Beth Farhat: Time to include workers on company boards

Regional head of the TUC Beth Farhat wants better worker representation in the boardroom

Iain Buist Beth Farhat, regional secretary at the Northern TUC
Beth Farhat, regional secretary at the Northern TUC

At a time when most shares in Britain are held overseas and any one share is held, on average, for just a matter of months, shareholders can no longer be the sole stewards of the long-term interests of a company.

We will only see sustainable economic growth if we create a corporate governance framework fit for the 21st century.

The majority of EU member states already provide for worker representation at board level in some form, which could be delivered along the same principles outlined for the election of workers onto remuneration committees. Polls show strong support for workers on boards, across the political spectrum.

A new Government should legislate to provide such representation, beginning with large companies who very often already provide for workers on the board in plants in other EU countries, and ensure that time off and training is funded to ensure that such representatives are competent in that role.

All the evidence shows that where workers are genuinely consulted and engaged at work business benefits too, with reduced turnover and absenteeism and improved performance. Workers’ rights to information and consultation – including on essential issues like the future of the company, TUPE transfers and redundancies - should be based on establishments rather than undertakings and the threshold for negotiation substantially reduced.

The relationship between an employer and an individual worker is an intrinsically unequal one. Unions play an essential role not only in fairer workplaces but in providing a collective voice – the largest democratic membership organisation in Britain.

Every worker has the right to join a union but not all workers have the right to have their union recognised for the purpose of collective bargaining on pay, hours and holidays, and workers have no right to meet a union at their place of work so they can choose whether to join. Unions should be automatically entitled to statutory recognition where at least 50% of workers in a bargaining unit are members.

In many countries, workers have the right to meet and talk with a union representative at their place of work, within the terms of what is deemed reasonable access, so they can consider whether or not to join a union. 

The evidence of continental Europe shows that information and consultation promotes trust, understanding and mutual respect in the workplace, assists managers to make better decisions for the long-term benefit of the company and widens the esteem in which unions are held, underpinning rather than undermining their position. Five years after the economic downturn, at a time when many argue for a better, fairer economic model, improved workers’ voice, as expressed through information and consultation, is an idea whose time has come. 

A new Government should give consideration to the potential worker, business and union benefits of introducing such a right for citizens in the workplace here, alongside stronger protection against unfair labour practices.

As with any election in any sphere of life, a Government should seek to ensure that as many people as possible participate in union ballots that are governed by statute and that red tape is minimised. A new Government should review options for modernising balloting methods for statutory ballots, including the option of using secure electronic balloting at places of work, as endorsed by the Electoral Reform Society.

Beth Farhat, Regional Secretary Northern TUC

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