The Grangemouth dispute crys out for industrial democracy

Now that the Government has launched an inquiry into the ‘intimidating tactics’ allegedly used by Unite in the Grangemouth refinery dispute there is a need to evaluate who is the aggressor and who is the victim. The victimised party has had its officials intimidated, threats issued towards it and its members very livelihood and families menaced. It is of course the workers of the Grangemouth refinery, and their union, Unite. The persecution of Stephen Deans, Unite convener and chair of Falkirk CLP was disgusting. Deans had been cleared of any wrongdoing by the Labour party, yet INEOS, the company that the run the refinery, continued their ‘investigation’ into Deans’ political activity. When, inevitably, Deans was fired, 72% of all refinery workers voted to strike. Next, INEOS suddenly decided that a survival plan was necessary, with wage freezes and pension cuts included. After Unite did not accept the plan, INEOS, in a show of aggressive might, said that the plant would close. Unite had no choice: the strike had to be called off.

This all shows how we must reconsider industrial relations in this country: how employers and employees conduct themselves in regard to each to other. It is clear, and has been clear since victorian times, that self regulation by employers cannot possibly work. It has given us child labour, 15 hour days and underpayment. It is also clear that the unions are no longer a fighting force in this country, since being all but destroyed by Thatcher and since they can no longer compete with business, who is more profit-hungry and more aggressive than ever, as INEOS has shown with its neglectful and irresponsible threat to close the Grangemouth refinery.

So what is the solution? Obviously I would gladly have a strong trade union and labour movement, but the problem with that is a union is a reactive force: it agrees or disagrees, through ballot of its members, to the decisions of the management. And anyway, industrial warfare is not the answer. In 2012, 250,000 working days were lost due to industrial action (in 2011 it was 1.4 million). I am not implying that industrial action is not a human right, nor do I think that striking is immoral, merely an inefficient way to conduct employer-employee relations.

For a solution let’s turn to Germany, as we should for many of our problems. In 2012 86,000 working days were lost to industrial disputes there, in a country with a bigger population and a much more unionised workforce. Germany manages this with a not so little word: Mitbestimmungsgesetz, or Co-determination. Every company with over 2,000 employees in Germany must have a supervisory board, which elects and scrutinises management board. The supervisory board, however, is half employee elected and half shareholder elected, including specific seats for union representatives. The result? Germany has a happy, skilled, well-paid workforce, there are no executive excesses such as the ones found here in the UK and equality is high. Conventional, neo-liberal thought would dictate that Germany should be a floundering economy, ruled by militant unions and on the verge of collapse, yet we know that isn’t the case: Germany is the engine room of Europe, and shows no sign of stopping.

The truth is that employees know more about the running of their company than the senior management. They provide a different view to the running of the company, and they can stop the bosses from making unpopular decisions and make sure that the workers best interests are represented on the highest levels of management. This improves industrial relations, improves productivity, and empowers workers.

This is what needs to happen in the UK. As the Mitbestimmungsgesetz act was being passed by the Bundestag, the Bullock Report on industrial democracy was commissioned by the Wilson government. It concluded that a German Mitbestimmungsgesetz system was indeed a good idea. However, before it could be implemented, Thatcher came along and crushed any thought of worker empowerment, through the unions or otherwise. Think how the Grangemouth dispute would have unfolded, if half of INEOS’s board were workers. It simply wouldn’t have happened. The banks wouldn’t have given out such obscene bonuses and the Cooperative, for all it’s cooperation, wouldn’t currently be circling the drain after years of mismanagement of the Coop Bank by Paul Flowers. The recession has given us the opportunity to re-examine the way our economy works so that we can build a fairer, more equal, and better society. Mitbestimmungsgesetz is a simple, elegant way of achieving this.