Shaping the future of democracy at work

Action is needed at European level to ensure workers enjoy democracy at work, particularly in the context of digitalisation.

Democracy, as a fundamental value of the European Union, provides the foundation for the trade union movement, with solidarity its raison d’être.

Democracy at work is one of the cornerstones of the social-market economy. Workers’ voices find expression in the exercise of collective rights, in private and publicly owned companies. Day after day, trade unions effectively exercise those rights and defend the interests of workers.

Exploiting loopholes

Democracy at work cannot however be taken for granted. It can only be considered consolidated as long as a majority of actors respect and support democratic principles and the exercise of democratic rights.

Democracy also relies on strong democratic institutions, to adopt and review legislation, so as to guarantee the effet utile of workers’ rights to information, consultation and participation. EU and national legislators should guarantee that European law does not lead to de facto circumvention of participation rights—as when businesses exploit loopholes in the European Company directive or create letterbox companies.

Lack of recognition of information, consultation and participation rights is a telling denial of democracy, not least in the public sector. On this, the European social partners in central government have negotiated an agreement, which should find its way into EU law.

New company forms

Likewise, new company forms—especially in the digital economy—should be regulated, so as to stop those business models circumventing fiscal and social rules, and in particular workers’ participation. This is leading to in-work poverty and precariousness, drastically affecting young people and women.

Digitalisation has a profound impact not only on how people work, their workloads and their health and safety at work. It also brings with it new means of management and control, and new forms of surveillance of workers’ behaviour and performance. This should be addressed, so that trade unions can defend workers’ rights to data protection and privacy.

All these attempts to minimise, sideline or evade workers’ rights clearly show that democracy at work is nowhere near as widespread as it should be. They weaken trade union structures and reduce the means available to workers and their representatives to defend and promote the interests of the workforce effectively. It is therefore of utmost importance to set standards within the EU.

Critical part

Democracy at work is not just nice to have—it is a must. It is fundamental to the trade union movement. Strong trade unions defend working people’s interests in Europe and the ability of workers to express their demands collectively is a critical part of the functioning of democracy at work.

For many, it is at the workplace that they experience the support of their trade unions most directly, most visibly, thanks to works councils and trade union delegations and occupational health and safety committees. European works councils and representatives on boards are the few places where unions have influence at company level—all the more important to counteract businesses’ short-term economic and financial interests.

Why? Not only is democracy at work the prerequisite for a wide range of positive outcomes for workers, business and society. It also delivers, in good times as well as bad, and is the foundation of social and economic cohesion.

Co-determination

The evidence clearly shows that those companies where workers’ representation and participation rights were respected, and effectively exercised, weathered the financial and economic crisis of 2008-09 more successfully than companies without co-determination. Democracy at work also promotes better quality jobs and wellbeing at work, respect for health and safety, higher wages, better working conditions, more productive workers, higher labour-force participation and more innovative companies.

Democracy at work is in any event a fundamental right, fostering more equal societies and more active and confident citizens through greater worker involvement at the workplace. Workers’ participation is the most powerful democratic antidote to inequality.

And co-determination is not just a promising idea for the future to help strengthen the presence of workers in corporate governance. It is an instrument of collective control over the disruptive and damaging impacts of globalisation, which is already anchored in law in 18 of the 27 member states of the EU.

Action urgent

It is the political and social responsibility of the EU and member states firmly to address these issues. This is all the more important during an unprecedented pandemic, when working people and their families should be at the core of political action. The European Trade Union Confederation, together with the European Trade Union Federations, has repeatedly alerted the EU and national institutions to the need to act urgently.

The labour ministers’ statement at the last Council of the EU meeting in October is a first step in the right direction. It is however not enough—words should be transformed into actions.

Concretely, democracy at work should entail:

• revision of the European Works Council directive, so that workers and their representatives can be informed and consulted effectively;
• elaboration of a new EU framework for information, consultation and participation of workers, so that businesses do not use EU law to circumvent workers’ voices;  
• anchoring board-level employee representation rights in EU company law, so that democracy at work becomes an essential element of sustainable corporate governance and a prerequisite for companies to do business and exercise freedom of establishment in the EU, and
• rendering access to public funds and public procurement conditional on democracy at work.

Democracy at work needs much more than a mention of the EU acquis in the European Pillar of Social Rights—failing to identify any new, progressive course of action. The EU also needs substantive inclusion of workers’ voices in the implementation of the pillar.

Autonomy and power

Far from weakening the need for democracy at work, the pandemic has revealed that workers’ participation is extremely important in such critical situations, in mobilising forces and resources for working people and their families to maintain employment. In good times, meanwhile, workers’ participation substantially strengthens workers’ voices and autonomy over their work, and their power over work processes and their working environment.

It is a means to shape the company they work for, whether publicly or privately owned, and the economy as a whole. Fundamental rights cannot stop at the factory gate nor at the office door. They cannot be secondary rights either.

More democracy at work is crucial for social and economic cohesion. We should invest much more in making it happen, now, and in shaping a responsible and sustainable future for the people of Europe.

This is part of a series on the Transformation of Work supported by the Friedrich Ebert Stiftung