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.