tory objections to a blanket ban
on zero hours contracts and other flexible working arrangements,
because it would be possible for workers themselves, through such an
agency to organise the working hours etc. that best suit them, rather
than being pressured by employers to accept the conditions that the
employer requires.
Alongside
the changes to the law on corporate governance so as to give workers
and managers control over their companies' capital, Labour should
also legislate to give workers the right to control their company
pension funds, rather than that control resting with company
executives, and more often with banks. The boards of pension funds
should be elected by the workers whose money those funds administer.
That would give workers a powerful source of additional
money-capital, to be used to further workers' aims of developing the
economy. It would also prevent the huge sums that currently are
syphoned away in commissions and other payments, and which thereby
never even get invested on workers behalf.
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