chronicle of a death foretold?

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An initiative failed to advance democracy at work however contains lessons for how to pursue the cause.

Last year’s May Day march in Logroño, La Rioja—time for a proper debate about workers’ representation on boards (www.mariomartija.es/shutterstock.com)

The Spanish Congress recently rejected a non-legislative proposal on democracy at work and worker-participation rights, which called on the government to adopt legislation on trade-union representation on company boards. The proposal was advanced by the progressive party Add, as a first step in its plan to translate article 129.2 of the Spanish constitution into more democratic firms. The rejection may sound like a severe setback, but the defeat is not final and some lessons should be drawn.

In contrast to legislative proposals, non-legislative ones are simply used by parliamentary groups in Congress to trigger public deliberation—preparing for eventual legislative action—on a concrete issue of socio-political relevance. It is a means to take the temperature, build arguments, contrast opinions and take sides on a topic.

Here, the debate was too raw and the proposal too vague. The preliminary ‘exposition of motives’ was purely technical, lacking a political narrative, and the last point of the proposal, calling for ‘a system allowing trade union participation in corporate boards’, seemed to have been sneaked in sheepishly. It appeared a missed opportunity to trigger a real political discussion on the benefit and feasibility of, and conditions for, a proper system of worker representation on boards in Spain.

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Unclear model

The minister of labor and leader of Add, Yolanda Díaz, has been signaling since May Day in 2022 her intention to promote legislation on workers’ participation, including trade-union representation on company boards, based on the German model of codetermination in supervisory boards. But which elements from that model were considered, and how they would articulate with Spanish institutions and realities, remained unclear.

In their October 2023 agreement to renew their coalition government, the Spanish Socialist Worker’s Party and Add committed themselves—but only briefly and vaguely—to ‘promote a more effective worker participation in companies … in line with Article 129 of the Constitution and within the framework of social dialogue’. Such an open formulation left huge room for speculation: how could ‘more effective worker participation’ be achieved, beyond existing rights of information, consultation and negotiation, through works councils, delegates and unions? It could mean a lot of things under Spanish law, worker representation on boards being only one of them.

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The PSOE and Add were much more specific in their agreement regarding the promotion of ‘a law on institutional participation to regulate the presence of social partners in the diverse bodies of Public Administration’. Such participation derives from article 129.1 and is evidently less sensitive than worker participation in private companies: it involves social partners’ representation on advisory bodies of public entities, to promote socio-economic interests and general welfare—a role emanating from tripartite social dialogue, different from direct representation of workers’ interests and trade-union freedom. The two largest national unions (CCOO and UGT) had been demanding a law to organize better and to clarify elements of a scattered practice of institutional participation—in spite of all proudly affirmed—while positions regarding worker representation on boards have been more ambivalent.

Spain is rare in Europe in lacking not only a law providing for worker representatives to deliberate and vote on corporate boards but even any open debate on the matter. A sounder non-legislative proposal could have kicked off such a debate and sought to end Spain’s outlier status.

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Not starting from scratch

The discussion would not start from scratch. Leaving aside experiences predating the 1978 democratic constitution, there has been (and still is) some practice of union representation on company boards. It is unfortunately not well known and has not been properly evaluated. This would be a necessary first step for any serious legislative proposal to succeed.

Article 129.2 of the constitution mandates public authorities to ‘effectively promote the diverse forms of participation in the company and promote, through adequate legislation, cooperatives, and … facilitate workers’ access to the property of the means of production’. So far, only the social economy, co-operatives and information-and-consultation rights have been legally developed, based on this article. In 2002, the PSOE (then in opposition) submitted a legislative proposal to Congress including concrete rights for worker representation on company boards, but this went no further during that conservative legislature. Nor however did the PSOE revive it when it came to power two years later.

Savings banks were a legal exception. Under 1985 legislation, employees could elect some representatives to the board, the supervisory and charitable-work commissions and the general assembly of a saving bank. But this basic framework was developed differently across regions and led to a kind of institutional participation in which board seats were distributed between political forces, including the social partners.

During the 2008 financial crisis, a ‘black cards’ corruption scandal was uncovered, which affected board members of a saving bank linked with the ruling People’s Party in the Community of Madrid, but also, regrettably, union board members. It was the perfect storm for the PP, returned to central government in 2011, to repeal the legal framework and restructure the banking sector against the backdrop of bank bailouts. All saving banks bar two disappeared, merging into larger banks or reconverting into foundations. This unfortunate episode buried the system, without a comprehensive assessment of what could have been an exceptional participatory experience.

Public enterprises

What remained was a scattered and modest experience in some public-sector enterprises, resulting from the late 1980s social concertation between the PSOE and UGT. In a 1986 agreement on trade-union participation in state-owned companies with upwards of 1,000 employees, the government committed to negotiate minority union representation on boards or parity representation on advisory commissions. For the metal subsidiaries of INI-TENEO group, the threshold was lowered to 500 employees.

These commitments were rooted in a political pact, without the normative value of collective agreement or law. They applied to state-owned companies only, setting out two possible but very different forms of trade-union participation, which had to be negotiated in company collective agreements and to be enforced according to company power relations.

When the era of concertation ended and company collective agreements expired, they were renegotiated under a much more hostile climate for unions, generally leading to the loss or trade-off of board participation. If this still exists in some companies, the fate of those rights has not been systematically tracked, and the privatization processes in the 1990s delivered a knockout blow to a negotiated system never properly established.

Admittedly, legislation by the European Union or other countries, as well as evolving practice, has offered opportunities for Spanish worker representatives to sit on the boards of non-Spanish multinationals. Volkswagen, the French Alstom and European companies such as Fresenius SE count Spanish union representatives among their board members.

This potential could increase since the ruling in October 2022 by the Court of Justice of the European Union in a case taken by IG Metall and ver.di against the German multinational SAP SE. It ruled that all trade unions representing workers in a European company were entitled to the supervisory-board seats reserved to unions according to German law.

Redistributing corporate power

The rejection of Add‘s non-legislative proposal looks like the ‘chronicle of a death foretold’. It reveals how democratizing the workplace still represents a cleavage demarcating right- and left-wing politics. Yet with democracy at work resurfacing on the European and global agendas, as a response to urgent multiple crises, there seems to be a momentum for a sound debate on worker representation on boards, in Spain and beyond.

At the same time, with the Spanish government wobbling under systematic ‘lawfare’ orchestrated by right-wing forces, the duration of the progressive legislature in the country is far from certain. One thing however is: passing a law on worker representation on boards will not be an easy fix.

It will take resources and expertise to elaborate concrete proposals and anticipate their impact. And it will require preparing the field, step by step, involving the social partners—crucially the trade unions—to develop a large social mobilization around the ambitious goal of redistributing corporate power.

Sara LafuenteSara Lafuente

Sara Lafuente is a researcher on EU industrial relations at the European Trade Union Institute and the Free University of Brussels. Her PhD was on democracy at work and worker representation on boards. She is a co-founder of the global initiative Democratizing Work.

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