Social Dialogue

Social dialogue is a fundamental part of the European social model. It encompasses the discussions, negotiations and joint actions undertaken by the social partners. Social dialogue means discussions and negotiations between employers and employees, conducted as part of a more or less formalised system to influence or decide issues connected with work. These include pay, working conditions, recruitment and dismissal, redundancies, respect for human rights (such as non-discrimination) and in some case broader societal issues.

It oils the wheels of business, aligns the interests of employers and employees, and provides the mechanism to avoid or defuse potential causes of conflict before they escalate into a possible labour dispute.

Above all, it allows the European economy to move forward with the active help of its economic actors and its workforce. It is part of a policy climate which responds to the need for more economic democracy, in which all collective actors can contribute creatively to building a smart, sustainable and inclusive social market economy.

The Social Economy

Social economy enterprises and organisations are economic and social actors present in all sectors of society, which are set up in order to meet citizens’ needs. Above all they are characterised by their purpose: a different way of doing business which continuously associates the general interest, economic performance and democratic operation.

They normally take the form of co-operatives, mutuals, associations and foundations. Some social enterprises use conventional commercial company structures, but with their constitutions written to incorporate social economy principles. Since it developed its organised form in the 19th century, the social economy has grown to comprise approximately 6.5% of the EU’s economy. In term of employment, it grew by 26% between 2003 and 2010.

Key Facts

  • European Trade Union Confederation: 85 national trade union confederations in 36 countries, plus 10 European trade union federations, 60m members
  • European Social Partners – cross-industry organisations representing social partners in labour relations and in European social dialogue at cross-industry level (Articles 154 and of the Treaty on the Functioning of the EU (TFEU):
    • employers: Business Europe, European Association of Craft, Small and Medium-sized Enterprises (UEAPME), Centre of Employers and Enterprises providing Public Services (CEEP)
    • trade unions: European Trade Union Confederation (ETUC) and Eurocadres (Council of European Professional and Managerial Staff) and European Confederation of Executives and Managerial Staff (CEC) as part of the ETUC delegation
  • European Framework Agreements:
  • Other socio-professional groups representing specific or sectorial interests (not recognised for EU social dialogue):
    • social economy: Social Economy Europe (SEE), Co-operatives Europe, Association of Mutual Insurers and Insurance Cooperatives in Europe (AMICE), International Association of Mutual Benefit Societies (AIM), European Council of Associations of General Interest (CEDAG), European Network for Social Integration Enterprises (ENSIE), European Foundation Centre (EFC)
  • Social economy in the EU: 2m enterprises, 14.5m employees.

The social economy is at the centre of the European Union’s drive to find innovative and entrepreneurial solutions to current economic and social problems. It is a key player with respect to sustainable growth, innovation, more and better employment, social inclusion and territorial cohesion.

The Project

The MESMER project has investigated social economy and social enterprises from  the dimension of social dialogue, as the method for combining the different demands and priorities of all stakeholders involved in the different dimensions of this special economic environment. In fact, social enterprises and the social economy are relevant fields for enhanced dialogue between the social partners, given their potential to foster employment and inclusion in the labour market.

Different kinds of partners were involved in the project and collaborated very concretely in the activities and the results achieved. They are: DIESIS (project leader), ETUC (EU), Social Economy Europe (EU), CGM (IT), COCETA (ES), CONFESAL (ES), ELABORA (IT), Associazione Bruno Trentin (IT), Legacoopservizi (IT), Legacoopsociali (IT).  All MESMER outputs are available on the project web site (www.mesmerproject.eu).

This Report

The social economy and the labour movement historically share roots and values, and so worker involvement and dialogue between management and worker representatives in some sense also benefit from these commonalities. Yet the very different political and institutional systems in different EU countries mean that in practice the extent of social dialogue and the way it is structured both vary greatly.

This report outlines the nature and extent of the social economy in eight European countries, and examines the traditions and practices through which social dialogue is structured on different levels, describing examples of good practice. It then analyses the relationship between social dialogue, working conditions, worker involvement and democratic governance in social enterprises, paying particular attention to the sector of worker-owned co-operatives. It concludes with a set of recommendations for policy-makers at the national and European levels. These set out the conditions for achieving win-win solutions through improved social dialogue in the social economy, to the benefit of workers, enterprises and European citizens.

Acknowledgments

The full report that forms the basis of this publication was put together by a team of international experts coordinated by DIESIS and ETUC.

Dorotea Daniele (DIESIS), Marina Monaco (ETUC) and Gianluca Pastorelli (DIESIS) coordinated the research and edited parts 2 and 3.
Toby Johnson edited this summary report.
The country reports were prepared by:
Belgium: Pol Cadic and Denis Stokkink (Pour la Solidarité)
Bulgaria: Veselina Starcheva and Vesselin Mitov (Podkrepa)
France: Marina Monaco (ETUC) and Gianluca Pastorelli (DIESIS)
Italy: Simonetta Sorio (Elabora) and Salvo Leonardi (Associazione Bruno Trentin)
Poland: Łukasz Komuda (FISE)
Spain: Francesc Abad (CONFESAL) and Paloma Arroyo (COCETA)
Sweden: Eva Ternegren (Coompanion)
UK: Toby Johnson (European social economy expert)
Special thanks to all researchers, public officials and representatives of trade unions, cooperative movements and social economy enterprises who have dedicated their time (and their confidence) to the interviews carried out in the framework of the present research.
Design and layout: stand-alone.it / nicolabenetti.com
The sole responsibility lies with the authors of this publication. The European Commission is not responsible for any use that may be made of the information contained therein.

Win-win solutions from social dialogue

  • Trade unions and the social economy in principle share values based on the primacy of people and democratic participation. To maximise positive outcomes, and open up new paths for joint actions, these should be remembered and encouraged;
  • Federal organisations in the social economy play a crucial guidance and support role for their member enterprises;
  • In some countries social economy organisations are fully recognised as partners in negotiating collective labour market agreements;
  • Multi-level structured collective bargaining systems offer the best environment to social partners to regulate companies’ obligations and ensure workers’ rights. These systems provide workers with guaranteed minimum standards which cannot be reduced in further levels of bargaining, but can be increased and adapted on a case-by-case basis;
  • The sectorial and local levels are further promising areas for profitable solutions based on social dialogue, because at these levels it is easier to develop tailored agreements which provide for flexibility and innovation as well as safeguarding workers’ rights, job quality and inclusiveness
  • Social economy enterprises have shown resilience and solidarity, often maintaining employment during the current economic crisis;
  • Social enterprises tend to benefit their host communities because of their rootedness in them;
  • A trade union presence in social enterprises is in the interest of the whole enterprise as worker representation reconciles the interests of owners and workers;
  • Effective social dialogue depends on the mutual reliability and transparency of the interlocutors, and their awareness of their responsibility to shape their relationship – “It takes two to tango”;
  • A culture of dialogue needs to be further developed. Social dialogue is a factor for social innovation which allows societal needs to be met effectively under changing conditions. Companies have to develop a higher awareness of solutions for competitive­ness which are different from cutting labour costs. Trade unions and worker representatives must be enabled to play a more proactive and concrete role.
  • Cultural change also involves public authorities, which are called upon to develop integrated approaches – setting priorities, enhancing existing resources and preventing any risk of marginalisation.

The social economy

The social economy has a strong position in Belgium: it represents 10% of total paid employment, with 463,000 workers in 2010. 95% of workers of the social economy sector work in non-profit associations. The sector enjoys tax exemptions and is booming: between 2003 and 2010, paid employment in the social economy increased by 65%.

The three regions of Belgium define the social economy in a broadly similar way, to include the four families of cooperatives, associations, mutual societies and foundations, but also companies registered as having a social purpose.

FACTS & FIGURES
  • Recognised co-operatives: 670 – 7,000 jobs (excluding 25,000 ‘false’ co-operatives not recognised by the National Co-operative Committee)
  • Mutuals: 5 national unions – 13,000 jobs
  • Associations: 19,000 – 440,000 jobs (fte)
  • Companies with a social purpose: 460 – 5,500 jobs

Social dialogue

The social dialogue takes place at different levels and within different contexts: at the federal inter-sectorial level and at regional, sectorial and enterprise levels.

At the federal level, three institutions are responsible for the social dialogue:

  • the National Labour Council (Conseil national du travail: CNT), a bilateral body which advises the government and parliament on social issues;
  • the Group of Ten, a less formal bilateral body which draws up two-year inter-professional agreements which define the rights of all private-sector workers beneficiaries of social benefits;
  • the Central Economic Council, which is consulted on economic issues.

At sectoral level, workers and employers are represented on Joint Commissions which negotiate collective bargaining agreements. The only JC which can be classified as a “social economy” JC is that responsible for sheltered workshops.

At company level, all firms with over 100 employees must establish an Enterprise Council, and all firms with over 50 employees must establish a Committee for Prevention and Protection at Work.

Collective bargaining agreements must be implemented in all private enterprises, including social enterprises, and applied to all employees and workers in all branches of activity.

Social dialogue in the social economy

The social economy sector participates in the social dialogue at the various levels. However there is no special mechanism for social dialogue in the social economy sector. It has to try to project its voice within the existing institutions.

On social economy issues, the Central Economic Council and the National Labour Council consult social economy federations such as ConcertES and UNISOC.

At regional level, two bodies dedicated to social economy issues have recently been set up: the Walloon Council of Social Economy (Conseil wallon de l’économie sociale) and in Brussels the Consultation Platform of the Social Economy (Plate-forme de concertation de l’économie sociale). However they deal mainly with work integration rather than broader social economy matters, and, rather than being proactive, depend on ministerial initiative.

The specific nature of the social economy is marginalised in the social dialogue. To overcome this, the social economy should build common positions for the sector, publicise its good practices so as to overcome suspicion and prejudice, and find complementarities between the social economy and trade unions.

Social dialogue within social enterprises often belies the sector’s participative ideology, and very few social enterprises and associations have workers who are not members of the management on their board of directors. In addition, participative management depends on the values of the organisation’s executives.

belgium

Good practice

SAW-B’s chantiers de l’économie sociale

In 2009, the association Solidarité des Alternatives Wallonnes et Bruxelloises (Solidarity of Walloon and Brussels Alternatives – SAW-B) launched the social economy construction project (chantiers de l’économie sociale) in Wallonia. Its aim is to organise the participation of employees in the governance of the members of SAW-B, namely small and medium-sized social enterprises. For small organisations with weak financial means, the mutualisation of competences and the help of a unifying organisation like SAW-B ensure the effective participation of workers. The participating social economy organisations have noticed the positive impact of this training on their performance.

 

The social economy

Co-operatives have existed in Bulgaria for 120 years.
Though the general legal framework is favourable to enterprises whose main aim is not to make profit, there is no legal definition of social enterprise. Social enterprises are governed by a complex set of regulations on trade, co-operatives, non-profit organisations, the integration of disabled people, employment promotion, social assistance, SMEs, crafts, culture and corporate taxation. Social enterprises are not recognised in official statistics.
The social economy sector comprises NGOs providing social services and training, together with cooperatives of people with disabilities. Its main activities are providing health, social and educational services and employing disabled and unemployed people.
The main representative body for the social economy is the National Union of Worker Producers’ Cooperatives (NUWPC), which has some 30 member enterprises employing 1,180 people with various degrees of disability. They produce clothing, toys, souvenirs, and packaging.
In 2012, Bulgaria developed a National Social Economy Concept. Its vision is to establish an operational SE sector, contributing to pro-active inclusion of vulnerable groups, flexible and stable employment, developed territorial cohesion. In 2014 the government will adopt a development plan for the social economy, which includes measures related to awareness, education and research, as well as training for the stakeholders. In addition, a permanent working group on social economy and social entrepreneurship will be created within the Ministry of Labour and Social Policy, a sign of the importance to the social economy in Bulgaria.

 

Facts and figures
  • social economy (co-operatives, associations & foundations) – 600,000 members
  • co-operatives: 2,000 – 500,000 members, 50,000 jobs (50% disabled). 4 national co-operative unions. Active in agriculture & production
  • associations & foundations: 9,000 – 1.7m members, 60,000 volunteers. Includes 820 NGOs providing social services. Active in social services, training and work integration

Social dialogue

Bulgaria has a legal and institutional framework of social partnership which functions at all levels. It is implemented on a tripartite and a bipartite basis. At national level the National Council for Tripartite Co-operation brings together employers’ organisations, trade unions and the government. Similar councils exist at sectoral and municipal level. They deal with employment, insurance and living standards.

There are four levels of collective bargaining, and collective agreements can be concluded by enterprises, branches, industries and municipalities.

The Economic and Social Council was set up in 2003 to act as an institution to conduct a broader social dialogue, including representatives of organised civil society as well as employers and trade unions. It contains no government representatives, and acts as an independent advisory body.

Social dialogue in the social economy

Co-operative members are seen not as workers but as owner-workers, and so they may be not be subject to unionisation, and are not subject to collective negotiation and agreements. They are represented by the co-operatives which employ them.

The Labour Code obliges employers to provide workers’ representatives with information about the enterprise, and lays down a consultation and dialogue procedure.

Although five social enterprise organisations sit on the Economic and Social Council, social enterprises are not seen as sufficiently different to be recognised as a distinct player in the social dialogue.

bulgaria

Good practice

European Fair of Enterprises and Cooperatives in the Social Economy

The European Fair aims to promote the active inclusion of disabled people, and counter negative attitudes among employers. It does this by presenting products made by disabled people in Bulgaria’s biggest fair site in Plovdiv. It has been held annually since 2012, and attracts around 80 social enterprises from some nine countries. As many as 30,000 people attended the 2013 event, which has developed into an international event comprising a conference and a round-table discussion as well as the fair.

The social economy

The ‘social and solidarity economy’ (ESS) comprises co-operatives, mutuals, associations and foundations. There are also some social enterprises that use other forms including very large enterprises such as Groupe SOS, which is owned by three associations, and comprises 330 enterprises employing 11,000 people.

Enterprises are considered part of the social economy if they incorporate social economy principles into their constitutions, i.e. membership of people not of capital, solidarity among members, democratic governance, limited or zero profit distribution, indivisibility of assets and independence from public authorities.

 

Facts & figures
  • co-operatives: 26,000 – 306,000 jobs, 22m+ members, annual turnover €288 billion
  • mutuals: 7,000 – 126,000 jobs, 40m members, annual turnover €42 billion
  • associations: 189,000 – 1.8m jobs, 16m members
  • foundations: 1,300 – 68,000 jobs

Social dialogue

France has a very well-structured system of social dialogue at various levels: multi-professional, sectoral, company-level and local (which may be sectoral or multi-professional).

There are no special rules for social dialogue in the social economy, and the general system applies. 80% of social enterprises have fewer than 10 employees, so have no wage negotiations of their own, and apply the national collective agreement (convention collective national – CCN) that covers their sector. Most CCNs in the social economy provide for the financing of joint committees (paritarisme).

Social dialogue in the social economy

80,000 social economy employers are organised in three federations: UDES (covering 60,000 employers and 800,000 employees in 13 sectors), UNIFED (covering the health sector) and GEMA (for insurers).

A transversal social dialogue in the social economy is carried out through UDES, the Union of Employers in the Social and Solidarity Economy (previously USGERES), which in 2001 set up a Social Dialogue Group (GDS). This has resulted in the signing of national collective agreements with five trade unions (CFDT, CFE-CGC, CFTC, CGT and CGT-FO), which are used as a basis for sectoral agreements. The provisions on professional training exceed the legal minimum.

The GDS initiates consultations, issues recommendations, and prepares for the negotiation of framework agreements across the social economy. In recent years, its discussions have helped to develop a joint vision on issues such as equality, discrimination, health and safety at work, work integration and youth employment, and also to share information on the European social dialogue and social services of general interest. For 2013-2014, the roadmap includes the themes of gender equality and social protection.

Sectoral social dialogue in the social economy revolves around national joint committees for negotiating, for conciliation, interpretation and validation, and for employment and training. Collective agreements sometimes provide for a committee to monitor the pension scheme or complementary health plan or a national appeals committee on classification.

Local social dialogue is different, in that it is project-based and linked to specific local needs. It does not set standards. It involves a multiplicity of actors, and focuses on implementing national provisions, and adapting them to local circumstances, audiences and projects.

France 3

Good practice

Worker take-overs of Helio Corbeil and Fontanille

The CGT and CFDT trade unions helped make a success of two workers’ take-overs in the Haute-Loire, printer Helio Corbeil and lace-maker Fontanille. To rescue the firms from bankruptcy, the workers invested their redundancy pay and unemployment benefit to capitalise two new cooperatives.

Working with the co-op federation CGSCOP, the trade unions helped to draw up business plans that are sustainable in the long run. Their most valuable contribution was to introduce participative management. Training to become a cooperative member has been a high priority, in particular in Helio Corbeil, where it takes 18 months to be trained and admitted as a member. All workers in the new cooperatives are members and are unionised. Working conditions in the previous enterprises have been maintained, while production processes are now more flexible and effective.

The social economy

The social economy comprises co-operatives, mutuals, associations and foundations.  Social co-operatives are a special category of workers’  co-operatives serving the general interest as well as the interest of their members. They are of two types: A-type social co-operatives manage social and educational services, while B-type social co-operatives promote the work integration of disadvantaged people. Social enterprises were defined in law in 2005 as being private organisations of any legal form (e.g. associations, foundations, cooperatives, non-cooperative companies) which continually produce goods and services for the benefit of the community and principally operate an economic activity (contributing over 70% of turnover).

The co-operative movement is recognised by the Italian constitution and has developed three strong federal structures with different political allegiances. The three strands have now combined to create a single alliance. A key feature of their organisation is their grouping into consortia.

Co-operatives have shown steady growth even throughout the current financial crisis, with employment rising by 8% between 2007 and 2011.

Facts & figures
  • co-operatives: 71,000 – 1.1m jobs, 12.2m members, annual turnover €140 billion
  • social promotion associations: 140 – 48,000 jobs + 15,000 volunteers
  • voluntary organisations: 21,000 – 867,000 jobs + 826,000 volunteers
  • NGOs: 240 – 27,000 jobs + 12,400 volunteers
  • foundations: 4,700 – 156,000 jobs + 46,000 volunteers

Social dialogue

Collective bargaining coves 80% of the workforce, with three main trade union partners (CGIL, CISL and UIL). On the employers’ side, co-operatives have their own associations. There is a strong propensity for social dialogue (bipartite and tripartite concertation) and a comparatively high level of industrial action.

Social dialogue and collective bargaining – at the different levels – have been key tools for launching, reforming and transposing policies and practices in all fields of labour law and social protection.

Collective bargain­ing, workers’ representation, strikes, participation and the minimum wage, are not regulated by law, but through autonomous collective acts (tripartite social pacts and top-level bipartite collective agreements).

In recent years a number of ‘pirate’ company and local-level agreements have been signed between small employers’ associations and trade unions which undercut national agreed pay levels by as much as 35%.

A mixed model provides for worker representation at the workplace level, through both union councils (Rappresentanze Sindacali Aziendali – RSA) and, much more widespread, unitary trade union structures/works councils (Rappre­sentanze Sindacali Unitarie – RSU), in establishments with more than 15 employees. RSUs can be elected by all workers, whether or not they are union members.

Social dialogue in the social economy

Around 33% of the Italian workforce is unionised, and union membership is higher in co-operatives than in workplaces overall, especially in those regions where there is the highest number of worker cooperatives (Emilia Romagna and Toscana), where they are historically part of specific political sub-cultures, linked to the labour movement.

Both cooperative and trade union confederations are structured into national and local sectoral federations for the different sectors of economic activity (agriculture and food industry, services, social services, etc.) and/or the different collective agreement applied (e.g.: metal, food, building, consumers and retailers).

At national level there are 400 industry-wide agreements, including 13 in the co-operative sector. There is a trend to decentralisation, and in addition 40% of the workforce is covered by sectoral agreements, which enable additional performance-related benefits to be negotiated. The trade unions (CGIL, CISL and UIL) and co-operative federations (Confcoop­erative, Legacoop and AGCI) enjoy a very positive relationship which recognises the specific nature of co-operatives.

Cooperatives are involved in the management of bilateral funds which fill gaps in the state welfare system. There are funds for vocational training (Coopform), supplementary pension schemes (more than one fund, mainly Cooperlavoro) and lifelong learning (Foncoop).

italy

Good practice

Worker involvement at Formula Servizi

Formula Servizi is a workers’ co-operative based in Forlí, which provides a wide range of services to private, corporate and public-sector clients. With 1,900 employees, it is rated among the ten best national companies by size and profits and has reached 35th position in the Top 500 European Growth Companies in 2013. In order to compete, it has:

  • cut waste, introduced recycling and reduced energy consumption;
  • organised work so as to suit the circumstances of its overwhelmingly female workforce: working time is flexible and personalised, and assignments are located close to employee’s homes. This has cut absenteeism and enhanced motivation;
  • invested in R&D and new technologies – for instance its hospital cleaning services will require the use of no water;
  • promoted its employees’ professional development through training and by involving them in company strategy formation;
  • promoted worker involvement by holding well-attended local general assemblies around the country.

Many of the managers have previously worked in trade unions. The high level of worker involvement means that the co-operative benefits from its employees’ hands-on experience and ideas for improving working methods and developing new services.

The social economy

The public image of the social economy is tainted by its deformation under Communism, and there are a considerable number of ‘façade co-operatives’ which are profit-seeking businesses under another name. Nevertheless in recent decades a “new social economy” or simply “new economy” has arisen, based on accepted European principles.

Social enterprises take the following legal forms: foundation, association, non-profit company, social cooperative, workers’ cooperative, cooperative corporation, CIS (Centrum Integracji Społecznej, Social Integration Centre), ZAZ (Zakład Aktywności Zawodowej, Institution of Professional Activity) and NZOZ (Niepubliczny Zakład Opieki Zdrowotnej, Non-Public Health Care Institution).

 

Facts and figures (at the end of 2013)
  • associations & foundations economically active in social work, activation and development: 630
  • social co-operatives: 750
  • Institutions of Professional Activity (ZAZs): 70
  • Social Integration Centres (CISs): 90
  • co-operatives focusing on employment: 881 – 60,000 jobs
  • NZOZs, co-operative corporations, non-profit companies, socially-oriented conventional businesses: c. 300
  • estimated total: 1,500-3,000 enterprises – 15,000-30,000 jobs. Growing fast
  • (NB other co-operatives: 9,100, economically active associations & foundations: 4,500)

Social dialogue

The social economy sector is fragmented by legal status and has no unified representative organisations. The main federal bodies are the auditing unions for worker’s co-operatives (198 members), social co-operatives (44 members) and ZAZs (41 members). The most promising starting point for dialogue is the Standing Conference of the Social Economy (SKES) founded in 2004, which unites 11 key organisations promoting the social economy.

Social economy enterprises are on average very small, with a handful of employees. The percentage of part-time workers is probably about the same as in the economy at large (7.6%), which is much lower than in the EU as a whole (20%). However the percentage of fixed-term contracts is higher than the European norm, at 19%. There is thus scope for a higher level of workforce organisation and collective bargaining.

According to the Labour Code, only trade unions can engage in collective bargaining with employers, but only 15% of the workforce is unionised. Therefore there are fewer than 8,500 company, workplace, multi-employer and sectoral collective agreements covering about 1.8–2.0 million workers or less than 13% of the workforce. Trade unions are active only in medium-sized and large enterprises.

Social dialogue in the social economy

The lack of a representative body hinders effective dialogue with government. The Task Force for Systemic Solutions for the Social Economy enables consultation between ministries, social economy organisations and the Social and Economic Affairs Trilateral Commission (which involves employers, employees and government).

This Task Force has drafted a proposal to establish a register of social enterprises and a Social Enterprise Chamber, but the government has yet to act in it.

Ideas of workers’ self-management are received sceptically. Trade unions are only just starting to realise the shared values of the two movements, and see the role that trade unions could play in advising social enterprises on how to improve working conditions. Examples of collaboration are almost non-existent.

Poland

 

Good practice

Kieleckie Autobusy – Workers buy out a municipal bus company

The Kielce Urban Transport Company (Miejskie Przedsiębiorstwo Komunikacji – MPK) was privatised in 2007. NSZZ Solidarność, the biggest trade union in the enterprise, organised a buyout. Using contributions from the company’s 470 employees along with a bank loan, the new company Kieleckie Autobusy (Kielce Buses) bought a 55% share of MPK for €1.35m.
The workers’ company invested €19m in a new bus fleet. Today it employs 614 people, most of its 151 buses are new and – last but not least – it not only survived, but became profitable and stable.

The social economy

The social economy was defined by law in 2011 as:

the group of economic and business activities that, in the private sector, are carried out by those entities that, in conformity with the principles listed below, pursue either the collective interest of their members, or the general economic and social interest, or both.

Its guiding principles are the primacy of people and the social objective over capital, application of profit to the benefit of members and the social objective, solidarity and independence.

It comprises cooperative societies of different types (including those of associated work, consumption, housing, agricultural, services, sea, credit, teaching, health, insurances and transport), worker-owned/labour companies, associations, foundations, mutual benefit societies, insertion companies, special employment centres and agricultural processing companies.

Worker-owned companies (sociedades laborales) are a unique Spanish speciality: they are share companies in which permanent employees must own a majority of the share capital; no single member may own more than 1/3 of the shares; the hours worked by non-member employees on permanent contracts may not exceed 15% of the hours worked by members; and existing members have priority when shares are transferred.

Facts and figures
  • CEPES members: 42,000 – annual turnover €145 billion (12% of national GDP)
  • co-operatives: 21,499 – 287,000 jobs
  • worker-owned companies; 12,294 – 67,000 jobs
  • mutual benefit societies: 397 – 1,350 jobs
  • insertion companies: 167 – 4,500 jobs, of whom 2,400 in integration
  • fisherman’s guilds: 219 – 440 jobs
  • sheltered employment centres (some with labour enclaves): 490
  • associations: 7,086
  • foundations: 54
  • SE enterprises in other legal forms: 445

Social dialogue

Spain’s social economy is well-structured, with the umbrella body being CEPES. It has 28 members, which are national or regional confederations and groups representing the various types of organisation. Together they have more than 200 regional support organisations. Workers’ co-operatives are federated in COCETA and worker-owned companies in CONFESAL.

The two main trade unions are the Worker’s Commissions (Comisiones Obreras – CCOO) and the General Workers’ Union (Unión General de Trabajadores – UGT).

The trade unions have noted the resilience of the social economy and its ability to preserve jobs during the current economic crisis, and see the value in a dialogue with the social economy over ways to recover from the crisis.

The co-operative movement has stronger ties with the trade unions than do the worker-owned companies. Within worker-owned companies, social dialogue is seen as a way through which worker-owners can make agreements to ensure then sustainability of their company.

UGT has negotiated more than 4,500 collective labour agreements, which benefit around 11,000,000 workers.

At national level, CONFESAL has signed collective agreements with the CCOO and the UGT. The first agreement was signed in 1997, and it has progressively been enlarged. It is replicated in regional agreements. It proposes initiatives to favour worker participation and socio-economic development, and to collaborate in the transfer to the workers of business that face closure when their owner retires

Social dialogue in the social economy

Around 90% of private sector employees in Spain have their wages and working conditions settled through collective bargaining. This system also applies to worker-owned companies, although these are not separately represented. Worker’s co-operatives, on the other hand, are not covered by collective agreements, although they use them as a reference. Here, trade unions are only involved in negotiations with respect to non-member employees.

At company level, the governance structures of co-operatives differ regarding members and non-member employees. Pay and conditions for members are set by themselves. Non-member employees elect a trade union representative as in any other business. Where the number of employees is sufficiently large, a Social Committee is set up with representatives of the workers and the cooperative in order to allow its participation in the board.

Co-operative members are not paid a salary, but rather an advance share of profits. For full-time workers, this will be at least equivalent to the minimum wage. Equal-pay systems are easier to operate in smaller co-operatives with simpler management structures, while larger co-operatives rend to have pay differentials, although these are narrower and more egalitarian than in conventional companies.

In worker-owned companies, internal regulations may be used to govern the relationship between the worker-owners and managers.

 

spain

Good practice

The Murcian Regional Pact for the Social Economy

In Murcia, a Regional Pact for Social Economy for the period 2013-2015 was signed between the regional government and the regional unions of workers’ cooperatives (UCOMUR), worker-owned companies (AMUSAL), agricultural cooperatives (FECOAM and FECAMUR) and education cooperatives (UCOERM). It aims to strengthen enterprises and organisations in the social economy by promoting the creation of these enterprises, developing their competitiveness, and promoting employment and training. This pact has the specificity of being bilateral between the regional government and the representative organisations of the social economy.

The social economy

The definition of the social economy is that made by a Swedish government committee in 1999:

The social economy concept refers to organised activities that primarily aim at serving the community, are built on democratic values, and are organisationally independent of the public sector. Associations, cooperatives, foundations and similar groups mainly carry out these social and economic activities. Benefit to the public or a particular association’s members is the main incentive for the social economy – not profit.

The main types of organisation included in the social economy are cooperative societies, mutual companies and the non-profit sector. There is a small but growing number of work integration social enterprises (WISEs).

Social enterprises have no specific legal form and tend to use one of four structures: economic association (co-operative), non-profit association (unlimited liability), limited company (facilitates financial investment) and foundation (no members).

 

Facts & figures
  • all active enterprises: 1.1m
  • co-operatives: 3,900 – 100,000 jobs
  • civil society enterprises: 77,000 – 120,000 jobs, annual turnover €13.6m
  • work integration enterprises: 310 – 9,500 jobs of whom 3,000 paid by the enterprise. Sector growing fast. Activities: shops, trading, coffee-shops, catering, domestic services, building and repair services, gardening, dog-watching, welfare

Social dialogue

In Sweden, the labour market has traditionally been regulated through collective agreements, the first of which was signed in 1938, rather than by legislation. Though many regulations were introduced after a political debate in the 1970s, many matters – such as the minimum wage – remain unregulated. The system of collective bargaining covers more than 80% of employees in the private sector, and 88% of all employees. The trade unions have negotiated very good working conditions on issues such as parental leave.

Approximately 70% of the workforce is unionised, but the figure is falling. Similarly, approximately 90% of employers are in representative organisations and are therefore covered by collective agreements. Negotiating rights are stipulated by law, and trade unions with a workplace agreement are privileged. The right to strike is highly centralised. Labour market regulations are the same for the private, public and social economy sectors.

The Co-operative Employers’ Association (KFO) has 3,900 member enterprises employing 100,000 people. It negotiates tailor-made collective agreements on wages and employment conditions with trade unions on behalf of its member enterprises. Its main task is to assist its members in negotiations and to conclude agreements on their behalf. The negotiations conducted by KFO can be divided into three types: collective bargaining, co-determination negotiations and negotiations to settle legal disputes. In addition to this, KFO provides services in matters arising in the member companies’ day-to-day personnel administration.

In the private sector, pay bargaining at national level has virtually ceased, and most collective bargaining takes place at industry level, although there is still some national co-ordination, as well as a lot of room for variation at company/organisation level: around 90% of employees have part of their pay determined by local level negotiations, and 11% have all their pay determined locally. Around 60 unions and 50 employers’ associations are involved in bargaining at this level.

Social dialogue in the social economy

Wages and working conditions in social enterprises are not very different from those in the private sector.

The relationship between the unions and the social economy and social enterprises is not without problems. This situation dates back to the early 19th century, when workers’ co-operatives were deemed not to be part of the workers’ movement, and similar attitudes persist today with regard to the new co-operative movement. Trade unions find it difficult to classify workers’ co-operatives or to find a role within them, and many co-operative members see no benefit in union membership.

In 1998, at the request of work integration social enterprises (WISEs), KFO drew up a special collective agreement for the WISE sector.

The social economy

The social economy is more commonly known as the ‘third sector’ in Britain. it includes the commonly accepted ‘families’ of the social economy in the European sense – voluntary organisations (associations), co-operatives, mutuals and foundations – together with the more Anglo-American style of investor-led ‘social enterprise’. The government defines a social enterprise as:

a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for share holders and owners

It is thus an enterprise with a social objective and limited profit distribution, but the dimension of participation is not mentioned. Social enterprise can take any legal form, but the specific status of community interest company (CIC) is available to those which pass a community interest test and have a cap on the size of dividends and a lock on the distribution of assets.

The social economy employs approximately 6% of the workforce.

 

Facts & figures
  • co-operatives: 6,000 – 236,000 jobs, 13.5m members, annual turnover €45 billion
  • mutuals: 50 – 50,000 jobs
  • associations: 870,000 – 1.3m jobs
  • other social enterprises: 70,000 – 974,000 jobs. Includes 9,000 community interest companies

Social dialogue

Social dialogue is not well structured in the UK, and industrial relations are conducted on an issue-by-issue and rather confrontational basis.

34% of all employees in workplaces with 10 or more employees are union members (62% in the public sector and 22% in the private sector). Three-quarters of workplaces with union members recognise one or more unions for the purposes of negotiating the pay and conditions of at least some their employees. 14% of workplaces with 10 or more employees have a bilateral joint consultative committee. A further 25% of workplaces have a consultative forum at a higher level in the organisation.

Social dialogue in the social economy

The consumer co-operative sector (300 co-operatives turning over €31 billion p.a.) has a well-established system of social dialogue. The Co-operative Employers’ Association (CEA) includes 13 retail co-operatives and has national agreements with two trade unions, the Union of Shop, Distributive and Allied Workers (USDAW) and the National Association of Co-operative Officials (NACO), which have large memberships among co-operative employees.

In the 500 worker co-operatives, the role of collective negotiation of wages and conditions is largely conducted among the members by virtue of their membership of the co-operative. However trade unions do play an important role in some cases, particularly by representing employees in cases of dispute and providing expert support based on industry practice on issues such as health and safety. In contrast the 250 employee-owned companies do not tend to practice dialogue with trade unions.

The 162,000 active voluntary organisations employ 765,000 people, 22% of whom are trade union members. Unionisation is rising among employees threatened by budgetary austerity and the privatisation of public service provision.

At national level, the Trades Union Congress and Co-operatives UK have signed a set of good practice guidance on public services, co-operatives and mutuals, which sets standards for the transfer of public services to mutual ownership. It urges that any such transfer should be endorsed by a ballot of employees, and that trade unions should be recognised and involved.

Six TUC-affiliated education unions have signed a national agreement with the Schools Co-operative Society setting standards for governance and working conditions in the 700 co-operative schools.

Wales

Good practice

Wales Co-operative Centre

Wales Co-operative Centre is unique in the UK in being a co-operative development organisation that was set up by trade unions. It opened in 1982 and has a long standing memo­randum of understanding with the Wales TUC. The Centre supports the development of new and existing social businesses. It has supported many worker buy outs of businesses, including the country’s last deep coal mine, Tower Colliery. After the pit’s closure was announced in 1994, it was bought out by 239 miners who each contributed €9,600 from their redundancy pay towards the cost of €2.4m. The colliery reopened in 1995 and continued for 13 years until it eventually closed when coal reserves were exhausted in 2008.

Worker cooperatives have long been engaged with trade unions in pursuing mutual objectives related to employment, innovation, education, social inclusion, equality and environmental sustainability. Their common past and values may facilitate a joint contribution, also involving public authorities.

However, all this can happen only if certain methodological and substantial conditions are met. If the relationship between trade unions and worker cooperatives appears to be quite close, nevertheless, it is also typified by issues and concerns that threaten collaboration and the achievement of mutual results.

This section investigates the conditions for successful collaboration between the two movements, and is based on original research in four countries: France, Italy, Spain and the UK, carried out through desk research and interviews.

Relationships between trade unions and worker cooperatives: shared values and methods

Trade unions and co-operative organisations have a tradition of working closely with political parties to secure workers’ rights. The major cooperative organisations regard work as a driver for democracy, for freedom and individual dignity, for social inclusion and cohesion, for legality and security and as a factor in both individual and collective development.

The nature of work is the basis on which worker co-operatives are built. They put people at the centre of their concern, in their roles as workers, (and also, but not necessarily) cooperative members, as well as individuals and citizens, who are part and parcel of the community. In traditionally established major cooperative organisations, such “attention to people” consistently goes hand in hand with attention to rights. In particular, the focus is on the fundamental right to work and to decent work, as well as on the right of workers to be involved in those strategic and organisational decisions that often determine the concrete realisation of the rights themselves. They pay special attention to doing business in a coherent way that advances both social and collective goals.

It is this set of values which characterises the genuine cooperative model, reflecting the original inspiring principles of the cooperative movement and grounded in legislative and regulatory provisions governing cooperatives. It is also because of these values that “traditional” cooperative organisations are acknowledged as active interlocutors, as partners wishing to implement a business model intended to provide generalised wellbeing, based upon the democratisation of the economy and fairness and equality in governance processes and distribution of resources.

This heritage of shared ideals seems to have a positive effect on industrial relations. In those regions with the highest concentration of worker cooperatives, the unionisation rate, the coverage of company-level collective bargaining and the percentage of open-ended employment contracts are usually very high, while there is a low degree of conflict. Co-operative federations play a key role in preserving such features, by advising their member businesses on issues such as preparing balance sheets and complying with co-operative, tax and employment regulations and existing collective agreements.

However these features alone do not make up strong enough conditions to implement a real mutual exchange. Conversely, it is more appropriate to refer to a “mere” use of the cooperative corporate form rather than to cooperation according to its original meaning.

Distinctive pathways of social dialogue and collective bargaining with cooperatives

The investigations in the targeted countries show that industrial relations in cooperatives tend to replicate national models, but with certain peculiarities, following their own typical paths. This occurs mostly where cooperative associations are well established and the national system enables them to do so.

In general, cooperative organisations may be engaged, although to different extents, in tripartite dialogue with public institutions at various levels. This happens with a view to defining wide policy scenarios and action plans for social and economic well-being (Italy). In addition, in bilateral dialogue, they tend to exercise autonomously the powers that can arise from their recognition as social partners, by developing their own collective bargaining arrangements. Notably, this occurs in Italy, where cooperative organisations – social partners for all intents and purposes – negotiate and sign sectoral national collective agreements which are different from those applying to non-cooperative companies. This practice has also emerged in other countries, although to a lesser extent and in different ways, in line with national industrial relations and bargaining systems. Moreover, this experience concerns key sectors where cooperative companies stand out as valuable economic entities.

Collective bargaining for cooperatives is also marked by the quality of its contents. In recent years, economic provisions and pay have, on average, been higher than in other types of company in the same business sector. Even if recent economic and sectoral developments have reduced differentials, nonetheless, measurable working conditions remain globally – albeit at times slightly – more favourable. In addition, it is possible to gain further margins in territorial and company level bargaining.

In all four countries studied, cooperatives appear to have a frequent recourse to participatory methods, both tripartite and bilateral. This is most formalised in Italy, but in all four countries diverse practices of enforced employee information and consultation allow the involvement of all workers, for the benefit especially of non-members who do not have access to the company decision-making bodies. Worker involvement tends to be formalised most often in company-level agreements.

Criticisms of the relationship between trade unions and worker cooperatives

A number of concerns and criticisms are levelled against the relationship between work co-operatives and trade unions, namely that:

  • worker co-operatives may provide lower wages and working conditions than other enterprises
  • members and non-member workers may have unequal rights and be treated unequally
  • co-operative members may exploit themselves
  • there is no effective worker involvement in the business
  • there is low awareness and freedom in decision-making

The supportive ‘quadrilateral relationship’ between trade unions, co-operatives, the public authorities and political parties (which was strongest in Italy) has weakened since the beginning of the 1990s. In a climate of globalisation, tight credit and public spending stringency, companies have sought more autonomy, and integrated strategies between co-operatives and public authorities have fallen away. Co-operatives have shown their resilience and have usually maintained pre-crisis employment levels. However, particularly in labour-intensive sectors and those dependent on public contracts, such as construction and services, some cost-cutting decisions have been made without considering innovative alternative strategies. Also, some co-operatives which had diversified away from their core mission have been obliged to retrench. This has led to industrial relations problems.

The fragmentation of representation and the establishment of dignified labour standards

A progressive fragmentation of interest representation on both sides has undermined social dialogue. Legal reforms in some countries have imposed weaker national-level collective agreements, vitiating the minimum standards that had been established. Elsewhere the social partners have negotiated bargaining frameworks allowing greater flexibility.

In Italy and Spain, small, “indep­endent” trade unions and newly established cooperative organisations have negotiated “pirate” company agreements with lower legal and economic standards than those guaranteed by the sectorial national agreements signed by most representative trade union and cooperative organisations. These “pirate” agreements have sometimes resulted in a drop in pay of as much as 35%.

There has also been a wave of unilateral cancellations by cooperative management of company-level agreements.

A risk also exists that “fake” co-operatives, established purely to avoid compliance with collective bargaining arrangements and labour inspections, alter the market and provide fertile ground for informal, illegal and unprotected work.

Position and contractual conditions of the member-worker

Trade unions have long been concerned that members of workers’ co-operatives in low-margin activities might self-exploit in order to stay in business. Such self-exploitation is prohibited by labour regulations in most EU countries: minimum standards applicable to employees usually apply to worker-members of cooperatives by law. Nevertheless, there are exceptions. In Spain, for example, a worker member is considered to be a self-employed person, to whom collectively agreed standards do not necessarily apply. Associated concerns and tensions with trade unions are related to the risk that legislative provisions allow member workers’ wages to be kept lower, in order to capitalise their business. In Italy, legislative provisions also allow exceptions to treatment of member workers, as set out in collective bargaining standards, though under certain conditions and following specific procedures. In the case of the handling of a corporate crisis, for example, the reduction of agreed wages is permitted, by virtue of the autonomy of shareholding cooperative members to make decisions.

The protection of this autonomy is undoubtedly important, as co-determination is an integral part of the cooperative idea. The key question is how to make it real, and to ensure that the exercise of such autonomy in decision-making is not just assumed. These remarks apply to cooperatives of all sizes.

There is also the question of how to ensure that the interests of non-member workers are also represented.

Innovation for integrated growth: relaunching competitiveness while protecting rights

Field research unearthed a complex set of issues, both long-standing and of more recent origin. Solutions are called for to foster integrated socio-economic development. Such solutions have to meet the needs and interests of large parts of the cooperative movement, of the trade unions and the community, all at the same time.

For this to be possible, it is necessary to prepare the ground for an extensive and intensive – that is to say structured and tailored – approach to dialogue. It is first necessary to identify the multi-level playing fields, where it is possible to give voice to all collective and even public interests. If participation, dialogue and the exchange of information is to be profitable, it needs to involve all parties: cooperative companies, trade unions and public authorities, as well as workers. It is necessary to put all concerned actors into contact with each other.

Social dialogue and industrial relations can offer the methodology for such innovative approaches. It is therefore useful to make reference to tripartite social dialogue, developed at national or local levels and, possibly, including other interest representation groups, such as citizens’ and users’ associations. On another level, bipartite social dialogue between cooperatives and trade unions appears more relevant, complying with typical industrial relations characteristics, collective bargaining and worker involvement practices. Particular attention should be paid to the company/group/territorial levels, the appropriate dimensions for addressing strategic and organisational needs. Here, bargaining and participatory methods need to be applied with a certain degree of flexibility and adaptation, to accommodate complexity.

“Integration versus complexity” is also the rationale whereby good practices are analysed and the action levels are based on dialogue and involvement tools appropriate to the task. These tools would be chosen each time by the concerned actors and they appear to combine with each other in a less schematic, but a more integrated way.

The analysed frameworks for action, at different levels, show a distinctive common character. They all address workers’ rights and labour conditions as features to be integrated and fostered within strategies aimed at supporting company competitiveness and seeking to lay the foundations for sustainable growth. In this scenario, the protection of collective provisions is to be combined with strategic and organisational needs, typical, for example, of the sectoral and company dimensions. The involvement of workers and trade unions, as well as the issues related to the interest representation, is strictly related to such needs.

Cooperatives and trade unions in the collective dimension

Despite the decline of the political “quadrilateral relations”, in several European countries recent trends show a renewed interest in integrated strategies of public relevance, agreed with public authorities and implemented under their coordination and guidance, and enacted through the joint action of trade unions and cooperative organisations. They address many different issues, such as job creation and protection; the promotion of career paths; the enhancement of resources, in particular human resources locally; agreed schemes for the efficient and sustainable supply of services of general interest; etc. Their common feature is, however, the acknowledgement of worker cooperatives as valuable economic and social actors.

A number of instances of co-operatives playing a positive role in the community stand out:

  • In Italy, the co-operative and trade union organisations in the region of Emilia Romagna have agreed a set of joint protocols setting standards for decent working conditions, covering labour-intensive sectors, tendering for contracts, illegal forms of employment, exploitation and collective agreements that embody working conditions that are worse than those in the national collective agreements. This approach is supported by a national trilateral dialogue and by regional and provincial observatories on co-operatives.
  • Also in Italy, Libera Terra, which establishes co-operatives on properties confiscated from the mafia, is instrumental in promoting a culture of legality and labour, which in the regional context is still not recognised as a key element of economic sustainability;
  • In the UK, Co-operatives UK and the Trades Union Congress have established a formal process of dialogue which has developed integrated strategies on topics including long-term unemployment, school drop-out and youth unemployment, training to prepare for restructuring and technological innovation.
  • In France, trade unions and the co-operative movement have long worked together, particularly at local and regional levels, to create new co-operatives. This collaboration is especially useful in cases of failed company succession. The 2014 national reform plan includes a chapter on the social economy, which covers the modernisation of the co-operative model to make worker takeovers of threatened businesses easier.

Collaboration between worker cooperatives and trade unions at enterprise level to relaunch competitiveness

It is the company and local levels that are closest to where wealth is being produced. It is therefore at these levels that innovation and experimentation in work organisation and productivity growth can most appropriately be carried out. At the same time, these are the levels where worker involvement is most important, to ensure the successful conception and implementation of innovation strategies.

Social economy enterprises have a distinctive role to play in achieving the goals of the Europe 2020 strategy in creating a smart, sustainable and inclusive Europe. In order to do this they need to find the right balance between economic objectives and social objectives – which also pertain to their original mission – regarding both their workforces and the broader communities which host them. They have a long history of working with trade unions on the issues of employment, innovation, education, social inclusion, equality and environ­mental sustainability.

The project tried to identify paths which allow both movements to collaborate in order to move towards a market economy that also promotes social development. Given the support of public authorities, such collaboration can produce integrated solutions to complex economic problems, which work within complex legislative constraints. Social innovation to increase participation and economic democracy benefits companies, workers and society alike.

Such collaboration relies not only on structured systems of dialogue and collective bargaining between employers and employees, but also on a shared culture and set of values.

The conclusions are as follows:

Social dialogue is the foundation for enhancing industrial and economic democracy through the promotion of participation, mutual responsibility and commitment in companies and in the community (with a large role for public authorities).

  • The social economy and trade unions share common values which should be remembered: these include putting people first, trust in participation, respect for legislative, statutory and collective bargaining provisions, and regulated collective bargaining. They can result in quality jobs, decent working conditions, participative and inclusive methods, and aspirations for flexibility and inclusion.
  • Most representative co-operative organisations can play an import role in advising, guiding and ensuring compliance with regulations. In Italy and Belgium they are fully recognised as social partners and thus participate in setting the rules, with positive results.
  • Multi-level bargaining systems seem more likely to result in effective results: they allow generally applicable frameworks of rules and guaranteed minimum standards to be set, while allowing more flexibility and concreteness by lower (company and/or local) level bargaining, where the definition of tailored arrangements, designed on a case-by-case basis, can better respond to the specific needs of the company, the workforce and the community.
  • In worker co-operatives, trade unions act in the interest of the whole enterprise – of member and non-member workers.  This action can bridge the gap between the involve­ment prerogatives of worker-members and non-member workers, who would not have access to the co-operative assembly.
  • At the same time, trade unions assist and represent the interests of worker-members, and are therefore committed to creating the conditions for company decisions taken by an assembly of worker-members who are actually, truly and substantially skilled and involved, and are therefore fully aware and responsible in playing their decision-making role. In this way the expression of codetermination typical of the cooperative model is genuine. Under certain conditions and given circumstances, trade unions, understanding these voluntary restrictions, bargain with the cooperative management on measures and terms to implement assembly decisions.
  • In times of crisis, most co-operatives have shown a high degree of resilience, and many have managed to preserve jobs, even at the expense of the capital holdings of members.
  • This resilience works to the benefit of local communities in which social economy enterprises are embedded.
  • Participation has produced a great deal of social innovation although not yet on a large scale. This could be improved by ensuring widespread and substantial participation procedures. This would help to build a culture of awareness and responsibility, in which industrial relations can be reshaped to balance the forces of globalisation with local development. To this end, education may certainly be useful on both sides.
  • Cultural change is called for:
    • by companies, which should pursue competitive­ness with due regard for the welfare of workers, especially disadvantaged workers. Co-operative organisations are called on to preserve and promote their genuine values through true actions of guidance towards their affiliated companies;
    • among trade unions and worker representatives, who have to be enabled to play a more proactive and concrete role in finding ad hoc solutions;
    • by public authorities in that they set priorities, provide resources and prevent risks of marginalisation.

It could be useful to:

  • rethink the space for social dialogue, for instance by exploring paths on the basis of the experience of sectorial social dialogue (also at European level)
  • increase company and local level social dialogue in articulation with national social dialogue
  • enable social partners to increase their role in companies and at local level.

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