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Trade unions and social enterprises – win-win solutions 16 February 2014

Posted by cooperatoby in cooperative, EU, Social enterprise.
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The final panel: L-R Bruno Roelants (CECOP, Marcel Smeets (Social Economy Europe), Patrick Itschert (ETUC), Emilio Fargnoli (UNIEuropa), Allison Roche (UNISON) with Marina Monaco (ETUC)

The final panel: L-R Bruno Roelants (CECOP, Marcel Smeets (Social Economy Europe), Patrick Itschert (ETUC), Emilio Fargnoli (UNIEuropa) and Allison Roche (UNISON), with Marina Monaco (ETUC)

At the MESMER final conference last Thursday, the highlight for me – and many of the 40 others present – was the presentation by Bob Cannell of Suma Wholefoods, my old co-operative. He showed engagingly how 150 ordinary people can run a successful and very profitable business using a collective management system based on equal net pay and job rotation, dispensing entirely with conventional executives. They have no trouble living with the double qualité of worker and manager. Economists would say that a business of this scale in a commonplace industry – food distribution – couldn’t survive, so they must have got this wrong too, mustn’t they?
But why does such a radical business need a trade union? After getting the brush-off from the major unions, in 1998 Suma set up a branch of the Bakers, Food and Allied Workers Union (BFAWU) to which 80% of the co-op’s members belong. The union plays a valuable role in helping the co-operators to avoid exploiting themselves, mediates in cases of conflict (and not automatically on the employee’s side, either) and helps spread Suma’s progressive practices (6 months’ full maternity pay!) to other workplaces.
I regret to say that some of the other presentations were less enthralling – those from Spain in particular being an object lesson in how not to perform in public. Speed-reading one’s text from the podium is not the way to keep an audience’s attention. It’s a tribute to the interpreters that they managed to make any sense of it at all. I certainly didn’t.

Good practice snapshots

The conference gave, if not a comprehensive overview, then a range of snapshots of the different styles of employer-employee relations in Europe’s social enterprises – from the highly structured national social dialogue in Italy to the fragmented situation in Britain. One outstanding example is the 1,400-worker Formula Servizi in Forlí, Italy, where social dialogue has reduced labour turnover from 45% to 3% a year.
In France, as Emmanuel Verny from CEGES explained clearly, the social economy has introduced a 4th level of social dialogue, with five national agreements feeding down to 13 trade sectors.
The UK contribution started with a summary from me of the fragmented nature of the relationship between social enterprises and trade unions in Britain. Unionisation runs at 62% in the public sector but only 22% in the private and voluntary sectors. Nevertheless, as the Workplace Employment Relations Survey shows, unions still do play a significant role in protecting working conditions and pay.
Despite this lack of co-ordination, there are good examples of productive relationships between trade unions and the social economy – or at least there are with co-operatives (and their 100,000 employees). Other types of social enterprises (974,000 people according to the optimistic self-selected government definition), and the voluntary sector (765,000), have been much less concerned to build bridges. Perhaps this will change. It is noteworthy that trade union membership in voluntary organisations has been rising, as more of their workers worry about their futures. I think the employee ownership sector (130,000 employees) is a major missed opportunity for trade unions: by and large they have failed to engage or to maximise employees’ input into management.
I agreed with Derek Walker from the Wales Co-operative Centre when he said that successions are major opportunity for co-operatives. WCC, set up in 1983, is a co-operative which develops co-ops, and it is sadly still the unique example of a trade union initiative to convert threatened businesses to employee ownership, and to preserve indigenous enterprise. Its most celebrated success is Tower Colliery, closed by the coal board but reopened and run by the workers for a further 13 years.

Questionable public service spin-outs

Allison Roche spoke on behalf of the UK’s major public service trade union, UNISON, which has 1.3 million members, including 60,000 in the voluntary sector. The union is concerned that the so-called ‘public service mutuals’ which the government is setting up – sometimes without the consent of the workforce concerned – will be short-lived in the face of competition from large corporations. Though flexibility and ‘social innovation’ may bring some advantages, there is no evidence that service quality improves (see Apse’s Proof of Delivery). There is the threat of a ‘race to the bottom’ on working conditions. And there is no demand for such a transformation: she noted that a minuscule 0.2% of National Health Service staff have chosen to exercise their ‘right to request’ to spin off as a ‘mutual’.
The EU’s new public procurement directive contains an article (76a) which allows employee-owned spin-outs to be sheltered from competition for the first three years (see Allison’s presentation and the Local Government Lawyer’s commentary) – but the way it will be implemented requires close scrutiny. It does not apply to many public services (fire, police and probation for example), and may exclude worthy bidders such as charities.

Luca Pastorelli (DIESIS) and Marina Monaco (ETUC)

Luca Pastorelli (DIESIS) and Marina Monaco (ETUC)

Marcel Smeets of Social Economy Europe made the point that the financial crisis has become a crisis of trust, and it is the participative governance of social enterprises and trade unions that can bridge the gap. He quoted President Barroso in this regard: “it is precisely those European countries with the most effective social protection systems and with the most developed social partnerships that are among the most successful and competitive economies in the world”. In Allison’s view, the social economy is so fragmented that it is unable to negotiate, and needs to join together and build a partnership with the unions. This is the best way to ensure that externalisations really do create social value. “We have a lot of work to do,” she said.

Co-operative schools and best practice guidelines

Two good practices deserve mention. First, 600 co-operative schools have been founded in the last five years, and they adhere to a national agreement with the six unions involved.
Secondly, the TUC and Co-ops UK agreed a set of best practice guidelines on public service spin-outs last December. Its main recommendations are:

    • the workforce should be balloted before any spin-out, and trade unions should be recognised
    • governance of the new enterprise should be democratic, with membership open to all employees, where possible collective shareholding (thorough an employee trust) and with collective bargaining
    • tenders for externalisation should make social objectives clear, and should provide for an initial contract period of 5 years to allow the enterprise to get established
    • there should be an asset lock to prevent public assets being stripped by new owners
    • better employee involvement does not replace trade union representation, it is complementary to it

Trade unions should be on board the SBI

The MESMER event was graced by an unexpected contribution from Jean-Claude Mizzi of DG MARKT, one of the key people behind the Social Business Initiative. He noted that the SBI has now entered a “democracy phase” till after the elections, with the EESC making the running for the time being. The expert group GECES will be renewed in 2015, to the extent that the 44 positions for civil society will be up for reappointment (the member state represented being in the gift of governments). This set me thinking that the trade unions should put up a candidate. This would usefully broaden the range of stakeholders who are represented and whose opinions should be part of the mix.

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