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INTERNATIONAL LABOUR OFFICE

CO-OPERATION
IN INDUSTRY

Workers
Employers
Public Authorities

GENEVA
1951

STUDIES AND REPORTS
New Series, No. 26

PUBLISHED BY THE INTERNATIONAL
GENEVA,

LABOUR

OFFICE

SWITZERLAND

Published in the United Kingdom for the INTERNATIONAL LABOUR OFFICE

by Staples Press Limited, London

PRINTED B Y " T R I B U N E D E G E N ä V E " , GENEVA,

SWITZERLAND

CONTENTS
Page
INTRODUCTION

CHAPTER I ; Co-operation between Employers and Workers in the
Undertaking
Introductory Remarks
Studies and Research
Purposes
Co-operation Initiated by the Parties
Individual Initiative
The American System
Promotion by Governments or Employers' and Workers' Organisations
The Scandinavian System
Co-operation Established by Legislation :
Works Committees and Councils in Certain European Countries
The Practice in Other Countries
Countries with a Planned Economy
CHAPTER

II : Go-operation at the Level of the Industry

Introductory Remarks
Machinery Set Up by Agreement between the Parties . . . .
Joint-Industrial Councils in the United Kingdom
The Canadian Construction Industry
The United States Clothing Industry
Rehabilitation Conferences in Japan
Machinery Set Up on Government Initiative or by Legislation .
Modernisation and Organisation of Industry
Industrialisation in India and Pakistan
Particular Industries
Publicly Operated Services and Nationalised Industries . . . .
Publicly Operated Services
Nationalised Industries
CHAPTER I I I : Co-operation at the National Level
Introductory Remarks
Systems of Voluntary Co-operation
Agreements between Employers' and Workers' Organisations
Consultation of Employers' and Workers' Organisations . .

5
5
6
9
14
15
19
32
45
52
53
84
91
110
110
112
112
114
115
117
117
119
144
147
150
150
151
172
172
173
173
177

CONTENTS
Page

Co-operation Based on Legislation
Constitutional Provisions
National Advisory Councils
Participation of Employers' and Workers' Organisations in
Public Administration
Co-operation between Public Authorities and Trade Unions
in Countries with Planned Economies
CHAPTER IV : Conclusions
APPENDIX

: Selected Beferences

181
181
184
198
215
221
228

INTEODUCTION

The problem of co-operation between public authorities
and employers' and workers' organisations, which is the
subject of the present study, is certainly one of the most
important problems of social policy at the present time. It is
on the agenda of the 34th Session of the International Labour
Conference.1 In the past, the Office has published many
studies 2 on the question, but the time is ripe for a fresh survey.
The present work describes the principal kinds of machinery
for co-operation set up at the different levels of national
activity : the level of the undertaking, the level of the industry,
and the national level.
There are a great many facets to this problem, which
quite naturally reflect the highly diversified social principles
at the root of various national systems of co-operation.
This diversity is reflected both in the methods of instituting
agencies for co-operation and in the powers conferred upon
them. While in some countries the agencies have a purely
contractual origin, in others they owe their existence to
legislation. While purely advisory in some cases, they possess,
in others, considerable powers of regulation and supervision.
But, under these apparently wide differences, common
tendencies are discernible.
In the first place, the objective is always the same—it is
always to associate the different factors in production in a
common task : the raising of social standards by a continuous
increase in productivity. One of the principal merits of systems
of co-operation is that they have made all concerned more
fully aware of the importance of productivity as a necessary
condition of any rise in standards of living.
The Eeport of the Director-General to the 33rd Session
of the International Labour Conference, and the discussions
1
International Labour Conference, 34th Session, Geneva, 1951 : Report
VI : Co-operation between Public Authorities and Employers' and Workers'
Organisations (Geneva, I.L.O., 1951).
2
See Appendix : Selected
"References.

CO-OPEEATION IN INDUSTRY

which ensued, made it quite clear that wholehearted co-operation between Governments and employers and workers was
absolutely necessary to increase productivity. The report
states :
It is not enough to know what should be done to increase productivity. The importance of psychological factors and of what
might be described as a good psychological climate can scarcely be
exaggerated. A united determination to increase productivity can
be created and maintained only through the fullest understanding
by employers and workers of each other's points of view ; it can be1
carried into effect only by the closest co-operation between them.
Kow—and this is the second feature to be found in all
systems of co-operation—the association of the workers in
this common task has led, somewhat by force of circumstances,
to a new conception of the role of the wage earners in the
production process. In this study many examples will be
found of the growing interest attached at the present time
to the human factor in production. This aspect of the problem
was fully emphasised at the last session of the International
Labour Conference.
As the Minister of Labour and National Service in Great
Britain declared :
. . . individual productivity cannot be considered in terms of
physical effort or technical application alone. It is a problem which
is psychological as well as material. It can only be tackled on the
basis of 2 full co-operation between Governments, employers and
workers.
For his part, the French Minister of Labour declared that
real co-operation on the part of the workers can only be
obtained if their dignity is respected. 3
In a word, as the United Kingdom Workers' delegate
declared, co-operation leads to the " humanisation " of the
work in the undertaking and gives to the worker the feeling
" that he is not just a cog in a very big wheel, but that his
personal effort is essential for the achievement of the over-all
production plan ".4
1

International Labour Conference, 33rd Session, Geneva, 1950, Report I
(Geneva, I.L.O., 1950), p . 105.
2
International Labour Conference, 33rd Session, Geneva, 1950, Provisional Record, p . 34.
3
Ibid., p . 95.
4
Ibid., p. 231.

INTRODUCTION

Finally—and this is a third common characteristic which
is particularly apparent now—in times of crisis, co-operation
between public authorities and employers' and workers'
organisations becomes a necessary condition of national
survival. During the last war, every country endeavoured to
associate the workers' and employers' organisations closely
with the administration of the war economy. Likewise, during
the present period of tension, it has appeared indispensable
to enlist the aid of workers and employers in order to obtain
that considerable increase in the efficiency of national economic
systems which, alone, can mitigate, if not prevent, the economic
and social consequences of superimposing rearmament upon
civil production or reconstruction which is already frequently
working at full capacity.
These are a few of the characteristic features of the movement towards co-operation between public authorities and
employers' and workers' organisations which will be illustrated
in the course of this study.
The movement has often been referred to as " industrial
democracy ", no doubt, because, like the political evolution
which transformed the subject of the old régime into a citizen,
in the social field it transforms the wage earner into a fellow
worker.
Purely empirical in some countries, deliberate and systematic in others, the movement is one of the fundamental tendencies of our time and has, moreover, found international
expression in the very structure of the International Labour
Organisation.

CHAPTEE I

CO-OPERATION BETWEEN EMPLOYERS AND WORKERS
IN THE UNDERTAKING
Introductory Remarks
The problem of co-operation in the undertaking is not
a new one and, at certain periods, especially in the years
that followed the first world war, it was well to the fore.
There is no denying, however, that in the last ten years the
movement in favour of co-operation between employers and
workers in the undertaking has developed in many countries
to an extent hitherto unknown.
In a great many countries, either during or since the last
world war, machinery has been established, for various reasons
and in many different ways, for associating the staff more or
less closely with the general operation of the undertaking.
Such machinery is now to be found, established on a
permanent basis, in nearly thirty countries, including Austria,
Belgium, Bolivia, Bulgaria, Canada, Ceylon, Czechoslovakia,
Denmark, Finland, France, the Federal German Eepublic,
Hungary, India, the Associated States of Indo-China, Iran,
Italy, Japan, Luxembourg, the Netherlands, New Zealand,
Norway, Pakistan, Poland, Rumania, Spain, Sweden, the
United Kingdom, the U.S.S.R. and Yugoslavia.
It also
exists, although on a less extensive basis, in Haïti, Ireland,
Israel, the Philippines, Switzerland, the Union of South
Africa and the United States. In other countries, such as
Greece, the demands of the workers' organisations include
the establishment of joint production committees.
The names borne by these agencies vary, but are not dissimilar : works committees or councils, management councils,
joint production committees, joint advisory committees,
labour-management committees, occupational committees,
factory committees or councils, workers' committees, estab-

CO-OPBBATION IN INDUSTRY

lishment representation committees, etc., to mention only
those of general scope. Occasionally, bodies whose main
function is to submit demands, such as staff delegates, trade
union delegations or grievance committees, also assume
certain functions relating to co-operation in a fuller sense
of the term.
Agencies differ considerably as to method of establishment,
operation and functions. The nature and content of the
regulations vary from country to country. Within a single
country, especially when there is no legislation on the question,
there are considerable divergences as between different
industries and even different undertakings. Any attempt to
generalise, therefore, must be made with great caution.
Nevertheless, the same major concerns usually lie at the
root of all these committees, and certain common tendencies
are noticeable in their constitution, activities and methods
of operation, so that no attempt to compare them can fail
to reveal a common denominator.
STUDIES AND BESEARCH

Simultaneously with the development of agencies for
co-operation, a growing interest is noticeable in the general
problem of improving human relations in the undertaking,
an interest which, for instance, takes the form of more active
study and research in this field. The following are a few
outstanding examples.
In the United States, Harvard University is particularly
well known for the emphasis it has placed on the human
factor in problems of labour organisation. Generally speaking,
one of the most novel features of economic life in that country
is the regular exchange of views between the universities on
the one hand and trade, including associations and unions,
on the other. In 1947 the National Planning Association
undertook with the assistance of the Greenwood Foundation
a series of case studies in fifteen American undertakings to
determine the " causes of industrial peace under collective
bargaining ". I t was specifically stated that the object of
these case studies was not to ascertain which were the undertakings with the best systems of industrial relations, but
simply to provide an analysis of the causes of a given situation.
But the National Planning Association also intends to provide

CO-OPEEATION IN THE UNDERTAKING

annual awards for firms and unions which have achieved
outstanding peaceful and constructive industrial relations.
The American Management Association has conducted, by
means of questionnaires, an enquiry, covering a thousand
American undertakings, into the results of the participation
of wage earners in the increase of production viewed as a
method of reducing the number of industrial disputes. Moreover, certain heads of undertakings sometimes sound the
opinion of their staffs as a guide in the orientation of their
industrial relations policies.
In the United Kingdom the National Institute of Industrial Psychology conducts surveys of human relations in the
undertaking. This is done by means of interviews, with the
agreement not only of the management but also of the trade
union representatives, when the enquiry relates to a question
within their competence or that of any consultative body in
the undertaking. The enquiries are confidential in that the
names of those presenting suggestions or criticisms are n o t

revealed, but the results are generally communicated both
to the management and to the representatives of the staff.
These surveys are evidence of the importance which the
managements of undertakings attach to the opinions of their
staffs, and they frequently lead to more permanent arrangements for co-operation.
The British Institute of Management and the Tavistock
Institute of Human Relations also carry out surveys in this
field.
These institutions have been particularly active since the
establishment by the British Government, in December 1947,
of the Committee on Industrial Productivity, whose members
were persons of high standing in the civil service, the universities, industry and the trade unions. The Committee was
to study the forms of scientific work which would serve to
promote a rapid increase in industrial productivity. It was
divided into four panels, one of which was concerned with
the human factors affecting industrial production. Among
the projects recommended by the Committee are the following :
1. Methods of joint consultation—this project was placed
in the hands of the National Institute of Industrial Psychology.
At the beginning of 1949 the Institute sent out a questionnaire
to all manufacturing establishments employing more than

CO-OPERATION IN INDUSTRY

250 workers and decided that its research teams should visit
as many firms as possible in order to collect detailed information
on a uniform basis. Certain selected undertakings will be the
subject of more detailed study ;
2. An intensive study of human relations in a particular
firm. The Tavistock Institute is carrying out this project
in co-operation with the Glacier Metal Company (1,500
employees). The enquiry was undertaken with the agreement
of all concerned :
. . . final agreement, obtained only after the workers had taken
the matter up to national level in the trade union movement, came
through the works council, as the body generally representative of
all interests in the company.
The agreement provided that the research team of the
Tavistock Institute " is responsible to and reports to the
works council ". 1
The Committee on Industrial Productivity has now recommended its discharge, on the grounds that its task has been
completed. The research projects which it had sponsored are
being undertaken and their results will be submitted to the
Medical Research Council, whose section on industrialpsychology

is engaged in research into the determining causes of satisfaction
or non-satisfaction of the worker with regard to his work.
Certain British universities also undertake research in
applied sociology with reference to industrial relations in
the undertaking. For instance, the Department of Social
Science of Liverpool University has undertaken case studies
in management-worker relations in six undertakings. The
first of these case studies has already been published. 2
Eesearch in industrial sociology has also been carried out
in other countries, particularly France and Switzerland. In
France, moreover, the Minister of Labour initiated an
enquiry, in 1949, into the progress made towards ensuring the
more active participation of the workers in the life of the
undertaking, especially by facilitating their sharing in profits,
in management and even their accession to ownership of undertakings. In Belgium, in 1948, under the auspices of the Federation of Belgian Industries a systematic enquiry was con1
J. ELLIOTT : " Study in the Social Development of an Industrial
Community ", in Human Relations, Vol. I l l , No. 3, 1950, p. 225.
2
See W. H. SCOTT : Joint Consultation in a Liverpool Manufacturing
Firm (Liverpool University Press, 1950).

CO-OPERATION IN THE UNDERTAKING

ducted, by means of questionnaires addressed to heads of
undertakings, into the social progress made in the industries
of that country. 1
In the international field, conferences on the social problems of labour organisation have, in recent years, dealt
largely with industrial relations in the undertaking.
An
enquiry is at present being carried out, under the auspices of
U.N.E.S.C.O., with a view to ascertaining in a number of
countries what are the elements which promote a good atmosphere in the undertaking.
The evidence is, therefore, that human relations in the
undertaking are at present the subject of much comprehensive
research in a number of countries. Such research, when it is
not a new departure, indicates a change of outlook in industrial
sociology. For example, before the war, the National Institute
of Industrial Psychology in the United Kingdom was mainly
concerned with problems of vocational guidance and selection
or with purely technical studies, and it is only during the last
few years that it has concentrated on human relations within
the undertaking. In fact, it would appear that henceforth less
study will be devoted to the problem of aptitude for work than
to discovering what factors affect the worker's enthusiasm.
Thus, there is a gradual transition from the technical to the
psychological field.
The importance of the human element has also been
stressed in the records and reports of the teams which have
in the last few years visited the United States from several
European countries under the E.C.A. Technical Assistance
Programme, in order to study the factors making for the high
degree of productivity of that country's industries. " The
whole purpose of American social policy seems to be to make
capitalism more human ", declared the leader of one of the
latest missions to visit the United States. 2
PURPOSES

Measures to promote co-operation in the undertaking serve
two main purposes. One is economic, to ensure increased
production : the other is moral and social, to secure full recognition of the importance of the human element and, accord1
Réalisations sociales dans l'industrie belge (Brussels, Editions de la
P.I.B.,
1950).
2
L'usine nouvelle, 30 Nov. 1950, p. 23.

CO-OPEEATION IN INDUSTRY

ingly, to give staff a greater interest in the general operation
of their undertaking. These two purposes are closely related,
because one of the most important factors affecting productivity is the atmosphere in the undertaking and because, conversely, increased production remains the essential condition
for continuous social progress.
The Economic Purpose
Increased productivity has been a major target in most
countries in recent years. During the war it was one of the
decisive factors. After hostilities had ended it was still an
essential element in the reconstruction and re-equipment of
the devastated countries and in their economic recovery ;
increased productivity is also the key to the industrialisation
of economically underdeveloped countries ; finally, political
events in recent months have given rise in several countries
to an economic system of " armed peace ", which must of
necessity be based not only on the restriction of civilian
consumption but also on a substantial increase in production.
Besides being a primary economic necessity, increased
productivity is now recognised as a primary social one, if not
by all workers, at least by a growing number of their leaders.
There is nowadays strong support for the view that improvement in social welfare is to be obtained not only by measures
calculated to ensure a more equitable distribution of national
income but, above all, by increasing production and efficiency.
This is true irrespective of the type of economic and social
system in force. A significant instance is to be found in the
preamble to the time and motion study agreement concluded
in 1948 between the Swedish national employers' and workers'
organisations. The preamble begins as follows :
A continual development of efficiency in industry and production
is a general and essential condition for raising the standard of living
of labour and the nation. Such rationalisation must be carried out
continually in each enterprise in order to enable it to keep pace with
technical developments. The common interest of the entire staff of
every enterprise is to assist in making it truly competitive. Like
all other members of the community the employees will benefit by
a rationalisation which leads to increased production and thereby
basically
contributes to a general improvement of the standard of
living.1
1
Agreement concerning time and motion studies concluded by the
Swedish Employers' Confederation and the Confederation of Swedish
Trade Unions, 1949.

CO-OPERATION IN THE UNDERTAKING

But it is also recognised today that production can be
increased only with the help of all participants, that is of
all wage earners. For an undertaking to be able to produce
more goods it is, in fact, essential in the first place that all
its members should be convinced of the need to do so ; they
must then be asked to consider themselves how the undertaking can be made to produce more. Accordingly the preamble
to the Swedish agreement referred to above recognises that
" the workers' own co-operation in and contribution to the
planning and performance of time and motion studies is an
important condition of their success ".
The workers need to be assured that they will get substantial benefits from the increased production and to be given
the opportunity of putting forward their own views as to the
methods of securing the increase.
So long as the employer acts alone and prefers to impose technical
progress rather than to discuss ways of achieving it with the trade
unions concerned, he will not inspire in the workers the confidence
necessary for fruitful
co-operation with his efforts, however justified
these may be.1
The association of the workers with efforts to increase
production is necessary not only on psychological, but also, and
with equal justification, on technical grounds. It enables the
experience and knowledge acquired by the workers to be put
to good use.
However thoroughly considered the conception of the organisation and preparation of the work may be, there are
always details
which only the person performing it can work out.2
This recognition of the need both to increase production
and to obtain for this purpose the effective co-operation of all
concerned has been one of the essential factors in the recent
growth of production committees and works councils.
The Moral and Social Purpose
But it is not for economic reasons alone that machinery for
co-operation is set up in undertakings. There is also a whole
set of other arguments which stress the human aims of the
1
a

La Lutte syndicale, 19 July 1950.
Les Conseils d'entreprise (Brussels, Editions de la F .LB., 1950), p. 12.

CO-OPEEATION IN INDUSTRY

undertaking, the need to improve existing labour-management
relations, to ensure the development of the worker's individuality and to recognise his right to play an active part in
organising production within the undertaking.
Conditions of work in large-scale industry tend to diminish
the worker's personality and to deprive him of all direct
contact with those responsible for the management of establishments. Accordingly, he often feels a stranger within the
undertaking and in a position of inferiority.
Although, politically speaking, the workers, under a democratic system, have the same rights as all other citizens, yet in
the undertaking they feel only too often that they are merely
cogs in the machine and that everything is arranged over
their heads because they do not in general take part in the
making of decisions which, nevertheless, directly concern
them.
This is the case not only with regard to decisions of dayto-day administration but also with regard to those which
concern the very life of the undertaking—
The orientation of the undertaking, the choice of its manufactures
and equipment, its integration in this or that economic or financial
group, its merger with this or that company, its temporary suspension of operations or permanent closing down, the distribution of
its products, the appointment of management personnel, in short,
all the decisions whose consequences have a decisive influence on
the lives of thousands of workers and of their families are taken
without the1 workers being called upon to express any opinion
whatsoever.
To provide a remedy for this situation is the first concern
of those who encourage the establishment of works committees. In their view, this arrangement should enable the
worker to develop his personality and to express his point
of view on decisions which directly concern him—
What will be sought . . . is a relationship which satisfies the
deepest-rooted of all human desires—recognition of the dignity of
man as Man . . . it is not a matter of a man being accorded the
privilege, although an employee, of stating a complaint or offering a
suggestion : but of his having a recognised responsibility for doing
so because he is an employee, and therefore a joint partner 2in the
enterprise in which he is investing not his money, but his life.
1

Speech of Mr. Fafchamps to the International Congress of Social
Progress (Brussels, 28-30 May 1949), in Le Progrès social, No. 13, July
1949, p. 49.
2
G. S. WALPOLE : Management and Men (London, Jonathan Cape,
1944), pp. 25-42.

CO-OPERATION IN THE UNDERTAKING

It is not only in the interest of the individual worker
that this association of the wage earners in the administration
of their undertaking is sought, hut in the interest of the
whole nation. Just as the workers, through their representatives, are becoming ever more closely associated in the
control of the national economic system, so they should be
associated also, it is argued, in the management of the undertakings, which form the basis of that system, and should
take the place to which they are entitled by virtue of their
contribution to the task of production. Works councils, then,
are not merely evidence of the dignity of labour but also
of the recognition of the right of the working class to be kept
informed of economic developments and to influence those
developments.
Through the works councils labour enters the citadel, to cooperate, certainly,1 but also to obtain a comprehensive view of the
existing situation.
In this connection, however, several different trends of
thought are apparent. While some see in the works councils
simply a means of improving human relations in the undertaking by giving greater consideration to the views of the
workers, others look upon them as the beginning of a change
in the actual structure of the undertakings. 2
Economic and social considerations alone do not explain
the rapid and general growth of works councils during the last
few years. They would certainly not have developed so
quickly if the workers' organisations had not promoted their
establishment. Generally the organisations have adopted a
very positive attitude with regard to works councils. But it
was not always so. Although the trade union organisations
were, at the outset, in sympathy with the establishment of
agencies to represent the staff, exercise a moderating influence
on the employers' authority and possibly provide a training
ground for workers' leaders, they were nevertheless very
reserved in their attitude towards works councils.
During and after the war, however, a number of trade
union organisations took the view that this possible disadvantage was fully counterbalanced by the advantages to
1

Clartés syndicales, Apr.-May 1950, p. 5.
Cf. Vers la démocratie sociale par l'accession des travailleurs à la gestion
économique (Brussels, 1946), p. 6.
2

CO-OPEEATION IN INDUSTRY

be anticipated as a result of such arrangements. I t has also
been found possible to set up works councils in such a way
as to safeguard the position of the trade unions. I t will be
seen that the relevant regulations generally contain a host
of provisions which draw clear distinctions between the
functions of the works councils and those of the trade unions.
In short, manifold and various though the reasons for it
may be, the existence of a powerful movement towards
co-operation in the undertaking does not seem open to doubt.
There is a growing awareness not only of the importance of
the problem but also of the need to find a concrete solution
for it.
Co-operation Initiated by the Parties
In a considerable number of countries it is the parties
concerned who themselves determine the means whereby cooperation shall be brought about and the fields to which it
shall be applicable.
I t is urged that this system permits of flexibility and
engenders confidence. The parties have full freedom to choose
the type of organisation which is most appropriate to the
particular conditions in the industry and to the particular
requirements of each undertaking.
Moreover, since the
employers and workers decide of their own free will to
collaborate for certain specified purposes and, to that end,
institute permanent machinery for co-operation, it may be
assumed that both parties intend to do all in their power to
ensure that the machinery shall operate successfully.
In the countries which adopt this procedure, its advantages
have been very strongly emphasised. There, the establishment
of agencies for co-operation is desired, but, generally speaking,
only in so far as it can be done by agreement between the
parties. The most widely accepted opinion is that compulsion would be undesirable and would entail disadvantages
that would detract much from the advantages anticipated.
The Minister of Production in Great Britain speaking, in
1942, on joint production committees, commented—
I should be the first to hope that they will become universal,
and to see that a healthy competition is promoted between them...
I feel in doubt whether we should attempt to make these committees

CO-OPERATION IN THE UNDERTAKING

statutory . . . it is clear that a great deal more depends on the spirit
which animates the members of the committees than upon the mere
fact of their existence. *•
And again, recently, the Minister of Labour in Great
Britain, at the end of an important Parliamentary debate on
the question, urged—
We cannot do more than encourage ; any attempt at compulsion
would fail at the beginning. 2
Co-operation initiated by freely-concluded agreement
between the parties, takes an infinite variety of forms. I t
generally entails the institution of agencies to promote its
own purposes, but this is not always so. Where agencies exist,
they are by no means uniform ; being instituted for specified
undertakings, they are adapted to the particular needs of
those undertakings^and, accordingly, each has its own special
features. Only the general features of the most typical agencies
are described in this chapter, without any attempt at exhaustive treatment.

INDIVIDUAL INITIATIVE
Already, for a considerable time and in a great variety
of countries, efforts have been made within the undertaking
to improve relations between the management and workers
and to create a team spirit. A change of outlook is taking
place in management, and heads of undertakings now require
supervisory staff to prove not only technical ability but also
aptitude for human relations. Under the influence especially
of the American system, which is particularly advanced in
this field, methods of training supervisory staff are being
developed. 3
To promote a team spirit in the undertaking, employers
have recourse to a wide variety of measures. Staff journals
or bulletins, giving news of manufacturing developments, the
activities of staff clubs and associations, or family events, are
an excellent means to this end. Such journals are a fairly
1

Parliamentary Debates, House of Commons, Official Eeport, Vol. 378,
49, 25 Mar. 1949, col. 2109.
2
Ibid., Vol. 473, No. 26, 5 Apr. 1950, col. 1313.
8
International Labour Review, Vol. LXII, No. 1, July 1950 : " Supervisory Training in European Countries ", and Vol. LIV, Nos. 3-4, Sept.Oct. 1946 : " Training Within Industry in the united States ", by C. E .
No.

DOOLET.

CO-OPEEATION IN INDUSTKY

general feature in some countries ; their number is estimated
at 150 to 200 in France and over 100 in Finland.
Some undertakings run associations, clubs, sports or cultural groups in which staff of all grades meet and learn to
understand one another.
When new workers are taken on, a special effort is sometimes made to ensure that each of them shall at once feel
part of the undertaking. Sometimes, for instance, they are
looked after by old hands, who help them to settle down in
the new environment. In other cases newcomers receive a
booklet containing a brief sketch of the industry and of the
undertaking's own history, activities, general structure, leading
executives, etc.
Information is sometimes supplied to staff periodically in
the form of management notes on the undertaking's activities
and future prospects. This is a common practice in the
United States. Sometimes it is during staff meetings—either
general or for certain branches or grades—that the head of
the undertaking gives this information and explains, for
instance, why it is necessary for this or that change to be
made. Often staff is invited to show initiative, as for instance
by making use of suggestion boxes. 1 In the United States
especially, information supplied to staff about the undertaking is often treated as part of a general public relations
policy, covering shareholders, customers, and public opinion
as well. More than 4,000 American undertakings have a
public relations service, and 500 independent firms in that
country act as consultants for such matters.
Finally, in order to maintain contact with their workers,
some heads of undertakings have, on their own initiative,
established agencies enabling staff representatives to co-operate in such activities as the institution of health and safety
measures, improvement of production, social services, etc.
Sometimes this has been done well before the institution
of works councils or joint production committees became
general in the country concerned. Now and then individual
employers have taken the initiative in setting up agencies
for co-operation within their undertakings in countries where
such arrangements are not officially encouraged by Govern1
Cf. American Management Association, Production Series, No. 165 :
Getting and Using Employees' Ideas (New York, 1946).

CO-OPERATION IN THE UNDERTAKING

ment or by the national employers' and workers' organisations.
All these activities show that employers do try to help
the worker to develop his personality and broaden his outlook
in the course of his work.
The Managing Director of the National Association of
Manufacturers in the United States declared recently in a
speech to 200 leaders of industry that the truly new element
which had become apparent since the second world war in
the field of human relations was the rediscovery by American
industry of employees as individuals. 1
However, as the Australian Council of Employers' Federations observes—
Unenlightened managements all too frequently understand and
study only one aspect of their business—that which begins with
manufacture and ends with sales. This type of thoughtless management often fails to comprehend the full significance of the simple
truth that their employees are human beings 2 not differing materially from those in the chair of management.
Another matter that is receiving close attention from
management is the form the wage earners' remuneration
should take. A recent enquiry, initiated in France by the
Ministry of Labour 3, draws attention to various systems of
profit sharing, production bonuses, and wages calculated on
a proportional basis—the whole wage bill, assessed monthly,
being determined as a percentage of turnover or production
figures and the wages fixed by law being guaranteed in any
event to each member of the staff. While works committees
in France are only seldom concerned with profit sharing,
they are fairly frequently invited to co-operate in the fixing
and distribution of production bonuses and, still more, in the
operation of proportional wage systems. Voluntary systems
of profit sharing are found in other countries—for example,
the United Kingdom and the United States—and compulsory
systems in several other countries, mainly in Latin America,
Eastern Europe and India. 4
It sometimes happens, but more seldom, that where such
systems of wage payment are found, the workers actually
1

N.Á.M. News, 11 Nov. 1950, p. 10.
Statement of Industrial Policy, Sydney, 2 Aug. 1950, p . 6.
3
Cf. Revue française du travail, Jan.-Feb.-Mar. 1950, pp. 13-31.
4
Cf. P . S. NARASIMHAN : " Profit-Sharing : A Eeview " in International
Labour Review, Vol. L X I I , No. 6, Dec. 1950.
2

CO-OPERATION IN INDUSTRY

have a share in management. This is so where each workshop in the undertaking is treated as an autonomous contractor and also under the system of controlled profit sharing
where the staff receive either a part or the whole of the
profit, the latter being calculated according to rules carefully
laid down beforehand in agreement with the staff representatives. The French Ministry of Labour refers in particular
to the case of a factory employing 900 wage earners, where
the works committee has had an active share in establishing
the system.
Armed with all the financial information it requires, it checks
the monthly trading figures and its agreement is necessary in calculating the profit ; the staff is well satisfied, and is doing its best
to achieve maximum production ; time clocks have
been abolished
without any consequent increase in absenteeism. x
Sometimes the staff is so closely associated with management that the very structure of the undertaking is profoundly
modified. In its enquiry, the French Ministry of Labour
mentions various cases in which this has happened. But
these experiments go beyond the scope of co-operation between
employers and workers and raise the problem of reorganising
the undertaking, a problem which has recently been discussed
in the French Economic Council. The debate showed that
views on this question differed widely and that it would be
difficult to find a general solution applicable to the problem
as a whole. 2 At least, as the French Ministry of Labour
observes, the discussion in the Economic Council confirmed
the fact that—
. . . the role of the workers' trade unions cannot be minimised,
these organisations constituting in our society the means of giving
expression to the aspirations of the workers.
Too often, indeed, in the past, measures taken by the
employers, sometimes with the best intentions, have been
viewed with reserve or suspicion by the wage earners, for
no other reason than that they were taken unilaterally
without being discussed first with the workers' representatives.
Consequently such measures have not fulfilled expectations
in changing the atmosphere of the undertaking.
1

Bévue française du travail, loe. cit.
" Les travaux du Conseil économique sur la réforme de l'entreprise " ,
ibid., June-July-Aug. 1950, pp. 270-289.
!

CO-OPERATION IN THE UNDERTAKING

T H E AMERICAN SYSTEM

During the second world war a number of American
undertakings established joint production committees. These
committees owe their existence to the initiative of the War
Production Board which, with the sole object of increasing
production, organised a campaign in favour of their establishment. Organisations as representative as the American
Federation of Labor and the Congress of Industrial Organisations, on the one hand, or the National Association of Manufacturers and the Chamber of Commerce of the United States,
on the other, supported the campaign. The employers' and
workers' organisations, however, did not go so far as to conclude
standard agreements on the working and functions of these
committees. Out of approximately 20,000 undertakings,
whose managements and recognised labour representatives
were officially contacted by the War Production Board,
approximately 5,000, belonging principally to the metal trades,
mines and shipbuilding, notified the Board that they had
organised these committees. Some of the committees, however, only existed on paper. Others were engaged in unimportant or temporary activities, so it is estimated that probably not more than 3,000 committees ever functioned simultaneously in an effective manner. 1 On 1 July 1945 they
numbered 3,224, affecting more than 5 million workers.
The committees were chiefly concerned with increasing
production ; they also carried on various patriotic activities
with the object of encouraging participation in the war effort
of their country. A certain number of them were limited
only to such patriotic activities.
Since the end of the war only a relatively small number
of joint committees dealing with questions of production, personnel or other aspects of industrial relations such as safety,
hygiene, leisure, etc., have continued to function in the United
States. 2 Where they do exist it is a question exclusively of
agencies established within a given undertaking by an agree1
Dorothea de SCHWEINITZ : Labour and Management in a Common
Enterprise (Harvard University Press, 1949), p. 22.
2
In 1947 a study by the United States Department of Labor established
the fact that among the joint production committees then existing in the
United States approximately 300 were agencies created during or before
the war and which had survived it. See International Labour Review, Vol. LIX,
No. 2, Feb. 1949, pp. 201-205.

CO-OPERATION IN INDUSTRY

ment between the management and the personnel, and never
of agencies established throughout the whole of a given industry, with the exception of the clothing industry.
But it should be noted that in the normal process of collective bargaining the unions have at times co-operated to some
extent in the solution of the problems of the undertaking
with respect to personnel, production or other questions.
General Considerations
In the course of the last 15 years the American trade union
movement has developed considerably. Whereas it had
3 million members in 1933, it now has more than 15 million.
I t is estimated that in non-agricultural occupations one
third of the employees are organised and that in industries
like aluminium and steel, mining, automobiles, agricultural
equipment, rubber products, shipbuilding, building and railroads, between 80 and 100 per cent, of the employees are
covered by collective agreements. 1 Whether they are affiliated with one of the large central confederations or whether
they remain autonomous, American unions do not generally
show marked political or ideological tendencies—they are
seldom doctrinaire about the class struggle.
Today, most labour leaders think it [the Marxian concept of the
class struggle] has been permanently discredited by events. 2
On the contrary, they proclaim their support for free
enterprise.
For over 50 years the American labour movement has worked
within and accepted the framework of capitalism. It has vigorously
attacked what it believes to be abuses, and there have been times,
such as during the great depression, when it had grave doubts,
but it has never even come close 3to flirting with a radically different way of running the economy.
In 1945, in an agreement concluded with the President
of the Chamber of Commerce, the presidents of the two large
American trade union confederations recognised that—
. . . the rights of private property and free choice of action,
under a system of private competitive capitalism, must continue
1

Monthly Labor Review, Apr. 1946, p . 568.
Partners in Production, Keport of the Labor Committee of the 20th
Century Fund, New York, 1949, p. 16.
3
Ibid., p . 23.
2

CO-OPEEATION IN THE UNDERTAKING

to be the foundation of our nation's peaceful and prosperous
expanding economy. 1

In fact, for various reasons, this agreement never entered
into force.
Let management run the business and we will handle wages
through collective bargaining.2
Such appears to be the general attitude of trade unionists.
The essential objectives of union action therefore continue
to be, in the first place, wages, to which may be added
security of employment, the improvement of conditions of
labour and also, nowadays, pensions or insurance. The
largest unions have established large research departments
which are responsible for advising members about collective
bargaining.
Facing the labour unions is a " dynamic management
movement with its own history, ideals and accomplishments,
about which it is justly proud ". 3 It is highly conscious and
jealous of its responsibility for ensuring the economic prosperity of American undertakings. I t intends to keep its
hands quite free in this respect, and its attitude is mainly
determined by realistic considerations of productivity and
profit.
We'll attend to making profit : you'll get your share through
bargaining.2
This is the line most employers take with their employees.
Finally,
U.S. management looks upon its personal relations as primarily
those between the employer and his own employees. The aim is
team-work4 and loyalty, both qualities being necessary for work
efficiency.
Conditions of employment are settled by collective agreements, but these are ordinarily concluded at the level of the
undertaking and rarely at that of the industry. îsTo doubt,
in regard to wages, certain key collective contracts, such as
that between the United States Steel Corporation and the
steel workers, or that between General Motors and the auto1

Cf. International Labour Review, Vol. LI, No. 5, May 1945, p. 637.

SCHWEINITZ : op.

cit.,

125.

Partners in Production, op. cit., p. 74.
* Ibid., p. 72.

CO-OPEBATION IN INDUSTRY

mobile workers, have a decisive influence in a particular
industry, but the fact remains, nevertheless, that the negotiators of a collective agreement are generally the management
of an undertaking on the one hand and the representatives
of the union recognised in the undertaking on the other. In a
great many undertakings the system of the " union shop " is
applied by collective agreements, that is to say that, within the
limits prescribed by the Labor-Management Eelations Act of
1947 (Taft-Hartley Act), the undertaking agrees to make
the continued employment of a worker conditional upon
his becoming a member of a given union within a fixed
period.
Workers' Participation in

Management

What, then, is the attitude of employers and workers
towards the principle of the workers having a share in
management ?
U.S. management knows from past experience that it must
remain strong and independent as a group, just as do the unions,
to survive, remain dynamic and continue to contribute to the
nation's welfare. It feels that to share
its responsibility to manage
with a union would be disastrous. 1
Also :
Most managements resist any proposal from unions that
employees be given a greater opportunity to participate in the
enterprise. They are sceptical of whether the amount of the contribution will be proportionate to the employer effort needed to
tap it. They are not sure of the extent of the workers' desire for
participation and are inclined to suspect that this is exaggerated
by the unions. 2
In practice they defend themselves actively against any
infiltration tactics by the unions which, in their opinion,
encroach upon the management's authority.
In a pamphlet published in the United States at the end
of 1946, the National Association of Manufacturers set forth
a series of arguments in support of its view that the workers
should not be given a direct share in management. Its primary contention is that—
The capacity to steer a business through the complex problems
of our industrial economy requires an efficient management free to
exercise flexibility, speed of decision, and the authority necessary
1

Partners in Production,
"Ibid., p. 61.

op. cit., p . 74.

CO-OPERATION IN THE UNDERTAKING

to accomplish results. Two drivers at the wheel can never steer
industry towards maximum production and employment. Anything
that would deprive management of the ability to make decisions
promptly and carry them out effectively would be a most serious1
Wow to industry's ability to produce needed goods at lower prices.
It is also argued by employers that few of the workers'
representatives have the necessary knowledge and experience
to take an efficient part in managing an undertaking ; that
it is unfair to " have unions on both sides of the bargaining
table ", taking part in management and still able, as unions,
to criticise management ; that " if union officials become too
management-minded, they may fail to represent and protect
the interests of their members, and consequently be repudiated " ; that no one can accept responsibility for management if that responsibility has to be shared with someone
having a power of veto, and so on.
As to the workers, it appears that on the whole they
have no desire to take the place of the employer and to
assume the management of undertakings. " They desire an
efficient management, for they desire a prosperous undertaking." Several British trade union officials who went to
the United States in order to study the role of the unions
in the increase of productivity, confess in their report to
having been surprised at the
unions' lack of interest in formal joint consultative machinery,
especially as many of them seem well qualified to make an effective
contribution to planned efficiency through such machinery. The
truth is that most unions do not expect or, we suspect, want to be
consulted about the running of a plant. Management, in effect,
can do what it likes within the terms of the agreement, but whatever it does is subject to consideration by the union which then
decides on appropriate action. There is nothing restrictive in this
attitude, even if it is not co-operative. The job of managing is
left to management.2
Indeed, Philip Murray, President of the C.I.O., made
the following declaration :
To relieve the boss or the management of proper responsibility
for making a success of the enterprise is about the last thing any
group of employees—organised
or unorganised—would consider
workable or even desirable.3
1

National Association of Manufacturers : Should Labor be Given a
Direct Share in the Management of Industry ? (New York, 1946).
2
British Trades Union Congress : Trade Unions and Productivity (London,
1949), p. 57.
3
Quoted by Charles E. LINDBLOM in Unions and Capitalism (New Haven,
Yale University Press, 1949), p . 157.

CO-OPERATION IN INDUSTRY

It is, however, significant that, at the Labor-Management
Conference called by the President of the United States in
November 1945, a Committee of the Conference was unable
to draft an agreement upon the question of the right of
employers to manage their enterprises. The employers' representatives on this Committee had presented a list of functions
and responsibilities which, in their opinion, were not to be
discussed with union representatives. This list included the
following points :
(1) The determination of products to be manufactured or
services to be rendered to customers by the enterprise ; and the
location of the business, including the establishment of new units
and the relocation or closing of old units. (When it becomes necessary to relocate a unit, or close an old unit, or transfer major
operations between plants, management should give careful consideration to the impact of such moves on the employees involved,
and discuss with them or their accredited representatives possible
solutions for the resulting problems.)
(2) The determination of the lay-out and equipment to be used
in the business ; the processes, techniques, methods, and means of
manufacture and distribution ; the materials to be used (subject
to proper health and safety measures where dangerous materials
are utilised) and the size and character of inventories.
(3) The determination of financial policies ; general accounting
procedures—particularly the internal accounting necessary to
make reports to the owners of the business and to government
bodies requiring financial reports ; prices of goods sold or services
rendered to customers ; and customer relations.
(4) The determination of the management organisation of each
producing or distributing unit ; and the selection of employees for
promotion to supervisory and other managerial positions.
(5) The determination of job content (this refers to establishing
the duties required in the performance of any given job and not
to wages) ; the determination of the size of the work force ; the
allocation and assignment of work to workers ; the determination
of policies affecting the selection of employees ; establishment of
quality standards and judgment of workmanship required ; and the
maintenance of discipline and control and use of the plant property ;
the scheduling of operations and the number of shifts.
(6) The determination of safety, health, and property protection
measures, where legal responsibility of the employer is involved.1
However, this list was not accepted by the workers' members of the Conference. While they recognised unequivocally
that—
. . . the functions and responsibilities of management must be preserved if business and industry are to be efficient, progressive, and
provide more good jobs,
See Partners in Production, op. cit., p. 85.

CO-OPERATION IN THE UNDERTAKING

they nevertheless considered—
. . . it would be extremely unwise to build a fence around the rights
and responsibilities of management on the one hand and the unions
on the other. The experience of many years shows that with the
growth of mutual understanding the responsibilities of one of the
parties today mayx well become the joint responsibility of both
parties tomorrow.
In fact it appears that American unionism, being full of
drive, considers that its scope is widening to cover an ever
increasing number of problems and that there is a consequent tendency for the content of collective agreements to
grow.
Certain unionists point out, for example, that, on the one
hand, it is illogical to hear management maintain that the
demands of the union are " completely unreasonable " and
" formulated without any regard for the impact on the cost
picture " and, on the other hand, if the union suggests means
by which its demands could be met—means having to do with
price policy—to hear management reply to the union that
that is not their business and that by offering such suggestions
they are " attempting to take over the business ". 2
Mr. ÍT. W. Chamberlain, Director of Eesearch at the Labor
and Management Centre of Yale University, and author of the
book " The Union Challenge to Management Control ", remarks
in this connection :
At each step in the advance which unions have made, their faith
has been tested. For many years their very right to organise was
in question . . . in the early 1800' s . . . the unions' right to seek wage
changes was challenged both by employers and by the courts . . .
from generation to generation the issue has changed . . . but the
conflict over rights and prerogatives has persisted . . . Managements
a hundred years or so ago believed that to negotiate with unions
over wages and hours was to surrender the rights and privileges of
management, while managements today accept such union intervention as proper and justifiable . . . What has changed then in the
hundred years that have passed, to have converted the wage bargaining union from a usurper of managerial rights into a proper
employee representative ? Is the wage decision any less a managerial concern today than it was a hundred years ago ? 3
1

Ibid.
William GOMBERG : " Should Labour Have a Voice in Management ?
A Union View ", in The Unions' Bole in Production Management (New York,
American Management Association, 1950), p . 13.
3
Neil W. CHAMBERLAIN : " The Practical Meaning of Union Management
Co-operation ", ibid., p. 4.
2

CO-OPERATION IN INDUSTRY

Clearly there is some disagreement as to the theoretical
boundaries of the region which is within the exclusive competence of management. It is for this reason that some union
leaders consider the question of whether the workers should
participate in management or not to be purely academic.
I t is indeed significant that in recent years there have
been introduced into collective agreements an ever increasing
number of provisions which formally recognise the prerogatives of management.
It has been said that this effort on the part of the managers
to obtain recognition from the unions is as significant a social
struggle as the earlier effort of the unions to obtain recognition from the managers.
Scope of Co-operation
I t was pointed out earlier that a number of the production
committees now found in the United States are wartime
agencies which survived as a result of agreement between
management and personnel that they functioned in a satisfactory manner. Such agencies may be found in undertakings
whose staffs vary from 15 to more than 40,000 workers. Their
organisation and functions are essentially variable but are
closely related to those of co-operation committees established
on a voluntary basis in other countries. 1
Another more recent study carried out under the auspices
of the American Management Association and based on a
questionnaire sent to 1,000 manufacturing companies, showed
that co-operation between employers and workers is more
widespread than is generally thought. Out of 263 undertakings which replied to the questionnaire, 226 indicated that
they had been practising certain forms of co-operation for
several years. Opinions on the practical value of this cooperation are divided, but the majority of the answers say
that the system has directly helped to increase the productivity of the undertakings in question.
I t is clear from these few indications that, nevertheless,
permanent consultative arrangements for promoting co-operation between labour and management are rare in American
industry. Joint committees are the exception rather than
1

See pp. 37-39.

CO-OPEKATION IN THE UNDERTAKING

the rule, but the few co-operative systems which do exist
get considerable publicity and arouse increasing interest. 1
As was pointed out earlier another form of co-operation
seems to be emerging, on a purely practical basis, in the
collective agreements system. There are indications of a
growing union interest and participation in the following
managerial responsibilities : finance, personnel, procurement,
production and distribution.
In finance, the interest of the unions is determined largely
by their wage policies ; if they concern themselves with the
size of profits and dividends and with accounting procedures
of the company, it is chiefly with the intention of determining
the ability of the company to pay higher wages. The union
leaders have contended that they should be allowed access to
the company's books and have some voice in deciding on
unusual expenditures and on depreciation and amortisation
practices.
Union participation in management has been greatest with
respect to personnel policies and practices. Unions have,
with some success, promoted a policy of non-discrimination
and have participated in the formulation of apprenticeship
programmes. They have had a voice in determining the size
of the work force through agreements to reduce working
hours before reducing the work force, and providing for the
reabsorption of workers eliminated by technological change.
Hiring and firing policies have been strongly influenced
by unions. Shop agreements and seniority provisions are
the most important elements of union control in this area.
Seniority provisions are often the determining factor in allocating workers to more or less desirable jobs.
Unions participate to an increasing extent in disciplinary
control. An employee is always entitled to representation
by his union in a grievance procedure. Permanent offices
of arbitration have been widely established, and where this
is so a body of doctrine governing the disposition of cases
is being established.
The influence of unions in the determination of wages
need only be mentioned, and the same applies to hours.
1
See, for example, R. W. DAVENPORT : " Enterprise for Everyman ", in
Fortune, Vol. LXI, Jan. 1950, p . 55, for a detailed analysis of a co-operation
plan in a small Massachusetts undertaking.

CO-OPEEATION IN INDUSTRY

Unions have attempted, with varying success, to establish
the principle that the selection of employees for promotion
should be based on seniority.
While provision for the health and safety of employees
still rests largely with management, this has become an
area for bargaining. Agreements that management " shall
continue to make proper provision for health and safety " are
common.
Another department of managerial responsibilities in which
unions have penetrated deeply is that of production. Their
influence has been felt in policies and practices concerning
machinery and equipment, job content and rates of operation.
While not opposing technological improvements as such, they
have sought to regulate their introduction in order to minimise
the threat to job and wage security. Wage scales being
dependent on the specification and classification of the various
jobs involved, the unions have sought with some success, to
take part with management in job specification. They have
had considerable influence in determining rates of operation.
In the mass-production industries, notably, the speed of the
assembly line is invariably subject to negotiation.
In the clothing industry, union participation in managerial
functions has extended to all aspects of production and even
to distribution. The unions have made studies of the industry,
on the basis of which they have formulated plans and codes
for increasing productive efficiency, regulating technological
change, improving working conditions and reducing seasonal
fluctuations.
These programmes have secured widespread
acceptance by employers. This form of co-operation has
been carried to such an extent that the unions in the clothing
industry have frequently given financial assistance to employers
where this would help to achieve their purpose of stabilising
the industry.
Thus it seems to be recognised in some collective agreements, that unions have certain rights concerning the management of the undertaking. A similar conclusion may be
drawn from the study of the National Planning Association on
industrial relations in certain specific undertakings.
This study reveals, for example, that, in the Crown Zellerbach
Corporation, the management consults foremen and trade union
representatives on a large number of problems. Management makes
full use of all the constructive possibilities offered by trade unionism

CO-OPEBATION IN THE UNDERTAKING

by ensuring the participation of the trade union in consultation. 1
The Vice-President of this corporation responsible for public and
industrial relations recognised clearly that the trade unions have,
among other functions, the function of providing a channel for the
exchange of information between management and personnel :
" This channel of communication and understanding, which employees
themselves have created, furnishes the modern substitute for the
individual contact between the employer and the worker which
disappeared in the growth of modern industry . . . Without
safety valves or channels of free discussion, dissatisfactions which
are outside the scope of the agreement can undermine the whole
collective relationship. The union must be encouraged to bring to
the attention of management, in various ways, every question or
suggestion relating to the ' good of the order '. In some cases, this
is done through a union 'advisory committee' which meets regularly
with management ; in others, through informal and irregular meetings between management and union officers ; in still others, through
union committees dealing with special subjects such as safety,
insurance . . . Two things are essential : such committees or
groups must be separate from the union grievance committees ;
and they must not deal with subjects which belong in the jurisdiction
of the grievance committees." 2
In the Hickey Freeman Company of Bochester, New York, a
high degree of co-operation exists between the management and the
Amalgamated Clothing Workers of America (C.I.O.). Management
encourages union participation in the making of important decisions
with respect to such matters as a change in the design of the product
or the letting of contracts to outlying workshops. A union representative is named as plant chairman and handles many day-to-day
production problems which ordinarily would be considered management problems. 3
At the Lockheed Aircraft Corporation the union (International
Association of Machinists) collaborates with management in the
working of a system of job evaluation, of a safety programme and
of an apprenticeship programme. In connection with the latter
two, joint committees have been established. This co-operation
has been provided for in a collective agreement, but consultations
have also taken place upon questions not strictly included in the
range of the collective agreement. For example, the company has
consulted the union on proposed rules and regulations, on questions
of operation, on the insurance programme, and, upon occasion, on
the company's financial position. 4
I t is to be noted t h a t this co-operation has evolved although
t h e c o m p a n y has not a d m i t t e d a n y general r i g h t of t h e union
to determine policy jointly, a n d this is perhaps typical of t h e
m a n n e r in which co-operation has developed in t h e United

States.
1
See National Planning Association : Causes of Industrial
Collective Bargaining, Case Study No. 1, 1948.
"Ibid., p. 21.
a
Ibid., No. 4, 1949.
* Ibid., No. 6, 1949.

Peace under

CO-OPERATION IN INDUSTRY

At the Libbey-Owens-Ford Glass Company the study revealed
that joint decisions by the company and the Silica and Sand Workers
of America (C.I.O.) on production problems were growing increasingly
frequent, but that no mention of co-operation on these matters is to
be found in the written agreements which regulate the union management relationship. 1
The co-operation which exists between the United Steel Workers
of America and the Sharon Steel Corporation does not involve
participation by the union in decisions on production matters except
in so far as union opposition might influence the management's
decision.2
T h e report published by a t e a m of British t r a d e unionists
u p o n their r e t u r n from a mission to t h e United States, also
points out certain especially typical cases of co-operation
between unions a n d m a n a g e m e n t .
Since 1941 the International Ladies' Garment Workers' Union
(A.F.L.) has maintained a service which studies means to improve
manufacturing techniques and operating methods. This service is
available to any of its locals and to the companies concerned. 3
The United Automobile Workers and Agricultural Implement
Workers of .America (C.I.O.) is a union which places its primary
reliance on collective bargaining and which generally does not seek
to co-operate actively in company planning of production standards.
Nevertheless, it has upon occasion completely reorganised a foundry.
Further, the local union which represents the workers in the Ford
Eiver Eouge plant in Detroit has two members on a Eeview Board
which meets every week to review current production matters.
This Board settles disagreements itself or negotiates with the department concerned. This is a procedure which has grown out of collective bargaining and it is characterised by the fact that unsettled
questions may go to arbitration, but the fact that only three cases
of arbitration have occurred since 1941 indicates t h a t there is a
good deal of co-operation in fact.
The United Steel Workers of America (C.I.O.) has co-operated
with the Carnegie Illinois Corporation of the United States Steel
Corporation in the working out of acceptable job evaluation standards
for the establishment of wage rates. A joint union-management
committee in 1942 failed to reach agreement on this question. Then,
under an agreement of August 1945, job classification committees
were established in each plant by the companies and the union.
This is a remarkable example of ad hoc co-operation for the solution
of a specific problem.
The International Association of Machinists, although opposed
in principle to participation by its locals in time study and scientific management plans, encourages the establishment of joint
consultative committees in certain plants and if the local desires
to co-operate in the installation of a job evaluation scheme, the
Association will offer technical advice. An example of this has
1

Causes of Industrial Peace under Collective Bargaining, op. cit., No. 2,
1948.
2
Ibid., No. 5, 1949, p. 39.
8
Trade Unions and Productivity, op. cit., p. 26.

CO-OPERATION IN THE UNDERTAKING

been mentioned in the ÏT.P.A. Study on the Lockheed Aircraft
Corporation.
A. local of the International Brotherhood of Electrical Workers
in Detroit, faced with the company's inability to maintain wage
rates, agreed to a reduction and subsequently set up a joint production committee which meets weekly to consider production problems.
In this plant the President of the union is paid by the company and
has an office assigned
to him, but works full time on union affairs
inside the plant.1
It is clearly difficult on the basis of this fragmentary
information to draw general conclusions as to the nature and
extent of the co-operation between employers and workers in
United States undertakings.
Nevertheless the cases in which unions have in fact been
associated with management in dealing with its problems
—whether this association results from a right formally recognised in a written agreement or not—evidence an evolution
in union activity.
In the second place this association of unions in the general
conduct of the undertakings is carried out on an entirely
practical basis without ideological preoccupations. When a
given union demands to be informed as to the financial policy
of an undertaking it is not with the hidden intention of ousting
management, but with a realistic desire to understand whether
the financial situation of the undertaking is in fact such that
the workers truly cannot be granted the increased wages or
other advantages which they are demanding.
Since co-operation between management and the unions
has taken place almost exclusively at the level of the undertaking, its forms are very diverse. In the cases where such
co-operation is practised it appears to have produced highly
satisfactory results both for the employers and for the workers
concerned.
The National Association of Manufacturers recently declared
in a resolution that industry should encourage by its
own means the application of any measure tending to ensure
the maximum co-operation of the workers in production, and
the Twentieth Century Fund's Labor Committee—on which
employers' and workers' organisations are represented—makes
the following basic recommendation at the end of its study on
co-operation between employers and workers in the United
States :
1

Ibid., pp. 38-49.

CO-OPERATION IN INDUSTRY

In all plants in which there is union representation, management
and organised labor assume responsibility for t i e integration of the
union into the plant organisation as an effective channel of two-way
communication from management to workers and from workers to
management.1
In any case it is apparent that, if there are in the United
States only a relatively small number of agencies for co-operation, that does not mean that there is no co-operation. In
reality this co-operation exists. I t develops from the normal
application of collective agreements. As was remarked by the
British trade unionists in their report :
. . . to a large extent matters often dealt with by joint consultative committees in 8Britain are in the U.S.A. written into union
company agreements.
PROMOTION BY GOVERNMENTS OH EMPLOYERS' AND WORKERS'
ORGANISATIONS

In the experiments which will now be described, Governments played an active part in the establishment of joint
production committees ; they did not, however, go so far
as to make the establishment of such committees compulsory,
for they believed, above all, in the value of co-operation freely
initiated by the parties within the undertaking. Some of the
experiments began during the second world war. Since the
end of the war, such co-operation, supported by Government
and employers' and workers' organisations, has continued in
these countries, particularly in Canada and Great Britain ;
it has also become a typical feature of industrial relations
policy in some other countries.
Joint Production Committees Established During the War
Joint production committees were established during the
last war, not only in the United States but also in the United
Kingdom 3, Australia and Canada, as a means whereby the
workers could help to improve the organisation of production in
their employers' undertakings. The establishment of such committees was one aspect of the war effort in these countries.
1

Partners in Production, op. cit., p . 147.
Trade Unions and Productivity, op. cit., p . 57.
3
Cf. International Labour Office, Studies and Reports, Series A, No. 43 :
British Joint Production Machinery (Montreal, 1944).
2

CO-OPEKATION IN THE UNDERTAKING

I n fact war was the direct cause of their establishment since
the needs of the moment called for maximum development of
production. I t was thought that a regular exchange of views
within each undertaking between representatives of. the staff
and of management, on an equal footing and in a co-operative
spirit, would be extremely valuable to this end.
The joint production committees were set up by agreements
freely concluded between employers and workers.
These
agreements were openly supported by the Governments which
often inspired their conclusion.
In the United Kingdom, for example, the Government
repeatedly affirmed its complete approval of the establishment
of joint committees. In industrial undertakings where the
Government was itself the employer, it made a point of setting
up joint production committees, thus showing publicly that
it recognised their value. On 26 February 1942, the Ministry
of Supply concluded an agreement with the trade unions
concerned providing for the establishment of joint production
committees in all Eoyal Ordnance Factories. This agreement
was followed almost at once by a very similar one between the
trade unions and the Engineering and Allied Employers'
National Federation ; others followed for the mines, shipyards,
the building industry, etc. The influence of these basic national
agreements was considerable. In July 1943, it was estimated
that 4,169 joint production committees or similar bodies were
operating in private mechanical engineering undertakings, and
that they covered more than 2 % million workers.
In Australia, too, the Government concluded an agreement
with the trade unions concerned for the establishment of joint
production committees in aircraft factories under Government
control and other Government undertakings, on principles
which were subsequently applied in practice in all the industries
working for essential war production.
In Canada, the Government also encouraged the persons
concerned to co-operate in order to increase production. At
the end of the war there were approximately 350 production
committees in existence there.
General Characteristics.
Since the committees were set up by agreement between
the management and staff of individual undertakings, consi-

CO-OPEEATION IN INDUSTRY

derable differences in composition, methods of working and
functions were apparent from the outset. The committees were
joint bodies with equal representation, the representatives of
the staff being generally elected by the workers on the basis
of representation for each branch or department. The British
national agreements made union membership a condition for
eligibility. In some cases the representatives of the staff were
chosen directly by the union or unions recognised in the
undertaking.
In the United Kingdom committees were integrated in a
regional and national organisation. Questions which a committee was unable to settle, whether because they had implications wider than the scope of the undertaking or because the
committee could not agree on the solution, could be referred
to regional or even national agencies for consideration with
respect to regional or national policy.
Post-War Developments in Canada and the United

Kingdom

In the United States, as has been seen, at the end of the
war most of the production committees disappeared, and no
governmental agency continued to be responsible for following their activities or promoting their establishment.
In Canada and the United Kingdom, on the other hand,
the Government and the employers' and workers' organisations openly support and assist the committees.
In Canada, the Labour-Management Co-operation Service
of the Department of Labour, which has offices in several
centres, is responsible for promoting the establishment of
joint production committees. I t is assisted in its task by an
advisory committee whose membership includes representatives of employers and workers. I t publishes a monthly bulletin, Team-WorJc in Industry, in order to convince the persons
concerned of the need for co-operation and to draw their
attention to the activities and results of joint committees.
I t has also published several pamphlets on this subject.
The principle of these production committees has been
approved by representative organisations of workers and
employers.
In Great Britain the object of the Government is to ensure
the rapid development throughout industry of joint production

CO-OPEEATION IN THE UNDERTAKING

committees, " so that what is now the practice of some firms
may become the practice of all ".l I t is making an attempt
to get individual employers and their workers interested in
the question. With this end in view the regional officials of
the Ministry of Labour are responsible for promoting among
all interested persons—by way of conferences, lectures, publications and individual visits—a better understanding of the
objectives and the advantages of mutual consultation, and for
taking care that when an agreement has been concluded on
a national level concerning measures which should be taken
in a determined industry, the individual undertakings receive
all necessary assistance in the establishment of their bodies
for consultation.
As far as the private sector of industry is concerned, the
National Joint Advisory Council decided in January 1947 to
recommend to employers' and workers' organisations that
joint consultative machinery should be set up, where it did
not already exist, for the regular exchange of views between
employers and workers on production questions 2, it being
understood that such machinery would be " voluntary and
advisory in character ", that it would not infringe upon the
normal functions of trade unions and that—
. . . it would be left to each industry to adopt the form of
machinery best suited to its own particular circumstances and to
decide in particular whether such machinery could best be established at the factory level or over a wider area.
The National Joint Advisory Council had also requested
the Ministry of Labour to keep it informed of progress made
in establishing joint committees in the various branches of
industry. The first report of the Ministry of Labour was submitted to the Council in July 1948.3 This report showed that
the Ministry had made enquiries in 54 industries. Among
those whose repües indicated that they had arrived at definite
conclusions on the question, the report made a rough classification into four main categories :
1. Industries where the national organisations on each side have
agreed to recommend to their members the establishment of joint
1
Ministry of Labour and National Service : Industrial Relations Handbooh, Supplement No. 3, Dec. 1949, " Joint Consultation in Industry ", p. 3.
*Ibid., p . 4.
3
See International Labour Review, Vol. LIX, No. 2, Feb. 1949, p. 200.

CO-OPERATION IN INDUSTRY

committees in accordance with some form of model constitution
which specifically provides for the consideration of matters relating
to production : engineering (it has been confirmed by both sides
that an agreement of 1942 is still operative) ; iron and steel ; film
production ; electric cable making ; rubber manufacture.1
2. Industries where the national organisations have agreed to
recommend or approve the establishment of joint consultative
machinery at factory level if such machinery is desired by both
sides in any establishment, but have left the form which such machinery should take for determination by agreement in the establishments concerned : carpet manufacture ; boot and shoe manufacture ;
chemicals ; rayon yarn producing ; hosiery ; silk ; printing (the
representation2 of the workers to be based on the existing " chapel "
organisation).
3. Industries where the national organisations are satisfied with
existing arrangements for joint discussion which permit the establishment of works committees or councils by local agreement with
powers to discuss matters relating to production : flour milling ;
cement (an agreement of 1920 sets out a model constitution for works
committees) ; cast stone and cast concrete products ; seed crushing,
compound and provender ; Welsh plate and sheet ; veneer producing
and plywood ; asbestos manufacture ; cocoa, chocolate and confectionery ; Welsh engineers and founders ; wallpaper making ; match
manufacture.
4. Industries in which existing arrangements are considered
adequate by both sides, although in general no formal machinery
for the purpose of joint consultation exists in individual establishments : cotton manufacture ; heating, ventilating
and domestic
engineering ; paper and paperboard manufacture.3
Thus it would appear that in the private sector of industry
there is much variety in the type of joint consultative
machinery whose establishment has been favoured. In many
cases it has been deemed preferable to leave the form of the
committee to be worked out at factory level in order to suit
local circumstances. Some industries, however, have deemed
it necessary to draw up model agreements intended to facilitate
the establishment of agencies for co-operation, but the parties
concerned are not bound to follow the model when concluding
1
Since the preparation of the Ministry's report, model agreements have
been concluded in certain other industries, in particular, pottery, shipbuilding,
biscuit manufacture and light metal trades. A similar agreement also
exists in respect of co-operative wholesale societies.
2
It would appear that the following industries may also now be included
in this category : quarrying ; tobacco ; chemicals, pharmaceutical supplies
and fine chemicals ; furniture ; soap, candle and edible fats.
3
It would appear that various other industries have also, subsequently,
adopted this attitude and, in particular, the following : bacon curing ;
building ; brick industry ; glass container industry ; leather goods.

CO-OPERATION IN THE UNDERTAKING

an agreement. Thus the memorandum addressed to the biscuit
manufacturers, issuing to them the text of a model agreement
adopted at the level of the industry, states :
To firms which already have this organisation, the enclosed
" model plan " will probably be of academic interest only. The plan
is really intended to serve a helpful and purely advisory purpose
to those firms which have no joint consultative machinery ; the plan
is in no sense obligatory, but firms which have so far not adopted
some form of works council1 are invited to give the suggestion their
most earnest consideration.
As far as the nationalised sector of industry is concerned,
the various Acts by which they were placed under public
ownership impose an obligation on the management, except
where adequate machinery is already in existence, to seek
consultation with the appropriate trade unions with a view
to the establishment of machinery for the promotion and
encouragement of measures affecting the safety, health and
welfare of persons employed in those industries, and for t h e

discussion of other matters of mutual interest, including
efficiency in the operation of the industries. Considerable
progress has been made in the establishment of machinery
for this purpose. 2

Operation and Functions of Joint Production

Committees.

In spite of the diversity that has been mentioned some
quite characteristic features are noticeable both in the general
agreements of certain British industries and in the history of
the Canadian committees.
The Canadian committees are joint bodies ; equal representation is usual, and in any case it is provided that the
representatives of the management shall not outnumber those
of the workers. The workers' representatives may sometimes
hold separate meetings ; the management of the undertaking
appoints its own representatives ; those of the workers may
be elected by secret ballot or be appointed by the trade union
1
2

Industrial Relations Handbook, op. cit., p . 7.
Ibid., pp. 65-94.

CO-OPERATION IN INDUSTRY

(this is quite a general practice in Canada) x, or, in a very
few cases, be appointed by management. Where there are
elections, rules are generally laid down as to eligibility—age,
length of service in the industry, nomination of candidates by
a number of other wage earners or by a trade union, sometimes trade union membership. The president of the trade
union often has the right to attend meetings of the committee
or is an ex officio member of the committee. Sometimes, in
addition to the delegates nominated by the trade union, the
management chooses a number of employees to sit in an
advisory capacity only.
The chairman of the committee is generally a representative of the management ; sometimes, however, the chairmanship alternates between the wage earners and the management or else co-chairmen are appointed. Very often there
are two secretaries, one appointed by each of the parties.
Members of the committee usually form specialised subcommittees on particular problems and often, also, departmental or branch committees. In large undertakings, the
committee representing the whole undertaking is, in fact,
often the apex of a pyramid, the workers' members being
elected by the workers' members of the departmental or
branch committees, who are themselves elected by plant
committees. An instance is afforded by the agreement on
joint committees in Imperial Chemical Industries, Ltd. A.t
the base is the plant committee whose recommendations are
transmitted either to the management of that plant or to the
divisional council. The recommendations of the latter are,
in turn, transmitted either to the management of the division
or to the central council for the undertaking, and it is only
the recommendations of the central council that are transmitted
to the management of the undertaking. 2
The agreements often contain provisions as to the
representation of the different branches, co-option of consultative members, frequency of meetings, circulation of
1
See Department of Labour : Industrial Democracy at Work (Ottawa,
1946), p. 35, where is stated that " both management and trade unions have
testified as to the advantages of this arrangement. It helps to maintain the
distinction between questions which are properly the subject of collective
bargaining and those which come under the jurisdiction of the labourmanagement production committee."
2
See Industrial Relations Handbook, op. cit., pp. 28-36.

CO-OPEBATION IN THE UNDERTAKING

agenda, preparation of minutes, quorum, period and termination of appointment of staff representatives, obligations of
the employer in relation to the committee, payment as for
working time in respect of time spent by the staff representatives in attending meetings of the committee and protection
of such representatives in respect of their activity as members.
The functions of the committees are strictly advisory.
Generally speaking, they are required to—
(1) deal with all questions relating to the improvement
of methods of production and to increased output, safety
and hygiene, better use of working time, reduction of absenteeism, economic use of materials, etc. . . . and to encourage
suggestions on the part of the workers on all these matters ;
(2) serve as a recognised means of communication between
workers and management with regard to any questions
concerning the welfare of the workers and the general benefit
of the undertaking ;
(3) give the wage earners a greater interest in and more
responsibility for determining conditions that affect their work ;
(4) promote a spirit of co-operation in the undertaking.
Their scope, therefore, is both varied and broad. In fact,
. . . many firms are discussing matters of high level policy
in their works councils, including programmes, the company's
financial position and the equitable distribution of profit. This
involves . . . the open disclosure to employees of financial information formerly regarded as the exclusive property of top
management.1
However, and this provision applies to nearly all the
committees, they are not competent to deal with questions
which normally come within the scope of negotiations between
the undertaking and the trade unions.
Results.
I t is generally recognised that the joint production committees directly or indirectly helped to increase production
and improve quality. The extent to which they did so is, however, hard to assess accurately. In fact it has not been possible to isolate the effects of the committees' work from that
1
A. F. STEWAKT, British Institute of Management : " Recent Developments of Joint Consultation in Great Britain ", in O.N.O.F. (monthly review
of the Commission Nationale de l'Organisation Française), Sept. 1948, p. 56.

CO-OPERATION IN INDUSTRY

of other factors which influenced production concurrently,
such as management or Government services.
The result on which most stress has been laid is that the
committees helped very greatly to improve relations between
employers and workers. A team spirit developed to an extent
which had not previously been known.
In Canada, there are now about 700 joint committees,
nearly 500 of which are to be found in the provinces of
Ontario and Quebec. The full significance of these figures
may be appreciated with reference to those for earlier years :
346 at the end of the war, 542 in December 1947 and 615 in
June 1949. Of these 700 committees, nearly 400 are to be
found in the manufacturing industries and nearly 150 in the
transport industry.
In its publications, the Department of Labour mentions
a whole series of practical results which the committees have
achieved, especially in the improvement of production. I t
quotes the views of the managements of many of the undertakings concerned and of trade union representatives, views
which, on the whole, are entirely favourable to the activities
of the production committees. I t may fairly be concluded,
therefore, that, in Canadian undertakings which have
established production committees, both employers and
workers are glad that this was done.
In Great Britain, the Ministry of Labour has defined the
situation as follows :
The extent to which joint consultation is practised varies widely
from industry to industry and from firm to firm. Some firms already
possess and operate most elaborate and successful schemes of joint
consultation ; others may have a works committee, but with limited
terms of reference ; others possess no such machinery and have,
apparently, still to be convinced of the advantages of joint consultation. 1
Eeference may also be made to the growing tendency in
large undertakings to organise machinery for joint consultation in pyramid form :
This system has the advantage of drawing a greater number of
people directly into consultation procedure, and, perhaps more
important, of ensuring effective dissemination of the results of
consultation and of management policies and intentions. Decentra1

See Industrial Belations Handbook, op. cit., p. 3.

CO-OPERATION IN THE UNDERTAKING

lisation of this sort aims at ensuring
direct representation of groups
not exceeding twenty employees.1
In fact, it is observed that, all too often, joint consultation
fails through the absence of machinery for effective reporting
back to the employee electorate.
The Practice in Certain Other Countries
In many countries other than those such as Canada and
the United Kingdom where present developments in cooperation at the level of the undertaking are a direct continuation of what was done during the war, staff representation
in bodies set up by agreement between the parties seems
to be a common feature of industrial relations.
In Italy, for instance, in 1943, and again in 1947 2, the
national employers' and workers' organisations agreed on the
institution of works committees in undertakings employing
more than twenty-five persons. These committees consist
only of workers' representatives and their terms of reference
are mainly confined to social questions. The 1947 agreement
had also given them wide responsibility in the matter of
dismissals, but this agreement terminated on 31 December 1948
and has not so far been renewed. On the whole, however,
the works committees have continued to perform all their
duties except those concerning dismissals, that is to say, they
operate in fact on the basis of the 1943 agreement.
With regard to dismissals, two agreements were recently
concluded between the national employers' and workers'
organisations, one relating to dismissals in the case of
retrenchment (April 1950), and the other to individual dismissals (October 1950). The latter agreement, concluded
under the auspices of the Minister of Labour and with his
assistance, provides, like that of 1947, for the examination
by joint arbitration boards of cases of individual dismissal.
Even if the arbitration board considers that dismissal is not
justified, the employer may nevertheless maintain his decision
—and this is the main departure from the 1947 agreement,
which provided for reinstatement in such cases—subject to
1

STEWART : op. cit., p . 56.

See International
p. 72.

Labour Review, Vol. LVII, No. 1-2, Jan.-Feb. 1948,

CO-OPERATION IN INDUSTRY

the dismissed worker's being paid compensation additional to
the usual dismissal indemnity.
When the country was liberated, management councils
were set up under the direct influence of the trade unions
in a number of undertakings—especially those of the I.E.I.
group, and the Montecatini and Fiat concerns. Their terms
of reference mainly covered economic matters. In fact, it
would appear that during recent years their terms of reference
have been appreciably whittled down and a number of them
have even ceased to exist. 1
In Switzerland, the committee of experts set up under
the auspices of the Federal Government to examine the
possibility of developing joint consultation at the industrial
level and at the level of the undertaking has not yet
published its final report. The problem of co-operation in
the undertaking, however, is still receiving attention in
certain quarters—especially in French Switzerland, where
a number of practical experiments are being conducted.
Moreover, workers' committees, dealing only with social
questions, are found in a number of undertakings, particularly in the metal trades.
A number of joint undertaking committees are also found in
Ireland, where, moreover, several undertakings make arrangements enabling employees to put forward suggestions. Thus,
at the end of 1948, a system of mutual consultation on
questions of common interest in the social field was instituted
in the big concern of Arthur Guinness & Co. (Dublin). This
system consists of a general works council for the whole
concern and a departmental council for each of the four
main departments. A system enabling employees to put
forward suggestions was also introduced in 1949.
In Israel the establishment of joint production committees
is actively encouraged by the workers' federation, the
Histadruth. Committees already exist in the metal trades,
glass and china industries, textiles, printing, and the wood,
quarrying, marble and building industries. 2
In South Africa, the Government is encouraging cooperation between employers and workers in the undertakings.
1
Draft legislation concerning management councils has, however, been
laid before Parliament (see p . 58).
2
Israel Labour News, No. 2, 1950.

CO-OPEBATION IN THE UNDERTAKING

Thus, at the annual meeting of the Federation of Industrial
Chambers in that country, the Secretary for Labour declared :
The Minister of Labour and I are convinced that it is on cooperation
that the future prosperity and efficiency of the country
depend.1
Promising results are to be observed, in particular, with
regard to social welfare, health and safety of workers and
increased productivity. The National Development Foundation of South Africa, too, has taken an interest in the
question and has published a pamphlet for the guidance of
those who wish to promote co-operation in the undertaking. 2
In New Zealand, the establishment of works councils is
encouraged by legislation, but they may be instituted only
with the previous agreement of the parties concerned. 3
In Japan, in a memorandum published in 1946, the Government recommended to employers and workers that they
should establish management councils. The Central Labour
Eelations Council, which is entrusted with the administration
of the Trade Union Law, has been asked to draw up model
plans to serve as a guide in the institution of the councils.
Composition is to be settled by agreement, but the workers'
members must be elected in accordance with a procedure
laid down by the trade union. The functions of the councils
vary but must be clearly defined in the agreement. The
terms of reference cover conditions of employment, safety
and hygiene, production and output. Eecruitment, dismissal
and transfer of workers and job classification may also be
discussed by the council. With regard to labour disputes,
it must be provided that no step may be taken (strikes,
lockouts, etc.) until the question has first been submitted
to the council.
The resolutions of the council are to be adopted unanimously. Provision must be made for conciliation or arbitration in the event of disagreement. These resolutions have
the force of collective agreements, but are not compulsorily
applicable to the undertaking unless they have been approved
at a general meeting of the shareholders.
1

Band Daily Mail, 29 Sept. 1950.
See National Development Foundation of South Africa : Works Councils
and Committees, their Objects and Functions, July 1950.
3
See I.L.O., Legislative Series (hereafter cited as L.8.), 1949—N.Z. 1.
2

CO-OPERATION IN INDUSTRY

According to an enquiry made in July 1949, more than
12,500 trade unions, with a membership of some 3,250,000,
had concluded collective agreements providing for the establishment of management councils. It would appear that the
councils may act as machinery for collective bargaining, as
production committees and as agencies entrusted with the
settlement of labour disputes. In the majority of cases,
they perform all three functions at the same time—or they
may perform only two of these functions. It appears that
the councils have tended, in particular, to become agencies
for the settlement of labour disputes.
In June 1949, the Employers' Association suggested the
abolition of the councils and their replacement by three
separate agencies to carry out these three different kinds of
functions. The Trade Union Law, amended in 1949, deals
with collective agreements and the settlement of disputes but
makes no reference to joint councils. Its application was
followed by a period during which no agreement was concluded
and this weakened the authority of the councils because their
standing appeared uncertain. However, a note addressed
by the Ministry of Labour in 1949 to its local offices favoured
the establishment in the undertakings of three distinct
agencies for these three kinds of questions, and this certainly
appears to represent the future Government policy.
In 1947, the Government of Ceylon went into the question
of establishing agencies for consultation in the public services.
In 1948 an amendment was introduced to the Trade Union
Ordinance of 1935 in order to permit officials to establish
and register their trade unions. With regard to private
industry, the Department of Labour encourages the practice
of co-operation at the level of the undertaking and it appears
that some results have already been achieved. 1
In the Philippines there are a number of joint committees,
generally referred to as " grievance committees ". They have
been set up by agreement between the managements and the
trade unions and may only deal with social questions.
In Haiti there are as yet only two works councils, and their
terms of reference cover the actual operation of the undertaking. The Department of Labour is strongly recommending
the establishment of further councils.
1
See " Labour Conditions in Ceylon : II ", in International
Eeview, Vol. L X I , No. 1, Jan. 1950, p . 8.

Labour

CO-OPERATION IN OCHE UNDERTAKING

T H E SCANDINAVIAN SYSTEM

In Denmark, Norway and Sweden—where for many years
collective agreements have provided for the appointment
of staff delegates (Denmark, Norway), or for some degree of
trade union control over engagements and dismissals (Sweden)
—joint production committees or works councils have been
established since the war by agreement between the central
organisations of employers and workers. The agreements
are dated 7 December 1945 (amended on 22 September 1950)
for Norway 1, 30 August 1946 for Sweden 2 and 2 June 1947
for Denmark. 3 In Norway and Sweden the organisations
also concluded, in 1947 and 1948 respectively, agreements
concerning the co-operation of the works councils in carrying
out time studies in the undertakings. Agencies for co-operation
have also been introduced by Eoyal Order, in 1950, in public
service and in the armed forces in time of peace.
This system of agreements between the national employers'
and workers' confederations is typical of the three Scandinavian countries. Being signed at the national level, the
agreements almost have the force of law.
Main Features of Industrial Relations
Industrial relations in the three countries are conducted
by powerful and extremely centralised industrial organisations
which are already about fifty years old. I n Sweden, it is
estimated that 98 per cent, of the workers are affiliated to
the General Confederation of Labour, and that almost the
entire industry of the country is represented in the Employers'
Confederation. The confederations have a strong hold on
their members : the Swedish or Norwegian employers cannot
enter into a new collective agreement without the consent of
the Employers' Confederation.
In spite of their differences of opinion, these organisations
have a long tradition of co-operation. I n Denmark, the
September Agreement concluded in 1899, after a very big
labour dispute, laid down the general pattern of relations
1
See International Labour Beview, Vol. L U I , Nos. 3-4, Mar.-Apr. 1946,
p. 222.
2
Ibid., Vol. LV, No. 5, May 1947, p. 425.
3
Ibid., Vol. LVII, No. 4, Apr. 1948, p . 365.

CO-OPERATION IN INDUSTRY

between employers and workers. In Norway, although cooperation is more recent, there are also basic agreements
between the national central organisations of employers and
workers—in particular, that of 1935, revised in 1947. In
Sweden, the activities of the Saltsjöbaden Committee, which
comprises representatives of the two central organisations,
have resulted in a series of agreements—the basic agreement
of 1938 which, in particular, instituted the Employment Market
Board, a permanent agency for negotiation between employers'
and workers' organisations constituted on a joint basis, and
later agreements concerning safety and hygiene, apprenticeship, works councils and time and motion studies. All
these agreements become applicable in a given industry only
when they have been accepted by the federations of employers
and workers for the industry in question.
Conditions of employment are to a large degree prescribed
by collective agreements of varying scope but for the most
part concluded at the level of the industry for a period of one
or two years. Disputes concerning the interpretation of
collective agreements (disputes concerning rights) are settled
by judicial or arbitral bodies (Labour Tribunal in Sweden,
Permanent Arbitration Court in Denmark, Labour Court in
Norway), while disputes as to the renewal of collective agreements (disputes concerning interests) are dealt with by conciliation although, with some exceptions, recourse to direct
action is not excluded. This system, in the opinion of those
concerned, has greatly contributed to the promotion of
industrial peace.
Being constantly in touch, the leaders of the employers'
and workers' organisations have developed a keen sense of
responsibility and extremely sound judgment.
Under these circumstances it is not surprising that the
employers' and workers' organisations seek to maintain their
independence in relation to the public authorities and do not
desire any State interference until every attempt to reach
agreement has failed.
Provisions of National Agreements
Production committees are established in Norway in all
undertakings employing at least 50 persons (20 under the
agreement of 1945). In Denmark and Sweden works com-

CO-OPBEATION IN THE UNDEETAKING

mittees may be set up in all undertakings employing 25 persons,
at the request of either the employer or the local workers'
organisation (Sweden), or at that of a majority of the workers
(Denmark).
Where the minimum number of wage earners prescribed
by the regulations is not attained, a works council may still
be instituted at the request of one of the parties (Norway),
or else questions falling within the terms of reference of works
committees are dealt with either by two delegates of the
staff (Sweden) or by trade union representatives (Denmark).
The Scandinavian committees are advisory joint bodies—
not necessarily with equal representation. In Sweden, only
workers who are trade union members have the right to
vote ; the same provision applies in the case of salaried
employees when three quarters of such employees in the
undertaking are trade union members. If that percentage
is not attained all the salaried employees have the right to
vote. In Norway, trade union membership is not required,
and all wage earners in the undertaking have the right to
vote, but one of the workers' representatives on the committee
must be a union shop steward ; in Denmark, the trade union
delegates are members of the committee as of right.
Since the committees were set up to increase production,
they have, in this respect, functions similar to those of the
Canadian and British committees. 1 In Norway and Sweden,
the workers' representatives have had a share in the rationalisation of production more especially in consequence of time study
agreements. The Norwegian agreement stipulates that the production committee must be consulted before such studies are
undertaken and provides for the election of staff delegates
for the special purpose of examining these matters with the
management. The Swedish agreement, which instituted joint
agencies at the national and industrial levels to deal with
time and motion studies, does not expressly provide that the
works committees should examine such questions, but it
would appear that these committees do act in an advisory
capacity, and as a go-between for management and staffs in
this respect. The works committees are not qualified to deal
with questions which are normally within the province of
the trade unions.
1

See p p . 37-39.

CO-OPEBATION IN INDUSTRY

The scope of the Scandinavian committees—and this is
one of the features which distinguish them from the production
committees in Canada and Great Britain—covers both social
and economic questions.
With regard to social questions the Scandinavian committees must endeavour to ensure good relations between the
employer and the wage earners, to improve conditions of work
in the undertaking, especially as to safety and hygiene, to
see that the workers are happy in their work and to promote
vocational training.
The Swedish agreement gives the committees an important
part to play in maintaining security of employment. From
this point of view, this constitutes an extension of the main
agreement concluded in 1938 between the national central
organisations of employers and workers.
Should an undertaking in Sweden close down either temporarily or permanently or reduce its activity to any considerable extent, the works committees must meet to study
the question as far ahead as possible. If any report is made
to the authorities in this connection, it must be communicated
to the committee, which must be kept informed of developments. The agreement also provides that if there is any question of dismissing or suspending workers who have been
employed in the undertaking for not less than nine months,
the employer must, fourteen days beforehand, inform one of
the workers' representatives on the committee of the step
which is contemplated and give him a list of the workers
who, in the employer's view, should be dismissed or suspended.
The representative may demand that the question be laid
before the committee and, if the workers are not satisfied with
the measures subsequently taken by the employer, they may
submit the question for conciliation to the Employment
Market Board. Finally, if a worker is dismissed or suspended,
owing to lack of work, and if the question of engaging or
re-engaging workers in the same category arises during the
next four months after this has been done, the workers' representatives may request that a meeting of the works committee
should be held to determine which workers should be engaged
or re-engaged.
In economic matters, the Scandinavian agreements confer
particularly important functions on the committees. Stress
is laid on the information which the employer must supply

CO-OPERATION IN THE UNDERTAKING

to the committee, concerning both the economic and technical
conditions under which the undertaking is operating and the
position of the undertaking in the market. Such information
bears on reorganisation measures contemplated, important
changes to be made in the conduct of the business or in conditions of employment, new products and new methods of manufacture, particular economic conditions required for the fulfilment of production and selling programmes, etc. In Sweden,
the production committee may inspect the balance sheet, the
profit and loss account, and the directors' and the auditors'
reports, where such reports are prescribed by law. The Danish
and Norwegian agreements provide that the members of the
production committees must receive the same information as
is given to the shareholders. On the other hand professional
secrecy is required of the workers' representatives, and it is
sometimes specified that the information communicated to
them must not be of a kind whose publication might cause
prejudice to the employer.
Under the Swedish agreement, the information is to be
supplied regularly and, under the Norwegian agreement,
quarterly or yearly according to its nature. In Norway, the
management must inform the production committee of any
decision taken with regard to questions which the latter has
had to discuss.
I t is generally provided that the committees must consider
workers' suggestions and, where appropriate, propose that the
authors of suggestions accepted by the employer should be
rewarded.
The agreements also contain various provisions concerning
the procedure and membership of the committees, and the
protection of members. In one form or another, there is always
a provision to the effect that the works or production committees must not deal with the regulation of conditions of employment and other questions which are normally the subject of
collective agreements. In Norway, it is provided that this does
not prevent the committees discussing the introduction of new
wage systems, although they have no power to conclude
agreements on this question with management. The committees, therefore, do not in any way compete with the trade
union organisations. This is also evident from the various
provisions, already mentioned, giving trade unions a privileged
position in the election of workers' representatives, and from

CO-OPEEATION IN INDUSTRY

the fact that the duty of interpreting agreements and supervising their application is entrusted to national joint boards
set up by the central organisations of employers and workers.
In Denmark and Norway, if these agencies cannot agree, they
may refer questions to arbitration. In both countries, the
national joint boards also have to keep the committees
informed and guide them in their work. In order to do this,
the central agency in Norway may, since the revision of the
agreement in 1950, co-opt experts and set up a secretariat.
Practical

Application

Number of Committees in Existence.
There are now more than 3,000 works committees in
Sweden. In some important industries (forestry, agriculture,
transport) they have only recently been instituted. I t is
estimated that some 4,000 committees could be set up, but
some industries, such as building, have not yet thoroughly
considered this step.
I t appears that in Norway there are fewer committees
than was expected. According to an interview by the trade
union secretary of the Norwegian Workers' Education Association published in the official periodical of the Swedish
woodworkers' trade unions, production committees have been
set up in only 800 undertakings (whereas 3,000 was the figure
expected) and, of these 800, some are not very active. 1
Action by Employers' and WorTters"1 Organisations.
Employers' and workers' organisations—which are on
principle very favourable to works councils, because they are
primarily responsible for the agreements which have established
them—have for the most part definitely tried to educate
their members so as to ensure the efficient working of the
councils. The Swedish example is typical in this respect.
The policy to be followed in regard to works committees
is laid down at conferences held at the headquarters of the
workers' confederation which publishes a periodical called
" Works Committees " for the guidance of committee members
1
See S.I.A.
No. 23, 1950.

(published by the Swedish woodworkers' trade unions),

CO-OPEBATION IN THE UNDERTAKING

and organises training courses for them at its school at
Brunnswick.
The Swedish Employers' Confederation, at its school at
Yxtaholm, has also organised special sessions for heads of
undertakings and their assistants in order to facilitate the
establishment and operation of works committees.
Results.
Although individual opinions may vary, it is generally
agreed in the Scandinavian countries that works committees
are an excellent means of ensuring co-operation and improving
production, and that they have achieved definite results.
It is still too early to assess the results of the amendments
to the Production Committees Agreement in Norway, but
the very fact that amendment has appeared necessary indicates
that the results there did not quite come up to expectations.
In the interview mentioned above, the trade union secretary
of the Norwegian Workers' Education Association declared
that the production committees had not so far had much
influence on production, but that they had achieved striking
results with regard to questions concerning the welfare, safety
and hygiene of the workers. 1
The Norwegian Confederation of Workers lets it be understood that, in 1945, the workers may, perhaps, have tried
to go too far in getting production committees set up in small
undertakings. Now, it will be possible to concentrate on a
smaller number of large undertakings and there will be more
opportunity for effective work. 2 The revised agreement has,
indeed, in several respects, given the production committees
wider powers while reducing the number of undertakings in
which they must be established.
In its preamble, however, the revised agreement states
that the national central organisations have renewed the
agreement of 1945 because they were convinced that the
undertakings, as well as individual wage earners and the
community as a whole, would benefit from the promotion
of a spirit of good will and co-operation between management
1
2

Ibid.
See Fri Fagbevegelse, No. 10, 1950.

CO-OPERATION IN INDUSTRY

and workers and from the pooling of efforts with a view to
increasing productivity in industry.
Finally, it may be observed that, in November 1950, a
meeting was held in Stockholm attended by representatives
of Swedish, Danish, Norwegian and Finnish employers, manual
workers and salaried employees, and that they agreed in
recognising the effectiveness of the works councils in their
respective countries.
Co-operation Established by Legislation
In another group of countries legislation has been deemed
necessary to ensure effective and continuous co-operation
between employers and wage earners in the undertaking.
The following reasons are given in favour of legislative action.
Legislation has the advantage of imposing uniform obligations on all the undertakings included within its scope. The
advantage is all the greater because often the legislation
merely sanctions practices already established in some sectors,
if not throughout the whole, of industry.
Legislation also permits of giving the machinery for
co-operation permanent status. The existence of the
machinery cannot then be questioned except in the event
of a new enactment to repeal the earlier legislation.
Finally, those who are in favour of legislative action
often argue that the community has no other remedy for the
failure of the parties to co-operate, and that, by implementing
what it considers to be legitimate aspirations of the workers,
the legislative body is able to protect the community from the
outbreak of serious industrial disputes.
But the very purpose of the legislation means that application must depend as much on the good will of the parties as
on compulsion. Even if the parties have not been able to
decide for themselves how they can effectively co-operate,
the legislator nevertheless hopes that, once the principle of
the reform has been decided on the political and parliamentary
level, the will to co-operate will be sufficient to ensure smooth
application of the legislation enacted. Indeed the law often
leaves the completion of its regulations to collective agreements or else provides that an agreement between the parties
may derogate from this or that legal provision. In France,
for instance, the legislation concerning works committees

CO-OPERATION IN THE UNDERTAKING

does not prevent any arrangements as to the operation or
powers of works committees being based on collective agreements or custom. In some cases, even, the application of the
legislation is optional. The establishment of agencies for cooperation is authorised under certain conditions but is not
compulsory.
Legislation concerning works committees now exists in the
following countries, namely, Austria, Belgium, Bolivia, Bulgaria, China, Czechoslovakia, Finland, France, the Federal
German Eepublic, the German Democratic Eepublic, Hungary,
India, the Associated States of Indo-China, Iran, Luxembourg,
the Netherlands, Pakistan, Poland, Eumania, Spain, the
U.S.S.E. and Jugoslavia.
WORKS COMMITTEES AND COUNCILS IN CERTAIN EUROPEAN
COUNTRIES

Apart from that in force in Luxembourg, all the legislation considered under this heading is of recent origin and has,
in fact, been enacted during the years following the second
world war.
However, one distinction may be drawn. In some countries, where legislation concerning works councils was in
force after the first world war, the new legislation has been
based on precedent. This is so in Austria and the Federal
German Eepublic, and was so in Czechoslovakia until 1948.
In Austria, the Act of 28 March 1947 1 , subsequently amended
by various Ordinances, established a system of representation
for the employees of establishments (works meeting and works
council) which bears certain analogies to that instituted under
the Act of 1919.2 An Act of 30 June 1948 altered the period
of office of staff representatives. An Act of 2 June 1948
deals with the representation of wage earners in agriculture
and forestry undertakings.
In the Federal German Eepublic, works councils were
established in the post-war years in a number of undertakings
at a time when the impoverishment of the country and the
requirements of reconstruction necessitated co-operation more
than ever before. A Law made by the Control Council on
i £ . £ . , 1947—Aus. 2.
2
See E. A D L E R : "The Works Councils Act in Austria", in International Labour Review, Vol. V, No. 3, Mar. 1922, pp. 411-436.

CO-OPERATION IN INDUSTRY

10 April 1946 authorised the organisation and activities of
works councils throughout Germany. 1 Separate laws concerning works councils have also been enacted in the different
Länder, for instance, the Laws of 31 May 1948 in Hessen,
18 August 1948 in Württemberg-Baden, 10 January 1949 in
Bremen, 3 May 1950 in Schleswig-Holstein, and 18 October
1950 in Bavaria.
Moreover, the question of works councils has, for several
months, been the subject of very lengthy discussions at the
Federal level, together with that of trade union participation
in the general control of the economic system. Under the
auspices of the Ministry of Labour, several conferences were
held last year attended by representatives of the employers'
associations and of the Deutscher OewerJcschafts bund, an
organisation which covers all organised workers without
distinction as to political colour. These conferences showed
that there was agreement on certain points (for example,
with regard to the intervention of the works council in staff
questions, conditions of employment and social services), but
differences of opinion subsisted between those concerned,
especially as to the extent of the workers' share in management, with reference to economic questions.
Following these conferences, several drafts of enactments
were laid before Parliament. One of them, tabled by the
Government of the Federal Bepublic, concerns the new
organisation of relations between employers and workers in
the undertaking ; a second, sponsored by the Social Christian
Party, is confined to the question of the workers' share in the
management of undertakings ; a third, of more general scope,
presented by the Social Democrat Party, embodies the
essential features of the trade union proposal and relates to
the new regulation of the economy. The employers' organisations have also published their proposals with regard to the
right of co-management.
Independently of these various proposals, which are of
general scope, the Government has also laid before Parliament
a second Bill concerning co-management by the workers
in coal mining undertakings and the iron and steel industry,
which provides for the participation of trade union representatives, on an equal footing, in the management of these
^L.S.,

1946—Ger. 3.

CO-OPERATION IN THE UNDERTAKING

undertakings. The text of this new draft incorporates the
essential points in the co-management demands of the trade
unions. These were accepted by the representatives of
the employers concerned in the course of discussions held
at the end of January 1951, under the threat of a general
strike of the 800,000 workers employed in these industries,
who, having first been consulted by referendum, had declared,
by a very large majority, that they were ready to cease work if
their right of co-management were not recognised. The German trade unions, which had made co-management one of
their main objectives, were able to argue, in support of their
claims, that co-management was already in partial operation
in certain undertakings. In fact, the British authorities had
introduced, in 1947, in the " decartelised " steel undertakings
in the Euhr, a system of co-management with equal representation which, on the whole, was considered to have
operated satisfactorily.
The text proposed by the Government provides that each
board of directors (Aufsichtsrat)
shall consist of eleven
members : five elected by the agency—e.g., the shareholders'
general meeting—normally responsible, by law or statute, for
appointing the members of the board (of whom one must be
an independent person, that is, belonging neither to an occupational organisation nor to the undertaking and not having
any economic interests in relation to the undertaking) ; five
nominated by the competent central trade union organisations
(of these five, two—one manual worker and one salaried
employee—must belong to the undertaking in question and
be designated by the works council, while one must be an
independent person as defined above) ; the eleventh member
is also an independent person designated by the agency responsible for selecting the members of the board of directors
on the proposal of the other ten members of the board—he is
to act as an arbitrator or mediator.
Moreover, the board of management (Vorstand) of the
undertaking, consisting of three members appointed by the
board of directors, is to include a member recruited from among
the workers, who can be neither appointed nor removed
from office without the consent of the majority of the trade
union representatives on the board of directors.
Finally, at the head of each of these two industries there
is to be a Senate—a kind of occupational council responsible

CO-OPEEATION IN INDUSTRY

for guiding and supervising the industry. I t will also consist
of equal numbers of representatives of each side. Its six
members, who must be at least 50 years of age, will be appointed
by the Government on the basis of proposals made by the
employers' and workers' organisations.
The draft provides that the law shall apply only to undertakings in which over 1,000 wage earners are employed or
which have a capital of more than one million marks.
At the time of writing this report, all these draft enactments—both those of general scope and that which deals
with co-management in the coal mining and iron and steel
industries—are still being considered by Parliament. Although
it is impossible, therefore, to describe in detail the system
that will finally be instituted, two facts should be stressed :
firstly, the outstanding importance which is at present being
attached to the problem of co-management (Mitbestimmungsrecht) in the Federal German Republic ; secondly, the acceptance of the view that it is the duty of the legislature to settle
the problem. Only the detailed provisions of the future
enactment are now under discussion, but the actual principle
of legislation is no longer contested.
In Luxembourg 1 , the basic text is still the Grand Ducal
Order of 8 May 1925, instituting workers' committees in
industrial establishments, although it has been amended subsequently on several occasions. The staff rules of the Luxembourg railways, promulgated in 1920, made provision for
staff representation, and the Law of 7 June 1937 instituted
salaried employees' committees.
In another group of countries, as in France, Finland,
Belgium and the Netherlands, the legislation at present in
force is the first legislative experiment of general scope concerning co-operation in the undertaking. These laws are therefore a considerable innovation. However, the principle underlying them had, in. general, been recognised in the course of
the contacts which took place during the war, in some of the
occupied countries, between the representatives of employers'
and workers' organisations.
In France 2 , moreover, on liberation, production or management committees were set up spontaneously in a number of
1

L.S., 1925—Lux. 1.
See International Labour Office, Studies and Reports, N.S. 9: LabourManagement Co-operation in France, Geneva, 1950, Chapter I I I .
2

CO-OPEEATION IN THE UNDERTAKING

factories and it appeared immediately to be necessary " to
make the establishment of these bodies a general practice and
to give them legal status ". 1 This was the purpose of the
Ordinance of 22 February 1945 2, brought into force by the
Decree of 2 November 1945 2, which established works committees. This Ordinance was amended by the Act of 16 May
1946 3, which widened the scope of the measure and gave
the committees more powers. A number of other laws have
amended the regulations in certain details : the Act of 7 July
1947, which instituted a system of proportional representation
in the elections to the works committees ; the Act of 2 August
1949, which amended the rules for determining the contribution
of the employer towards the expenses of the committee ; the
Collective Agreements Act of 11 February 1950, one of whose
provisions requires the inclusion in national collective agreements—and, in appropriate cases, in regional and local agreements—of provisions concerning works committees ; the Act
of 12 August 1950 which defines the scope of the regulations.
A number of other texts relate to agencies for co-operation
in public or assimilated services and in certain branches of
activity requiring special provisions (for example, passenger
transport in the Paris region, the merchant marine, national
defence) ; finally, it is provided that the statute for the public
undertakings, at present in course of preparation, shall contain
general provisions concerning works committees in public
undertakings and services of an industrial and commercial
character.
In Finland 4, the Act of 21 June 1946, which established
production committees on an experimental basis, became
definitive on 30 December 1949.
In Belgium and the Netherlands, the legislation concerning
works committees is directly related to the general legislation
concerning the organisation of the economy. The Belgian
experience is particularly striking because one and the same
law—the Act of 20 September 1948 providing for the organisation of the economy 5 —established the Central Economic
1

See the preamble to the Ordinance of 22 Feb. 1945.
L.8. 1945—Pr. 8.
3
L.S., 1946—Fr. 8.
'L.S., 1946—Fin. 1.
*L.S., 1948—Bel. 8.
2

CO-OPERATION IN INDUSTRY

Council, industrial councils and works councils. The Act
contains general provisions. In many respects, it provides
specifically that the details and the application of the regulations will be determined by Eoyal Orders concerning either
industry as a whole or certain industries. Hitherto, seven
executory Orders have been issued, dealing in particular with
the organisation of works councils, the procedure to be followed
in their elections and the information to be supplied to works
councils by the heads of undertakings. Moreover, the Act of
20 September 1948 has been supplemented by an Act of
18 March 1950, which deals with protection against the arbitrary dismissal of representatives of the staff and of workers
who are candidates for election.
In the Netherlands 1, the Act of 4 May 1950, which came
into force on 7 June 1950, deals only with works councils, but
it is closely related to the question of the general organisation
of the economy. It provides in several cases, for action by
the Economic and Social Council established by the Act of
27 January 1950.
In Spain, works councils were instituted under a Decree
of 18 August 1947.2
Finally, in some countries which have no legislation on
works councils, the principle of co-operation between employers
and workers in the undertaking is nevertheless embodied in
the Constitution.
For instance, Article 46 of the Italian Constitution recognises " the right of the workers to participate, in ways and
within limits established by law, in the management of undertakings ". 3 For the moment, no legislation has been enacted
to give effect to this Article of the Constitution, although
Parliament now has before it a Bill concerning management
councils.
Analysis of the Régulations
The texts of the laws concerning works councils are generally preceded by a statement summarising the main reasons
for which the legislative body has considered their institution
desirable. These reasons include arguments of an economic
and social character similar to those referred to at the beginning
1

Industry and Labour, Vol. IV, No. 7, 1 Oct. 1950, p . 284.
*L.8„ 1947—Sp. 3.
a
L.S., 1947—It. 5.

00-OPERATION IN THE UNDERTAKING

of this chapter, in the analysis of the reasons for the present
movement in favour of co-operation at the level of the undertaking, but the emphasis is placed more definitely on the
social reasons for the reform. The preambles of the French and
Belgian enactments are particularly explicit in this respect.
Scope.
The legislation concerning works committees applies
only to undertakings in which a specified number of wage
earners are employed. Sometimes it covers only undertakings
of a particular kind. Furthermore, provision is sometimes
made to ensure that the legislation shall be applied only by
gradual stages.
Number of workers employed in the undertaking. The legislation usually specifies that if not less than a given number of
workers are permanently employed, the head of the undertaking
shall set up a works committee. The figure is, for instance,
not less than 20 wage earners in Austria and Luxembourg, 25 in
the Netherlands, and 50 in Belgium, Finland and France. In
France, an Act of 2 August 1950 makes it possible in future to
abolish a works committee in the case of an undertaking
which, since 16 May 1946, has suffered a considerable and
permanent reduction in staff, bringing the number employed
down to less than 50 wage earners.
In some cases the law allows exemptions. Thus, in the
Netherlands, exemptions may be granted either by the Economic and Social Council, with Government approval, or by a
Minister, in the case of certain public corporations. Temporary
exemptions may also be granted by the industrial commissions
for certain undertakings or groups of undertakings.
In cases where the minimum figure is not attained, some
enactments nevertheless still make it possible for works
committees to be instituted. Thus, in France, Ministerial
Orders may, in such cases, provide for the establishment of
works committees in undertakings belonging to certain
occupational categories. A Decree of 14 March 1949 applied
the legislation concerning works committees, with various
modifications, to the merchant marine. In the Netherlands,
the Economic and Social Council may, in agreement with the
competent industrial commission, instruct the heads of
undertakings concerned to institute works councils. In Austria,

CO-OPEEATION IN INDTJSTKT

the workers are represented by one or more elected delegates
(provided, however, that the undertaking has at least five
employees).
What is meant by " workers " or " employees " in the
undertaking ? According to the Belgian legislation, the persons
concerned are the wage earners, apprentices and salaried
employees in the undertaking, including supervisory personnel
with the exception of persons holding managerial posts. In
Finland, employees who can sign for the firm are not regarded
as wage earners for the purposes of works councils ; the same
applies to higher grades of staff in Austria who exercise powers
of decision with regard to the operation of the undertaking ; in
the Netherlands, the works council may provide under its
rules that the managerial staff shall be deemed to be represented
by the chairman of the works council, and are therefore not
eligible either as electors or as candidates. French legislation
regards homeworkers as part of the staff of the undertaking ;
Austrian legislation, on the other hand, excludes them.
Nature of the undertaking. Belgian legislation, which does
not apply to public or semi-public services, specifies that
" undertaking " means " the technical working unit ". Basing
its arguments on this definition and on the fact that the Law
concerning works councils is part of the Act for the organisation
of the economy, the Federation of Belgian Industry considers
that establishments which are not permanent economic
entities should be excluded from the scope of the legislation.
On the other hand, it has been argued that the Act concerning the organisation of the economy, " by giving to ' undertaking ' a definition which can only mean ' establishment ',
makes provision simply for establishment councils and not
for undertaking councils ". 1
In France, the regulations apply to all industrial or commercial undertakings, public law offices, the liberal professions,
non-commercial companies, trade unions and associations of
every kind. In Finland, they cover industrial establishments,
in Austria, undertakings of all kinds with the exception of
agricultural and forestry undertakings, public services, public
transport undertakings and public educational institutions.
However, the Employment in. Agriculture and Forestry Act
of 2 June 1948 lays down certain fundamental provisions
1

See Clartés syndicales, Aug.-Sept. 1949, p . 41.

CO-OPERATION IN THE UNDERTAKING

concerning the representation of wage earners in agricultural
and forestry undertakings, and regulations applying this law
have been issued in the various provinces. Likewise, in the
case of the federal railways, staff representation has been
instituted by agreement between the general administration
and the staff.
When an undertaking comprises several separate establishments, there is set up in each establishment, in the case of
France, an establishment committee, which functions in the
same way as an ordinary works committee and, for the whole
undertaking, a central committee is created consisting of
delegates from the various establishment committees.
Progressive application. Some of the laws have come into
force only recently or are still applied only in part. Thus, the
Belgian legislation was first made applicable to undertakings
having more than 200 workers ; it still applies only to undertakings having more than 100 workers, and it will not apply
to undertakings employing more than 50 workers before
July 1951.
In the Netherlands, the Economic and Social Council is
to fix the date by which works councils have to be instituted.
Structure of Agencies.
Composition. The works committees thus established are
generally joint bodies. They consist, on the one hand, of the
head of the undertaking (who, in Belgium, is accompanied by
one or more delegates appointed by him x ), and, on the other
hand, of a certain number of staff representatives. The number
of the latter varies according to the number of persons employed in the undertaking.
It will be, for instance, for an undertaking having 50
workers : two representatives in Luxembourg and France,
four in Belgium and the Netherlands ; for an undertaking
having 200 workers : five representatives in France and
Luxembourg, six in Belgium, and eight in the Netherlands.
A maximum membership is generally prescribed. The
figure is 25 (including the head of the undertaking) in the
Netherlands, 20 in Belgium, eight in France.
1
The number of delegates representing management may in no case
exceed the number representing the staff.

CO-OPEEATION IN INDUSTRY

Within these limits, legislation sometimes provides that
the number of staff delegates may be increased by agreement
between the head of the undertaking and the representative workers' organisations. This is, for instance, the case
in Belgium.
Provision is generally made for substitute delegates, their
number normally being equal to the number of titular delegates, but sometimes less (half the number of regular delegates
in Belgium).
In Austria and the Federal German Eepublic, on the other
hand, the works councils consist exclusively of staff representatives. Again the numbers vary according to the size of the
undertaking. In Austria, for example, there are three members
for a small factory and 13 for a factory with 1,000 employees,
with provision for one extra member for each additional
500 employees.
As a rule, the works committee consists only of workers
belonging to the undertaking. Thus, in France, where each
representative workers' trade union organisation recognised
in the undertaking may appoint a representative to attend
meetings of the committee in an advisory capacity, such representative must be an employee of the undertaking unless
there is an understanding with the head of the undertaking
that this condition shall be waived. However, in Austria,
if the works committee has more than four members, only
three quarters of the members must necessarily be employed
in the undertaking concerned ; the others may be trade union
delegates who, although not working in the undertaking,
are nevertheless eligible ; but these trade union delegates may
belong only to one works committee at a time and may not be
appointed as its representatives on the board of directors of
the undertaking.
Appointment of members. Staff representatives on the
works committee are generally elected by secret ballot by all
the workers in the undertaking. But the regulations normally
lay down certain conditions for eligibility as electors or candidates ; often they contain provisions concerning the representation of different grades of staff on the committee, lay
down the procedure for elections and relevant disputes and
prescribe the period during which staff representatives hold
office.

CO-OPERATION IN THE UNDERTAKING

Conditions of Eligibility

as Electors or Candidates

To be an elector, a person must generally have been employed
in the undertaking for a certain time (three months in Belgium, six
in France, and one year in the Netherlands), have attained a certain
age (18 years in Austria, Belgium and Prance, 21 in the Netherlands), enjoy civil and political rights (Austria, Belgium, Prance),
be a native of the country or at least show he has worked in the
country for a certain period (held a labour permit for two years in
Belgium, or worked five years in Prance). In Belgium, he must also
have worked for at least one year in the branch of industry to
which the undertaking belongs.
The conditions governing the eligibility of candidates are even
stricter than those mentioned in the case of electors. They relate,
for example, to nationality (Austria, Belgium, Prance), age (21 years
in Finland and Prance, 23 in the Netherlands, 24 in Austria, 25 in
Belgium) !, length of service in the undertaking (six months in Austria
and Belgium, one year in Finland and Prance, three years in the
Netherlands) and, sometimes, period of service in the industry
concerned (three years in Belgium), and enjoyment of civil and political rights 2, and sometimes the person concerned must have a
certain degree of education—ability to read and write (France) or
have certain moral and occupational qualifications (Finland).
Sometimes specific conditions are laid down which render a
person ineligible as a candidate. Thus, under French law relations
in the ascending or descending line, brothers, sisters and connections
by marriage of the head of the undertaking are ineligible, and so are
wage earners who have been removed from office in a trade union
association in pursuance of the Ordinances respecting the restoration
of freedom of association. In Germany, no person who has been an
official of the German Labour Front or who was a member of the
Nazi Party is eligible for election to a works committee. 3
On the other hand, the functions of a member of the works
committee are not incompatible with those of a staff delegate in
France or of a trade union delegate in Belgium.
The Netherlands legislation provides that the works council may
make exceptions in its rules with regard to the conditions governing
eligibility as electors or as candidates.
Frequently the trade union organisations which are most representative of the workers are made responsible for drawing up
lists of candidates. This is so for instance, in Belgium, Prance and
the Netherlands.
As to the determination of the most representative organisations,
the Act of 11 February 1950, instituting the new system of collective
agreements in France, mentions the following points : number of
members ; degree of independence ; amount of contributions ;
experience and age; and political behaviour during the occupation.
The question has also been dealt with in several Ministerial circulars.
In Belgium, the organisations deemed to be most representative
are inter-occupational organisations federated at the national level
1
The Belgian legislation provides that representatives of young workers
may he consulted by the works council.
2
In Belgium, this condition applies also to memhers nominated by the
management.
3
L.8., 1946—Ger. 3.

CO-OPERATION IN INDUSTRY

with 100,000 members or 10 per cent, of the persons in the undertaking as members, or which, again, are represented on the national
joint committee for the industry to which the undertaking belongs.
In the Netherlands, the organisation or organisations of wage
earners which may present lists are designated by the industrial
commissions.
But the exclusive right to present lists of candidates is sometimes
only temporarily granted to trade unions. Thus, in Prance, if the
number of persons casting votes is less than half the number of
electors on the roll, a second ballot takes place within a fortnight
and the electors may then vote for lists of candidates other than those
put forward by the trade unions.
In Germany, the trade union organisations simply have a right
to put forward lists of candidates. 1 I n Finland, they no longer
enjoy the exclusive right to put forward lists of candidates and
workers are free to elect whom they wish.
Representation of Different Grades of Staff
The regulations often prescribe rules to ensure fair representation
for the different grades of staff in the undertaking.
The French legislation provides for two separate electoral bodies,
one for the manual and clerical workers and the other for the higher
grades : engineers, heads of departments, foremen and others on a
similar footing. The allocation of seats to the various grades and
the division of the staff between the different electoral bodies are
governed by agreement between the head of the undertaking and
the trade union organisations concerned, with the divisional labour
inspector acting as an arbitrator. In undertakings employing more
than 500 persons, the engineers and heads of departments must be
represented by at least one regular member.
When a single electoral body is prescribed, provision is often
made to ensure fair representation on the committee of the different
sections of the undertaking and of the different grades of the staff.
Thus, in Belgium, the number of seats allotted respectively to the
workers' members and the salaried employees' members is determined in proportion to the numbers of each of the two grades and
a Eoyal Order has laid down the procedure to be followed. Separate
electoral bodies for manual workers and salaried employees must be
set up where, in a given undertaking, the grade which is in a minority
(manual workers or salaried employees as the case may be) numbers
more than 50. I n Austria, in undertakings where more than 50
persons are employed, separate works councils must be established
for the manual workers and the salaried employees if each of these
groups consists of at least 20 persons employed on a permanent
basis ; but the legislation also provides that the two councils must
perform their functions and hold their meetings jointly.
Election Procedure and Disputes
In Belgium and France, the regulations lay down in detail the
procedure to be followed at elections (drawing up of electoral lists,
election procedure, counting of votes, etc.). In France, since the
Act of 7 July 1947, the elections are governed by proportional
1

L.8., 1946—Ger. 3.

CO-OPERATION IN THE UNDERTAKING

representation, the number of seats on the committee to be allocated
to each list of candidates being equal to the number of times the
total number of votes received by that list contains the figure representing the electoral quotient (which is obtained by dividing the
number of votes cast by the number of seats to be filled). In Belgium,
the allocation of seats as between the different lists is made by
simple proportional representation.
Objections relating to elections are, in Belgium, to be referred
to the probiviral court or, if there is no such court, to the justice of
the peace for the district in which the undertaking is situated, with
a right of appeal against his decision to the appellate probiviral
court or, if there is no such court, to the court of first instance for
the district in which the undertaking is situated. In France, these
objections are brought before the justice of the peace, who exercises
summary jurisdiction and against whom there is no appeal. In
Germany the labour courts have jurisdiction in such matters.
The Netherlands legislation contains no provisions concerning
the regulation of elections properly speaking. Such questions are
within the competence of the industrial commissions under the
supervision of the Economic and Social Council.
Period and Termination of Office
All the regulations prescribe a certain period during which
members of the works committee hold office. This period, is, for
example, one year in Finland and France, two in Austria, and four
in Belgium (except for the initial period, which is two years) ;
members are eligible for a further term.
Tenure of office automatically comes to an end on decease,
resignation, termmation of contract of employment or loss of one
of the qualifications for eligibility. In Belgium, it also comes to
an end where the member ceases to belong to the organisation
which proposed him or to the group of workers or employees by
whom he was elected ; moreover, the group which put forward
the member as a candidate may apply to the labour court for his
removal from office in the event of serious misconduct. I n France,
removal from office by the trade union organisation is also provided for by legislation, but it must be ratified by the majority of the
electoral body to which the committee member in question belongs.
Functions.
The functions of works councils v a r y appreciably from
one c o u n t r y to another. They m a y be classified either according to t h e fields in respect of which t h e functions are exercised
or according t o t h e practical importance of those functions,
t h a t is to say, in accordance with t h e e x t e n t of the rights which
t h e y confer u p o n t h e members of t h e committees. I n t h e first
place, they m a y relate to t h e social field, to t h e technical
field, or to t h e economic a n d financial field ; b u t , on t h e other
h a n d , according to t h e different cases, t h e y are reinforced b y
rights the e x t e n t of which varies considerably : t h e members

CO-OPERATION ITÑ INDUSTRY

of the committee may merely have a right to receive information, or they may have a right to put forward suggestions and
opinions, or they may have a right to press their demands
before institutions outside the scope of the undertaking or,
finally, in certain well defined cases, they may have a right
of co-management or of management properly so-called.
In the technical field the works councils have an advisory
role similar to that of the production committees whose functions were described earlier. 1 Their functions in the social
and in the economic and financial fields are described below.
Social field. In the social field there are generally
several aspects to the functions of the works councils : the
councils are empowered to consider methods for improving
the working and living conditions of the staff and for developing a spirit of co-operation in the undertaking ; sometimes,
they have special functions with regard to engagements and
dismissals ; finally, they supervise or manage welfare schemes
in the undertaking.
Improvement of Working and Living Conditions
Under French legislation, the works committee has no power
to take decisions about such matters ; its role is purely advisory.
It may make suggestions as to the better arrangement of hours of
work, scheduling of holidays with pay, equipment of workshops,
health and safety conditions and even, since 1946, some aspects
of wages. Netherlands legislation gives the committees somewhat
similar powers.
Belgian legislation, on the other hand, allows the committees,
in some cases, to take decisions or to exercise supervision. The
works committee is expressly required to fix the dates for annual
holidays and, if necessary, draw up a roster of the employees for
this purpose, draft and amend workshop rules subject to the relevant
legislation, and take all the necessary steps to keep employees
informed of these rules, supervise the strict application of social
and industrial legislation and the application of all general provisions affecting the undertaking 2, both in the social field and with
respect to the specification of various grades of skill and, subject
to the fulfilment of certain conditions, carry out the duties of safety
and health committees. Austrian legislation and that enacted by
the various Länder of the Federal German Bepublic also places
considerable responsibility on the works councils with regard to the
1

See pp. 37-39.
The Federation of Belgian Industries considers that this means " general
measures taken by the head of the undertaking ". The Christian Trade
Unions, on the other hand, consider that the law gives them the right to
supervise the application of " all legal provisions or agreements concerning
the undertaking ".
2

CO-OPERATION IN THE UNDERTAKING

improvement of working conditions and the application of labour
legislation.
While they have general powers in these various fields, the works
committees may not, however, deal with questions which normally
fall within the province of the trade unions. They do not as a rule
take part in collective bargaining, although they often have to
supervise the general application of collective agreements or adapt
such agreements to the undertaking (for example, adjustment of
wage rates to suit local conditions, fixing of piece rates in the undertaking).
Promotion of a Spirit of Co-operation
Several enactments make the works committee responsible for
promoting good relations between management and staff. Belgian
legislation makes it a duty of the works committee " to consider
any action likely to promote the development of a spirit of co-operation between the head of the undertaking and his employees—for
example, by the use of the language of the region in the internal
affairs of the undertaking ". 1
French legislation, while it does not make it a special function
of the works committee, nevertheless indicates that the committee
should " co-operate with the management " in the improvement
of the conditions under which the employees in general work and
live. I t therefore defines very clearly the spirit in which the works
committee should carry on its activities.
This marks the difference between works committees and other
agencies representing the staff in some countries, particularly.
Belgium and France, namely, trade union delegates and staff
delegates. The works committees are responsible for promoting
co-operation whereas the staff delegates are responsible for submitting grievances. Thus the preamble of the French Ordinance
of 1945 declares that " the works committee cannot be a body for
formulating grievances ", and the Eeporter on the Belgian Act
declared before the Chamber of Deputies : " I t is important not to
confuse the functions of the works councils with those of the trade
union delegates. The latter have especially the duty of formulating
claims with regard to wages and working conditions and of supervising the application of collective agreements. This task is essentially different from that of the works councils which, moreover,
are founded on an entirely different basis."
The distinction gives rise to difficulties 2, but it was the intention
of the legislative body that " there should be no opposition between
the two institutions ", the works committees and the staff delegates.
" Each of them, in order to produce results, must be stimulated by
a sound, vigorous, constructive and vigilant trade unionism." 3
In some countries, on the other hand, the view has been taken
that, because the works committees were entrusted with the promotion of good understanding between the employer and his staff,
they had power to intervene in, and help to settle, labour disputes.
1

On the occasion when this draft legislation was being discussed by the
Senate, the Eeporter indicated that this example " obviously constituted
only one suggestion among many others ".
2
See p . 78.
3
Les conseils d'entreprise, op. cit., p. 56.

GO-OPERATION IN INDUSTRY

This is provided, for example, in Germany, under the Control Council
Law of 1946, and also under the Finnish legislation, which establishes the works council as the first instance in conciliation procedure.
Dismissals and Engagement
In Belgium, the works committee is an advisory body for such
purposes. I t has to consider what general principles should be
followed in regard to the dismissal or engagement of workers.
French legislation contains no specific provision about this. In
Austria, on the other hand, the committees have important functions
with regard to the termination of contracts of wage earners. If,
contrary to the view of the works council, the management decides
to dismiss a wage earner, the council may, at the request of the
worker concerned, appeal to the conciliation board if it considers
that the reason for notice of dismissal being given arises out of the
employee's trade union activities or his works council activities or,
again, if it considers that the dismissal would constitute social
hardship having regard to the personal situation of the worker. I n
the Federal German Bepublic, the legislation enacted by the Länder
also gives the works council a kind of right of veto with regard to
engagement, dismissal, transfers, changes of status, etc. Should
the employer disagree, the works council may refer the matter to
the labour court. If the court finds for the works council and the
employer, nevertheless, persists in his attitude, the works council
may obtain from the labour court a formal decision binding the
employer.
Welfare Schemes
Works councils have wide powers as to the management of
welfare schemes. In France, for instance, the terms of reference of
the works councils cover all welfare schemes instituted in the undertaking for the benefit of employees or former employees of the
undertaking and their families, irrespective of the method of finance.1
As a rule the works committees manage these schemes themselves.
This applies to all schemes that are not organised as bodies corporate :
canteens, day nurseries, holiday homes, spare time and sports
schemes, instruction in domestic science, and vocational training
centres (except apprenticeship centres). In some cases, however,
the works committees merely exercise supervision. This is so in
the case of mutual benefit societies, social insurance funds established in the undertakings, schemes to provide workers with housing
or allotments, and so on. In such cases the board of directors which
administers these bodies must include two representatives of the
works committee. In other cases, again, the committees are responsible for the management of the schemes. This is so when the
schemes are organised as bodies corporate. At least half the members
of the board of directors running such schemes must then be representatives of the works committee. Finally, the industrial committees share responsibility for welfare and medical services whose
managers are appointed by agreement between the head of the
1

See René PETIT : " La gestion des œuvres sociales par les entreprises ",
in Droit Social, May and June 1946.

CO-OPEKATION IN THE UNDERTAKING

undertaking and the committee, the appointment being referred to
the labour inspector in the event of disagreement.
In order to carry out its duties, the works committee has legal
personality, and funds are made available to it. The funds are
mainly derived from contributions made by the employer.
They are also supplemented by contributions which the committee may decide to levy on the staff without having power to
make the levies compulsory, receipts derived from events organised
by the committees, gifts, bequests and subsidies, and income derived
from these different forms of property. At the end of each year the
works committee must make a detailed report on its financial operations, which has to be made known to the employees of the undertaking by being posted up on the notice boards.
Where several undertakings run welfare schemes on a joint basis,
the works committees of these undertakings must constitute an
inter-works committee consisting of a representative of the heads
of undertakings concerned, acting as chairman, and two delegates
from each of the committees.
In Belgium, the works committee is entrusted with the management of all welfare schemes organised by the undertaking for
employees, unless the schemes are independently administered by
the employees themselves.
In the Netherlands, the works committee takes part in the
management of the social institutions of the undertaking when the
administration of such institutions is not regulated by law or otherwise.
In Austria, the committee may establish and be solely responsible for the administration of provident societies and other funds
for the improvement of the wellbeing of the wage earners and of
their families, or have a share in their administration where such
funds have been instituted by the owner of the undertaking. Similar
rights are accorded to the works committees in the Federal German
Eepublic.
Economic
and financial field. I n t h e economic field
t h e duties of works councils are, in some respects, purely
advisory and, in others, supervisory or executive.
I n t h e first place, works councils generally h a v e t h e right
t o s u b m i t opinions a n d suggestions on all i m p o r t a n t measures
t h a t might affect t h e organisation, m a n a g e m e n t and general
working of t h e concern. French law even specifies t h a t in
this field consultation with t h e works committee shall be
compulsory, b u t this does not give t h e committee power
to resist t h e employer's decisions. I n order t h a t t h e committee m a y give its opinion w i t h full knowledge of t h e facts,
t h e head of t h e u n d e r t a k i n g must supply periodically (every
three m o n t h s u n d e r t h e Belgian law, every year under t h e
Austrian a n d F r e n c h laws) information concerning t h e general
position of t h e u n d e r t a k i n g : n a t u r e a n d volume of production, orders in hand, sales, and plans to improve t h e

CO-OPEBATION IN INDUSTRY

efficiency of the establishment, etc. Austrian law imposes
this obligation only on establishments in which more than
30 persons are employed. Under French law, the committee must also be informed about profits and may suggest
how they should be used ; it may also express opinions on
price increases and may be consulted by the public authorities
responsible for fixing and controlling prices.
In Belgium, works councils may also submit opinions or
reports recording the view of their members on all economic
questions within their terms of reference which have been
submitted to them by the industrial council for the branch
of industry to which the undertaking belongs or by the Central
Economic Council.
If their suggestions are not adopted, the works councils
may sometimes apply to agencies outside the undertaking
in order to have their views considered further. Thus, in
Austria, in undertakings employing more than 500 persons,
the works council may, if it comes to the conclusion that the
economic policy followed by the undertaking is contrary to
the general economic interest, decide, by a two thirds majority,
to lodge a protest with the Austrian Federation of Trade
Unions. This protest is then submitted for decision to a
tripartite State economic commission at the Federal Ministry
for the Protection of Property and Economic Planning. In
the Federal German Eepublic, the legislation of most of the
Lander provides, in the event of disagreement between the
employer and the works council, for decision by an arbitration court whose award takes the place of an agreement
between the parties and is binding upon them. The proposed law of the Federal Government provides for the establishment, in undertakings employing more than 100 persons,
of joint " economic committees ", the workers' representatives
on these committees being nominated by the works council.
These committees would be advisory and the employer would
have to supply them with information of various kinds (including the annual balance sheet and the profit and loss account).
In the event of disagreement in the committee, either party
could have recourse to a joint committee of experts, which
would simply have to decide whether the employer had
neglected the manifest interests of the undertaking. The
employer would remain free to act as he intended but, should
he subsequently wish to reduce staff, he would not be able

CO-OPEKATION IN THE UNDERTAKING

to claim that this was necessary owing to the situation of the
undertaking.
In Finland, the works council may, if the management
has not taken notice of its suggestions, appeal to the occupational organisations concerned or to the Minister for Social
Affairs.
The regulations sometimes provide that the head of the
undertaking must supply the works council with various
reports and accounts showing the financial results of the
undertaking, that is to say, in general, a copy of the balance
sheet and of the profit and loss account. These documents
are normally supplied at the end of the financial year and the
head of the undertaking must give any necessary explanations. Belgian legislation provides that, if the members
appointed to the works council by the workers so request,
these documents shall be certified as correct and complete
by a works auditor, whose rights and duties are similar,
pending the enactment of a special law to define their status,
to those of the auditors of limited companies. According to
French law, the communication of such documents is compulsory only if the undertaking is a limited company ; the
committee then examines the documents before the general
meeting of shareholders and may call upon the auditors to
attend in order to explain various items and the financial
situation of the undertaking, and may make any relevant
observations which must be laid before the general meeting
of shareholders together with the report of the board of directors. During the meeting at which it examines the documents, the committee may have the assistance of a qualified
accountant, at the expense of the undertaking. 1
In Finland, according to an opinion of the Chancellor of
Justice given in 1947, the works committee has no right to
examine the accounts of the undertaking.
Austrian and French laws confer on the works committees of fimited companies the right to delegate two of their
members to the boards of directors ; in France, these delegates
attend only in an advisory capacity ; in Austria, they have
the same rights and obligations as other members of the board
1
Only in the case of limited companies : this, at least, is the opinion
which has been generally held following a decision of the Criminal Division
of the High Court of Justice (Cour de Gassation)—Crim. 23 Dec. 1948—
D.1949, J.83 and S.1949, 1.54.

CO-OPERATION IN INDUSTRY

of directors. The Bill submitted by the Government of
the Federal German Eepublic provides that one third of the
members of the board of directors shall be designated by the
workers in the undertaking. In the coal mining and iron
and steel industries the claim of the workers to nothing less
than co-management has been recognised. x
In France, the workers also have several representatives
with full voting powers on the boards of directors of nationalised undertakings. 2
Operation.
The regulations all contain a number of more or less comprehensive provisions intended to ensure the proper functioning of works committees. Some of these provisions concern
the methods of operation of the committees ; others lay
certain specific obligations on the employer or the representatives of the staff ; others, again, are intended to give
special protection to the staff representatives.
Organisation of meetings. Legislation generally provides
that the works committee shall meet normally at regular
intervals—once a month, for example, in Belgium and France.
In France central works committee meetings are held at least
once every six months at the head office of the undertaking.
The employer or his representative generally acts as chairman. In Finland, however, the cliairman is elected by the
committee and chosen alternately, each year, from among
the representatives of management and those of the staff.
A secretary is generally elected by the committee from among
the members representing the staff.
The regulations sometimes contain provisions concerning
the agenda, discussions, minutes., the communication of
committee decisions to the staff, the transmission of minutes
and decisions to the authorities, etc. These points are
usually covered in the works committee's own rules. This
is so in France where the legislation provides that each committee shall draw up its own rules. In some other countries,
for instance Belgium, there is no legal provision for this.
1
2

See p. 55.
Labour- Management Go-operation in France, op. cit., p. 130.

CO-OPEEATION IN THE UNDERTAKING

Specialised subcommittees. In order to perform its duties
efficiently, the works committee is often empowered by legislation to form a number of specialised subcommittees. Thus,
in France, it may appoint subcommittees for the investigation of special problems (occupational, social, educational,
etc.) and co-opt to these subcommittees experts and technicians belonging to the undertaking but not to the committee.
Such persons attend the meetings in an advisory capacity and
are bound to professional secrecy. The subcommittees report
on their activities to the works committee.
In Belgium, the law provides that the committee may
be subdivided into works sections.
The safety committees which existed in some countries
prior to the institution of works committees have, in many
cases, been attached to the works committees as special subcommittees. This is so, for example, in France, since the
Act of 1 August 1947. Subject to certain conditions, it has
also happened in Belgium.
Elsewhere, as in Finland, where the safety committees
are voluntary organisations, they have remained but they
operate in close touch with the production committees.
Go-ordination and supervision. In several countries, legislation has provided for the establishment at the national level
of a joint or tripartite commission with the duty of supervising the general operation of works committees and of
advising them how to direct their activities. This is so, for
instance, in Finland and in France, where the Higher Commission for Works Committees is responsible for supervising
the application of the Ordinance by which they were instituted,
of contributing by its advice towards the settlement of difficulties that the committees might raise and, in general, of
studying all measures which are likely to ensure the effective
operation of the works committees.
In thé Netherlands, the Economic and Social Council
exercises general supervision over the enforcement of the
relevant Act, and industrial commissions instituted by the
Economic and Social Council for groups of particular undertakings supervise the operation of the works councils. The
members of the industrial commissions are appointed by the
Economic and Social Council on nomination by the representative organisations of employers and workers.

CO-OPERATION IN INDUSTRY

Further, legislation often provides for the appointment
of officials to supervise the application of the regulations.
Thus, in Belgium, officials appointed by the Crown have free
access to establishments and may demand all necessary
information for supervising the application of the regulations.
At the request of the works council, they may also attend
its meetings in an advisory capacity. In France, labour
inspectors are given comprehensive supervisory powers and,
in some cases, power to arbitrate in matters concerning the
application of the legislation.
In Finland, the production committees report yearly on
their activities to the Minister for Social Affairs.
Supervision is generally reinforced by sanctions. Belgian
and French legislation, for example, imposes a civil liability
and penal sanctions in the event of contraventions or in that
of deliberate obstruction.
Obligations of the employer. Generally speaking, not only
must the employer abstain from any act likely to obstruct
the committee but he must also do all he can to make the
committee's work easy. First, he must provide the committee
with various material necessities (premises, heating, lighting,
etc. ) ; the employer, moreover, . is usually hable for the
committee's general expenses ; in Austria, however, a
works council contribution not exceeding one half of one
per cent, of the gross earnings may be levied on the
employees.
Further, the management must allow the members of the
works committee time to perform their duties (apart from
exceptional circumstances, not more than 20 hours per month
in France, excluding attendance at meetings) and must pay
them for time spent in attending meetings held outside working hours.
It is generally for the head of the undertaking to convene
the works committee (except where, as in the Federal German
Bepublic and in Austria, the committee is not a joint body).
In Belgium, the employer must convene the council when
at least hah0 of the members representing the employees so
demand. In France, if he fails to convene the committee,
the latter may, at the request of half of its members, be convened by, and meet under the chairmanship of the labour
inspector.

CO-OPERATION IN THE UNDERTAKING

A further obligation on the part of the employer is, as
already noted, to make available to the committee all the
information it requires to perform its duties.
Obligations of committee members. The various regulations also impose certain obligations on committee members,
who, acting as intermediaries between the employer and his
staff, have duties to both.
It generally follows, if not from the actual text of the
relevant legislation at least from work preparatory to the
enactment, that members of the committee must respect
the authority of the head of the undertaking and his decisions,
unless these decisions violate a right which is clearly accorded
to the committee by legislation. Netherlands legislation,
for example, stipulates that the works council must perform
its functions " without prejudice to the independent nature
of the employer's role ". They must also respect the rules
of the undertaking. Thus in Finland, the Chancellor of Justice
gave it as his opinion, in 1947, that a member of the committee has no right, unless the committee so demands, to enter
during working hours a department of the undertaking to
which he does not normally have access by reason of his
employment.
Being in a position of trust, members of the committees
are also, under most regulations, bound to professional secrecy;
they have no right to divulge or to make use of information
of a technical or economic character which has been communicated to them by virtue of their office and which is a
professional or commercial secret (Finland, France). But
French legislation confines professional secrecy to questions
relating to manufacturing processes.
The committees must also maintain contact with the staff
whom it is their duty to represent. Accordingly, reference
is made in many of the regulations to such points as the
publicity which they must give to their activities and the
account of their activities which they must furnish at regular
intervals to the general meeting of the staff (in Germany, for
example).
Protection of members. Most of the regulations provide
that members of the committees shall have special protection
against any discriminatory measures on the part of the
employer, and, particularly, against dismissal on the ground

CO-OPBEATION IN INDUSTRY

of their activities as staff representatives. Thus, in Austria,
the previous consent of a conciliation board is necessary for
the dismissal, with or without notice, of a member of a works
committee, and this consent may be given only in certain
cases specified by law ; in Finland, the members of the committee may not be dismissed except on particularly justifiable
grounds, of which the works committee must be informed
if it so requests ; the legislation of most of the Lander of
the Federal German Eepublic also provides that the previous
consent of the works council is required for the dismissal of
a member of the council ; this consent is also necessary in
France—in the event of disagreement, the decision rests with
the labour inspector, but, if the member of the committee
has been guilty of serious misconduct, the employer may
dismiss him forthwith pending the decision of the labour
inspector. Should the head of the undertaking dismiss a
member in spite of the views of the committee and of the labour
inspector, the matter may be brought before the courts for
decision.
In Belgium, a committee member may not be dismissed
except on serious grounds justifying immediate dismissal or,
since the Act of 18 March 1950, on economic and technical
grounds previously recognised by the competent joint commission. The Act was also intended to protect workers
whose names appear on lists of candidates. Thus, from two
weeks before the date of the elections is posted until two
years after the posting of the election results, a worker who
has stood as a candidate may not be dismissed except on
grounds which would permit of a representative of the staff
being dismissed. The Act provides that dismissal may be
justified on economic and technical grounds only after the
results of the elections have been posted. The Act is
retroactive and heads of undertakings have been obliged to
reinstate workers who have been dismissed contrary to those
provisions, where such workers have demanded reinstatement,
and to pay them an indemnity equal to the amount of remuneration which they would have had to pay to them. In
the event of reinstatement being refused, the Act makes the
heads of undertakings liable for compensation of various
kinds besides any damages which may be claimed for material
and moral loss suffered.

CO-OPEBATION IN THE UNDERTAKING

Practical Application of the Legislation
I n Austria, the Ministry of Labour considers that the legislation concerning works committees has contributed to social
peace and economic development. In Luxembourg, also,
the results are regarded as satisfactory.
In Finland, where there are some 800 committees, of which
almost half are in the wood industries, machine shops and
textiles, some criticisms have been voiced, but on the whole
the results obtained have given satisfaction ; this is confirmed,
moreover, by the fact that the parties concerned have agreed
in wishing to see the production committees maintained—they
were set up only on a provisional basis in 1946—and that the
Act of 1949 was adopted unanimously by Parliament. The
employers say that the cases in which politics have crept
into the activities of the committees have been exceptional,
that the best results have been obtained in matters affecting
the wellbeing of the staffs and that, while the committees
have not always been able to introduce improvements of a
purely technical character, their proposals for improving
discipline in workplaces have had considerable effect in increasing production.
In Belgium, the application of the relevant legislation
is still only in the initial stage. In August 1950, the Minister
of Labour declared that works councils had already been
instituted in 678 establishments (not including the construction and brick-making industries). Moreover, the legislation
is still incomplete, as the regulations provided for in the Act
of 1948 concerning the form of presentation of accounts
and works auditors have not so far been promulgated. The
workers' trade union organisations have protested at the delay
on several occasions.
The central organisations of employers and workers have
made a great effort to supply their members with commentaries on the legislation concerning works councils and with
all necessary guidance in its practical application. 1
The Federation of Belgian Industries has also recommended to heads of undertakings that they should assume in
the works councils the " prominent position accorded to them
1
See, for instance, the studies which h a r e appeared in Problèmes, the
monthly review of the F.Gr.T.B., in Clartés syndicales, the monthly review
of the C.S.C., and Les conseils d'entreprise, op. cit.

CO-OPERATION IN INDUSTRY

by law "—otherwise " they may be regarded as responsible
if the councils pursue objects other than those for which they
are set up " 1) and has given them the following general
directives :
Ensure that authority and the power to take decisions are
retained in the hands of those who have responsibility ; stress the
spirit of co-operation postulated by legislation ; let your own wilhngness to co-operate be an example ; take your measures with obvious2
prudence and act in a broad-minded and constructive social spirit.
The pamphlet also draws the attention of the heads of
undertakings to the need not to " short-circuit the supervisory
staff " and shows how the works council must maintain contact with the staff as a whole. Finally, it emphasises that
the part which the works council has to play is one of co-operation and that it should not be an agency for the submission
of demands.
In this connection, the representatives of the workers
often point out that the position is not without its complications. On the one hand, the trade union delegations
have often had, directly or indirectly, to co-operate with
employers.
If one examines the activities of a trade union delegation in a
fairly important factory over a number of years, it is seen immediately
that no field concerning the workers has been excluded from their
activities and that it is an over-simplification to state that the
mission of a trade union delegation Ì3 confined to the presentation
of demands.
On the other hand, they declare—
. . . to the co-management, social and technical and financial
duties of the works committee, there is very soon added... a duty
to formulate demands. Is it possible to imagine the workers
co-operating in the life of the undertaking on a one-way basis,
that is to say, by making suggestions or accepting proposals of
the employers with a view to improving productivity, for example,
without laying down certain conditions ? . . . As a matter of legal
theory there is no question that they should act in this way, but if
the employers wish the works councils to be real agencies for
co-operation, they will admit that this co-operation must benefit
the workers as well as the undertaking itself... No-one must be
a catspaw under a régime of co-operation. This indirect duty to
formulate demands—extra-legally—of the delegation to the works
council should be accepted and even desired by the employers.
1
2

Les conseils d'entreprise, op. cit., p. 5.
Ibid., p . 53.

CO-OPEEÂTION IN THE UNDERTAKING

Moreover the persons who form part of the trade union
delegations are often members of the works councils as well,
but it nevertheless appears that in most cases in which this
problem arises—and this is so not only in Belgium but in other
countries, such as France—the parties concerned have realised
that the institution of works councils must be viewed in a
different perspective from that of the trade union delegations
or staff delegates, and that, while the representatives of the
workers on the works councils certainly cannot disregard the
interests of their constituents, the works council is nevertheless
not the appropriate forum for examining individual complaints.
Since the Belgian Act concerning works councils came into
force attention has dwelt mainly on procedural questions
and methods of operation.
Belgian legislation did not deal with the question of
standing orders for works councils. The trade union organisations have prepared model rules 1, but the employers have
generally refused to discuss these drafts in the works councils,
as they did not agree even with the principle of adopting
such rules. They declared that—
. . . the rules will not change the mentality of the parties concerned ; on the contrary, they cannot fail to aggravate points of
dispute. The primary condition of successful operation for works
councils is the mutual goodwill of the parties concerned.
The Federation of Belgian Industries states—
. . . it is for each individual works council, having regard to the
characteristics of the undertaking in which it operates, to adopt
voluntarily certain regulations,
of a very simple kind, to enable it
to function normally.2
Another question with which the Act does not deal is
how the works council shall take decisions. What is to happen
if it is impossible to reach agreement ? The employers' organisations consider that unanimous decisions should be the rule.
The workers' trade union organisations, on the other hand,
consider that such a rule would make the council ineffective.
Unless it is desired to paralyse the council, the council's rules
must (since legislation has made no provision) say how valid decisions
shall be taken and whether these decisions shall be opinions binding
x
T h e F.G.T.B. has prepared two separate drafts for use according
to whether more or less than 1,000 workers are employed in the undertaking.
2
The question of the rules of works councils has been the subject of
discussion in the General Joint Council.

CO-OPERATION IN INDUSTRY

only the council or decisions binding third parties. To give the head
of the undertaking a right of veto would deprive the council of its
character as an organ of the undertaking. 1
I n F r a n c e , works committees were set u p more t h a n five
years ago. I t is estimated t h a t t h e n u m b e r of committees
actually operating a m o u n t s t o some 10,000—2,000 in t h e
m e t a l trades alone—whereas t h e n u m b e r of establishments
covered b y t h e regulations would b e a b o u t 15,000.
The
activities of these councils are beginning to be t h e subject
of comprehensive studies. I t is nevertheless difficult to form
a general appreciation of their results. I n fact—
. . . they vary considerably from one undertaking to another
and are dependent, partly, on the driving force of the members
of the committee and, partly, on the spirit in which the employers
approach the development of these institutions.
According as circumstances permit and according to the interest
shown by members of the committees, either they concentrate more
on economic and technical problems, improvement of production,
and improvement of working conditions or, on the other hand,
they devote most of their efforts to social activities, the development of social institutions, the improvement of wellbeing.
I t seldom happens that both these sets of problems are given
prominence and that one may find in any one undertaking an
example of achievements in the two fields being attained by a single
committee. 2
The councils fall into several groups.
Some of them exist only in name : elections are held regularly ;
a secretary has been appointed ; the actual meetings are held regularly, but no important question is dealt with at those meetings
and the minutes are a record of discussions which are devoid of
interest and ineffective.
Others merely duplicate and supplement the activities of the
staff delegates and mainly raise problems in the form of demands,
without contemplating any constructive solution. The discussions
are devoted to trifling disputes or to the examination of individual
cases. This leads to tension between the chairman and the members
of the committee which cannot fail to produce a result contrary
to that which the legislator sought to attain.
On the other hand, the majority of the committees genuinely
participate in the life of the undertaking and endeavour not only
to improve the living conditions of the staff but to take an interest,
also, in production and in the general running of the undertaking. 8
1

See Clartés syndicales, Apr.-May 1950. The Confederation of Christian
Trade Unions considers that, according to circumstances, decisions should
be taken by absolute majority, by simple majority, or unanimously, but
always by secret ballot.
2
O. EAFFALOVICH : " Les comités d'entreprise en France ", in Bévue du
Travail, May 1949, p. 388.
3
Ibid., pp. 391-392.

CO-OPERATION IN THE UNDERTAKING

In the economic field, although the legislation provides
that the committee must be consulted on questions concerning
the organisation, management and general running of the
undertaking, it would appear, from an enquiry undertaken
in 1947 by the divisional labour and manpower inspection
services 1 , that employers are for the most part content
merely to give their works committees a general idea of these
matters without going into greater detail. They only provide
fuller information when, for economic reasons, reduction of
staff is contemplated on a large scale. Difficulties often arise
when members of the committee consider that they should
not only be kept informed but consulted before any decisions
are taken and when they ask for full and precise information.
However, there are committees which have played a
relatively important part in this field, especially in the case
of very large undertakings, where the members are chosen
from a very large staff and often show much judgment.
In general, employers are readier to recognise the prerogatives of the committees in the purely technical field and
the labour inspectors' reports state that the employers sometimes have reason to be satisfied with the solutions proposed
by the technical study groups set up by the committees
(committees or sections on planning, job analysis, piece work,
time studies, etc.) and with the suggestions made concerning
the organisation of production (elimination of absenteeism
and waste, reduction of general costs, economies in raw
materials, etc.). More than once, suggestions of this kind
have yielded substantial results, and some of the changes
proposed have led to a considerable saving of time in production.
The authors of such suggestions have often been
rewarded.
In some cases the committees have approached the Government services concerned in order to obtain an allocation of
raw materials or to extend sales, thus preventing the closing
down of the factory or the reduction of its activities.
Although some interesting measures have been taken as
regards the appropriation of profits, there is generally an
atmosphere of distrust about the examination of the financial
results of working. The employers are always suspicious
about the committees' enquiries into the question of costs,
1

See International Labour Beview,Vol. LIX, No. 2, Feb. 1949, pp. 192-200.

CO-OPERATION IN INDUSTRY

especially as the members very often approach this question
in a spirit of systematic criticism which does not conduce
to the improvement of relations between employers and
employees.
All the divisional labour inspectors agree that it is in the
social field that the works committees have best fulfilled the
mission assigned to them. There are many instances of improvement in the wellbeing of wage earners (canteens, consumers'
co-operatives, holiday homes, organisation of housing, etc.),
the utilisation of workers' spare time (athletic, cultural and
educational activities), and in the arrangement of workplaces.
But difficulties have sometimes arisen about the use of funds
marked for social services. The committees have fairly frequently investigated the systems of output bonuses and
group bonuses adopted by the employer. In other cases, they
have tried to have bonuses paid for technical ability, regular
work, work in unhealthy conditions, etc.
However, various factors—partly omissions and lack of
clarity in legislation but more often the attitude of the parties
—have prevented the works committees from operating as
successfully as was expected.
Thus, in the economic field, performance of the duties
assigned to committees " is often hampered by inadequate
definition of the circumstances in which the committees'
powers may be exercised ". 1 This is illustrated by differences
of opinion as to whether the right of the works committee to
call in a qualified accountant held good in all undertakings or
only in limited companies. In the end the more restrictive
interpretation prevailed, but uncertainty about such matters
obviously makes for discord.
The day-to-day behaviour of those concerned is naturally
influenced by their general attitude towards the institution
of works councils and what they believe the ultimate purposes
of the councils to be.
On the employer's side there are some people who—
. . . often show reluctance about genuine implementation of a
social reform which they have not yet fully accepted and, while
they carry out correctly the obligations imposed upon them by law,
they do not always endeavour, by interpreting the relevant texts
in a liberal spirit, to allow the full development on a broader basis
1

K A F F A L O V I C H , op.

cit.,

392.

00-OPERATION IN THE UNDERTAKING

of real co-operation in order to seek, with the aid of their wage
earners, a genuine improvement in conditions of work and production and equitable solutions for the various difficulties which may
arise in the undertaking.1
But, the activities of these committees—
. . . depend to a considerable degree on the employer himself.
The results achieved are very different according to whether or not
the employer knows how to utilise an institution which has its
dangers but also its advantages. Even among industrialists who
have difficulties with the committees there are those who recognise
that the committees permit of useful exchanges of views.2
As to the wage earners, they have often shown some
degree of indifference " towards an institution which has
not always brought them the concrete results which they
desired ". 1 In the small undertakings, it would appear that the
workers have very little interest in the committees. Quite often
it has been difficult to find candidates not only in the small
undertakings but—
. . . in undertakings employing a labour force which is not
highly skilled and is insufficiently developed from the trade union
point of view and in undertakings in which the workplaces are
scattered and the labour turnover is high ; these circumstances
are unfavourable to the satisfactory functioning of the committees.1
Moreover, a fairly high percentage of the workers do not
vote at the elections.
Recent statistics covering several hundred committees and several
hundreds of thousands of workers in the metal trades have revealed
that an average of 30 per cent, refrain from voting.2
Another difficulty arises through the insufficient training
of the members :
An effort has been made to provide education for the workers
through the workers' education centres set up by the various trade
union organisations and which have been subsidised by the Ministry
of Labour. But the measures taken in this direction are still quite
inadequate and cover only a limited number of members of works
committees.3
1

Idem, p. 391.
Pierre WALINE : " Les relations entre employeurs et salariés dans la
France d'aujourd'hui ", in Journal des Associations patronales suisses, 11 and
25 Aug. 1950.
2

KAFFALOVICH, op. cit.,

399.

CO-OPERATION IN INDUSTRY

In spite of the difficulties or obstacles encountered in
operating works committees in France, in spite of the reservations which are expressed with regard to their activities in
certain cases and in certain circles, in spite of the disappointments which they have sometimes occasioned, there still
appear to be a considerable number of persons who are prepared to recognise that the majority of them " have already
done useful work, often by finding effective solutions, and,
in other cases, by bringing forward the problems which it is
important to solve". 1
T H E PRACTICE IN OTHER COUNTRIES

A number of other countries also have legislation concerning
co-operation between employers and workers at the level of
the undertaking.
In Bolivia, an Act of 14 July 1950 2 provides for the creation
of joint works councils at the request of a majority of the
workers in every industrial or commercial undertaking
employing more than 25 workers over 18 years of age. The
councils are agencies for co-operation, consultation and information to assist the undertaking and the workers. Their object
is to ensure effective co-operation between employers and
workers, to increase production and reduce costs, without
prejudice to the employer's right to direct the undertaking
or the workers' right to negotiate collective agreements.
Their terms of reference with regard to social affairs are
wide. They are responsible for the vocational training of
workers, the training of apprentices, the granting of scholarships to workers' children and of bonuses to exceptionally
good workers. They also act as production committees in the
technical field.
They have the right to receive considerable information
about economic and financial matters. In return, they are
bound to secrecy in respect of this information and the
employer has, in addition, the right not to show them documents whose disclosure might be prejudicial to the undertaking.
Each council is composed of four members : two workers'
representatives, one representative of the technical and com1

RAFFALOVICH, op. cit., p.

See Industry and Labour, Vol. IV, No. 10, 15 Nov. 1950, p. 402.

393.

CO-OPEEATION IN THE UNDERTAKING

mereiai staff who are not represented by any workers' organisations, and one representative of the employer, the latter acting
as chairman.
I n undertakings where the workers and employees are
organised in trade unions, the workers' delegates are elected
by them, after being nominated by the trade union, by secret
ballot and a two thirds majority. Should an undertaking
employ both workers organised in trade unions and nonorganised workers, each of these groups is to be represented
by a delegate. A leader of a trade union may not at the same
time be a member of a works council.
The representatives of the staff are elected for two years.
Their services may be terminated at the request of the respective trade union or group by which they were elected, subject
to such termination's being approved at a general assembly by
secret ballot.
The proceedings of the council are communicated to the
trade union of the undertaking or to a meeting of workers
and employees, whenever the nature of the matter under
consideration makes it necessary to do so.
Finally, the Act provides for the setting up of a central
co-ordinating council under the chairmanship of the Minister
of Labour and composed on a tripartite basis to co-ordinate
the activities of the works councils and to mediate in any
disputes which may arise in the councils. The works councils
are to submit to the central council any reports which the
latter may see fit to ask of them.
Following the publication of this Act, the National Chamber
of Industry addressed a memorandum to the President of the
Bepublic, informing him of their express reservations with
regard to the intervention of the works councils in economic
and financial matters. I t would appear that no works council
has so far been created.
Provisions concerning works committees are also contained
in the Indian Industrial Disputes Act of 17 March 1947.x
This Act is at present in force in both India and Pakistan.
According to the industries concerned, it calls upon the Central
Government or the provincial or State Governments to require
works committees to be set up in all industrial undertakings
in which at least 100 persons are employed.
1

L.8.,

1947—Ind. 1.

CO-OPEEATION IN INDUSTRY

It is the duty of the committees to promote measures
for securing good relations between the employer and his
workers and, to that end, to discuss matters of common
interest and to endeavour to compose any material differences
of opinion in respect of such matters.
The Industrial Disputes (Central) Eules, 1947, promulgated
by the Central Government and Part V of which deals with
works committees, limits the membership of the committees
to 20 and provides that the number of members shall be so
fixed as to afford representation to the various categories of
workers engaged in the undertaking and to the various
sections, shops or departments. The number of representatives of the workers must not be less than the number
of the employer's representatives. The employer nominates his
representatives ; the workers' representatives are elected
in consultation with the trade unions. The trade union is to
inform the employer of the number of workers who are members of the union and how the membership is distributed among
the different shops, sections and departments of the establishment. The workers are divided into two electoral groups,
one consisting of trade union members and the other of nonmembers, unless more than half of the workers belong to the
union, in which case no such division has to be made. The
number of workers elected by each group must be proportional to the respective numbers of workers in the undertaking who are trade union members or who are not organised.
If he thinks fit, the employer may subdivide the two constituencies and direct that the workers shall vote in each by
groups, sections, shops or departments.
Any workman not less than 19 years of age and who has
served not less than one year in the undertaking may be
nominated as a candidate, and any workman who is not less
than 18 years of age and has served, not less than six months
in the undertaking is entitled to vote. The employer regulates
the election procedure. If the number of candidates who
have been nominated is equal to the number of seats, they
are declared elected. Otherwise, a vote must be taken.
The works committee must elect its officers, including
a chairman representing the employer, a vice-chairman
representing the workers and two secretaries respectively
representing the employers and workers. The regular term
of office of the workers' representatives is two years and

CO-OPERATION IN THE UNDERTAKING

the office becomes vacant if the worker ceases to belong to
the undertaking or resigns from the committee.
The committee meets as often as necessary but not less
than once a month. The employer must provide accommodation for holding meetings together with all necessary
facilities. The committee has the right to co-opt in a consultative capacity persons employed in the establishment
having particular or special knowledge of any matter under
discussion.
Some of the Indian States, including Madras, Bihar and
Assam, have adopted Eules concerning works committees
applicable in their respective territories. Also, in a number
of cases there are State Industrial Eelations Acts which
sometimes include provisions concerning works committees.
Thus, under the Bombay Industrial Disputes Act, 1946 *,
joint committees may be established in any undertaking with
the consent of the employer and the registered union. Such
committee may not be established if there is no representative
union unless at least 15 per cent, of the employees in the
establishment are members of a registered union.
The decisions taken by the committee must be communicated within 48 hours to the trade union, the employer
and other specified authorities. In the absence of authority
delegated to the committee by both the employer and the union
whereby the decision of the committee becomes final, the
decision must be approved by the respective parties. If
the decision is approved, an agreement is signed and registered ; but if no agreement is reached within seven days from
receipt of the decision, either party may have the matter
entered as an industrial dispute and initiate conciliation proceedings or invoke the services of a labour court.
There are at present more than 300 committees in the
undertakings comprised in the " central sphere ", and 574
in the States of Bombay, Bihar, Madras and Punjab. At the
9th Session of the Conference of Ministers of Labour (Patna,
19-20 January 1951), it was emphasised that, even if the
works committees had not yielded such encouraging results
as had been hoped, they had contributed towards the promotion of better relations between employers and workers.
1
See International
p p . 67-74.

Labour

Review,

Vol. L V I I , N o s . 1-2, J a n . - F e b . 1948,

CO-OPEBATION IN INDUSTRY

In the Associated States of Indo-China, a Decree dated
24 July 1947 provides that works committees may be set up
in undertakings with more than 100 employees, by adapting
to local conditions the provisions of the Ordinance of 22 February 1945 which instituted such committees in France. 1
In Iran, the Labour Law of 1946 provided for the establishment in each industrial undertaking of a tripartite factory council (one representative of workers, one representative
of the employer and one representative of the Ministry of
Labour). The workers' representative must be nominated
by the trade union if a majority of the workers were members
of such union ; otherwise, he was to be chosen by the workers
themselves by means of a vote organised under the supervision of the representative of the Ministry of Labour.
This Law was followed by regulations for the application
of the Law issued in August 1946, under which the factory
councils had to investigate individual or collective labour
disputes, to exercise supervision over the operation of the
assistance fund organised under the Labour Law, to promote
good relations between workers and employers and to endeavour to increase output and production in the undertaking.
The formation of factory councils was made compulsory
in undertakings employing more than twenty workers ; in
smaller undertakings it was left to the Ministry of Labour
to decide whether they should be set up.
Under the revised Labour Law, which was approved in
June 1949 and came into force in January 1950, the provisions
relating to factory councils are replaced by a chapter which
provides that all disputes between one or a number of workers
and their employer shall first be referred to a conciliation board
in the undertaking (in fact, the factory council) consisting of
representatives of the workers and representatives of the
employer. The board must examine the question and endeavour to promote a settlement between the two parties. Hitherto
however, no change has been made to the regulations issued
in 1946 and only^a short time ago the factory councils were
continuing to function according to the procedure originally
laid down.
Factory councils are to be found where the Anglo-Iranian
Oil Company carries on its operations, that is to say, at Abadan
1

L.S.,

1947—Fr. 1.

CO-OPEKATION IN THE UNDERTAKING

and in the oilfields. They also exist in various other industries
—textiles, tobacco, cement, railways, etc.—but they are not
very numerous, as industrial activity in Iran is not on a large
scale. Their main task would appear to be, above all, to
manage the assistance funds and to investigate labour disputes.
It is not possible to say whether the councils have as yet
actively performed those of their functions which deal with the
development of production, output and the study of various
other aspects of the economy. 1
In the People's Eepublic of China, in execution of the
" common programme " adopted by the Chinese People's
Political Consultative Council in September 1949 2, the Trade
Union Law, promulgated on 29 June 1950, stipulates that the
trade unions constituted according to its provisions have
the right to participate in the management of nationalised
and co-operative undertakings and to be represented on the
consultative councils formed by representatives of the workers
and of management which are instituted in private undertakings. 3 Detailed directives concerning the establishment
of these councils in private undertakings have been issued by
the Ministry of Labour. 4
According to these directives, labour-capital consultative
councils may be organised, when both parties agree, in private
undertakings employing more than 50 persons, in order to
facilitate consultation on matters relating to the improvement
of production and business and the treatment of workers.
The owner of the undertaking or the manager appointed by
him, the superintendent of the factory and the chairman of
the trade union serve as ex officio members of the council.
The parties themselves decide the number of delegates each
will have, but generally it is considered desirable for each party
to have from two to six delegates. As a rule, the delegates
should be permanently appointed but the parties have the
right to change them whenever they consider it necessary.
The chairmanship is held in rotation by the delegates of labour
and capital.
As is clear from their title, the councils are purely consultative ; they are not responsible for the management of the
1
See International Labour Office, Studies and Reports, N.S. 24 : Labour
Conditions
in the Oil Industry in Iran (Geneva, 1950), pp. 56-67.
2
Industry and Labour, Vol. I l l , No. 1, 1 Jan. 1950, p . 8.
3
Ibid., Vol. IV, No. 9, 1 Nov. 1950, p. 365.
* Ibid., Vol. IV, No. 11, 1 Dec. 1950, p . 438.

CO-OPERATION IN INDUSTRY

undertaking. Their competence may extend to the following
problems : the signing and enforcement of collective agreements ; increase of production and output ; improvement
of the operation and management of the undertaking ; the
drafting and revision of factory rules and disciplinary measures ;
employment and discharge of employees, promotion and
demotion and other personnel affairs ; wages, working hours
and welfare of the workers ; safety and hygiene ; provision for
sick, wounded or disabled employees, dependants of deceased
employees and, for women employees, during confinement.
The councils hold regular meetings ; as a general rule
the meetings must not be held during working hours.
With respect to matters of day-to-day concern, agreement
may be made with the unanimous consent of the delegates of
both sides. For more important questions, agreement may be
concluded only after the delegates have reported to and
obtained the consent of the employees and persons concerned.
ÏTo agreement can be made in contravention of the Acts and
Orders of the Government or of the provisions of collective
agreements. The revision of a collective agreement, whenever
necessary, is to be carried out in accordance with the procedure
provided for in the agreement itself. Matters on which agreement has been .reached shall be reported by the delegates
to the employees and persons concerned and shall then
be put into effect. In case a dispute arises and a solution
cannot be reached, the matter shall be settled in accordance with the procedures governing the settlement of labour
disputes.
The local bureaux of the Ministry of Labour are required
to call a meeting of the representatives of local labour organisations and industrial and commercial bodies, to confer on
measures for applying the directives of the Ministry of Labour
and to report to the Ministry on the results obtained.
At present it is estimated that more than 5,000 consultative
councils have been set up in private undertakings in eight
particularly important industrial centres and that they have
greatly contributed to the solution of disputes between capital
and labour and to the increase of production.
The directives of the Ministry of Labour do not make the
setting up of consultative councils compulsory. Although
their institution is contemplated in the relevant legislation,
they are set up on a voluntary basis.

CO-OPEBATION IN THE UNDERTAKING

COUNTRIES W I T H A PLANNED ECONOMY

The systems of co-operation at the level of the undertaking in various countries of Central and Eastern Europe,
such as the U.S.S.B., Czechoslovakia, Poland, Hungary, Bulgaria, Eumania or Yugoslavia are sufficiently similar to be
analysed briefly together.
The Development of Worlcs Committees within the
Trade Union Movement
It is the workers' central trade union organisations rather
than legislation which determine the status and functions
of the works committees.
At the present time, works committees, originally conceived
as agencies representing the staffs of undertakings, have been
transformed into primary agencies of the united trade union
movement. The main stages in this development were as
follows.
I n the U.S.S.E. the works committees, which were set
up spontaneously in the month of March 1917, were given
legal status by an Act of 22 April 1917.x This Act provided
for the establishment of workers' committees in private or
public undertakings of every kind, either on the demand of
one tenth of the workers or on the initiative of the administration of the undertaking. The committees could convene
workers' meetings and the undertakings were obHged to make
appropriate premises available to them.
I t was not long before the system of works committees,
which by then had been extended considerably, came to be
integrated in the trade union movement.
The principle of the fusion of the works committees and
the trade union organisation was approved by the Eirst
Russian Trades Union Congress in January 1918 ; this decision
was confirmed by the Second Trades Union Congress (1919),
which adopted the system of " one undertaking, one trade
union ". This meant the organisation in the works union
of all the wage earners whatever their occupation might be.
The works council then acted as a committee of the works
union.
1
See International Labour Office, Studies and Reports, Series A, No. 26 :
The Trade Union Movement in Soviet Russia (Geneva, 1927).

CO-OPEEATION IN INDUSTRY

The system was confirmed by the Soviet Labour Code of
1922 1, which made the works committee the " basic organ
of the industrial union ". Since then, the works committees
have been an integral part of the trade union movement
and have helped to carry out the duties assigned to it.
After the last war, a similar development was noticeable
in other countries of Central and Eastern Europe.
In
Czechoslovakia, the works councils, which had existed since
the first world war as bodies representing the whole of the
staff in undertakings in which at least 30 persons were
employed 2, acquired, by virtue of a Presidential Decree of
24 October 1945 3 , a new legal status, becoming closely
attached to the United Trade Union Organisation. In
fact, the latter had the exclusive right to submit lists of
candidates. By virtue of this Decree, many important
functions in the social and, especially, in the economic field
were conferred on the works councils. An Act of 20 March
1948 integrated the works councils as " basic executive organs "
in the United Trade Union Organisation. 4 According to the
Eules and Eegulations of the Eevolutionary Trade Union
Movement of Czechoslovakia adopted by the Second National
Congress (December 1949), works councils form an integral
part of the committees of the trade union groups in the undertakings. 5
The question then arose whether the legislation concerning
works councils should be repealed or maintained. The
Government adopted the second solution. The reasons
advanced in support of the adoption of this solution were
summed up in a statement made by Mr. A. Zápotocky, President of the Council of Ministers and, at that time, President
of the Central Trade Union Council.
Works councils were and still are today one of the great gains of
our trade union movement... The moment has not yet come when
we should give up those gains... Works councils have become organs
of the United Trade Union Movement and we can say, therefore,
without having recourse to new legislation, that a works council is
at the same time the executive organ of the trade union organisation
1

L.8., 1922, Russ. 1 (1936—Russ. 1).
L.8., 1921 (first part), Cz. 4 ; ibid., 1920—Cz. 3.
3
L.8., 1945—Cz. 1.
4
L.8., 1948—Cz. 2 ; see International Labour Review, Vol. LVIII, No. 1,
July 1948, p. 70.
6
See Industry and Labour, Vol. I l l , No. 8, 15 Apr. 1950, p. 298.
2

CO-OPEBATION IN THE UNDERTAKING

in the undertaking... All the rights which legislation has
conferred
on works councils pass to the trade union organisation.1
Under the Polish Works Councils Acts of 1945 and 1947 2
the councils were from the beginning assimilated to executives
of the works unions. The regulations of the Polish Trade
Union Confederation, adopted in 1949, stipulate expressly
that works councils act as trade union committees. 3
In Hungary, the first works committees were set up spontaneously by the workers at the beginning of 1945 as " organs
of popular action for the resumption of production ".*
I t was not long, however, before the Hungarian Government gave a legal status to these committees, which thus
became agencies authorised to represent the staffs in the
undertakings. From February 1945 until February 1947 no
less than 15 Ordinances have regulated the constitution and
functions of these committees in eight categories of undertakings and institutions. In 1948, the works councils also
were transformed into purely trade union organs responsible
for all trade union activities within the undertaking. 5 Under
the regulations at present governing the functioning of works
committees—
. . . works committees perform their functions in complete
agreement and in close collaboration with the management of the
undertaking. They help management to accomplish its tasks.
Whenever they consider that certain measures taken by management
are prejudicial to the workers or to the good operation of the undertaking, they are obliged to report the matter to the higher trade
union bodies.6
The principle of single trade union committees, as the only
representatives of the workers at the level of the undertaking,
was also applied in Bulgaria, Rumania and Yugoslavia. In
Yugoslavia, however, a new system for the participation of
wage earners in management was introduced, in the summer
of 1950, in the nationalised undertakings.
1
News Bulletin of the Bevolutionary Trade Union Movement of Czechoslovakia, No. 9, Sept. 1949.
2
See L.8., 1945—Pol. 2 ; 1947—Pol. 1.
3
See Industry and Labour, Vol. I l l , No. 4, 15 Feb. 1950, p. 132.
4
Keeord of the Second Plenary Session of the National Trade Union
Council (Budapest, 21 Feb. 1949), p . 60 (Hungarian text).
6
See Industry and Labour, Vol. I, No. 8, 15 Apr. 1949, p . 334.
6
Regulations concerning the functioning of trade union organs in the
undertaking and works committees (Budapest, 1949) (Hungarian text).

CO-OPERATION IN INDUSTKY

Thus, in all the countries which have adopted the system
of a State-directed economy with over-all planning, a single
trade union organ represents the wage earners at the level
of the undertaking. This is important in view of the predominant part played by the higher organs of the workers'
united central organisation in determining the status and the
role of the works committees.
Legal Status of Works Councils
Organisation.
The Soviet Labour Code of 1922 leaves the industrial
unions concerned full freedom to determine the organisation
of works committees, to fix the principles of registration, to
issue rules for elections, to decide the amount of funds necessary to ensure the functioning of works committees, etc. The
budget of the works committee may not, however, exceed
2 per cent, of the total wages paid in the undertaking. Beyond
that, the Code does no more than fix the number of members
of the committee which the management must excuse from
their normal work in order to fulfil committee functions,
namely, one, two, three or five members according as the
number of persons engaged in the undertaking is less than
300, 1,000, or 5,000 or more than 5,000 respectively.
The Czechoslovak and Polish Works Councils Acts state
how many members shall sit on the councils and lay down
certain principles for elections. While Polish legislation
makes it possible for the different groups of wage earners to
present independent lists of candidates, the seats being
allocated according to proportional representation, Czechoslovak legislation gives the trade union organisation the exclusive right to present a single list of candidates. However,
for election this list must obtain a majority of four fifths of
the votes cast ; if it does not, another election must be held
•under the same conditions and, if the list again does not
obtain the necessary majority, the trade union organisation
must appoint a " substitute organ ", which takes the place
of the works committee. In Poland, as well as in Czechoslovakia, legislation gives the trade union organisation the
right to dissolve the works council and to order new elections
where necessary.

CO-OPERATION IN THE UNDERTAKING

The Soviet Labour Code and the Czechoslovak and Polish
legislation forbid the dismissal or transfer of members of the
works council without the consent of the competent trade
union organisation. In Czechoslovakia, this protection is
also guaranteed to ex-members for a period of two years after
the date on which they gave up office.
Functions.
The functions conferred on the works councils by the
various enactments mentioned above include social as well
as economic functions. The Soviet Labour Code, for example,
makes the works committees responsible for representing and
safeguarding the interests of the wage earning and salaried
employees in relation to the management of the undertaking
in respect of matters connected with the employment and
conditions of life of employees and, generally, for representing
the employees before the Government and other public authorities. The works committees must see that the managements
of the undertakings faithfully carry out legislative provisions
concerning the protection of workers, social insurance, payment of wages, hygiene and safety, etc. ; they co-operate
for this purpose with the State authorities concerned with the
protection of workers ; they must also take steps to improve
the social and material situation of wage earning and salaried
employees, co-operate in the regular carrying on of production
in State undertakings and participate in the regulation and
organisation of economic activities through the competent
trade unions.
Under the Czechoslovak Act, works councils must ensure that
the economic activity of the undertaking is carried on in harmony with the public economic interest and in accordance
with the regulations concerning business administration,
while the Polish Act requires the works councils to collaborate with the employer also in matters concerning workers'
supplies.
The Czechoslovak Act further provides that the works
councils shall have the right to take part in the collective
settlement of conditions of employment, in the conclusion of
individual contracts and in the allocation of employees to
different tasks ; they may share in decisions concerning the
engagement of employees (from the point of view of suitability

CO-OPERATION IN INDUSTRY

of character and political reliability) and their dismissal.
Finally, works councils are entitled to take part in the
drawing up and execution of the commercial and production
plan, to supervise its execution and, in general, to supervise
the running of the establishment from the technical, administrative and economic points of view.
To enable the works councils to discharge their duties,
management is bound, under the Czechoslovak legislation, to
keep the council informed on all general questions concerning
the employees, to furnish it regularly with information concerning the general situation of the undertaking, to consult
the works council regarding any economic measures which
depart from the usual methods of administration, and to
provide it with any explanations or information whenever
it so requests. The works council is entitled to propose to
the management of the undertaking measures calculated to
improve the economy and productivity of the undertaking ;
the management is bound to examine these proposals and,
so far as possible, to put them into effect.
In Poland, the employer is obliged to hold a conference
w i t h t h e works council, a t least once a m o n t h , for m u t u a l

consideration of matters concerning the work of the undertaking and, in particular, increasing output, enforcement of
labour discipline, industrial safety and hygiene, new improvements in technique and organisation, etc. In addition,
the management must furnish the council every three months
with a report on the situation of the undertaking.
Works Committees as Part of Trade Union Organisation
As executive bodies of the works unions, the works committees are governed by trade union statutes and the directives of the central bodies of the trade union movement.
Thus, according to the Czechoslovak Trade Union Act of 1946 1,
the Eevolutionary Trade Union Movement in that country
has—
. . . the right to direct the organisational development of the
trade union movement and to issue suitable rules for its organisation
and conduct, and, also, to establish and dissolve its affiliated organisations and to direct their activities.
1

L.8., 1946—Cz. 1.

CO-OPERATION IN THE UNDERTAKING

The trade union legal or statutory regulations in other
countries of Central and Eastern Europe include similar
provisions. In fact, therefore, the establishment of works
councils or committees, their electoral rules and their internal
organisation, as well as all other questions concerning the
functioning of these bodies, are regulated by the central
bodies of the competent unified organisation. The same is
true of the functions assigned to these bodies.
I t may also be observed that, according to the rules and
regulations adopted since the war by the national trade
union movements of the countries with planned economies,
works councils are helped in their task, firstly, by trade union
committees set up in the various shops or sections of the
undertaking and by workers' delegates (in the U.S.S.E.
" group organisers "), each of whom is responsible for a group
of from 20 to 30 trade union members and, secondly, by
specialised committees entrusted with some of the economic
and social duties of the council ; such committees may also
be attached to the shop committees.
Economie Functions of the Works

Unions.

According to the rules and regulations of all the trade
union organisations in countries of Central and Eastern Europe
with planned economies, the essential function of the works
trade union committee consists in ensuring that economie
plans shall be fulfilled, and even exceeded if possible, and in
increasing productivity and efficiency.
Competition among workers. In the first place, the works
committees must organise " competition among the workers ",
which, as is well known, is of outstanding importance in the
system of production adopted in the countries with planned
economies. To a large extent, indeed, reliance is placed on
the committees for the success of the " competition campaigns " organised periodically or as a long-term policy, which
bring into competition not only the workers but also the
undertakings or whole branches of production.
The works union selects the workers who are outstanding
for increased output. The title of " shock worker " granted
to these workers carries with it many advantages, both
material and social. The works committees must discover

CO-OPERATION IN INDUSTRY

" inventors " and " innovators " in the field of production,
encourage their efforts, ensure that they are equitably
rewarded, and take care to see that methods for rationalisation are popularised and put into application to the greatest
possible extent. For instance, during the years in which
the Polish Three-Year Plan was in operation (1947-1949)—a
period during which a strong movement towards rationalisation took place in the industries of that country—economies
to the extent of 1,500 million zloty were realised, thanks to
inventions and suggestions submitted by the workers. During
the same period, awards paid to " rationalisers " amounted
to 42 million zloty. 1
In Czechoslovakia and in Poland, the " invention rights "
of the workers are the subject of legal regulations which
guarantee to the workers rewards proportionate to the economic value of the rationalisation measures proposed and institute a procedure to be followed to ensure that they are
utilised to the best economic advantage. 2
This effort to stimulate the competitive spirit, inventiveness and rationalisation—an aim which is pursued not
only by the trade union but also by the management of the
undertaking and by the organs of the party—would have
little effect as regards increasing over-all production if the
increased output of the shock workers and production innovators did not lead to increased output on the part of the
average worker. To attain this objective the works unions
convene " production meetings ", organise the exchange of
experience, take part in the periodic revision of output
standards and in the drawing up of " counter plans for the
undertaking " and conclude works agreements with the
management.
Production meetings. Production meetings, which bring
together all the workers in the undertaking or shop concerned,
must be convened periodically and whenever the solution of
production problems so requires. The principal daily trade
1
Biuletyn Wynalaznoéci Przemyslu Hutniczego (Warsaw), Nos. 6-7,
June-July 1949.
2
Czechoslovakia : Ordinance of the Minister-President of the National
Planning Onice concerning nationalisation Proposals. SbírJca Zákonú,
No. 49, 21 Aug. 1950.
Poland : Decree of 12 Oct. 1950 respecting the inventive genius of the
. workers. DeienniJc TJstaw, No. 47, 21 Oct. 1950.

CO-OPERATION IN THE TOTDEBTAKING

union newspaper in the TJ.S.S.B. describes these meetings as
follows 1 :
Production meetings have the purely popular and democratic
character of our social order, they develop the creative initiative
of the masses and enrich the knowledge of the workers by the
experience acquired by the pioneers. It is at these meetings that
the workers co-operate in finding a solution for the most difficult
production problems, try to find means whereby the objects of the
plan may be exceeded and modern technical methods may best be
utilised. It is at these meetings that the realistic and revolutionary
self-critical spirit of the masses is developed, it is at these meetings
that concrete means of improving our whole creative endeavours
are determined. By taking part in the meeting, the workers may
make themselves familiar with all the problems which arise in
their workshop, establishment or undertaking, and in undertakings
whose production programmes are related to those of their own
undertakings ; thus, at the same time, the workers broaden their
horizon, even at the national level.
At the production meetings, says Stalin, the workers study the
working plan followed in the undertaking ; they observe its defects
and imperfections and they have the opportunity to remedy them
with the help of the trade unions, the Party and the organs of the
Soviet Government. . . . The immediate conduct of the production
meetings is assured by the trade union organisations for the establishments and undertakings. This is a powerful lever in the hands
of the trade unions in their struggle for the continuous development
of socialistic competition, for the stimulation of the work of the
masses, and for the implementation and surpassing of State economic
plans.
Revision of output standards.
The principal means of
effectively popularising the experience and results obtained
by the shock workers and " innovators " are the campaigns
for " revision of standards ", organised from time to time or
at regular periods when the annual plan for the undertaking
is being prepared. In view of the fact that wages are fixed by
regulations which impose a minimum standard of output
wherever that is possible, the object of the revision of standards
is to explore, on the spot, and if possible by discussion with
all the workers, the possibility of increasing output and,
consequently, of accepting a higher standard of output. In
other words, it is a question of replacing statistical standards
by progressive standards of output or technical standards, in
order to attain or to surpass the ever more ambitious objectives
of the plan. The review of the Polish Planning Office defines
this problem as follows 2 :
1

Trud, 8 Oct. 1950.
Bronislaw MINZ : " Metoda, zadania i zasady planowania ", in Oospodarlca Planowa, No. 1, 1950.
2

100

CO-OPEEATION IN INDUSTEY

The plans must be based on standards established in accordance
with progressive averages of output and not on standards established
in accordance with statistical averages. Statistical standards do not
facilitate increases in productivity because they merely register
mathematically the output figures attained. Plans based on such
standards would be deprived of their essential object, which is to
serve as an instrument for structural reform. Progressive standards
take account of modern technical improvements and of the results
obtained by shock workers and by the most advanced undertakings.
Progressive standards are higher than statistical standards, but
slightly lower than the standards attained by the best undertakings
or by the shock workers who have achieved the best results.
. . . Economic planning, writes Stalin, would not be possible
without the introduction of technical standards. Technical standards,
moreover, are indispensable for stimulating a spirit of willingness
among the less advanced masses to attain a higher level ; technical
standards are an important element in the administration of production, because they make it possible for the general masses to
rally round the advanced elements of the working class.
In Czechoslovakia, a big campaign for the revision of
standards was undertaken during the second half of 1950, in
order to prepare the way for the drawing up of " undertaking
counter-plans " for the year 1951. On this occasion, the
Czechoslovak Government gave all workers who accepted the
new "revised" standards, a guarantee that the standards
would not be altered during the whole of the year 1951.
Thus—
A man who fulfils his output standard 200 per cent, will receive
double wages ; this principle will be applied without limitation
except for cases in which the management of the undertaking may
introduce new production methods
which simplify manufacturing
processes to a substantial degree.1
The conduct of a " campaign for revision of standards "
requires close co-operation between management and the
organs of the trade unions. I n this connection, the directives
published in a Czechoslovak trade union review sum up the
procedure to be adopted as follows 2 :
The revision of standards is the responsibility of the administration of the undertaking, which must make all necessary technical
preparations to ensure its success. With the help of the works
council, the administration must set up committees consisting of the
members of the wages committees, the best employees and shock
1
3

Budujeme (Prague), No. 49, 7 Deo. 1950.
Odboráf (Prague), No. 38, 22 Sept. 1950.

CO-OPERATION IN THE UNDERTAKING

101

workers, foremen and technicians, whose task will be to explore,
in common with the workers in each shop and workplace in the
undertaking, all the possibilities, from the technical and organisational points of view, of improving the work, of reducing the time
taken in the various steps in production and of making the best use
of machines ; they will consider methods of f acilitating the transport
of materials, of eliminating loss of man-hours and of establishing
new output standards by these means. In the course of their work,
the committees must utilise the experience and working methods of
shock workers and innovators. They must pay particular attention
to the case of workers who lag behind with regard both to their
output and to the wages they earn. They must find out the reasons
for this and suggest suitable remedies.
These committees must collaborate very closely with management and the works committee, for it is only in this way that there
can be any certainty that technical defects and imperfections in
the organisation of the work revealed by the revision procedure
will be effectively eliminated.
Another aspect of the problem was clearly put by Mr. Z.
Valouch, Secretary of the Central Council of Czechoslovak
Trade Unions, at a trade union conference :
We must always reiterate and demonstrate by examples that,
by revising standards, we seek to reduce the number of working
hours necessary for the various steps in the production process.
We do not wish to attain this object at the cost of increased physical
effort but by means of a more perfect technique, inventions, rationalisation and improvements in production methods.1
The directives mentioned above go on to say :
A thorough discussion of all the methods used during the revision
of standards in the different shops in the undertaking, a discussion
in which all the wage earners take part, is the first guarantee for the
success of the revision of standards. The official who is responsible
for explaining to the wage earners not only the importance of revising
standards but also the procedure to be followed in doing so must
be aware of all the problems, all the bottlenecks and all the difficulties with which the shop in question has to cope. A plan for the
revision of standards in each shop must be prepared beforehand,
taking into account the experience of the best shock workers and
innovators belonging to the shop in question.
The guarantee of the standards thus laid down and made
effective for a given period is deemed " to give even freer rein
to the initiative of the workers ", tending to increase productivity and labour efficiency.2
1
2

ibid.

See News Bulletin
Czechoslovakia, op. cit.

of the Revolutionary

Trade Union Movement of

102

CO-OPEEATION IN INDUSTRY

The individual standards of output taken together enable
the management of the undertaking to prepare a working
plan which takes into account every possibility of increasing
production or making economies. An optimum production
plan may thus be drawn up which, thanks to suggestions made
and pledges given by the workers, surpasses the expectations
contained in the production plan assigned to the undertaking
under the general economic plan or which provides for lower
production costs. This " counter-plan " of the undertaking
must, in principle, be ratified by the whole body of workers
who have undertaken to contribute to its realisation.
The trade union agencies must obviously use strong arguments in order to persuade all workers in the undertaking to
concentrate on the discovery of untapped " reserves " of
production. The production meetings convened in the various
shops in the undertaking serve most frequently as a forum for
discussions between representatives of management, of the
trade union and the wage earners. 1 To make the workers
understand the objects of the plan is, beyond doubt, the
essential task of the trade unions in the economic field.
In this connection, Mr. Bierut, President of the Polish
Eepublic, has stated :
If every worker in the undertaking knows what tasks are assigned
under the plan, understands them and conscientiously endeavours
to accomplish them, he will also take care to eliminate all waste,
to make full use of existing reserves of production and 2to raise his
own output and also that of his group to a maximum.
Labour contracts. In order that they may be laid down in
precise terms, the reciprocal pledges given by the management
and works union undertaken with a view to increasing production and output are incorporated in collective contracts
or works contracts. In this connection, Mr. Z. Valouch,
Secretary of the Central Council of Czechoslovak Trade
Unions, addressing a conference of district trade union secretaries, declared 3 :
The essential part of the contract is the reciprocal engagement of
the administration and works council stating what measures shall
be taken, and within what periods, to assist the ever-growing
numbers of workers to fulfil and to surpass the new work standards.
1
2
8

See Odboráf, No. 25, 23 June 1950, pp. 846 et seq.
Zwiqzhowiec, No. 33, 13 Aug. 1950.
Budujeme, No. 49, 7 Dec. 1950.

CO-OPERATION IN THE UNDERTAKING

103

The administration of the undertaking must enter into specific
engagements, providing on what dates and on whose responsibility
measures of a technical or organisational character shall be taken to
eliminate the mistakes and defects which have been noted by the
workers during the discussion on the new work standards. Management
must also specify the measures which it promises to take in order to
diminish the incidence of industrial accidents and to improve conditions with regard to sanitation and hygiene in workplaces, changing
rooms, sleeping quarters, etc. The contract must also contain
engagements on the part of management concerning the measures
to be taken in order to ensure an adequate distribution of the labour
force, to organise training and occupational rehabilitation courses,
etc.
The engagements of the works unions must also fix the dates
on which the measures prescribed will be taken and must indicate
the name of the trade union official appointed to assume responsibility for their application. They determine the tasks of the works
council prescribed by the plan relating to the development of new
forms of socialist competition, the setting up of innovators' groups,
shock brigades, and the organisation of conferences and courses in
workers' schools. All the data concerning the revision of output
standards is also an integral part of the contract ; in particular, the
contract must specify the date on which the new work standards,
the introduction of which is prescribed for the corning year, will
actually be introduced and guaranteed.
Functions in the Social Field.
Recreational centres. The welfare activities of the works
unions greatly reinforce their economic activities. In the
first place, the trade unions themselves administer most of
the recreational centres for workers in the countries of Central
and Eastern Europe. While the management of these centres
is reserved to the higher agencies of the trade unions, it is
left to the trade union agencies in the undertakings to designate, in accordance with the relevant directives, the workers
who have distinguished themselves by meritorious conduct,
either in their normal work or as trade union activists, etc.,
and who, in consequence, acquire the right to spend their
holidays in one of the trade union recreational centres, either
free of charge or at a relatively moderate cost. 1
The advantages thus offered to workers whose productivity
is outstanding are difficult to express in figures, but they are
nevertheless substantial, because the trade union organisations
allocate to the maintenance of these centres a large part of
their own funds, funds derived from participation in profits
1
The various countries of Central and Eastern Europe possess legislation which guarantees to the wage earners an annual holiday with pay of
from two to four weeks.

104

CO-OPEBATION IN INDUSTRY

or " directors' funds " 1, as well as contributions obtained
from social insurance funds.
Secondly, the works unions are often made responsible for
the supplementary distribution among the workers of certain
rationed commodities or of vouchers enabling them to buy
luxury products at reduced prices, etc. When carrying out
this duty the works unions consider, above all, the question
of individual productivity.
Social insurance and industrial safety. After the abolition
of the Labour Commissariat in 1933, the trade unions in the
U.S.S.B. were made responsible for administration of social
insurance as well as for certain duties performed by the
labour inspectorate. 2 The works unions are directly responsible for the administration of sickness insurance and other
branches of short-term insurance. For this purpose, an
insurance council is set up and affiliated to the works council
in undertakings in which at least 100 persons are employed.
This council is assisted, where necessary, by shop committees
set up under the shop councils and by insurance delegates
appointed for each group of from 20 to 30 wage earners. The
insurance councils and the shop committees are presided over
by the President of the corresponding trade union organ.
They must report on their activities periodically to the trade
union.
The principal task which devolves on the works unions
is to determine, in accordance with the legislation in force,
insurance benefits in case of temporary incapacity for work,
maternity benefits, and grants towards funeral expenses.
Furthermore, they must combat morbidity, endeavour to
prevent accidents, supervise the standard of medical assistance
given to insured persons and seek to prevent the insurance
system being abused by such persons. For this purpose, they
set up labour groups, among whose duties are the prevention
of accidents, supervision of sick persons at home, supervision
of hospital services, child welfare, etc.
1
A portion of the profit made by the undertaking is left, as a general
rule, at the disposal of the director, who must use it, in agreement with the
trade union, to improve the living conditions of the workers and to encourage
their productive efforts.
2
Cf. I. KOCHANOVSKOV : Pfehled socialmiho pojiStëni v SSSR (Social
Insurance in the U.S.S.E.) (Prague, Sociální Eevue, 1949). See also International Labour Review, Vol. IV, ÎTos. 3-4, Mar.-Apr. 1947, p . 261 : " Social
Insurance in the Soviet Union ".

CO-OPEBATION IN THE UNDERTAKING

105

The struggle against absenteeism always being one of the
main problems of the trade unions and of the bodies which
direct the economy, the works unions are responsible for investigating on the spot the reasons for absence pleaded by the
workers. Further, thanks to the help of voluntary activists,
the works unions are able to ensure that the financial interests
of the sickness insurance administration and the economic
interests of the undertakings are effectively protected.
Thus, the trade union insurance councils fulfil the tasks
hitherto performed by the decentralised services of the Labour
Commissariat, which were responsible for social insurance and
labour inspection. In Bulgaria and Poland, a similar system
was put into effect with regard to labour inspection. Elected
workers' inspectors function under the works councils. In
particular, they are responsible for ensuring industrial safety
and hygiene.
Labour

Discipline.

The maintenance of labour discipline in the undertakings
is one of the main statutory duties of the trade unions in the
countries with a planned economy, which devote considerable
attention to this matter. Thus, for example, the Plenary
Session of the Central Council of Polish Trade Unions, when
examining the responsibilities imposed on the trade unions
under the Six-Year Economic Plan adopted in 1950, recognised
the failings of the trade union activities in this field and
adopted the following resolution x :
It is the duty of every trade union to carry on a continuous
programme of ideological education with the object of developing
among the masses of the workers a socialistic attitude towards work
and collective property. The essential element in the general struggle
to improve labour discipline is the need to strengthen the feeling of
responsibility for production and to mobilise the workers to accomplish the tasks assigned to them by foremen, chiefs of departments
and the head of the undertaking. The industrial unions and, in
particular, the works councils must reinforce the authority of the
director, who is the single head of the undertaking and responsible
for the whole of its economic activities.
Moreover, special legislation has been enacted to combat
absenteeism, slackness in work and in administration, waste
of raw materials and any other uneconomical use of the assets
1

Zwiqzkowiec,

op cit.

106

CO-OPEEATION IN INDUSTRY

of the undertaking or of working time. These laws lay down
a whole range of penalties, from a mere fine or loss of a day's
pay to detention in a labour camp. It was after the introduction of structural reforms in the economic and social fields
that labour discipline became one of the main problems of
the trade unions. Thus, the Preamble to the Polish Act of
19 April 1950 1 respecting socialist labour discipline contains
the statement that :
. . . the working class of the Polish people's democracy, aware
of its rights and obligations, has given labour discipline a new
socialistic sense. The great majority of the workers carry out their
task conscientiously and enthusiastically and show a sense of social
responsibility by devoting all their efforts to building a more powerful nation. Some workers, however, disregard labour discipline and
thus reduce the effectiveness of their colleagues' efforts and hinder
the improvement of material and cultural wellbeing. Those who
absent themselves from work without valid reason commit one of
the most serious infringements of labour discipline.
The directors of undertakings are thus entrusted with
important powers, whose effective exercise implies the cooperation of the trade union bodies concerned. The various
enactments, indeed, provide, either implicitly or explicitly,
that the trade unions will be called upon to share in the application of the disciplinary measures prescribed. On this point,
reference may be made to the speech of the President of the
Central Council of Polish Trade Unions, Mr. W. Ktosiewicz,
at the fifth plenary session of the Council :
The industrial unions and, in particular, the works councils,
must, when examining the problems involved in the maintenance
of labour discipline in the undertaking, submit every individual case
of breach of discipline to a careful analysis and avoid any considerations of an indulgent nature. Por the purposes of education each
case of breach of labour discipline must be thoroughly discussed and
be analysed in the trade union groups.2
Educational Role and Selection of Trade Union Officials and
Supervisory Staff.
In view of the fact that both trade union officials and the
technical grades in the undertaking and even the administrative staff are often recruited from among the workers, the
works unions also have educational duties relating both to
1
2

See Industry and Labour, Vol. IV, No. 16, 15 Sept. 1950, p . 245.
Zwiqzkowiec, op. cit., p . 24.

CO-OPERATION Dì THE UNDERTAKING

107

the social and economic and to the political and cultural fields.
The development of trade union activities in this direction
corresponds, moreover, to the statements of principle made
by the most authoritative trade union leaders in the countries
concerned, which, in general terms, may be summed up in
the following quotation from Lenin :
The trade unions are not a governmental organisation, not a
compulsory organisation, but an educational organisation, an organisation for the training of the masses, a school, a school of govern-1
ment, a school of economic administration, a school of communism.
The political, economic, social and cultural tasks which
thus devolve on the works unions necessitate an appropriate
selection of trade union officers. An important article in the
principal trade union review in the TJ.S.S.E. 2 recently stated :
The Communist Party teaches that the success of our work
depends on the selection of suitable officers both from the political
point of view and from the point of view of capacity and efficiency.
It is, therefore, important to know whether the worker in question
merits political confidence and whether he is capable of performing
the functions concerned. It is inexcusable to find among these
officers persons who are not sufficiently trained to perform their
duties, persons who lack energy, principles and ideas and who
commit serious mistakes in their work and accept inefficiency.
It is not uncommon also to find, among these officers, persons who
adopt a conciliatory attitude towards infractions of discipline and the
abuse of public functions. The Party wages an unremitting battle
to eliminate these deficiencies. It is the duty of the trade unions to
increase their watchfulness over these officers and to promote to
positions of leadership in the unions persons possessing some degree
of education and the necessary training.
Yugoslavia
The system of co-operation in Yugoslavia has been radically amended by an Act of 2 July 1950. This Act set up
agencies for co-operation both at the level of the undertaking
and at the higher level of management of industrial collectivities. 3
The agencies for co-operation thus established are of two
kinds : firstly, the workers' councils, generally agencies for
staff representation and, secondly, management councils
which share directly in the administration of undertakings.
1
2
8

LENIN, Vol. XVI, p. 64 (Russian edition).
Professionalnye Soiuzy (Moscow), No. 9, Sept. 1950.
SluSbeni List, No. 43, 5 July 1950.

108

CO-OPEEATION IN INDTJSTBT

Thus, having regard to the number of staff employed and to
the economic importance of the undertaking, the number of
members of the workers' councils varies from 15 to 200 and
that of the management councils from 3 to 15.
The two councils include only representatives of staff
elected by majority vote for lists of candidates. The workers'
council is elected directly by the wage earners in the undertaking, while the management council is elected by the corresponding workers' council. The director of the undertaking
is, ex officio, a member of the management council.
These agencies for co-operation work in close relationship
with the works unions. The trade unions, which retain their
unified character, have, in fact, been made responsible for the
institution of the new agencies for co-operation ; they organise
the elections and present the lists of trade union candidates.
The workers' and management councils nevertheless have
their independent existence, distinct from the trade union
movement, which maintains its own agencies in the undertaking. Moreover, lists of candidates other than those put
forward by the trade unions may be presented by a specified
number of wage earners when the councils are being elected ;
the splitting of votes between different lists is authorised.
I t is, in the last resort, for the judicial authorities to ensure
that the election procedure is properly observed. Moreover,
the trade union has no right to impose its views on the workers' council or on the management council as to the policy
to be followed in the performance of their duties.
The terms of reference of the workers' councils and management councils may be summarised as follows. While the
workers' councils have to decide and to define the general
policy of the undertaking with regard to economic and social
matters, it is for the management councils to ensure the
application of this policy, or in other words, to administer
the undertakings.
The Yugoslav legislature has provided this new system of
management of undertakings with a number of safeguards
necessary to ensure the protection of the general interests
of the collectivity and to avoid the excesses and abuses to
which the application of the new regulations may give rise,
especially during the initial period. The workers' councils
and management councils are obliged to respect the law and
to observe the directives issued by the higher organs of

CO-OPERATION IN THE UNDERTAKING

109

the State economic administration. The director of the
undertaking, responsible for day-to-day administration, is
a member of the management council. He is appointed by the
higher authority (the management council of the competent
industrial collectivity or the competent agency of the economic administration) ; the management council, if it deems
it necessary, may do no more than propose to the appointing authority that the director of the undertaking be dismissed.
The director may also suspend any decision taken by the
management council which he considers to be contrary to
existing laws or regulations, to the stipulations of the plan
or to the directives of higher authorities. Finally, the management council can act only collectively.
Nevertheless, the duties assigned to the workers' councils
and to the management councils are still extremely important.
Their members enjoy adequate guarantees against wrongful
dismissal or transfer. It is they who ensure the implementation of the economic plans for the undertaking, approve the
works regulations and control its staff policy. The management council is directly responsible to the workers' council,
as the latter can at any moment revoke its authority and
elect a new management council. Finally, the management
council may ask for the dismissal of the director.
The Head of the Yugoslav State has compared the importance Of this reform with that of the general nationalisation
of means of production put into effect in Yugoslavia after the
second world war. According to Mr. B. Kidrié, Chairman
of the National Planning Commission, this reform is, in fact,
" the beginning of an historic process, in the course of which
the management of collective property, hitherto exercised
by the State, is to be transferred to a free association of direct
producers ". 1

Narodna DrSama (Belgrade), Nos. 7-8, 1950.
8

CHAPTER I I

CO-OPERATION AT THE LEVEL OF THE INDUSTRY
Introductory Remarks

In several industrialised countries where employers' and
workers' organisations have existed as powerful entities for a
considerable number of years, co-operation at the level of the
industry, either on a bipartite basis or in collaboration with the
public authorities, was already a well-established tradition before
the second world war. After the first world war and as a consequence of the tremendous advance in the membership and
power of employers' and workers' central and industry-wide
organisations, there was in these countries a great increase in
joint machinery for negotiation at the industry level. This
was the period when joint industrial councils were established
in Britain, joint committees in Belgium, the Employment
Market Board in Sweden, the Matignon Agreements in France
and joint institutions for negotiations in various other countries.
When the war began in 1939, therefore, employers' and
workers' organisations in several countries were already
thoroughly accustomed to joint action on an industry-wide
basis and willing to collaborate and capable of collaborating
with their Governments in the solution of technical and
economic problems on the industry level. During the war the
organisations showed themselves willing to sacrifice their
sectional interests in order to further the social and economic
policies and general war efforts of their countries. I t was,
therefore, natural that they should be associated with those
policies and efforts, in order to ensure that the legitimate
interests of their members should be safeguarded. Actually
in one industry after another, machinery was established which
rendered invaluable assistance to Governments in the organisation of industry to meet the needs of war. On the cessation
of hostilities the Governments made it clear that they would

CO-OPERATION AT THE LEVEL OF THE INDUSTRY

111

continue to rely on co-operation at the level of the industry
to solve the difficulties arising out of the problems involved
in national reconstruction and recovery.
Machinery for co-operation at the level of the industry
has advanced particularly in the industrialised European
countries which, as a natural result of the war, have found
themselves called upon to make the greatest efforts in
order to restore their national economies—for instance,
Belgium, France, the Netherlands, Norway, the United
Kingdom, etc.
In other countries great efforts are being made to achieve
industrialisation itself. In countries such as India and Pakistan,
which are endeavouring to achieve in a few years what some
of the older industrialised countries took generations to
achieve, the great drive for production depends equally for its
success on the collaboration of organised employers and
workers in the modernisation and improved output of industry.
In yet other countries, there are striking examples of
co-operation at the industry level with regard to particular
branches of production.
Co-operation at the industrial level is, of course, considered
here as something broader than collective bargaining and the
prevention and settlement of disputes. Machinery established
for the latter purposes is, therefore, relevant to this discussion
only where it is utilised, in addition, for co-operation on
matters which lie outside the scope of ordinary collective
negotiation and the settlement of disputes—as is the case, for
example, with the Belgian joint committees under the 1945
Act and certain of the joint industrial councils in the United
Kingdom.
There are wide differences between the structures, functions
and manner of establishment of agencies for co-operation
at the level of the industry in the various countries. Some are
set up by voluntary agreement, others by legislation or administrative order. Some are purely of an advisory character,
others exercise functions of a mandatory character under the
authority of the law. Again, the problems of co-operation in
the free sectors of industry differ in many respects from those
involved in co-operation in nationalised industries.

112

CO-OPEEATION IN INDUSTRY

Machinery Set Up by Agreement between the Parties
The machinery considered under this head includes, first,
those agencies which employers' and workers' organisations
have set up entirely or mainly on their own initiative to deal
with matters that are the subject of collective bargaining or
with the prevention and settlement of disputes, but which
have also undertaken co-operation between employers and
workers alone to solve general problems affecting a given
industry or which are or have been consulted by Governments
on such problems. I t includes also machinery which the parties
have set up by agreement for the specific purpose of consultation between themselves or of rendering advice to their Governments with regard to problems affecting respective
industries.
The principal examples of machinery of this kind which has
also rendered valuable service in the broader fields of cooperation are afforded by some of the joint industrial councils
in the United Kingdom, industrial councils set up under the
auspices of the Foundation of Labour in the Netherlands, and
by the co-operation which has been arranged in the construction industry in Canada and in the clothing industry of the
United States.
J O I N T INDUSTRIAL COUNCILS IN THE U N I T E D KINGDOM

Some of the British joint industrial councils were cooperating at the level of the industry many years before the
outbreak of the recent war. The Whitley Committee on
Belations between Employers and Employed, set up in October
1916, recommended the establishment of a joint industrial
council for each industry consisting of equal numbers of
representatives of employers and workers. The main purpose
of the Committee had been to make recommendations which,
if adopted, would help to secure industrial peace. The Committee proposed, therefore, that the functions of the councils
which employers and workers should be invited to set up
should especially cover wage negotiations and conditions of
employment and the settlement of disputes. But it proposed
that the councils should also consider such matters as " the
better utilisation of the practical knowledge and experience

CO-OPEBATION AT THE LEVEL OF THE INDUSTRY

113

of the workpeople " and " technical education and training,
industrial research, improvement of processes, etc., and
proposed legislation affecting the industry". 1 The majority
of the councils, however, set up mostly in industries in which
adequate bargaining machinery did not exist, have concerned
themselves mainly or exclusively with the negotiations of
collective agreements and the settlement of disputes.
A few on the other hand—and these are among the most
successful—do not negotiate wages, such
functions being performed
by other means previously in existence. x
But those councils which have co-operated on broader
issues have rendered most useful service both to the industries
and to the economy as a whole.
Among the matters dealt with have been unemployment, restoration of trade, research and the collection of statistics within the
industries and from outside authorities, education, training and
apprenticeship, welfare, health and safety, workmen's compensation,
transport facilities, etc. In such matters there is consultation2 between
the Councils and the Government Departments concerned.
In the case of several councils, officers of the Ministry of
Labour and National Service attend the meetings.
An outstanding example of such a joint industrial council
is that for the pottery industry. It was established in 1918—the
first to be formed following the report of the Whitley Committee. I t is empowered to deal with wages and other conditions
but has in fact not done so, leaving them for direct negotiation
between the actual organisations. Among its broader functions
are the régularisation of production and employment ; the
study of processes, the encouragement of research and the
full utilisation of their results ; the provision of facilities for
the full consideration and utilisation of inventions and improvements designed by workpeople and for the adequate safeguarding of the rights of the designers of such improvements ;
education in all its branches for the industry ; the collection
of full statistics ; enquiries into problems of industry and
where desirable the publication of reports ; representation
of the needs and opinions of the industry to Government
1
Ministry of L a b o u r a n d N a t i o n a l Service : Industrial
book ( L o n d o n , H.M. S t a t i o n e r y Office, 1944), p p . 23-24.
2
Ibid., p . 25.

Relations

Hand

114

CO-OPERATION IN INDUSTRY

authorities centrally and locally and to the community generally. " The Council has devoted itself very successfully to
the objects enumerated." 1 The Eeconstruction Committee
of this Council has made a study of post-war reconstruction
problems.

T H E CANADIAN CONSTRUCTION INDUSTRY

Until recently, National Joint Conferences played an important part in effecting co-operation in the Canadian construction
industry. The first Conference met in 1921, for the purpose of
finding a solution for some of the problems resulting from the
first world war. The happy experience of that Conference
led the employers and workers to call a second Conference in
1941 when wartime conditions had again given rise to serious
problems affecting the industry. A number of the decisions
taken on this occasion dealt with post-war planning and
rehabilitation programmes. The third Conference in 1946,
called at the instance of employers' and workers' organisations
in the construction industry, brought together 31 representatives of the contractors and 31 representatives of the trade
unions concerned to discuss a number of vital problems affecting the industry in the years immediately following the war.
In the period between these two last sessions of the Conference
a National Joint Conference Board, consisting of nine representatives each of employers and workers, had met regularly and
frequently, acting in an advisory capacity to the Government
both on social problems affecting the industry and on economic
problems such as material shortages, etc. At its 1946 meeting,
the Conference adopted several resolutions concerning
employer-employee relations, Government controls, wages,
prices, etc., the supply of labour and materials and the construction outlook. This last resolution recognised housing
to be a war emergency and recommended a steady volume of
annual construction based on a proper balancing of privatelyfinanced and public works. At its closing sitting the Minister of Labour congratulated the Conference on its work and
declared that the contribution of the construction industry
1

Industrial Belations Handbook, op. cit., p. 26.

CO-OPEBATION AT THE LEVEL OP THE INDUSTRY

115

to effective labour-management co-operation was unequalled
by any other group in Canada. 1

T H E UNITED STATES CLOTHING INDUSTRY

The outstanding example of co-operation at the level of the
industry in the United States is afforded by the clothing
industry.
Co-operation between employers and workers has contributed to a high level of stabiüty in an otherwise unstable industry"
—an industry with many small undertakings and a very high
turnover of undertakings 2 and in which in earlier years there
was a bitter history of industrial relations. Despite the old
struggle between labour and management, the International
Ladies Garment Workers' Union concluded a " Protocol of
Peace " as early as 1910 with the Cloak Manufacturers' Association in New York. I t established a Joint Board of Sanitary
Control on which were represented labour, management and
the public, as well as arbitration procedures and joint price
committees. Similar agreements followed in other branches of
the industry. Opinion had so far advanced that it is stated in
an agreement concluded in 1921 : " Co-operation and mutual
helpfulness are the basis of right and progressive industrial
relations ". 3
By 1936 the International Ladies Garment Workers'
Union claimed to have organised 95 to 98 per cent, of the
workers in the women's clothing industry and the Amalgamated Clothing Workers of America 95 per cent, of the workers
in the men's clothing industry. The stage was set for cooperation at the different levels of the industry.
Co-operation now takes place, at the plant level through
shop committees, in the market area through joint boards of
all the local unions meeting with the employers' associations,
at the industry level through meetings of the national unions
1
See " Labour-Management Collaboration in the Canadian Construction
Industry ", in International Labour Review, Vol. L U I , Nos. 5-6, May-June
1946, pp. 379-387.
2
Theresa WOLFSON, " Role of the ILGWU in Stabilising the Women's
Garment Industry ", in Industry and Labor Relations Review, Oct. 1950.
3
United States Bureau of Labor Statistics : Beneficiai Activities of
American Trade Unions, Sept. 1928, p . 157.

116

CO-OPERATION IN INDUSTRY

with the employers' associations and their national federations.
Permanent agencies have been established at all levels financed
and operated by labour and employer groups jointly.
The scope of co-operation is wide and covers such matters
as increasing production, security of employment, competition,
commercial practice, technical improvements, vocational training, etc. 1 In practice, the initiative on any particular major
matter generally comes from the unions after they have undertaken a study of the position. A notable example was the
study made in 1939 to discover what could be done to aid the
industry in recovering from the depression. The plan is then
presented to the employers' associations, which study the
report and sometimes undertake an investigation of their own.
Meetings between the two sides then define the areas of agreement, iron out differences and initiate a joint programme.
Alternatively the original study may be made for a joint
agency, either by outside experts or by experts from the two
groups.
One technical field in which co-operation has been achieved
concerns the introduction of labour-saving devices. Modernisation has been ensured by the unions accepting technological advances as beneficial in the long run, but the practice
of introducing new machinery by agreement enables the unions
to take measures to protect the workers so far as possible
against the effects of dislocation caused when the machinery
or methods are actually instituted.
Perhaps the best known of the agencies for consultation
in this industry is the National Coat and Suit Industry Eecovery Board set up in the sector of the industry comprising the
manufacture of women's garments. This Board was set up
by the International Ladies Garment Workers' Union and
fifteen manufacturers' associations representing the great
majority of coat and suit producers. I t has the duty of stabilising the industry and for this purpose maintains and
supervises the application of a code of fair commercial practices. I t makes recommendations with respect to production
and marketing and—most important—serves as a permanent
forum for the exchange of views between labour and manage1
See Kurt BRAUN : Union-Management
Clothing Industry, Washington, 1947.

Co-operation : Experience in the

CO-OPERATION AT THE LEVEL OP THE INDUSTRY

117

ment and provides machinery to implement at once the
agreements co-operatively reached between them. 1
REHABILITATION CONFERENCES IN JAPAN

In Japan, in February 1947, the central organisations of
employers and workers agreed to establish an Economic
Rehabilitation Conference. Practically all the organisations
of both sides at the national level took part in this Conference
which was intended to take measures to promote economic
recovery. Organs of the national Conference were established
at the industrial and district levels. Thus Rehabilitation
Conferences were organised in 14 industries—coal mining,
iron and steel, the ammonium sulphate industry, etc. At the
district level they were organised in 19 prefectures. Their
main function was to endeavour to overcome bottlenecks in
production. An Agricultural Rehabilitation Conference was
organised in June 1947 which collaborated with the Economic
Rehabilitation Conference on foodstuffs problems.
However, divergencies of opinion between management
and labour led to the dissolution of the Economic Rehabilitation Conference in April 1948. The industrial Conferences did
not long survive the dissolution of the parent organisation
and by September 1950 only one of them was still in existence
—the National Metal Mines Conference—and this was not
expected to continue much longer.
During their short period of existence, however, the Conferences gave valuable assistance in the drawing up of production programmes, assignment of personnel and allocation
of materials. 2
Machinery Set Up on Government Initiative
or by Legislation
The greater part of the machinery now existing in different
countries at the level of the industry has been established on
Government initiative or by legislation—Acts of Parliament,
Ministerial Orders, Decrees, etc.
1

B E A U N , op. cit.,

pp.

155 et

seq.

Communication from the I.L.O. correspondent in Tokyo, 22 Sept. 1950.

118

CO-OPERATION IN INDUSTRY

Several Governments, whether initiating general economic
plans, as in the United Kingdom or Norway, modernisation
and re-equipment plans, as in France, or schemes for reorganisation, as in Belgium and the Netherlands, have taken
the view that, despite the existence of well-organised employers'
associations and trade unions, the general programmes of
planning, reconstruction or recovery are so urgent and comprehensive and require such a degree of co-ordination to be
fully effective, that they could not entirely be entrusted to
such machinery for consultation as might be established by
voluntary agreement. The bodies which were to be set up
would in many cases require statutory powers to perform
their functions effectively, uniformity would have to be secured
between the mandates given to the agencies established in
different industries in order to avoid duplication of functions
and, in the case of the United Kingdom and Norway in particular, and in France so far as modernisation and re-equipment
was concerned, in order to ensure that plans or programmes
at the national level should be fulfilled with uniform success
in all major industries.
In India and Pakistan, in particular, there was the difficulty
that, while the Government desired to modernise and develop
a number of key industries simultaneously, there was no long
tradition of mutual co-operation at the industry level between
experienced national organisations of employers and workers.
At the same time, in all the countries mentioned, it has
been made clear that in the actual implementation of the
measures for joint co-operation the Governments would
depend essentially on the voluntary aid rendered by the
employers' and workers' organisations participating in the
machinery to be established. The laws could not be implemented without that voluntary aid. In most cases the agencies
to be created would not be able to function at all unless the
organisations were willing to give their unstinted and wholehearted support. Where this support was given the laws would
actually strengthen rather than weaken the hands of the organisations participating in co-operation by the powers those
organisations would be given to conduct necessary investigations and to implement their decisions.
This fundamental dependence of machinery for co-operation
established by legislation on willing and voluntary participation by the representatives of organised employers and workers

CO-OPEBATION AT THE LEVEL OF THE INDUSTRY

119

cannot be emphasised too strongly. Time and time again
Governments have given effect to the principle that no machinery at the level of the industry can hope to succeed without
the willing and generous support and collaboration of
employers' and workers' organisations.
MODERNISATION AND ORGANISATION OF INDUSTRY

Five European countries—Belgium, the Netherlands,
France, Norway and the United Kingdom—have had a great
many problems of reconstruction and recovery in common,
but there are certain essential differences between the machinery for co-operation at the industry level which has been
established in each, largely as a result of the different degrees
to which the respective Governments have followed a policy
of social and economic planning.
Joint Committees and Occupational Councils in Belgium
In Belgium two main systems of machinery for co-operation
at the level of the industry have been established.
First, there is one system of machinery with functions of
a social character—the joint committees which were set up
after the first world war, enlarged in scope in 1936 x, suppressed in 1940, and established on a permanent basis by a
Legislative Order of 9 June 1945. 2
This Order provided for the setting up by Eoyal Order of
a national joint committee, consisting of equal numbers of
heads of undertakings and representatives of employees, in
each branch of industry, commerce or agriculture, on the
application of the industrial organisations concerned or
after consultation with them. The competent Minister was
empowered to institute regional joint committees on the
application of any of the national committees or of a representative organisation which must respect the decisions of the
national committees. The Eoyal Order might also set up
special joint committees for salaried employees or other
classes of employees engaged in various forms of activity on
1
Methods of Collaboration between the Publie Authorities, Workers' Organisations and Employers' Organisations (Geneva, I.L.O., 1940), pp. 41 and 139.
2
J0.S., 1945—Bel. 5.

120

CO-OPEBATION IN INDUSTRY

the application of the industrial organisations concerned.
Each national committee must include at least four representatives each of heads of undertakings and employees. The
chairman and vice-chairman must be appointed by Boyal
Order from among persons specially well-versed in economic
or social questions and not connected with the interests of
which the joint committee might be required to take cognizance.
The main functions of these joint bodies relate to collective
bargaining and the prevention of industrial disputes 1, but
they are also empowered to assist the governmental authorities
in the drafting and enforcement of social legislation affecting
the branches of activity concerned, encourage the training of
apprentices in the trade in question and the formation of close
and permanent relationships with vocational guidance institutions and trade schools.
The second system of machinery consists of agencies for
co-operation at the industrial level on economic or technical
matters, instituted by the Act of 20 September 1948 2 " to
provide for the organisation of economy ".
The object of the Act is to establish a clear and balanced
system, based on joint representation, for co-operation at
the national, the occupational and the plant level between the
different factors in production. I t provides for occupational
councils to be established by Orders in Council for the various
branches of economic activity, after the Central Economic
Council 3 instituted under the same Act has given its opinion.
The Order establishing each occupational council determines
the number and terms of office of the titular and substitute
members, the method of submission of candidates for these
posts and the manner in which the council is to act. They
have the status of public institutions and are to be composed
of equal numbers of representatives of the two sides in industry.
The occupational councils are advisory bodies. They have
the function of communicating to the Central Economic
Council or to the Ministries opinions or proposals concerning
problems relating to the different branches which they repre1
See International Labour Conference, 31st Session, San Francisco, 1948,
Keport VIII (1) : Industrial "Relations (Geneva, I.L.O., 1947), p. 48.
2
Moniteur belge, 27-28 Sept. 1948 ; see also Industry and Labour, Vol. I,
No. 6, 15 Mar. 1949, p . 221.
3
See p . 193.

CO-OPERATION AT THE LEVEL OF THE INDUSTRY

121

sent. In order to be able to fulfil this mission, the secretariats
of the occupational councils may call upon the undertakings
for which they are competent to give information on any
particular points which are examined when opinions or proposals are being prepared. If the management of such undertaking fails to comply, the necessary research may be conducted
ex officio at the expense of the said management through sworn
agents of the secretariats. The Act leaves the councils a high
degree of independence in the performance of their duties but
lays down regulations to ensure the co-ordination of their
activities. In particular, the President of the Central Economic
Council and the chairmen of the occupational councils must
meet periodically to consult together, to exchange information
on matters of common interest and to co-ordinate their methods
of work. The secretaries of the occupational councils will meet
to arrange for the execution of joint decisions of the chairmen.
These meetings are to be held under the authority of the
President of the Central Economic Council and to be conducted by the Secretary to that body.
The first two Eoyal Orders to set up occupational councils
were issued on 18 January 1951 1 , in respect of the metal
trades and the textile and clothing industry. The council for
the metal trades includes 16 employers' and 16 workers'
representatives ; that for textiles and clothing consists of
14 representatives of each side.
The measures described above apply uniformly to the
different branches of industry. Special agencies have been set
up for coal mining and for inland navigation.
A National Coal Council was set up by an Act of 23 August
1947.2 Its 24 members are appointed by the Crown. I t is
divided into two sections—a production section and a prices
section—each composed of equal numbers of representatives
from the most representative organisations of management
and workers and of representatives of the Ministries concerned.
The production section was made generally responsible for
supervising the working of collieries, instituting a uniform
system of accounting, enquiring into re-equipment needs and
the re-allocation or merger of pits, keeping down costs, etc.
The prices section studies problems involved in fixing scales
1
2

Moniteur belge, 31 Jan. 1951.
International Labour 'Review, Vol. LVII, No. 6, June 1948, p. 632.

122

CO-OPERATION IN INDUSTRY

of charges for the market price of coal and carries out enquiries
into marketing, import and export requirements, etc. The
Council is also concerned with social problems such as the
standard of living of the workers, recruitment, health and
safety, and has wide powers of investigation. I t also acts as an
adviser to the Government when the latter has to fix maximum
prices for coal, to control imports and exports or to order the
re-allocation or merger of pits.
The Act also contemplated the setting up of a National
Institute for the coal mining industry to be attached to the
Ministry of Fuel and Power under the direction of a Council
consisting of a chairman and 18 members appointed by the
Crown, five of them nominated by the most representative
organisations of colliery managers and two by the most
representative organisations of the workers and staff employed
in the mines, the rest being technical or scientific experts and
representatives of the Ministries concerned. The purposes of
the Institute as defined by the Act include the co-ordination
and promotion of research into technical, economic, social
and occupational problems of the coal mining industry and the
setting up of an information bureau concerning possible uses
of coal and the making of grants for research work relating
to mining methods. I t was laid down that the resources of the
Institute would be made up of State grants and the proceeds
of a levy on each ton of coal mined.
By Order of the Eegent of 18 November 1949 \ the Superior
Council for Inland Navigation, first set up in 1912, was reorganised. The Council has 36 members of whom 12 represent
the Ministries and public services concerned, 12 represent
general interests (agencies for defence of Belgian industrial
interests, chambers of commerce concerned, etc.) and 12
represent boatmen's interests (including six representatives
of boatmen's associations and two of associations protecting
interests of workers). The Council gives advice on all questions
affecting inland navigation submitted to it by the Minister of
Public Works or by any of its members, and is particularly
competent regarding the utilisation and improvement of
existing waterways, establishment of new waterways, legal
and administrative problems—national or international—
relating to inland navigation.
1

Moniteur belge, 30 Nov. 1949, p . 10,610.

CO-OPERATION AT THE LEVEL OF THE INDUSTRY

123

Joint Bodies for the Organisation of Industries
in the Netherlands
In the Netherlands, under the Act of 27 January 1950 1,
industries are organised as " public institutions ", and coordinated under a central body—the Economic and Social
Council.2
The joint bodies for the organisation of industries set up
by this Act may be constituted on one of two alternative
bases. First, the agency may be concerned with a single
industry or with a group of similar or related industries.
Such a body may be designated a principal body if it deals
with a major industry or major group. Or, secondly, the
agency may cover a number of different branches of industry
which are, however, engaged in the same manufactures.
The first kind of agency may be set up by legislative or
administrative action, the second only by legislative action.
Where it is set up by administrative action, the Economic
and Social Council—in agreement with the organisations
representing to its satisfaction the employers and workers
concerned—must first have given a favourable opinion ; nor
may the Government establish a body until the Economic
and Social Council has been given an opportunity to express
its opinion after consulting the representative organisations.
Each agency at the industrial level will have a governing
body, a president, a steering committee and a secretariat.
I t may set up other committees.
The governing body must consist of at least 10 persons,
appointed by organisations representing the employers and
workers concerned and designated by Decree. The employers'
and workers' members will be appointed in equal numbers
save in exceptional cases. The governing body is competent
to deal with any matter not placed within the purview of any
other organisation. The president may not be a member of
the governing body. In the case of those agencies which must
be set up by legislative action, he is appointed by the Government after consulting the Economic and Social Council.
In other cases he is appointed by the governing body with
the approval of the competent Minister. The governing body
elects its vice-president from among its own members. The
1
2

Staatsblad,
K . 22.
See p . 195.

124

CO-OPEEATION IN INDUSTRY

steering committee consists of members of the governing
body. Its composition must have regard to the various
tendencies represented by the organisations concerned.
The various organs of the agencies are required to aid in
the enforcement of Acts and regulations. The governing body
may prepare administrative regulations which must be in
conformity with the regulations issued by the respective
higher authority (the Economic and Social Council or the
agency itself) and are subject to approval by it.
The agencies take over the functions of the old industrial
councils 1 with regard to the application of many social
welfare schemes and the adjustment of industrial disputes. 2
An agency may be required to undertake enquiry in the
social, economic and technical fields and to deal with the
following matters : registration of undertakings within its
terms of reference and of persons employed in such undertakings ; production, marketing and handling of products ;
competition, mechanisation, rationalisation of undertakings,
standardisation of means of production and operation ;
management of undertakings within its field of activity ;
wages and other conditions of work ; employment, including
placement, engagement and dismissals, vocational training
and any other question connected with unemployment or
manpower shortage ; establishment of funds and other services
for the benefit of the persons engaged in the industry. The
foundation, extension and suspension of undertakings do not
fall within the agencies' terms of reference. ÍTo regulations
issued by them may hamper fair competition. In performance
of their duties the agencies are entitled to procure all the
necessary data, to study accounts and other documents, and
to inspect and check industrial plant and stocks.
The governing body of any of these agencies is empowered
to issue regulations on any question which may be referred
to the body by legislative or administrative action. I t must
follow the same rules of procedure as the Economic and
Social Council ; the president of an agency, who is not a
member of its governing body, has no vote.
Special provisions apply where the number of members
of the governing body appointed by workers' organisations
1

L.8„
*L.8.,

1933—Neth. 1.
1923—Neth. 1.

CO-OPERATION AT TEE LEVEL OP THE INDUSTRY

125

is not equal to the number appointed by employers' organisations. Equality of voting strength is then assured by a special
voting procedure, which operates when the governing body
is deciding any of the following matters : appointment,
suspension or removal from office of the president or a vicepresident, or the remuneration of such officials ; the budget
of the agency ; any matter of a social character, including
the question whether a given matter shall be considered to
be of a social character. Where there is an equal vote on
the question whether a given matter is " social ", the employers' members having voted against the workers' members,
the president must submit the issue to the Economic and
Social Council. Proposed regulations on any question other
than those mentioned above, i.e., chiefly on economic questions, are considered to be rejected if all the employers' or all
the workers' members have voted against them.
An agency may undertake the regulation of a matter
within its terms of reference only if the Economic and Social
Council has given a favourable opinion, in agreement with
the organisations of employers and workers concerned. But
any regulations hold good unless and until they are annulled.
All regulations require the approval of the competent Minister,
unless the rules of the agency otherwise provide.
The regulations issued by an agency may contain compulsory provisions applying to the management and personnel
of undertakings falling within its terms of reference ; such
provisions take the place of any contrary stipulations in
contracts of employment ; if there is no stipulation on the
subject the regulations become part of the contract. The
same rules apply to job contracts, contracts of service, representatives' contracts and collective agreements.
Two or more governing bodies may take combined action
to protect their common interests. For this purpose they
may set up a separate institution and determine its rules and
more particularly may delegate to this institution the right
to issue regulations on specific matters ; but they cannot
delegate powers they themselves do not hold. Any such
joint action requires the approval of the Economic and Social
Council. If the parties are unable to agree on this question,
the Council may obhge them to establish a joint institution
if either party so requests. 1
1

Staatsblad, K. 22.
9

126

CO-OPERATION IN INDUSTRY

Particular reference may be made to the council for the
mining industry, set up by an Order of 20 June 1945, under
the chairmanship of a Government representative and consisting of equal numbers of employers' and workers' representatives. The council supervises the production and distribution
of coal, the social and economic administration of the mining
industry, and the social security of workers in the industry.
It exercises supervision in particular over the management of
mining undertakings, industrial combines, methods of production, etc. ; it also has the duty of drawing up a miners' charter.
In the exercise of its functions it is assisted in the undertakings
by joint works committees and section committees.
This Order remains in force until the Council is superseded
by machinery set up under the 1950 Act or until three years
after the promulgation of that Act.

Modernisation Committees in France
In France, the full association of the employers' and
workers' organisations with the efforts of the Government was
attained with the inauguration of the Monnet Industrial
Equipment Plan by a Decree of 3 January 1946, later
amended on 8 March 1946. 1 This Decree formulated a general
plan for the modernisation and economic equipment of French
industry and established machinery for co-operation at the
level of the industry which was destined to perform a role
in France very similar in many respects to that foreshadowed
in Britain by the appointment of the working parties. 2
The formulation of the over-all equipment plan was entrusted,
under the Decree, to a planning council at the national level. 1
This council was assisted in its work by modernisation committees established for separate industries.
These committees were established for each of the products
which the council considered suitable for study. They included
representatives of the administration, experts, representatives
of trade associations of employers and workers and technical
and managerial staff. I t is through them that the active
1
See pp. 207-210 and International Labour Review, Vol. LIV, Nos. 1-2,
July-Aug. 1946, pp. 77-78.
8
See p . 132.

CO-OPERATION AT THE LEVEL OF THE INDUSTRY

127

forces of the country participated in drawing up the plan.
The members of each committee were to be chosen from
among " the most progressive persons representative of the
branch in question ". By midsummer of 1947 a considerable
number of modernisation committees had been set up. There
were then modernisation committees for coal mines, electricity,
iron industry, inland transport, motor fuel, manpower, rural
equipment, vegetable production, animal production, agricultural machinery, construction materials, building and public
works, machine tools, automobiles, textiles, cinemas, consumption and social modernisation, overseas territories, coke and
gas, fats, chemical industries, smelting works. Later committees
were set up for tourist traffic and telecommunications. I t
may be noted that not quite all of them were for specific
industrial branches and that some of them, contrary to the
case with regard to the British working parties, covered
nationalised sectors of industry.
The numbers of representatives of employers and workers varied and, though almost
all were set up on a tripartite basis, there were no trade union
members on the committee for animal production and no
heads of undertakings were included in the committee for
consumption and social modernisation. 1
Several of the committees have been presided over by the
secretaries of central trade union organisations {e.g., coal mines,
building and public works, manpower, consumption and social
modernisation). 2
For the purpose of drawing up the plan, the modernisation
committees, which were to receive instructions periodically,
had first to carry out enquiries into labour productivity in
France in order to compare it with productivity in the same
industries in other countries. When a serious lag was noted
they were to find the reason and to propose means to put an
end to it—technical training, mechanisation, replacement of
existing equipment, improvement of organisation, technical
concentration and geographical decentralisation, development
of research services, etc. They were also requested to make
proposals concerning the volume of production they considered
reasonable, taking account both of home requirements and of
possible exports. Their work was intended to make it possible
1
a

See Labour-Management
Ibid., p . 33.

Co-operation

in France,

op. cit., p p . 33-34.

128

CO-OPEEATION IN INDUSTRY

to draw up a balance-sheet of the whole of the means, requirements and possibilities which would enable the planning council
to arrive at definite conclusions, to establish the necessary
priorities, and to submit to the Government proposals concerning what production might be essential and what targets
should be aimed at during a given period.
When the report containing the first industrial equipment
plan was submitted to the national planning council on
27 October 1946 1, tribute was paid to the work of the modernisation committees—
The modernisation committees, each bringing together the
active elements of production—industrialists, agriculturists, workers
and technicians, along with the representatives of the administration—have caused all the active forces of the nation to participate
in the preparation of the plan.
Once the plan was adopted by the Government and the
Decree of 16 June 1947 2 fixed the methods of carrying it out,
the modernisation committees, having fulfilled the temporary
duty of drawing up recommendations for their industries,
now had the duty of assisting to carry out and supervise the
application of the plan. The report adopted distinguished, as
to the carrying out by co-operation of all parties, between the
methods to be followed in the nationalised and non-nationalised
sectors of the economy. In the non-nationalised sector, where
the industry was of a concentrated nature, the plan would be
implemented by agreements between the public authorities
and the industry concerned, as, for example, in the iron,
building materials, liquid fuel, machine tools, agricultural
machinery, textile and automobile industries. In the decentralised industries of the non-nationalised sector, where the
method of concluding agreements was not feasible, the modernisation committees had the task of drawing up the programmes
with the assistance of the administrations and occupational
organisations. In the nationalised sector the occupational
organisations could co-operate both by the participation in
the work of the modernisation committees and by their association in the direction, management and administration of
the nationalised industries and certain industrial services. 3
1
Commissariat Général du Plan de modernisation et d'équipement :
Bapport général sur le premier plan. Nov. 1946-Jan. 1947.
2
Journal officiel, 17 June 1947, p. 590.
3
See p. 152 et seq.

CO-OPEEATION AT THE LEVEL OP THE INDUSTRY

129

The modernisation committees, however, were not intended
to be a permanent feature in French industry. A number of
them have now ceased to operate since the successful launching
of the plans for the different industries which they helped to
prepare and to put in operation ; the modernisation committee
for textiles, for example, submitted its final report in 1948.
I t may also be mentioned that, during the earlier period
of post-war reconstruction, a number of bodies were established to advise the competent Ministers on questions affecting
different branches of the economy, as for example, the joint
advisory committees set up for separate branches of production under the auspices of the Minister for Industrial Production, the advisory committees set up under the Minister for
Agriculture, as well as a number of tripartite bodies such as
the Advisory Committee on Coal Distribution, the Higher
Council for Transport, etc.
Joint Industrial

Councils in Norway

In Norway, a central co-ordinating council was set up by
Executive Order in 1945 1 to advise the Government on matters
affecting its general policy. Its work was supplemented, at
the level of the industry, by the establishment of joint industrial
councils in 1947.
The Joint Industrial Councils Act of 6 June 1947, which
came into force on 1 July 1947, provides that the Crown may
decide that joint industrial councils be established for the
different industries, for the purpose of promoting efficient
co-operation within the industry and between the industry
and Government agencies for industrial policy. The Act lays
down that the councils shall be appointed by the Crown and
shall consist of as many members as the Crown may decide.
The members must include representatives of industrial
management—including independent producers—workers and
salaried employees in the industry concerned. Their appointment shall preferably be based on nominations from the
organisations concerned. Eepresentatives of the raw material
interests may likewise be appointed. The Government shall
also be represented on the joint industrial councils. The
Crown is to determine the period of functioning of the members
1

See pp. 206-207.

130

CO-OPERATION IN INDUSTRY

of the joint industrial councils, and to appoint among them
chairmen and deputy chairmen.
The function of each council is to act, within its field of
activity,, as an advisory agency to the Ministry concerned, and
to prepare reports on matters placed before it by the Ministry.
Specifically, the council is to prepare studies, reports and
recommendations on the following matters :
1. Exploitation of the results of industrial research, in cooperation with Norway's Technical-Scientific Besearch Council
and other public or private research agencies.
2. Distribution of industrial tasks between the various establishments with a view to securing the highest possible degree of efficiency
in the exploitation of industrial capacity with regard to conditions
of production and marketing prospects at home and abroad.
3. Establishment, expansion, alteration or closing down of
industrial undertakings.
4. Surveying of the technical and economic activities of the
industry with a view to securing an improved development of the
industry, and of matters related to the supply of raw materials.
5. Technical and organisational rationalisation and other matters
of importance to productive and economic efficiency. The joint
industrial council shall not, however, act as a price or wages committee or be concerned with questions relating to collective agreements.
All persons are placed under an obligation by the Act to
give the councils or their experts any information requested
by them for the performance of their duties pursuant to the
Act, but may demand that information concerning secret
technical installations or processes be communicated only to
persons authorised by the Crown to receive such information.
The councils or their expert committees may claim the right
to inspect installations and other property, goods and other
chattels.
These provisions, as well as the broad grant of general power,
were opposed strongly by industry, which charged that the councils
could go so far as to recommend complete industrial reorganisation.
Labour asserted that thorough-going reorganisation would be necessary in some industries, and that the advisory councils were the
most appropriate organs for the formulation of specific plans. It
was also indicated that the Government intends to consult the
councils on rationing of materials, labour training, standardisation
of products, changes in accounting
methods, and possibilities of
joint purchasing and marketing.1
1
Walter GALENSON : Labor in Norway
1949), pp. 263-265.

(Harvard University Press,

CO-OPEEATION AT THE LEVEL OF THE INDUSTRY

131

The Government has set up such councils in ten different
industries—mining, tile works, the electro-technical industry,
the shipbuilding industry, the motor industry, foundries,
the paper, cellulose and wood pulp industry, the saw milling
and planing industry, the footwear and leather industry, and
the textile industry. The councils so far appointed have
from 8 to 11 members, of whom two or three represent the
State. Administratively, the councils are under the Ministry
of Industry, Handicrafts and Shipping, where the secretariats
of the councils are situated.
The councils are not executive but advisory bodies, as their
decisions must be approved by the Government or the competent Ministry before they can be put into effect. One of
their most important tasks has been to assist in improving
the co-ordination of the work of the individual undertakings
and of the authorities for the development and increased
efficiency of the industries concerned.
With their comprehensive set-up and with the expert knowledge which their members represent, the councils have proved
weU adapted to the task1 of dealing with many important questions
covered by their work.
Development Councils and Other Joint Machinery
in the United Kingdom
In the United Kingdom there have been considerable
developments since the war in machinery for co-operation
at the level of the industry as a consequence of, and as a means
of ensuring, the implementation of the Government's postwar industrial and economic planning.
The details for this Government planning, so far as they
related to co-operation at the level of the industry in the
non-nationalised sector of the economy, and the reasons for
the measures to be taken with regard to the different industries, were made public in the autumn of 1945, soon after the
Government had been elected to office.
On 9 September 1945, the President of the Board of Trade
revealed his plan to set up tripartite working parties in several
major industries. 2 These industries would be those for which
1
Social and Labour News from Norway, published by the Norwegian
Joint Committee on International Social Policy ; Oslo, No. 3, 1950.
2
See Board of Trade Journal, 15 Sept. 1945 ; International Labour
Review, Vol. LII, No. 5, Nov. 1945, p. 508.

132

CO-OPEEATION IN INDUSTRY

the Board of Trade would have responsibility and did not
include those covered in the Government's nationalisation
programme. x He emphasised Britain's need to regain her
export trade and foreign markets, to export to obtain the
food and raw materials she was always bound to import.
The question, therefore, was not just one of making good
deficiencies in the home market, but of increasing exports
to pay for these vital imports.
He stressed the desire of the Government to deal with
the problem of reorganising industry " on the basis of a tripartite partnership—employers, employees, and the Government ", and pointed out that in that partnership it would
be the duty of the Government " to emphasise at all times the
national as distinct from the sectional interest, and the
consumer's rather than the producer's needs".
Accordingly he announced the proposal to set up tripartite
working parties to review the needs of each of a number of
important industries. Each working party would include
equal representation of management, labour and the public
and would have an independent chairman. The representatives of the public, including the chairman, would be
chosen by the President of the Board of Trade on his own
initiative, and he would choose the other representatives
on the basis of lists proposed by the employers and by the
trade unions. He said that when the time came to consider
the reports of the working parties, it would be necessary to
carry out their recommendations by appointing " continuing
bodies of the same composition " as the working parties to
" advise the Government as to the needs of the industry and
as to what, if any, compulsions would be required to see that
the minimum plan was implemented". These powers of
compulsion would be in the hands of the Government and not
placed in the hands of industry itself.
Working parties were set up for some 18 industries—
boot and shoe industry, cotton, pottery, hosiery, furniture,
jewellery and silverware, heavy clothing, wool textiles, linoleum, lace, light clothing, cutlery, rubber-proofed clothing,
hand-blown domestic glassware, carpets, china clay, jute
and building. The large majority of these working parties
were established between October 1945 and April 1946,
1

See p . 152.

CO-OPERATION AT THE LEVEL OF THE INDUSTRY

133

although a few were not set up until later, the most recent
being that for the building industry appointed in July 1948.
As their reports became available one after another, they
were found to constitute in most cases plans for the over-all
reorganisation of the industry concerned, and the majority
favoured the establishment of tripartite councils to carry on
research, to advise the Government on the position of the
industries concerned, and to keep the industries advised as
to Government policy.
Prior to the enactment of the Industrial Organisation and
Development Act in July 1947 (see below), reports had been
rendered by nine working parties 1, among which those for
the cotton industry, hosiery, furniture, heavy clothing and
wool textile industries recommended the establishment of
central tripartite councils for those industries, while the
working party for the boot and shoe industry recommended
the establishment of a joint board, and that for the jewellery
and silverware industry recommended the establishment of
a Central Production Efficiency Organisation.
I t was partly on the basis of these reports 2 that the Government proceeded to enact the Industrial Organisation and
Development Act of 31 July 1947.3
1
See Ministry of Labour Gazette, June 1946, p . 148 (Cotton, Pottery) ;
ibid., Sept. 1946, p . 248 (Boot and Shoe industry) ; ibid., Oct. 1946, p. 276
(Hosiery) ; ibid., Dec. 1946, p . 356 (Furniture) ; ibid., Jan. 1947, p . 15
(Jewellery and Silverware) ; ibid., May 1947, p . 150 (Heavy Clothing) ; ibid.,
June 1947, p . 187 (Wool Textile industry, Linoleum industry).
2
For summaries of the later reports of working parties, see Ministry
of Labour Gazette, Sept. 1947, p. 292 (Lace) ; ibid., Nov. 1947, p. 372 (Light
Clothing) ; ibid., Jan. 1948, pp. 12-14 (Cutlery, Kubber-proofed Clothing,
Hand -blown Domestic Glassware) ; ibid., Feb. 1948, p. 50 (Carpet industry) ;
ibid., Mar. 1948, p . 84 (China Clay) ; ibid., July 1948, p . 231 (Jute) ; ibid.,
May 1950, p. 160 (Building).
Of these, the working parties for the light clothing, rubber-proofed
clothing and jute industries recommended the establishment of Development
Councils under the Industrial Organisation and Development Act, 1947,
which was now in force ; those for the cutlery and china clay industries
recommended the establishment of appropriate central tripartite machinery ;
the working party for hand-blown domestic glassware recommended a Joint
Industrial Council in preference to a Development Council ; that for the
carpet industry recommended the reconstitution of the wartime Carpet
Manufacturers' Executive Committee ; the working party for the lace
industry stated specifically that it did not believe that the setting up of a
permanent tripartite council would be of service but suggested that, some
five years later, some body of a constitution similar to that of a working
party should be set up to review progress and make further recommendations.
3

10 and 11 Geo. VI. ch. 40.

134

CO-OPERATION IN INDUSTRY

Under this Act, the President of the Board of Trade,
the Minister of Agriculture and Fisheries, the Minister of
Supply, the Minister of Pood, the Minister of Works, the
Admiralty, the Secretary of State and the Minister of Fuel
and Power were each empowered, with regard to any particular industry for which they were respectively competent,
to establish a development council if deemed expedient, in
order to increase efficiency or productivity in the industry,
to improve or develop the service which it renders or should
render to the community or to enable it to render such service
more economically. The Orders made required approval by
both Houses of Parliament and should not be made, according
to the Act, unless the Minister is satisfied that the council
is desired by a substantial number of persons engaged in
the industry concerned.
During the Third Beading Debate on this measure, the
Chancellor of the Exchequer, on 3 June 1947, summed up
the object of creating development councils as follows :
The object is to get one responsible body of persons who can
speak for all interests in the industry with a single voice and who,
in their consideration of the interests of the industry, will have in
mind as well the interests of the nation and of the consumers of the
industry's products. It is the intention of the Government to give
great weight to the recommendations of these bodies when they
are set up, and to use them in a large degree for that liaison with
industry which is now such an essential part of1 any national planning
or the execution of any plan which is made.
The first development council to be set up was for the
cotton industry, the Order being issued on 25 March 1948
and coming into force on 1 April 1948.2 The Orders made in
respect of the furniture industry and of the jewellery and
silverware industry came into force on 1 January 1949. 3
The Order in respect of the clothing industry was made on
16 November 1949 and came into force on 1 January 1950.4
1

Parliamentary Debates, House of Commons, Official Eeport, Vol. 438,
cols. 90-91, 3 June 1947.
2
See S.I. 1948, No. 629 : Industrial Organisation. Development : The
Cotton Industrial Development Council Order, 1948 (London, H.M. StationeryOffice, 1948) ; Ministry of Labour Gazette, Apr. 1948, p . 130 ; Cf. International
Labour Review, Vol. LVIII, No. 3, Sept. 1948, p . 377.
3
S.I. 1948, No. 2774 (Furniture), and S.I. 1948, No. 2801 (Jewellery
and Silverware) ; for a summary of the Orders, see Industry and Labour,
Vol. II, No. 1, 1 July 1949, pp. 29-31.
4
S.I. 1949, No. 2124 ; Industry and Labour, Vol. I l l , No. 2, 15 J a n .
1950, pp. 50-51.

CO-OPERATION AT THE LEVEL OF THE INDUSTRY

135

As mentioned earlier, the working parties for all these
industries had recommended the establishment of permanent
central bodies for the industries concerned. In the case of
clothing, the heavy clothing industry had reported first in
favour of a central tripartite body before the passing of the
1947 Act. The light clothing industry, reporting later, recommended a development council consisting of two sections to
cover heavy and light clothing respectively. Finally, the
rubber-proofed clothing industry working party, whose report
was published in January 1948, supported the establishment
of a single development council on a kind of federal basis to
cover all three sections of the clothing industry.
The circumstances attending the establishment of the
Cotton Board (as the new development council for that industry
is called) were somewhat different from those prevailing in
the other cases in that the new board was a continuation on
a broader basis of machinery already existing in the industry.
A board had been set up under the Cotton Industry Act, 1940,
to perform certain central services on behalf of the industry,
mainly with a view to satisfying the then urgent demand for
expansion of exports. On 15 March 1948, speaking with regard
to the proposed Order in the House of Commons, the President of the Board of Trade referred to the work of the old
board and pointed out that its work would continue on a
broader basis under the new board. He declared that the old
board, containing representatives of employers and employed
in the industry, had interpreted the needs and objects of
Government policy to the industry and also the needs and
views of the industry to the Government, and had represented
especially since the end of the war, " a most valuable point
of focus for all policies and projects connected with the cotton
industry and had brought about a spirit of co-operation
and unity in the industry such as never previously existed".
He added that the relationship between the old and the
new would be enhanced by the fact that the chairman of the
old board would become the chairman of the new one. The
development councils established in the other industries
mentioned consisted of entirely new machinery.
All the development councils are tripartite but their
composition varies and is fixed by the particular Orders
setting them up. The Cotton Board consists of 11 members
appointed by the Board of Trade, four being " capable of repre-

136

CO-OPERATION IN INDUSTRY

senting " those carrying on business in the industry—one
for each of its four main sectors—four representing workers
in the different sectors \ and three being independent persons
selected by the Board of Trade. In the case of this development council, as in the case of the others, the representative
organisations were consulted before the employers' and
workers' representatives were appointed.
The furniture
industry development council consists of seven employers'
representatives, seven workers' representatives and three
independent members, together with one further member
having special knowledge of marketing or distribution of
products in the industry. The council for the jewellery and
silverware industry consists of four employers' members—
representing different sectors 2 of the industry—four workers'
members, three independent members, and one further member
having special knowledge of the distribution of products in
the industry.
The development council for the clothing industry is
composed of six members capable of representing the interests
of employers (three for heavy, two for light and one for rubberproofed clothing) ; one member representing managers and
technicians ; six members representing employees ; four independent persons having no financial or industrial interests
in the industry ; one further member having special knowledge
of the distribution of clothing—18 members in all. The
relevant Order provided that this council should set up three
advisory committees, one for each main section of the industry.
It is impossible here to enumerate in detail the precise
functions contained in all the Orders, functions in the performance of which employers' and workers' representatives participate directly by virtue of their membership of the councils.
But the functions of the development council for the furniture
industry are typical, with slight variations, of those contained
in all the Orders, and may usefully be cited as an example.
Apart from the general functions of all development councils
as defined in the 1947 Act, the functions of the furniture
industry development council are : promoting scientific
research ; enquiry as to materials, equipment, methods of
1

Spinning and doubling, weaving, finishing and converting respectively.
Goldsmiths and silversmiths, manufacturers of electro-plated goods,
fine jewellers, manufacturers of imitation jewellery respectively.
2

CO-OPERATION AT THE LEVEL OF THE INDUSTRY

137

production, management and labour utilisation, including
discovery and development of new materials, equipment and
methods and the improving of those already in use ; improving
of design ; production of products conforming to minimum
standards of quality ; better definition and use of trade
descriptions ; certification of products and registration of
certification trade marks ; training of persons engaged or
proposing to be engaged in the industry and their education
in relevant technical or artistic subjects ; adoption of measures
for securing safer and better working conditions and provision
and improvement of amenities ; research into the incidence,
prevention and cure of industrial diseases ; encouragement of
entry of persons into the industry ; improved arrangements
for marketing and distributing products ; research into consumption or use of goods and services supplied by the industry ;
development of exports and overseas publicity ; arrangements
for better acquainting the public with the goods supplied and
methods of using them ; improving of accounting and costing
practice ; calculation and formulation of statistics ; advising
on any matters relating to the industry (other than wages
or other conditions of employment) as to which advice may
be requested by the Board of Trade, and undertaking enquiries
to enable such advice to be given ; undertaking arrangements
for making generally available information on matters with
which the council is concerned in the exercise of its duties.
All the Orders provide that persons carrying on business
comprising activities for which a particular council is established are required to register with that council. With the
approval of the Board of Trade, councils may impose levies
on such persons in order to meet their expenses. In the case
of cotton, furniture and clothing, the councils may require
manufacturers to supply such returns and other information
as is necessary to enable the councils to exercise any of their
functions, subject to safeguards with regard to the disclosure
of secret processes. The council for the jewellery and silverware
industry may exercise this last-mentioned power only for the
purpose of completing its register.
The 1947 Act requires " the agreement of a substantial
number of persons engaged in the industry " before a development council is set up in any particular industry. In the
case of the Development Council for the cotton industry, the
President of the Board of Trade, speaking with regard to the

138

CO-OPEEATION IN INDUSTRY

proposed Order then before Parliament, explained that, in
accordance with the Act, the appropriate employers' associations and trade unions had been consulted before making the
Order. Their proposals had been discussed and certain amendments in consequence had been made to the draft. He believed
the final draft of the Order to be " acceptable in all its basic
principles, and almost from point of detail, to everybody
concerned in the industry". In fact, there appears to have been
no dispute in respect of the Orders made establishing councils
for the cotton, furniture and jewellery and silverware industries.
When the Orders were discussed in Parliament it was not
necessary for any of these Orders to come to a division. But
in the case of the Development Council Order for the clothing
industry, the Parliamentary Debates disclosed conflicting
views as to what constituted the proper necessary degree of
agreement within the industry. I t was claimed by Opposition
speakers that 16 employers' organisations, whose members
employed 80 per cent, of the labour force in the industry,
were opposed to the establishment of a development council,
and that the two trade unions representing organised labour
in the industry, which were in favour of the establishment
of a council, in fact represented only 30 per cent, of the actual
labour force in the industry. The President of the Board of
Trade said that " the workers in the industry, as represented
by their trade unions, are completely in favour of the development council and the employers are largely, but not completely
against it". He added that of the three working parties set
up for the three main sections of the industry " two recommended the establishment of a development council and the
third was very much in agreement with the proposal". Accordingly the Government attitude was that there was a sufficiently
substantial desire for the council to satisfy the requirements
of the Act and the Order was approved by the House of
Commons by 196 votes to 77. 1
Before concluding the survey of machinery set up in the
United Kingdom, a short reference should be made to the
machinery for co-operation set up in certain branches, especially
agriculture, building and civil engineering and shipbuilding.
This machinery was set up as something apart from the system
1
Parliamentary Debates, House of Commons, Official Keport, 1 N O T .
1949, cols. 293-362.

CO-OPERATION AT THE LEVEL OF THE INDUSTRY

139

of enquiries by working parties and the eventual possibility
of establishing development councils. In most cases it was
set up during the war in order to further the contribution of
the industries mentioned to the general war effort. How
it has its part to play, in conjunction with the machinery
described in the foregoing pages, in ensuring the development
of British industrial productivity.
Agriculture is an industry for which no working party or
development council has been set up, for which no general
system for consultation on a regular basis has been set up
by agreement, and no sector of which has been covered by '
nationalisation legislation. There is no single national joint
committee or board. There is frequent consultation between
the Government and the separate national organisations,
representing farmers, workers and landowners, on all questions
of policy. The machinery for co-operation established by
legislation is mainly at the level of the county, that is to
say on a regional basis.
County agricultural executive committees were set up
under emergency powers in England and Wales in 1939 for
the purpose of securing the maintenance or increase of food
production during the war. Their work continued during
the post-war transitional period. The passing of the Agriculture
Act, 1947, led to their reconstitution on a permanent basis
in February 1948, with the duty of promoting agricultural
development and efficiency on the lines directed by the
Minister of Agriculture. The membership of each committee
consists of 12 persons, one of whom is appointed by the
Minister after consultation with the county council concerned,
while four others, with agricultural or scientific qualifications,
are also directly appointed by the Minister. Of the remaining
seven members, three are to be appointed from panels nominated by the National Farmers' Union, two from among
nominees of the agricultural workers' unions and two from
among nominees of the Central Landowners' Association.
The chairmen and deputy-chairmen are designated by the
Minister.
The chief function of the county committees is to supervise
the carrying out of the Government's policy of increasing
food production and to organise the means of production
for that purpose. They work closely with the Agricultural
Land Service in helping farmers and landowners on all agri-

140

CO-OPERATION IN INDUSTRY

cultural problems and play a valuable part in bringing to the
notice of the Minister all local problems affecting agricultural
development and efficiency in their counties. Accordingly,
their work can make a most useful contribution towards the
realisation of the Government's general planning policy.
The committees appoint subcommittees to deal with
various branches of their work, and also appoint district
committees to advise them on the condition of agriculture in
their districts.
In Scotland also, eleven agricultural executive committees
were set up in 1947 to take over the work of the committees
set up in 1939. They are appointed by the Secretary of State
after consultation with the representative organisations.
Finally, provision has been made for the appointment in
Scotland of local advisory committees, to which the representative organisations and various educational bodies will
nominate members, to advise the agricultural colleges on all
matters in the field of agricultural education and improvement. 1
Various consultative agencies have been set up in the
building and civil engineering industries to deal with different
aspects of the problems concerning those industries.
The National Consultative Council, set up in 1942, consists
of representatives of employers, operatives and professional
institutions, sitting under the Presidency of the Minister of
Works. I t deals with broad issues of policy and long-term
trends in the building and civil engineering industries, its
functions being—
. . . to advise on the general planning and control of the national
bunding and civil engineering programme, the relationship of the
programme to labour and material resources, the use of building
materials and the development and use of substitute materials and
the review of the arrangements for licensing building
and civil
engineering work under Defence Eegulation 56A.2
The Building and Civil Engineering Joint Committee, set
up also in 1942, consists of representatives of the five principal
national organisations of employers and operatives in the
two industries in Britain. The Chairman is the Parliamentary
Secretary of the Ministry of Works. Its function is—
1
Government and Industry : A Survey of Machinery for Consultation and
Co-operation (London, H.M. Stationery Office, 1948), pp. 5-6, 23-24.
2
Ibid., pp. 14-15.

CO-OPERATION AT THE LEVEL OF THE INDUSTRY

141

. . . to consider and advise on specific matters arising in the
execution of the building and civil engineering programme, including
labour questions, welfare, shortages of materials, the organisation
and efficiency of the building and civil engineering industries, and
the work of the regional joint committees.1
The regional committees deal with problems arising out
of the application of the general programmes to the different
regions. 1
The joint Building Industry Production Subcommittee,
created in 1946, provides a channel between, the Ministry
and the industry for the exchange of information about
output ; and considers and gives advice upon matters of
general production policy in the building industry. 2
The Building Apprenticeship and Training Council set up
in 1943 has a membership consisting of representatives of
employers, operatives, professional institutions, educational
organisations and Government departments, the latter acting
in an advisory capacity. I t advises on all matters concerning
the recruitment, education and training of young persons for
craftsmanship and management and encourages apprenticeship schemes in the industry on a comprehensive basis. 3
Finally, there are certain joint committees for particular
matters in the industry, for example, the Advisory Committee of Specialists and Sub-contractors and the Advisory
Committee on Contractors' Plant.
In the allied building materials industry two joint agencies
—the National Brick Advisory Council and the Committee
for the Salt Glazed Pipe Industry—advise the Minister of
Works on a number of matters, for example, price fixing,
quotas, correlation of production and demand and, in general,
on all matters affecting production, including transport,
labour, fuel and other problems affecting output. 4
A tripartite Advisory Council for the Engineering Industry was set up in February 1947 under the chairmanship of
the Minister of Supply after consultation between the Ministry and the employers and trade unions. The purpose of the
Council is to afford the Minister, in the discharge of his responsibilities for the engineering industry, a means of consultation
1
2
3
4

Ibid.,
Ibid.,
Ibid.,
Ibid.,

p . 15.
pp. 15-16.
pp. 16-17.
pp. 17-18.
10

142

CO-OPEEÁTION IN INDUSTRY

with employers and workers in the industry on matters of
general concern in the engineering field. The Council is competent with regard to mechanical, electrical and radio engineering but not shipbuilding or iron and steel. 1
A number of other joint bodies exist for consultation on
various problems affecting the engineering industry. The
Engineering Advisory Panel, set up in 1947, advises the
Minister of Supply on matters mainly connected with the
transfer and distribution of labour and other aspects of
employment. The Gauge and Tool Advisory Council,
a tripartite body, was set up in 1946 to advise on measures for
promoting a gauge and tool industry capable of making a
maximum contribution to industrial efficiency, exports and
security and to provide a means of regular contact between
the gauge and tool industry and the Government. The
Council considers such matters as the collection and dissemination of statistics and information, production, exports, imports,
research and development, and consults with engineering
industries in the planning of new production involving a
demand for gauges and tools, etc. Somewhat similar functions are performed with regard to machine tools by the
Machine Tools Advisory Council also set up in 1946. The
National Advisory Council for the Motor Manufacturing
Industry, established in 1946, consists of representatives of
employers and workers in the industry, representatives of
the Ministry of Transport, the Board of Trade and the
Ministry of Supply and one independent member. Its
function is—
. . . to provide a means of regular consultation between the
Government and the motor manufacturers on such matters as the
location of industry, exports, imports, research design and technical
development, production methods and the general progress of the
industry.
Finally, the tripartite Heavy Electrical Plant Committee
has advised the Government, since March 1947, in establishing
the prospective supply and demand position and considers—
. . . practicable ways and means of utilising the capacity of
the industry to the fullest extent and to the best advantage in relation to home and overseas requirements,
the spread of orders and
production difficulties generally.2
1
2

Ministry
of Labour Gazette, F e b . 1947, p . 49.
Government and Industry,
op. cit., p p . 19-21.

CO-OPEBATION AT THE LEVEL OF THE INDUSTRY

143

The Shipbuilding Advisory Committee consists of representatives of the shipbuilding industry and trade unions,
shipowners and Merchant Navy unions, the Admiralty,
Ministry of Transport and Ministry of Labour, together with
other Government representatives when necessary. The independent chairman is responsible jointly to the First Lord of
the Admiralty and to the Minister of Transport. The Committee was set up in July 1946 with the following terms of
reference :
(i) To advise the Government on all matters which affect or
are likely to affect the efficiency and stability of the shipbuilding industry ; and in particular to advise on the part which the
shipbuilding industry can play in fulfilling the policy of full employment.
(ii) To advise the Government of any steps required to safeguard
the war potential of the industry.
(iii) To promote the co-operation of the shipbuilding employers both with the shipowners and the representatives of shipyard
labour.
(iv) To advise from time to time on organisation, practice and
cognate matters with a view to maintaining and improving the
efficiency and stability of the industry ; and to arrange for such
consultation with the industry and for such enquiries into specific
matters as may be necessary. The Committee was not to deal with
matters falling within the ordinary competence of existing bodies
for joint negotiations in industrial relations questions.1
Eeference will be made to the Iron and Steel Board, now
discharged, when consideration is given to the nationalised
industry.
Finally, an important step has been taken with regard
to an industry of a different kind from the great economic
branches enumerated above. This was the appointment, in
March 1948, of a National Film Production Council, consisting
of seven representatives of the film producers and seven
representatives of the unions concerned and meeting under
the chairmanship of the President of the Board of Trade.
The purpose of this council is to keep under review by the
Government and by the industry the measures being taken
to promote all aspects of production efficiency and, in particular, to consider the question of the costs of production
in the industry. 2
1
2

Ibid., pp. 22-23.
Ministry of Labour Gazette, Apr. 1948, p. 131.

144

CO-OPEEATION IN INDUSTRY

These various agencies, therefore, side by side with the
development councils in other industries and the machinery
set up in basic industries under nationalisation measures,
complete the all-embracing network of consultation in industry
which the Government deems essential to the realisation of
its over-all economic plan.

INDUSTRIALISATION IN INDIA AND PAKISTAN

Co-operation at the level of the industry in India has come
into being as an extension of previously existing machinery at
the national level. There are two separate agencies at the
national level, one dealing primarily with social questions and
the other with economic questions. Separate machinery for
these two kinds of questions has also been established at the
level of the industry.
Dealing mainly with social questions, the Tripartite Labour
Organisation was set up on a permanent basis at the national
level in 1942, with the objects of promoting uniformity in
labour legislation, determining the procedure for the settlement
of industrial disputes and consultation on all matters of general
interest to industry as a whole. By 1948 the Organisation
had met in conference six times and its Standing Committee
ten times, so that by that date co-operation in these fields at
the national level had become well established. With the
success of this tripartite consultation assured, the Government
of India early in 1948 was extending the principle of tripartite
collaboration to major individual industries.
Tripartite
industrial committees, modelled on the I.L.O. Industrial
Committees, have been set up in the textile, plantation, coal
mining, cement and leather industries, with functions similar
to those of the Tripartite Labour Organisation itself. Protective
labour legislation has figured prominently in their discussions
as is illustrated by the far-reaching proposals made to the
Government by the Coal Mining Committee in connection
with the proposed revision of the Indian Mines Act. 1
Tripartite collaboration for consultation on economic
questions relating to the formulation of industrial policy has
also developed rapidly.
1
" A Decade of Labour Legislation in India, 1937-1948 : I ", in International Labour Review, Vol. LIX, No. 4, Apr. 1949, pp. 394-424.

CO-OPERATION AT THE LEVEL OF THE INDUSTRY

145

At the Indian Industries Conference held in New Delhi
from 15 to 18 December 1947, and attended by representatives
of the Government of India, State Governments, employers and
trade unions, an important resolution was passed concerning
the urgent need for increased production. The conference
emphasised the need for close consultation between the various
Ministries concerned with industrial development and the need
to associate representatives of industry and labour in a periodical review of progress and of the measures necessary to
stimulate it, and recommended the setting up of a central
industrial advisory council with appropriate subcommittees
for important industries. 1
On 6 April 1948 the Minister for Industry and Supply
presented to the Constituent Assembly of India (Legislative)
a resolution outlining the Government of India's industrial
policy, which was approved by the Assembly on 7 April 1948. 2
The Minister referred to the need to " promote a rapid rise in
the standard of living of the people by exploiting the latent
resources of the country, increasing production and offering
opportunities to all for employment in the service of the
community ", and stated that " for this purpose, careful
planning and integration over the whole field of national
activity are necessary ". Among the measures to be taken to
attain these objects, he declared it to be the Government's
intention to establish suitable tripartite and bipartite machinery at the central, regional and unit levels to ensure the
fullest co-operation. He went on to speak of eighteen basic
industries which would be subject to central regulation and
control and stated that representatives of industry and labour
would be associated with the Government in the Industrial
Advisory Council and other bodies to be set up. The Central
Advisory Council would have under it tripartite committees
for each major industry, with other appropriate machinery at
lower levels.
A Tripartite Central Advisory Council for Industries
was established on 2 September 1948 to assist the Government
in securing the maximum increase of industrial production and
to advise on specific questions relating to industry. 3 The
1
2
3

International Labour Review, Vol. LVIII, No. 1, July 1948, pp. 64-69.
Ibid., Vol. LVII, No. 6, June 1948, pp. 626-632.
Industry and Labour, Vol. I, No. 7, 1 Apr. 1949, p. 265.

146

CO-OPEEATION IN INDUSTRY

standing committee of this council, meeting on 11 and 12
November 1949, recommended the immediate constitution
of working parties 1 , consisting ordinarily of two representatives
each of the industry and of the workers employed in it and
three persons nominated by the Government, to enquire into and
report on the cotton textile, coal, heavy engineering and sugar
industries, with the duty of considering measures to (a)
increase production, reduce costs and improve quality ; (b)
increase the efficiency of labour, management and organisation
of the industry as a whole ; (c) improve the marketing of products both at home and abroad ; (a) promote rationalisation
of the industry. The working parties would make their recommendations within six months. The standing committee also
recommended that production targets for the year 1950 should
be determined and announced by the Government in respect
of the more important industries having a direct bearing on
the cost of living. 2 I t further suggested that small committees,
made up of representatives of employers and workers concerned, should be set up and charged with the responsibility
of facilitating the achievement of the targets and of obtaining
the required assistance from the Government whenever
necessary. 3
In accordance with the above recommendations, tripartite
working parties were set up for the cotton textile and
coal industries 4 and for heavy engineering. 5
In Pakistan also, machinery for consultation at the industrial level has been preceded by tripartite machinery at the
national level. The general trends are remarkably similar
in the two countries.
The Pakistan Industries Conference, held in Karachi from
13 to 17 December 1947, made several recommendations
calculated to develop certain industries and accepted the
principle of central planning for many basic industries. 6 The
Government of Pakistan, having examined the recommenda1

Industry and Labour, Vol. I l l , No. 11, 1 June 1950, pp. 418-421.
Provisional production targets for 14 of the country's largest industries
were accordingly announced by the Government of India on 23 November
1949 ; see Industry and Labour, Vol. I l l , No. 9, 1 May 1950, p . 331.
3
Statesman, 13 and 14 Nov. 1949 ; Hindustan Times, 14 Nov. 1949.
4
Communication from the I.L.O. correspondent in India, Apr. 1950.
5
Ibid., May 1950.
8
International Labour Beview, Vol. LVIII, No. 2, Aug. 1948, pp. 214215.
2

CO-OPERATION AT THE LEVEL OF THE INDUSTRY

147

tions, issued a statement on its industrial policy on 21 April
1948.1 The statement referred to the industrial backwardness
of Pakistan and the extent of its untapped natural resources,
and to the fact that agriculture was still the primary occupation
of its people. Nevertheless, the Government intended to
encourage the development of large-scale industries. For the
time being, the Government envisaged central planning for
27 industries. It announced the establishment of a planning
advisory board, including among its members representatives
of employers and labour, to advise the Government generally
on matters relating to planning and development, to review
the progress made in the implementation of the plans, etc.
On 13 July 1949, the Government set up a Tripartite
Advisory Council of Industries to advise the Government in
the matter of fixation of targets, location and size of industrial
units, to advise generally on industrial policy and the allocation of raw materials in short supply, to review periodically
production of major industries and to advise the Government
on steps to be taken to secure the best use of existing capacity,
to advise on imports of capital equipment and raw materials
and to deal with specific problems referred to it by the Government. In the resolution 2 in which the creation of this council
was announced, it was stated that subordinate advisory
committees had been set up for seven industries—chemicals,
glass and ceramics, heavy engineering, leather, bight engineering, shipbuilding, and the food industry—to deal with the dayto-day development problems of these industries and to
report to the Advisory Council from time to time on the
progress made. The Government expressed its hope in the
resolution that, with the setting up of the above machinery
for the co-ordinated development and promotion of industries,
a concerted effort would be made by labour, capital and the
general public for a rapid industrialisation of the country.

PARTÍCULAS, INDUSTRIES
In the case of the countries mentioned so far, the machinery
for co-operation at the level of the industry does not represent
1

Ibid., pp. 211-214.
Government of Pakistan, Ministry of Education and Industries (Industries Division), Kesolution of 13 July 1949.
2

148

CO-OPERATION IN INDUSTRY

isolated examples of co-operation in particular industries.
In each country that machinery has been set up in each
case, with such modifications as may be necessary, in several
important industries. Co-operation there involves a considerable degree of co-ordination between the different industries,
in relation to economic planning, re-equipment programmes or
organisation of industry.
But, in a number of countries, machinery for co-operation
has been established on a less comprehensive basis—generally
for one or two industries only, either because the industry is
one of outstanding importance or because the circumstances
have been especially favourable to the development of
co-operation.
Machinery of this kind has been established, or there is
legal provision for it to be established, in Australia, ÎTew
Zealand, South Africa, Uruguay, Austria, Switzerland and
the Saar. It will be observed that such machinery is generally
advisory.
In Australia, tripartite advisory panels for stoves and
ovens, electric motors and refrigeration have been set up
under the Secondary Industries Commission.
The New Zealand Industrial Eelations Act* empowers
the Minister of Labour to appoint an Industrial Advisory
Council and also special advisory councils for particular
industries. A special advisory council is to consist of a chairman
and such employers' and workers' representatives and other
persons as the Minister sees fit to appoint. Its functions
are to enquire into means of improving industrial relations
and industrial welfare in the industry and to make reports
and recommendations to the Minister on its own initiative
or where a matter has been referred to it by the Minister.
It is especially concerned with such questions as incentive
payments, profit sharing, safety and health of workers,
provision of amenities and establishment of works committees.
In the Union of South Africa, joint industrial councils
established in accordance with the Industrial Councils Act,
1937 2 are sometimes consulted by the Government about the
preparation and application of legislation relating to the
1
New Zealand, Industrial Eolations Act, 1949, No. 6, an Act to provide
for the Improvement of Industrial Eelations, 16 Aug. 1949.
2
L.S., 1937—S.A. 3.

CO-OPERATION AT THE LEVEL OF THE INDUSTRY

149

particular industries with which they are respectively concerned.
In Uruguay, a Decree of 18 October 1946 established a
special committee on a tripartite basis to study the development of the national textile industry.
I n Austria, agencies for consultation have been set up
from time to time since the war in particular industrial or
agricultural branches to advise the competent Ministers on
the application of controls to imports and exports. Two
recent examples are the agencies established by the Wheat
Control L a w x and the Cattle Control Law 2 , both dated
12 July 1950. Each of these Laws provides for the establishment of joint committees—the committee in respect of
the cattle industry has nine members and that for wheat
has 27. The members are appointed by the Federal Minister
of Agriculture and Forestry—one third each on the basis of
proposals made by the Chamber of Agriculture, the Federal
Economic Chamber and the Austrian Chamber of Labour in
full session. The committees make proposals to the Minister
with a view to the fixing of import and export plans on the
basis of quotas prescribed for wheat and cattle. 3
In Switzerland, under a draft Federal Decree which is
intended to replace the present regulations concerning the
watchmaking industry when they cease to apply on 31 December 1951, the Federal Council would be permanently empowered
to make the opening of new undertakings in the industry,
increases in the number of personnel employed in undertakings,
the transformation or removal of existing undertakings or the
reopening of undertakings which have been closed down for
a period, subject to the Council giving its permission. Before
giving its permission for any of these operations the Federal
Council would require to ask the opinion of an advisory
committee, to be established under the proposed Decree,
comprising representatives of the employers' and workers'
organisations concerned in the watchmaking industry. The
committee would be appointed by the Department of Public
Economy after it had consulted the said organisations. 4
1
2
3

Bundesgesetzblatt, No. 168.
Ibid., No. 169.
Communication from the I.L.O. correspondent in Austria, 27 Sept.

1950.
4

La Lutte syndicale, 22 Nov. 1950.

150

CO-OPEKATION IN INDUSTRY

As a result of the economic integration of the Saar with
France, a Saar Mines Administration was established on
1 January 1948 under the authority of the French Ministry
of Industrial Production. A French Director-General was
made responsible for the administration of the mines, assisted
by an administrative board of Government representatives.
The board was supplemented by a consultative body, the
Higher Council for the Saar Mines, composed of the French
High Commissioner in the Saar and 30 members nominated
by various French Ministers, economic interests in the Saar
and French and Saar workers' organisations. 1
Publicly Operated Services and Nationalised Industries
PUBLICLY OPERATED SERVICES

In a number of countries the workers, through their
representatives, participate in or are associated with the
management of certain publicly operated services—in particular, the railways.
To mention a few examples only, one or more representatives of the staff are appointed to the boards of management of the State railways in several countries (e.g., Belgium,
Canada, France, Italy, Norway, Switzerland, etc.).
Three of the 21 members of the board of management
of the Belgian State railways are designated by the railwaymen and two of the eight members of the Norwegian board
are similarly nominated.
In Switzerland the general secretary of the union concerned
represents the staff on the board of management of the
federal railways and, in the case of some of the small private
railways, a member of the staff sits on the board of management as a member designated by the cantonal Government.
In France, since 1938, five representatives of the railway
unions, of which four are designated by the National Federation of Eailwayworkers and one by the Federation of Christian
Trade Unions, have sat on the board of management of the
national railway company.
1
International Labour Organisation, Coal Mines Committee, Third
Session, Pittsburgh, 1949, Report I : General Report (Geneva, I.L.O., 1949),
p . 189.

CO-OPEBATION AT THE LEVEL OF THE INDUSTRY

151

In Canada, the unions have one representative on the board
of directors of the Canadian National Railways.

NATIONALISED INDUSTRIES

While nationalisation in Western Europe has been limited
to a few of the most important industries in France and the
United Kingdom and the electricity industry in Austria,
in Eastern Europe by far the greater portion of industry has
been nationalised. The problems of co-operation, and especially the manner of their solution, have been very different
in the two cases.
Western European Countries
Since the issue here is not nationalisation as such, but
simply how far and in what manner co-operation is effected
where there is nationalisation, it is unnecessary to refer
separately to every individual branch of nationalised industry or to the different undertakings over which the State
exercises varying degrees of control. It is, however, useful
to consider the main nationalisation measures so as to determine the extent of the nationalised sector in respect of which
co-operation is effected and to illustrate the principles underlying such co-operation in an administrative or advisory
capacity—this being the main difference as between France
and the United Kingdom respectively—in the operation of
the nationalised branches.
In France, the Bank of France and the great deposit banks
were nationalised in 1945 1, mineral fuel was nationalised by
the Order of 13 December 1944 a (the coal mines of the Nord
and Pas-de-Calais) and the Act of 17 May 1946 3 (all the principal mining and fuel undertakings, with the exception of
national gas, mineral oils and peat), undertakings for the production, transport, distribution, import and export of gas and
electricity by the Act of 8 April 1946 4 and insurance under1

Act of 2 Dec. 1945, Journal officiel, 3 Dec. 1945, p. 8001.
Journal officiel, 14 Dec. 1944, p . 1876 ; see also International
Review, Vol. LII, No. 4, Oct. 1945, p . 388.
3
Journal officiel, 18 May 1946, p . 4272.
. * Ibid., 8-9 Apr. 1946, p. 2951.
2

Labour

152

CO-OPEBATION IN INDUSTRY

takings by the Act of 25 April 1946. 1 An example of a specific
important nationalised undertaking is that of the Eenault
motor factories, placed under public ownership by an Order
of 16 January 1945. 2 Eeference has already been made to the
State-owned railway system.
The Austrian electricity industry was nationalised in 1947. 3
In the United Kingdom, the Coal Industry Nationalisation
Act of 12 July 1946 4 came into force on 1 January 1947.
The Bank of England Act came into force on 1 March 1946,
the Civil Aviation Act on 1 August 1946 and the Cable and
Wireless Act on 1 January 1947. The generation and bulk
supply of electricity was placed under State control by the
Electricity Act of 13 August 1947 5, while gas followed under
the Gas Act of 1948. 6 Bail and road transport, docks and
inland waterways, together with ancillary hotel and catering
facilities, were nationalised by the Transport Act of 16 August
1947.7 Finally, a very substantial part of the iron and steel
industry was nationalised by the Iron and Steel Act 1949 8,
the vesting provisions of which took effect on 15 February 1951.
It is against the background of these industries that the
question of co-operation in nationalised industry in France,
Austria and the united Kingdom must be reviewed.
^Workers'1 Participation in Administration in France and Austria.
In France, after the war, the main workers' organisations
demanded the participation of workers' representatives in the
actual administration of nationalised industries. They argued
that the interests of the great capitalists should be eliminated,
that bureaucratic control should be avoided and that the
nationalised companies should be administered by boards of
directors representing all classes of workers, the interests of
consumers and the interests of the State. 9
1

Journal officiel, 29-30 Apr. 1946, p. 3566.
Ibid., J a n . 1945, p . 222.
3
Nationalisation Act No. 2, Bundesgesetzblatt, No. 81/1947.
4
International Labour Review, Vol. LIV, Nos. 3-4, Sept.-Oct. 1946,
p. 198.
6
10 and 11 Geo. 6, ch. 54.
6
11 and 12 Geo. 6, ch. 67.
7
10 and 11 Geo. 6, ch. 49.
8
12 and 13 Geo. 6, ch. 72.
9
Labour-Management Go-operation in France, op. cit., pp. 109 et seq.
2

CO-OPERATION AT THE LEVEL OF THE INDUSTRY

153

The National Council of Eesistance had also urged " the
participation of the workers in the direction of the national
economy ", 1
There was already a precedent for participation of workers'
representatives in administration afforded by the example of
the Société nationale des chemins de fer 2 and by the fact
that the trade unions had been called upon in the past to take
part in the administration of various " joint undertakings ",
in which State participation varied from 3 to 99 per cent., for
example, the General Council of the Bank of France as reorganised in 1936, the potash mines, the National Nitrates
Office, the autonomous ports, etc.
The legislature has, generally speaking, made the administration of the nationalised undertakings a matter of genuine
co-operation by giving to them the status of public nationalised
institutions of an industrial or commercial character, endowed
with legal personality and financial autonomy, and administered in the interests of the community by all the parties
concerned—the public authorities, consumers, staff and producers.
The most important and the most regularly observed of the
general principles in this connection is that which brings together
on boards of directors representatives appointed by the State,
representatives of the staff appointed by the most representative
of the trade unions, and representatives of the general interests of
the country, chosen in most cases by trade union federations, large-3
scale family associations or various groups of consumers and users.
Some brief description may be given of the present structure
of the French nationalised industries in order to illustrate
how the machinery established to operate those industries
gives practical effect to the theory that representatives of
occupational organisations should participate directly in
management—and that, moreover, workers' representatives
should be recruited from among persons who have actually
been employed in the industries concerned.
The management of the nationalised fuel mines throughout
the whole territory is entrusted to a national coal board, the
Charbonnages de France. This board was given the functions
of directing, supervising and co-ordinating the operation of
1
2
3

Ibid., p . 110.
See p. 150.
Inventaire de la situation financière, 1913-1946.

154

CO-OPERATION IN INDUSTRY

the various coalfields, submitting for Government approval
a plan for coal production and re-equipment, advising on
import and export schemes and fuel prices, promoting research
and the training of workers, etc. Each coalfield was placed
under a regional board established as a public corporation
responsible for production, operation and marketing. Six
members of the national coal board represent the State and
are appointed by the Ministers concerned, six represent consumers (three for industrial consumers and three for domestic
consumers, one of the latter being appointed by family associations and two by trade unions) and six represent the different
grades of staff (manual workers, salaried employees, supervisory
staff, engineers and higher grades), being appointed on the
recommendation of the most representative trade unions.
Through this twofold method of representation, therefore, the
trade unions provide eight of the 18 persons entrusted with the
over-all management of this important industry. Of the 18
members of each regional board, seven, representing the various
grades of staff, are appointed by the most representative trade
unions in the coalfield. The director-general of each regional
board is appointed by the competent Minister on the recommendation of the board itself.
The nationalised electricity and gas undertakings are
administered respectively by the electricity board, Electricité
de France, and the gas board, Gaz de France. Each is placed
under a council of 18 members—six representatives of the
State, six representatives of consumers, six representatives of
the workers (three for administrative and technical grades,
one for salaried employees and two for manual workers)
appointed on the recommendation of the most representative
trade unions. In each region there are electricity distribution
departments and gas production and distribution departments
administered by boards appointed by the national services.
Of the 18 members of each administrative regional board, four
represent the National Board, eight represent the consumers
and six represent the various grades of workers and employees.
Thus, in the three great producing industries mentioned
above, the workers provide at least one third of the persons
entrusted with administration and management at both the
national and regional levels.
With regard to banking and insurance, there are no over-all
administrative boards at the national level, each of the natio-

CO-OPEBATION AT THE LEVEL OP THE INDUSTRY

155

nalised undertakings having its own separate board. Here
again, however, the direct participation of organisational
representatives is equally marked.
The staff are represented on the General Council of the
Bank of France. Each of the four main deposit banks which
have been nationalised is managed by a board of 12 members—
four chosen by the Government from among persons engaged in
industry, commerce or agriculture, and four appointed on recommendations made by the most representative trade unions
concerned (two chosen from the higher grades and two from the
subordinate grades of the staff of the bank) and four other
members appointed by the Minister of Finance (two representing
public credit institutions and two being persons with a wide experience of banking). The President of each bank is elected by
the board, subject to approval by the Minister of Finance. The
nationalised insurance undertakings are also managed by
boards, each composed of a Chairman, appointed by the
Minister of Finance after consultation with the board, three
members appointed by the National Insurance Council for
reasons of technical ability, three members representing the
State, three members representing insured persons and three
members appointed by the most representative trade unions
(one representing employees, one representing senior staff
and inspectors and the third representing agents).
Although there are no general boards of management
for banking and insurance at the industrial level, there are
advisory agencies at that level in which trade union representatives also participate. The French Act of 2 December 1945
concerning the organisation of credit set up a National Credit
Council as the central agency of the new financial system.
Of its 38 members, seven are nominated by the most representative trade unions—three to represent their general interests,
appointed by the Minister of National Economy, and four to
represent the various grades of bank staff, appointed by the
Minister of Labour. The National Insurance Council is the
central agency which advises the Minister of Finance on
all measures concerning the general activities of nationalised
and non-nationalised insurance undertakings. Under the
chairmanship of the Minister of Finance, it is composed of 21
members—seven representing the State, appointed by the Ministers concerned, seven representing insured persons, appointed
respectively by the trade unions, the chambers of commerce,

156

CO-OPEBATION IN INDUSTRY

the trade chambers, the French Chamber of Foreign Trade
and the family associations, and seven representing persons
employed in insurance, appointed by the federations, trade
unions or other national associations concerned (one for
managers, one for the higher grades and inspectors, two for
clerks, two for agents, and one for the staffs of agricultural
mutual insurance funds).
A new form of statute for publicly owned undertakings
is now under consideration, but the right of workers' organisations to participate in their management will be safeguarded.
The Austrian Government also has given effect to the principle of direct co-operation by representatives of occupational
organisations in the management of the nationalised electricity
services. The co-ordination of the regional and special electricity services is entrusted to a central company established
on a commercial basis. One third of its board of directors are
appointed by the central Government, one third by the various
regions, while one third must consist of at least one representative of the Chamber of Labour, one representative of
the chambers of agriculture and one representative of salaried
employees and workers in the nationalised undertakings.
Joint Advisory Machinery in the United

Kingdom.

In the United Kingdom, on the other hand, the Government rejected at the outset the theory that representatives
of trade unions or employers' organisations as such should
participate directly in the management of the nationalised
industries.
When the Labour Government was elected to office in
the summer of 1945, it already had prepared plans for the
nationalisation of the Bank of England, coal mining, transport, electricity, gas, telecommunications, civil aviation and
for the possible nationalisation of iron and steel. The simultaneous plan of instituting working parties, leading eventually
to the enactment of the Industrial Organisation and Development Act, 1947 and to the establishment of development
councils pursuant to that Act, was kept quite separate and
distinct from the nationalisation programme. No working
party or development council was ever contemplated for any
industry scheduled for nationalisation.

CO-OPEBATION AT THE LEVEL OF THE INDUSTRY

157

The Government did not permit representatives of employers' or workers' organisations to sit as representatives of those
organisations on any of the public authorities it set up. I t
appointed independent persons to the boards of all the nationalised industries. The boards as now constituted do in fact
include ex-employers and ex-trade union officials. But when
this has happened they have been chosen—by the Government itself—purely on the ground of qualifications and not
in a representative capacity. Moreover, when so chosen, they
have been required to surrender their industrial interests or
sever their trade union connections as the case may be.
At the same time, the Government took steps to ensure
development on an advisory basis of co-operation by representatives not only of the persons engaged in the industries
concerned but also of consumers. Furthermore, the Acts
all require the agencies of management established under
them to seek by agreement with organisations representing
the workers the institution of permanent machinery—unless
adequate machinery already exists—for the purpose of collective bargaining and the avoidance or settlement of disputes.
In fact, as will also be seen, agreements in the main nationalised industries have established joint agencies for consultation
on much broader matters.
The present structure, when it was in the planning stage
in 1944, was approved in general terms both by the Trade
Union Congress and by the Labour Party.
The essential difference between consultation and control is
that, in consultation, the power of decision remains one-sided in
the hands of the employer or management, however much the
decisions may be influenced by the attitudes of those who are
consulted... Trade unions could not pass beyond joint consultation
to joint control without having to assume a degree of responsibility
going far beyond that which mere consultation involves. In sharing
in the power of decision they would necessarily come to share in
the responsibility for the proper conduct of the industry or establishment, in the public interest ; and it is clear that this might involve
for their representatives a conflict of loyalties when what they
thought desirable in the interests of industrial efficiency clashed
with what their members wanted, or were prepared to accept without
serious protest. Trade unions, in effect, cannot easily double the
parts of (a) protective agencies, democratically responsible to their
members and required to carry out their members' wishes, and
(b) joint policy-makers and managers of industry, responsible to
the public as a whole for carrying out its wishes and for furthering
the highest possible efficiency of production. In the last resort
these two functions would be bound to show themselves incompatible
11

158

CO-OPERATION IN INDUSTRY

at certain points... many of those interested in industrial democracy
judge that these difficulties make it undesirable for workers or their
organisations to have a direct share in management, and that
effective consultation, reinforced by a continual widening of the
scope of collective agreements is the trade unions' best form of
approach to industrial democracy.1
Proposals have been put forward at Congresses held since
the war for direct participation by trade union representatives
in the management of nationalised industries.
One group has demanded that these branches should be
organised in the form of industrial parliaments. A representative of the Chemical Workers' Union put forward the
following resolution at the 1950 Congress :
Congress, whilst registering its complete support of the principles
of nationalisation, is of the opinion that the existing methods of
control and administration are not in keeping with democratic
principles and have not fulfilled the hopes of the industrial workers.
Congress therefore urges the General Council to consider at the
earliest possible moment an entirely new structure of administration
and control based on the establishment of industrial parliaments
for each of the nationalised industries. Such paruaments to have
limited aims as laid down in the nationalisation Acts but full executive powers within the democratic limitations of the British Constitution.
The General Council's view was that methods of parliamentary government could not be translated into industrial affairs
and that " the application of industrial democracy to industry
has got to be through the development of the process of joint
consultation ". The resolution was defeated. 2
A second group, in which the National Union of Eailwaymen has been prominent, has urged that some direct trade
union representatives should be appointed to the boards,
but not necessarily as many as half the total. This kind of
reasoning inspired the second resolution on this question at
the 1950 Trades Union Congress at Brighton which was put
forward by a representative of the Association of Supervisory Staffs, Executives and Technicians :
Congress places on record its concern at the nature of appointments made to boards and similar bodies in nationalised industries
at all levels. Peeling that insufficient use is made of the wealth of
knowledge and ability to be found within all ranks of the trade
1

Hugh CLEGG : Labour in Nationalised Industry, Interim Keport of a
Fabian Research Group (London, Fabian Research Series No. 141, 1950),
pp. 12-13.
a
Trades Union Congress, Brighton Congress Beport, 1950, pp. 512-514.

CO-OPERATION AT THE LEVEL OF THE INDUSTRY

159

union movement, Congress calls upon the General Councü to make
representations to H.M. Government to ensure that at least one
third of the members appointed to the boards of nationalised industries shall be representatives of the trade union movement of whom
at least half should have worked in the industries concerned.
The General Council stated that the T.TJ.C. was committed to a different conception than that envisaged in the
resolution and declared that " we do not regard those boards
as representative bodies representing interests". This resolution also was defeated. 1
A third resolution, sponsored by the National Union of
Mineworkers, was in the following terms :
That this Congress is of opinion that trade union representation
on the board of any nationalised industry or on the board of the
nationalised section of any industry shall be from the union
organising that industry and instructs the General Councü, when
consulted by the Government, to make recommendations accordingly,
after consultation with the union concerned.
But the Council argued that the Government must be allowed
to choose the best men available in the interests of the community as a whole. The resolution was lost on a card vote
by 5,613,000 votes to 1,169,000.2
Finally there is a school of thought which favours the
appointment of more members drawn from the working class
movement but not representing the trade unions as such,
thus leaving the unions free to follow their traditional function
of independent protection of their members' interests. This
school, therefore, while accepting Ministerial nomination as
the method of appointment, without any representative
element, has asked for " the appointment of more persons
drawn from the working-class movement, both as board members and as senior officers". This demand has received the
endorsement of the Trades Union Congress.3
The Government has in fact fulfilled the principle of
independent representation in its constitution of machinery
of management pursuant to the nationalisation Acts while
at the same time establishing advisory machinery in which
organisational representatives play their part. It is with
respect to the operations and functioning of the machinery
1

Ibid., pp. 514-517.
Ibid., pp. 517-521.
8
Labour in Nationalised Industry, op. cit., p . 7.
2

160

CO-OPEEATION IN INDUSTRY

of management of the nationalised industries that advice is
tendered through the advisory agencies set up either under
the relevant statutes or by agreement.
Each of the nationalised industries is managed at the
highest level by an independent public board x to manage
the industry on business-like lines. Although the Government
becomes the complete owner of the nationalised industry
the competent Minister does not interfere with normal administration but the board must " be responsive to the will
of the Minister if expressed".
Co-operation in the iron and steel industry had already
been developed, prior to nationalisation, through the establishment, in succession to earlier machinery, of an Iron and Steel
Board in 1946. This tripartite part-time body had functions
with regard to the modernisation of the industry ; supervision
of the industry, especially with regard to raw materials and
the application of production, distribution and import controls,
and advising on price policies. I t is unnecessary to describe
these functions more fully as the Board ceased to exist before
the nationalisation of the industry. Although there had been
direct organisational representation on the Board, the Government, in this last nationalisation to date, still adhered to
its principle of independent management under public ownership. The 1949 Act creates the Iron and Steel Corporation
of Great Britain as the central authority. It has a chairman
and six to ten members to be appointed by the Minister
of Supply.
The qualifications on the basis of which the competent
Ministers appoint persons to the central bodies set up to
administer these nationalised industries are substantially
similar in all cases. They are chosen from among persons
who have had experience of or shown capacity in the industry
concerned (but in the case of coal the qualification is simply
experience in public affairs), or, alternatively, in industrial,
commercial or financial matters, administration or the organisation of workers. Experience in applied science is also a qualification in the case of coal, gas and electricity, as is experience
of local government in the case of the area gas boards. I t
1
National Coal Board ; British Electricity Authority ; Gas Council (with
12 area hoards) ; British Transport Commission (with separate executives
for railways, docks and inland waterways, road transport, London transport,
and hotels) ; Bank of England ; and Iron and Steel Corporation.

CO-OPEBATION AT THE LEVEL OF THE INDUSTRY

161

is especially through the qualification of having had experience
of the organisation of workers, though not necessarily in the
industry concerned, that at least one trade union official
comes to be a member of each of the central boards. But,
by virtue of the provision that no member must have " such
financial or other interest as is likely to affect prejudicially
the exercise or performance by him of his functions as a member ", such officials must sever their trade union connections.
Direct consultation with organisations may take place
in connection with the appointment of the statutory advisory
bodies which have been set up.
The members of the National Industrial Consumers'
Council for the coal industry are appointed by the Minister
after consultation with representatives of bodies which
represent industrial consumers of coal, coke, etc., and those
engaged in the distribution of these products. A national
Domestic Consumers' Council represents domestic consumers
and consumers (workers, etc.) not represented on the other
council. The councils may make representations to the
Minister regarding sale and supply on behalf of the consumers
they represent and may make reports to the Minister on matters
which he refers to them. The Minister may as a result issue
directives to the National Coal Board. Regional councils
may be appointed by the Minister.
The consultative council in each electricity and each gas
area, which considers and reports to the area board on matters
affecting distribution of electricity or gas in the area, consists
of from 20 to 30 persons representing local authorities, agriculture, commerce, industry, labour, consumers and other
persons or organisations interested in the development of
electricity or gas in the area.
Central and area consultative committees, with members
drawn from similar circles, are set up under the Transport
Act, to consider and make recommendations where necessary on any matters affecting services and facilities provided
by the British Transport Commission.
The Iron and Steel Act, 1949 provides for the establishment of an iron and steel consumers' council, consisting of
an independent chairman appointed by the Minister of Supply
and 15 to 30 members appointed by him after consultation
with such bodies (which may include organisations of workers)
as he thinks fit, to represent the interests of consumers of the

162

CO-OPEKATION IN INDUSTRY

products of any of the principal activities of the Corporation
and the publicly owned companies. Two members of the
council are appointed by the Corporation. The council has
to consider any matter affecting the interests of the consumers
(including prices), to consider and report to the Minister or
Corporation on any matter referred to the council by the
Minister or Corporation, and to make representations to the
Minister on such matters affecting the interests of consumers
as the council deems necessary.
As already indicated 1 , consultation with the unions,
especially on terms and conditions of employment, is required
under all the Acts nationalising industries, to be ensured
through the establishment of appropriate joint machinery,
if it does not already exist. This clause is being rapidly
implemented in the case of each nationalised industry. It
is of interest to note, however, that some of the bodies set
up pursuant to this general provision provide consultation
also on matters rather beyond the scope of ordinary collective
bargaining. This is the channel, in fact, through which
occupational organisations can play their greatest part in
rendering advice on the actual conduct of the industries.
Thus, pursuant to the provisions of the Gas Act, 1948,
a joint industrial council was set up in October 1949, to secure
joint action between the Gas Council and manual employees
for the safeguarding and development of the industry, for
general improvement of working conditions and for the attainment of higher output. The functions of the joint council
with regard to wages and conditions are specifically without
prejudice to the general nature of the functions first mentioned.
The British Electricity Authority and nine unions concerned, by an agreement of 1 January 1949, set up a national
joint advisory council, with district joint advisory councils
for each area and, at the lowest level, local advisory committees. The national council is to have a maximum of
79 members (57 representing the boards and 22 representing
the unions). Its functions are to promote and encourage
measures affecting safety, health and welfare of employees and
to discuss other matters of mutual interest including efficiency
in the operation of the services of the boards ; to consult on
1

See p . 157.

CO-OPERATION AT THE LEVEL OP THE INDUSTRY

163

measures for advancing the skill of employees and for improving the efficiency of their equipment ; and to consider any
matters inrelation to the aforesaid subj ects which may be referred
to the council by an appropriate authority for consultation
or advice. This council does not negotiate terms and conditions
of employment or undertake the prevention or settlement of
disputes. 1
A national consultative council for the coal mining industry
was established by agreement on 27 November 1946. I t
consists of 27 members—six appointed by the National
Coal Board, nine appointed by the National Union of Mineworkers, nine appointed by the National Association of Colliery
Managers and three appointed by the National Association of
Colliery Overmen, Deputies and Shotfirers. The chairman of
the National Coal Board acts as chairman of the council.
Its functions are—
. . . to provide a regular means of consultation between the Board
and organisations appearing to them to represent substantial proportions of persons in the employment of the Board, or any class of
such persons, on : (i) questions relating to the safety, health and
welfare of such persons ; (ii) the organisation and conduct of the
operations in which such persons are employed and other matters
of mutual interest to the Board and such persons arising out of the
exercise and performance by the Board of their functions.
Questions relating to terms and conditions of employment are
excluded from consideration by the council. Provision is made
for the establishment of divisional, area and colliery consultative committees. 2
Finally, the British Transport Commission and the main
unions concerned entered into an agreement in December 1948
to establish a British transport joint consultative council, to
include among its members the members of the British Transport Commission and its six executives and representatives
of the National Union of Eailwaymen, the Associated Society
of Locomotive Engineers and Firemen, the Eailway Clerks'
Association, the Transport and General Workers' Union and
the Confederation of Shipbuilding and Engineering Unions.
The purpose of the Council is—
. . . to provide by regular meetings opportunity for the exchange
of information and views upon matters of common interest in
1
2

Industrial Relations Handbook, op. cit., pp. 80 et seq.
Ibid., p . 67.

164

CO-OPERATION IN INDUSTRY

relation to inland transport and the activities of the British Transport Commission and its executives, not being questions of wages or
conditions of services or otherwise coming within the scope of the
established machinery of negotiation or matters
dealt with or to be
dealt with by any statutory committee.1
Countries with Planned Economies
The U.S.S.E., Czechoslovakia, Poland, Hungary, Bulgaria,
Bumania and Yugoslavia, having progressively nationalised
almost all branches of their economic activity—industry,
banking, insurance, transport, distribution etc.—the operation of all these branches is governed by economic plans
prepared by the central executive bodies of the State economy.
The authorities responsible for the management of the different
branches—whether specialised ministries, as in the U.S.S.R.,
or directors-general, as in Czechoslovakia—are subdivided by
lines of production and by areas. The directing agencies for
each line of production are responsible, firstly, for preparing
the data needed by the central planning authorities when
drawing up the plan for the particular branch and, secondly,
for seeing to the application of the plan, once it is approved,
by allocating work to the economic units under their control
and by checking up on their performance. Accordingly, they
undertake the general organisation of production, fix technical
production standards and standards for productivity and efficiency and thus, in a general way, determine thé wages and
working conditions for their respective branches. They also
have to appoint the responsible heads of the subordinate
economic units.
I n considering the part played by the industrial organisations in the administration of nationalised industries, two
phases may be distinguished. During the first phase, when
both a private and a nationalised sector were found side by
side in the various branches of the economic system, the
industrial organisations participated directly in the administration of nationalised industries, while in the second phase,
when almost all economic activity was nationalised, the
system of joint administration was superseded by that of a
single chief personally responsible to the authorities.
Thus, in Hungary, a system of tripartite collaboration covering both the socialised and private sectors of the economy was
1

Industrial Relations Handbook, op. cit., p . 95.

CO-OPERATION AT THE LEVEL OP THE INDUSTRY

165

instituted in 1945-46. Production committees were set up in the
different branches of industry and were responsible for taking
mandatory decisions as to working methods, manufacturing processes and the regulation of standards of output and systems of
wage payments. On each production committee, under an
independent chairman appointed by the Minister of Industry,
there were two workers' members, one designated by the
National Trade Union Council, and one by the occupational
organisation concerned, and two employers' representatives.
The work of the different production committees was coordinated by a council for industrial production, which also
heard appeals against decisions taken by the industrial committees. 1 In the Hungarian coal mining industry, production
committees were set up at the centre of each mining district ;
they consisted of a director, who was a qualified mining
engineer, a miner-worker and a salaried employee with experience of mining administration. The members of the committees were appointed by the Minister for Industry on the
recommendation of the competent trade union, and of the
Government commissioner for coal production. The committee had to determine, in agreement with the directorate and
works council of the mine, the standard coal production for
each mine and workings, to ensure labour discipline, to supervise the allocation of workers and, where necessary, to recruit
extra workers, and to supervise the efficient operation of the
system for the supply of working equipment and foodstuffs
to the workers. 2 After the wholesale nationalisations carried
out from 1948 to 1950 3 , this system of co-operation gave way
to a system of direction by a single chief.
In Poland, a Decree of 3 January 1947 concerning the
methods of establishing State undertakings 4 provided for
setting up, in nationalised industries 6, " social control councils " to supervise and advise the management of undertakings. It was provided that the occupational organisations
would be represented on these bodies. However, since the
administrative regulations were never promulgated, in spite
1

Ordinance No. 6540 of 1946, dated 9 June 1946.
Ordinance No. 97600 of 1945—13 Dec. 1945—abrogated 14 July 1946.
3
See, especially, Act No. XXV of 1948 (Országos Torvénytár). Legal
Decree No. 20 of 1949. Magyar Kòzlòny, No. 265-268, 28 Dec. 1949.
i
Dziennik Ustaw, No. 8, 3 Feb. 1947.
6
L.8., 1946—Pol. 1.
2

166

CO-OPERATION IN INDUSTRY

of the wishes expressed by the Polish Central Trade Union
Council, the social control councils never came into being. 1
The Act of 26 October 1950 2, concerning national undertakings, simply confirms the existing state of affairs by placing
the nationalised industries under the direct and personal
responsibility of directors.
In Czechoslovakia, since the war, the administration of
nationalised industries has passed through two distinct phases.
The four Presidential Decrees of 24 October 1945 3 , which
nationalised, among other branches, the mines and key industries, the joint-stock banks and mutual insurance companies,
etc., entrusted the administration of the various economic
branches to councils appointed for that special purpose by
the Government, on the proposal of the competent Ministers *,
after having considered the opinions of the representative
employers' and workers' organisations and, where necessary,
other organisations concerned. Close co-operation between
the public authorities and occupational organisations was to
develop in these administrative councils, which assumed the
task of directing the major portion of the Czechoslovak economy during 1946 and 1947. However, the legislation enacted
in April and May 1948, which considerably extended the
nationalised sector in the different branches of production 5 ,
did not maintain these councils as administrative and supervisory machinery for the nationalised industries. In fact, in
February 1948, the administrative councils ceased to exist
throughout Czechoslovak industry, administrative and executive authority being combined in the person of the single
responsible director. 6
This situation was confirmed by the Act of 13 July 1950,
concerning national industrial undertakings, and by the new
statutes for these undertakings promulgated at the same time

1
See Uchwaly i Bezolucje, etc. (Resolution of the Central Trade Union
Council), Warsaw, 1949, pp. 48-49.
2
Dziennik Ustaw, No. 49, 28 Oct. 1950.
3
SbirJca Zakonû a naflzenl, No. 47 of 27 Oct. 1945.
4
In the case of the Mutual Insurance Council, the appointment of the
members was reserved for the President of the Republic.
6
See Industry and Labour, Vol. I , No. 3, 1 Feb. 1949, p . 89.
6
Národní ShromáMení republiky oeskoslovenské, 1950 (ParliamentaryTexts), No. 485 (Draft Law concerning national industrial undertakings :
Statement of the Government's reasons).

CO-OPEKATION AT THE LEVEL OP THE INDUSTRY

167

b y Governmental Ordinances. 1 Under t h e new Act, t h e
competent Ministers direct t h e nationalised industries t h r o u g h
directors-general appointed b y t h e Government. Thus, as
stated in t h e report of t h e Economic a n d Juridical Committees
of t h e Czechoslovak P a r l i a m e n t 2 —
...the benefit of Soviet experience has been fully utilised in the
reorganisation of Czechoslovak industry : the new Act gives effect
to the principle of individual responsibility with all its consequences.
Under t h e new Act, however, t h e directors-general h a v e t o
consult t h e Central Trade Union Council before appointing
t h e directors of t h e u n d e r t a k i n g s within their jurisdiction.
The new s t a t u t e for national undertakings describes t h e
t w o main stages in t h e organisation a n d direction of nationalised i n d u s t r y as follows :
After the first nationalisations, our task was to organise industrial
property into autonomous economic units subject to the unified
direction of the Socialist State and to give to nationalised industry
its first organisational structure. Thus, the national industrial
undertakings were set up which, at the time, efficiently fulfilled
their role in overcoming post-war difficulties. These national undertakings were indispensable in ensuring the development of the new
social order.
A new social order can only supplant the old if it is able to
provide society with more goods, of better quality, and at cheaper
prices, and so contribute to the development of its wealth. Further,
it was apparent that, in view of the constitution and internal
organisation of the national undertakings, they could not be expected
to fulfil successfully this fundamental task, especially by reason
of the ever-increasing needs of our planned economy with regard
to the accuracy of economic plans and the extension of their scope.
. . .
In order to be able to accomplish all the tasks facing
industry, and to attain fixed objectives, it became necessary to
reorganise the national undertakings. The object of this reorganisation was to eliminate from the life and organisation of the undertakings all surviving characteristics of the capitalist régime and to
endow them with a new organisation and administration in accordance with socialist principles.
I n t h e B a l k a n countries, t h e administration of nationalised
industries was entrusted from t h e beginning to single responsible directors. Thus, in Yugoslavia, t h e basic Act of 24 J u l y
1946 concerning public undertakings 3 placed t h e different
1
8birka Zâkonù, No. 44, 26 July 1950 (Statutes of national industrial
undertakings are included in the supplement to the Sbirka Zâkonû, p. 211).
2
Národní Shromáedení republiky oeskoslovenské, 1950 (Parliamentary
Texts), No. 504.
3
Sluzbeni List, No. 62, 2 Aug. 1946.

168

CO-OPERATION IN INDUSTRY

industries under the direct control of the competent public
authorities, that is to say, the authorities of the central Government, or of the federated republics or the local authorities,
according to the economic importance of the undertakings. 1
One section of this Act, however, provides that individual
undertakings may be grouped in larger units of production.
The direct management of the undertaking is assumed b y a
single responsible director ; the Yugoslav legislature nevertheless provided that a consultative council should be attached
to each administration to advise the director on all important
questions concerning the undertaking. The trade union
organisation in the undertaking was authorised to delegate
one of its members to sit on the council. Finally, the new
system of workers' participation in the management of undertakings, instituted under the Act of 2 July 1950 2, applies
also to industrial groups, where the latter have been set up
as intermediate agencies in the economic hierarchy in order to
strengthen the link between the competent authority and the
undertaking.
In Bulgaria 3 and Eumania 4 the process of nationalisation
was gradually extended to almost the whole economic sphere
with the exception of agriculture and handicrafts.
In Eumania, the organisation of national undertakings and
industries was regulated by the Decrees of 13 and 7 July 1948
respectively 5 ; central industrial agencies are set up for the
different branches of industry as executive organs of the
competent Ministries. These agencies, entrusted with the
direction, development and supervision of the activities of
State undertakings, are placed under the control of a responsible director, assisted by one, two or three deputy directors
appointed by the competent Minister. The functions of these
agencies cover all the fields of activity of the undertakings
subordinated to them.
1

The Yugoslav Act of 5 December 1946 nationalised undertakings of
more than local importance, that is to say, the undertakings referred to as
" of national or republican importance " (the Yugoslav State consisting of
several federated republics) and recognised as such by the competent
authorities {SluSbeni List, No. 98, 6 Dec. 1946).
2
SluSbeni List, No. 43, 5 July 1950. See also p. 107.
3
L.S., 1947—Bui. 4.
4
See Industry and Labour, Vol. I, No. 6, 15 Mar. 1949, p . 218.
5
Monitorul Oficial, Nos. 155, 156, 161 and 165 of 1948. See Industry and
Labour, Vol. I, No. 6, 15 Mar. 1949, p . 218.

CO-OPEEATION AT THE LEVEL OP THE INDUSTRY

169

A similar system of management for national industries
came into operation in Bulgaria under the Act of 14 September
1948 concerning State undertakings 1, and the regulations of
25 May 1948.2
Clearly, occupational organisations are no longer directly
associated, at the level of the industry, in the management of
economic activities, and the experiments made in this direction
after the war have, in general, been abandoned. At the
present time, the principle of industries being directed by a
single and personally responsible chief appears to have been
adopted, generally speaking, in all the countries of Eastern
and Central Europe. In a study published by the Economic
Institute of the Academy of Sciences of the U.S.S.E. 3, Mr. A.
Arakelian defines the position of the " single chief " as follows :
The single chief, as a trusted person of the Soviet State, is
entrusted with the fate of a definite segment of production, and
he bears full and direct responsibility for the condition of this segment, for order, for fulfilment of the State plan, and so forth. On
the other hand, the single chief possesses administrative and executive power. His order is law for all his subordinates. The struggles
against sentimentality, petty-bourgeois disorder and disorganising
elements, and for high organisation, iron labour discipline and
Bolshevik order are all included in the tasks of the single chief.
But Mr. Arakelian states further that unity of direction
does not exclude the possibility of group discussion of the
fundamental problems of administration and production. The
economic Ministries of the U.S.S.E., in fact, have advisory
boards consisting of Vice-Ministers and certain important
heads of industry. These boards discuss and give advice on
all important points concerning the work of the Ministries.
Furthermore, according to the resolutions of the 18th Congress
of the Communist Party of the U.S.S.E. (1939), groups of
activists must be organised in the Ministries and in the undertakings to associate the most advanced workers and the
supervisory staff in the discussion of current problems, in
order that their experience may be utilised and self-criticism
developed. Although during the war the importance of these
activist groups greatly diminished, efforts have been made
since the war to set them in operation again and, in fact, such
1

Dürzhaven Vestnik, No. 219, 18 Sept. 1948.
Ibid., No. 287, 7 Dec. 1948.
8
A. ABAKELIAN : Industrial Management in the U.S.8.B. (Washington,
Public Affairs Press, 1950).
a

170

CO-OPEARTION IN INDUSTRY

groups have actually been reconstituted in several Ministries.
Hence, despite the concentration of all powers in the
person of the responsible director, the trade unions can discharge important advisory and executive functions at the
level of the industry as well as in other spheres öf public and
economic life. The trade union organisation is linked closely
with the economic organisation, and there is a federation of
trade unions corresponding to each economic branch. The
central occupational councils of the trade union are able to
give all useful information to the authorities directing the
branch concerned, and to give opinions or formulate proposals
on the basis of information obtained through the hierarchy of
trade union organs which are subordinate to them. This more
or less close bond of collaboration and mutual consultation
between the trade union organs and the organs of the economy
may, no doubt, apply with regard to all economic and social
problems arising out of the activities of the economic branch
in question. Nevertheless, the whole trade union policy at
the level of the industry constantly reflects the major preoccupations, shared by the trade union movements of these
countries, with regard to the implementation, at or even
before the time desired, of the production plan for the given
branch, the practice of economy in the use of materials and
manpower and, generally, the reduction of manufacturing and
operating costs, which, according to the fundamental premises
of economic planning, should result in a raising of the living
and working conditions of the whole community and, in particular, of the wage earners.
The central trade union councils' direction of the activities
of their subordinate agencies, and, especially, of the works
unions, is also inspired by the same principle. Whether it be
a question of " labour emulation ", rationalisation of production, " workers' inventions ", campaigns to verify standards,
production meetings, safety and health, social insurance or
any of the other economic, political, social and cultural activities carried on by the works unions, it is the central council
for the branch which assumes responsibüity at the level of
the industry, co-ordinates and encourages individual initiative,
and intervenes in the event of failure or difficulty. I t may be
observed that the various types of activity cited as examples
above fall, also, within the competence of the agencies responsible for the direction of the economy at the different hier-

CO-OPEBATION AT THE LEVEL OF THE INDUSTRY

171

archical levels, and within the competence of the parallel organs
of the communist parties. Thus, a very close collaboration
generally develops between them, whether it be a question
of accomplishing a specific task, organising certain activities
or remedying an unfavourable situation, the prime mover in
relation to any action taken being, in fact, the communist
party.

CHAPTEE III

CO-OPERATION AT THE NATIONAL LEVEL
Introductory Bemarks

Measures taken to ensure co-operation at the level of the
undertaking and at the industrial level essentially concern
productivity and working conditions and, therefore, the
people who co-operate are mainly the representatives of the
parties directly concerned.
At the national level, employers' and workers' organisations are associated in the preparation and implementation
of the Government's economic and social policy. The principle
of thus associating the organised forces of industry and labour
in work of concern to the whole community is today very
widely accepted. Moreover, it was explicitly stated in the
Declaration of Philadelphia, which recognises the " obligation
of the I.L.O. to further among the nations of the world programmes which will achieve . . . the collaboration of workers
and employers in the preparation and application of social
and economic measures . . . "
Furthermore, many international Conventions and
Eecommendations provide for the participation of employers'
and workers' organisations in the application of social regulations. Again, only recently, the Conference, in the Eesolution
concerning action against unemployment adopted at its
33rd Session, declared itself in favour of joint action by
Governments and employers' and workers' organisations to
put into application measures calculated to eliminate mass
unemployment and under-employment.
Co-operation between public authorities and employers'
and workers' organisations is particularly necessary in times
of crisis. It was so during the last war, when employers'
and workers' organisations were closely associated in the
running of war economies, and is so again in the present

CO-OPERATION AT THE NATIONAL LEVEL

173

crisis, because Governments, being anxious to have recourse
to legal compulsion only as an exceptional measure, wish to
secure the co-operation of employers' and workers' organisations to prevent or mitigate the social consequences of
rearmament as far as possible.
But although, like so much else that has come to stay,
such co-operation owes its origin to a state of emergency, its
main importance today is that it has become a normal and
essential feature of modern economic and social organisation.
The methods by which it is effected, however, vary considerably from country to country.
In some countries, the central organisations of employers
and workers have agreed to settle a number of social and
economic problems elsewhere which are governed by legislation.
In other countries, the Government regularly consults
employers' and workers' organisations about the preparation
and application of social and economic measures that are
likely to have a direct bearing on their interests.
In most countries, permanent machinery for co-operation
has been established, more generally by legislation, to aid
the Government in carrying out social and economic policy.
The various systems are not mutually exclusive, but exist
side by side in many countries.
Systems of Voluntary Co-operation
AGREEMENTS BETWEEN EMPLOYEES'
ORGANISATIONS

AND

WORKERS'

I n some countries, the central employers' and workers'
organisations have, on their own initiative, agreed on solutions
for social and economic problems of mutual concern.
The most typical instance of this method is to be found
in the basic agreements concluded in Denmark, Norway and
Sweden. In Denmark, the agreement of 5 September 1899,
which defines the mutual obligations of the central organisations and affiliated associations and fixes the conditions
under which a strike or lock-out may be declared, still forms
the basis of industrial relations. In Sweden, a first agreement—
the " Compromise Agreement "—was concluded in 1906.
I t recognised the workers' right to organise. While, like
12

174

CO-OPERATION IN INDUSTRY

most collective agreements, it reserved the employer's right
to engage and dismiss workers, it initiated the system of
collective bargaining. ÏTow, the basic agreement of 20 December 1938 confirms the mutual rights and obligations of the
employers' and workers' organisations. . It not only lays
down the conditions under which a strike or lock-out may
be called but also regulates the procedure to be followed
in case of collective dismissals. Finally, in Norway, a basic
agreement was concluded in 1935 and renewed with slight
modifications in 1947. This agreement formally affirms the
right to organise, recognises trade union delegates in the
undertakings, provides for the settlement of disputes, etc.
but—
the significance of the basic agreement lay not so much in the particular provisions as in the fact that it implied the successful evolution
of
a method of dealing with labour problems on a national basis. 1
Thus, in these three countries, the central organisations
of employers and workers have, solely by agreement, succeeded
in establishing, without any intervention on the part of the
Government, a system whose coverage is equivalent to that
of legislation. This system not only laid down the procedure
for collective bargaining but also enabled co-operation between organisations to develop at all levels of economic and
social life. I t is thanks to these agreements that those concerning the institution of works committees referred to earb'er
were concluded 2 and that it has been possible to set up the
Employment Market Board, a permanent joint agency for
co-operation at the national level, in Sweden. The board
consists of three representatives each of the central employers'
and workers' organisations, with an equal number of substitute
members. By virtue of the works committees agreement, it
also includes representatives of the central organisation of
salaried employees.
The tasks of the Employment Market Board have multiplied during the twelve years of its existence. First, the Board
has enabled its members to discuss all their common problems
in full freedom. Hence, their discussions have resulted in the
conclusion of several national agreements : that of 1942
1

GALENSON, op. cit., p .

See p . 46.

197.

CO-OPERATION AT THE NATIONAL LEVEL

175

concerning industrial safety, that of 1944 concerning vocational
training, and that of 1945 concerning works committees.
The Board also has certain powers of investigation, consultation, supervision, and arbitration.
Particular agencies
have been set up for special questions, as, for instance, the
Committee for Industrial Safety, the Vocational Training
Committee, and the Time and Motion Study Committee.
The co-operation established, on a purely voluntary basis,
at the national level in the three Scandinavian countries
has been facilitated by the fact that both employers and
workers are organised in powerful single central federations
which are genuinely representative of the interests of the
great majority of employers and workers respectively.
Another example of a bipartite agency for co-operation
entirely independent of the Government is furnished by the
Foundation of Labour in the Netherlands. This is an instance
of an agency for co-operation in which several employers'
and workers' organisations participate whose political or
denominational tendencies are widely different.
The Foundation was established on 17 May 1945, but its
origin lies in an agreement entered into during the war by
the leaders of the various employers' and workers' movements.
I t is an agency set up under private law, on a contractual
basis, but as a permanent institution. I t groups together
all employers' associations and trade unions, with the single
exception of the communist organisation, and is intended
mainly to facilitate consultation between organisations, to
promote the regulation of conditions of employment and
social security and to serve as an advisory body for the Government. In principle, these activities relate only to social
questions, but the examination of the economic aspects is
not excluded.
A joint administrative committee is the central organ.
Below it are a council of employers' organisations and a
trade union council, which co-ordinate the policies of the
different groups on both sides. Joint committees have also
been set up to examine the main technical problems, such as
wages, social security, vocational training, etc.
Finally,
joint industrial councils* are to ensure the co-operation of the
two parties in the various industries, as, for example, building,
1

See p . 123.

176

CO-OPERATION IN INDUSTRY

metal trades, textiles, etc. Labour congresses are convened
from time to time to discuss questions of general importance.
It would be impossible to sum up in a few bines the manifold
activities which the Foundation has undertaken since it came
into existence over five years ago. It will suffice to give a
few examples.
In view of post-war conditions, the Government was
obliged, to exercise strict control over wages and prices. A
public agency, the Board of Government Conciliators, was
given control over wages. In particular, any wage increases
must be approved by this agency. However, before giving a
decision, the Board of Government Conciliators must consult
the Foundation of Labour.
When a request for a wage increase is referred to the
Foundation by the Board of Conciliators, the administrative
committee requests the competent joint committee to examine
the case, and this joint committee discusses the proposal with
the parties, considering especially whether the increase sought
is compatible with the national wages policy. An attempt is
made to secure agreement between all parties concerned, and
on the basis of the joint committee's report the administrative
committee bases its opinion for submission to the Board of
Conciliators.
The Foundation of Labour had to solve a twofold problem.
On the one hand, the central organisations associated together
in the Foundation had to agree on the general Lines of a wages
policy and, on the other hand, they had to get the policy
accepted by their affiliated organisations. 1 ïfow, the main
reason given for the Foundation's success in this task
is that the affiliated trade unions have resorted only very
•exceptionally to the strike weapon. 2
1
The Netherlands builds a new road to industrial peace through voluntary
•co-operation. (Published by the Foundation of Labour, The Hague, no
•date), pp. 22 et seq.
3
Number of working days lost on account of strikes (op. cit., p. 27) :

1919
1920
1946
1947
1948
1949

Total
1,056,800
2,354,900
681,600
203,400
131,400
289,400

Declared by one oí the unions
belonging to the Foundation
of Labour
—
—
18,253
1,857
60
410

CO-OPEKATION AT THE NATIONAL LEVEL

177

In considering this problem, the Foundation has, of course,
also had to examine certain economic questions, as, for instance,
the prices of consumers' goods, some credit problems and cooperation with the Organisation for European Economic Cooperation, this last problem having been the subject of a
labour congress.
Many other questions have been studied by the Foundation
of Labour, as, for instance, employment, social security, etc. 1
It is to be observed that, in all its opinions, the Foundation
has stressed the need for co-operation on a broad basis between
employers' and workers' organisations and the public authorities. This point was illustrated particularly with regard to
social security legislation, which is mainly administered by
autonomous agencies constituted and operated by the
employers' and workers' organisations.
Furthermore, the Foundation of Labour was invited to
help in drafting the Act of 27 January 1950 concerning the
organisation of the economy, which provides for the establishment of works councils 2, industrial councils 3, and a National
Economic and Social Council.4
Article 139 of the Act provides that the Economic and
Social Council, before taking a decision or formulating an
opinion, will, as a rule, have to give the Foundation an opportunity to express its views on any social questions in respect
of which it is competent under its rules. 5
CONSULTATION OF EMPLOYEES' AND WORKERS' ORGANISATIONS

It is of course impossible to list the innumerable cases in
which public authorities have resort to the employers' and
workers' organisations—as well as to other agencies representing different interests or to experts—to obtain their
opinions on particular problems.
Parliaments, through
technical committees or special committees of enquiry, Ministries, and administrative authorities in the exercise of their
discretionary powers, frequently have occasion to consult
the representatives of the central organisations or federations,
1
2
3
4
5

See annual reports of the Foundation of Labour.
See p. 58.
See p. 123.
See p. 195.
Staatsblad, K 22.

178

CO-OPERATION IN INDUSTRY

or, again, at the regional or local level, the representatives of
the trade unions.
The following are typical cases in which the State approaches the parties concerned, without such co-operation being
imposed on either side by any formal regulations, whether to
obtain information on certain technical problems or to base its
economic and social policy on their previous agreement.
Temporary Measures Talten by Agreement between tJie Publie
Authorities and Employers'' and Workers' Organisations
The need to harmonise social policy with existing economic
conditions, in particular to co-ordinate the movements of prices
and wages, has induced the Governments and employers' and
workers' organisations in certain countries to agree on a
common policy. For this purpose, a great variety of methods
are adopted, experimental rather than institutional ; but,
whatever their nature, the main feature of these methods
is that they are voluntary.
Conferences.
In several countries attempts have been made to arrive at
such a common policy by means of national conferences
attended by representatives of all the organisations concerned.
In Belgium, for instance, the national labour conferences which
met periodically after the war contributed, by their unanimous
resolutions, towards the rapid reconstitution of national
economic life. In France, too, the Government convened a
national economic conference in 1947 to agree on an economic
stabilisation policy.
Agreements between Governments and Employers' and Workers'
Organisations.
In several other European countries (Austria, Sweden and
the United Kingdom), agreement between the Government and
the central organisations of employers and workers with regard
to prices and wages policies has been reached in the course of
the last few years. In Switzerland, too, the joint stabilisation
committee, which functioned during 1948 and 1949, helped

CO-OPERATION AT THE NATIONAL LEVEL

179

to stabilise wages and prices. The examples mentioned are
temporary measures liable to revision in the light of economic
and social developments ; in several countries, this method is
supplemented by others whose purpose is to permit of periodically adjusting social conditions to economic change.
Permanent Agencies -for Co-operation
In Belgium, the General Joint Council, originating in a
secret agreement reached during the occupation by the representatives of employers and workers, performs an important
function as an adviser to the Government on social questions.
It was established unofficially on 19 December 1944 and is
not yet governed by legal statute. At present, it consists of
six representatives of employers and six representatives of
workers designated by their respective organisations. An
independent person acts as chairman, but important meetings
are presided over by the Minister of Labour. Its activities
cover all kinds of social problems : systems of social security,
regulation of joint committees, status of trade union delegates,
problems concerning works councils, etc. Again, very recently,
it was called upon to consider the problem of prices and wages,
continuing to a certain extent the work of the national labour
conferences.1
It should be noted, however, that the Act of 1948 respecting economic organisation provides for the replacement of
the General Joint Council by a National Labour Council.2
In the United Kingdom, the National Joint Advisory
Council, set up in 1939 and replaced in 1940 by a smaller
Joint Consultative Committee, was reconstituted in 1946. By
virtue of an agreement between the central organisations of
employers and workers and the Government, the Joint Consultative Committee has been retained as an executive committee.
Subcommittees are instituted to consider particular questions.
The Joint Committee has the function of studying all problems
in which employers and workers have a common interest.
This bipartite body consists of 17 representatives of the
British Employers' Confederation and 17 representatives of
the Trades Union Congress.
1
Cf. F . EoELANDTS : " Considérations sur le Conseil national du Travail ",
in Bévue du Travail, Dec. 1949.
2
See p . 193.

180

CO-OPERATION IN INDUSTRY

In the first place, the Council has examined the economic
policy of the Government as revealed by the programmes laid
down each year. Hence, it has had to consider the different
measures for ensuring the most adequate and equitable utilisation of the forces of national production.
Certain manpower problems occupied an important place
in the discussions of the Council, as, for example, the distribution of manpower in the various industries, the diversion of
workers to undermanned industries, the utilisation of foreign
workers, etc. Moreover, certain aspects of the productivity
problem have engaged the attention of the Council, such as
systems of wage payments based on piece work and co-operation between employers and workers in industry.
In 1947 the Council had before it a memorandum on
production under full employment prepared by the Trades
Union Congress. The Council approved the principle of joint
consultation on matters affecting production, provided that
any machinery considered for this purpose would be purely
voluntary and advisory in character, that it would not deal
with questions relating to terms and conditions of employment
normally dealt with through collective bargaining, and that
it would be left to each industry to choose freely the form of
consultation most appropriate to it and to decide, in particular,
whether the machinery for consultation should be established
at factory level or cover a wider area.
The employers' and workers' confederations agreed to
bring this decision to the notice of their respective affiliated
organisations ; agreement was also reached as to the ways in
which the Ministry of Labour and National Service might be
of assistance to industry in the establishment and development
of the agencies contemplated. 1
Having been informed of the progress made in establishing joint machinery through reports circulated to it by the
Ministry of Labour, the Council considered what would
be the most effective means of promoting co-operation
in the largest possible number of industries and, to this
end, made proposals to the Ministry of Labour and to the
organisations. 2
1
a

Ministry of Labour Gazette, Aug. 1947, pp. 254-255.
Ibid., Aug. 1948, pp. 259-260.

CO-OPEEATION AT THE NATIONAL LEVEL

181

Co-operation Based on Legislation
CONSTITUTIONAL PROVISIONS

In an increasing number of countries, the principle of
co-operation between employers' and workers' organisations
and the public authorities is laid down in the Constitution.
Some Constitutions make consultation of employers' and
workers' organisations obligatory, but most of them provide
for the institution of certain machinery for co-operation.
Under Article 152 and following Articles of the Netherlands
Constitution, public institutions may be set up to organise
particular occupations or industries or particular groups
thereof or economic life in general. They may be given power
to issue regulations. 1 The Act of 27 January 1950 concerning
the national economy gives effect to the principles laid down
in these Articles. 2
The economic provisions of the Swiss Federal Constitution,
revised in 1947, which define the economic and social questions
that may be the subject of legislation, provide expressly that
no regulations concerning such questions may be prepared
unless the parties concerned are consulted.
By virtue of these constitutional provisions, the Confederation may take measures, inter alia :
(a) to
or
(b) to
(c) to
(d) to
to
(e) to

protect any major sections of the national economy
occupations whose continued existence is threatened ;
safeguard the well-being of the peasant population ;
protect regions whose economy is threatened ;
remedy harmful economic and social consequences due
cartels or similar groups ;
take safety measures in the event of possibility of war.

In cases (a) and (b) the legislature must intervene only
if the parties concerned have taken measures for mutual aid,
and, if it does intervene, it must further the development of
groups based on mutual aid.
Further, the Confederation, in consultation with the
cantons and private industry, must take measures to prevent
1
2

Staatsblad, H 2 8 .
See p p . 123 a n d 195-197.

182

CO-OPEBATION IN INDUSTRY

economic crises and, in case of need, to combat unemployment,
in particular, by instituting public works.
In all the cases mentioned above, the economic groups
concerned must be consulted in the preparation and execution
of legislation and may be called upon to co-operate in carrying
out its provisions. 1
It may also be observed that the organisations concerned
have already been consulted with regard to the proposed
amendment of the Constitution. It was essentially on their
advice that an Article appearing in an earlier draft was deleted.
That Article made it possible for decisions taken by associations in the social and economic field to be made generally
binding. On the other hand, a provision relating to the
extension to third parties of collective agreements concerning
conditions of employment concluded by associations, having
received little or no criticism, was retained and is now embodied
in the Constitution. 2
Among the Constitutions of the Swiss cantons, that of the
Canton of Geneva provides, in Article 120, paragraph 2,
adopted in 1947, that the administrative board of the water,
gas and electricity supply services—a pubuc undertaking—
shall include three members who are employees elected by the
whole of the staff.3
Whereas the fundamental law of 1949 in the German
Federal Eepublic—differing in this from the German Constitution of 1919—contains no provision regarding co-operation
between employers' and workers' organisations and the public
authorities, the Constitutions of most of the Lander, on the
other hand, contain, apart from provisions concerning co-operation in undertakings, stipulations regarding co-operation at
the national level. The following are examples :
Under the Bavarian Constitution of 1946, workers, like
other persons associated in the production process, must
participate in the solution of economic problems. 4
Under the Constitution of Hesse of 1946—the Württemberg-Baden Constitution of the same year includes similar
1

Feuille fédérale, 11 Apr. 1946, p. 889.
" Message du Conseil fédéral à l'Assemblée fédérale ", 3 Aug. 1945,
in Feuille fédérale, 16 Aug. 1945, Vol. I, pp. 877 et seq.
3
Constitution de la Bépublique et Canton de Genève, Annexe No. 14
(Chancellerie d'Etat).
4
United Nations : Yearbook on Human Bights, 1946, p. 124.
2

CO-OPERATION AT THE NATIONAL LEVEL

183

provisions—legislation must provide the measures necessary
to guide manufacture, production and distribution in an
appropriate manner, to ensure everyone a just share in the
economic results of all labour. The labour unions and representatives of the undertakings have equal right of representation in the bodies charged by the State with carrying
out its directive measures. 1
The Ehiheland-Palatinate Constitution of 1947 lays down
the broad outlines of economic organisation ; according to
this plan, workers' and employers' organisations shall be
merged in economic associations which shall deal with general
matters of common interest and safeguard the interests of
their particular branch of industry in respect of industry as a
whole.
Every undertaking in a district shall be a member, in
accordance with public law, of a chamber of industry and commerce, a trade guild, a chamber of agriculture or a chamber
of the liberal professions, as the case may be.
Employers and workers shall co-operate in these various
chambers. In chambers of industry and commerce employers
and workers shall have equal rights of representation. Eepresentatives of employers and workers shall be guaranteed an
equal voice in the control ofo prduction and distribution by
the State. 2
The Constitution of 1947 of the Free Town of Bremen
also provides for the establishment of a joint economic chamber
constituted and administered by representatives of employers
and employees in equal numbers. 3
The Constitution of 1947 of the Saar Territory provides
for a chamber of industry and trade, a chamber of handicrafts,
a chamber of agriculture and a chamber of labour. Further,
employers and workers are to be equally represented in the
economic associations to be set up to protect the interests
of their branch of industry in the entire economic field and
to be entitled to be heard by the Government in respect
of all economic and social measures of fundamental importance. 4
Provision is made for the institution of a National Eco1
2
3
4

Ibid.,
Ibid.,
Ibid.,
Ibid.,

p. 126.
1947, pp. 111-112-,
p. 130.
pp. 281-282.

184

CO-OPEBATION m

INDUSTRY

no mie Council in the Constitutions of a large number of countries (Brazil 1 , Ecuador 1, Trance 2, Italy 3, Panama 1, Peru 4,
Uruguay 4, Venezuela 4 ).
Some Constitutions, while leaving it to executive legislation to lay down detailed provisions concerning the institutions contemplated stipulate expressly that such institutions must include representatives of the parties concerned
(Italy, Peru, Uruguay, Venezuela). In Prance, the role
of the trade unions is confirmed in the Preamble to the
Constitution, which provides that everyone may defend
his rights and interests through trade unions and that the
workers in particular shall have the right to take part,
through their representatives, in the collective fixing of
conditions of work as well as in the management of undertakings.
Provision is likewise made for collaboration between the
parties concerned and the administration in the Peruvian
Constitution. Article 180 provides that advisory committees of experts shall be set up, attached to each Ministry,
and, under Article 181, technical councils for administrative
co-operation shall be established for industry, agriculture,
mining, labour, etc.
It may also be observed that some Constitutions contain
provisions concerning the public organisation—on an autonomous basis—of industries or branches of industry (Panama,
Nicaragua and Uruguay) ; in Nicaragua it is expressly provided
that certain groups shall be represented on the organs of
management of the public services. 1
NATIONAL ADVISORY COUNCILS

A vast number of councils, commissions and committees at
the national level have been set up or have been provided
for, to ensure co-operation between public authorities and
employers' and workers' organisations. Apart from permanent
1
Las Clausulas económico sociales en las constituciones de América
(Buenos Aires, 1947), Vol. I I .
2
International Labour Beview, Vol. LIV, Nos. 5-6, Nov.-Dec. 1946,
p . 364.
3
Ibid., Vol. LVII, No. 3, Mar. 1948, p . 225.
4
Las Clausulas económico sociales en las constituciones de América,
op. cit., Vol. I.

CO-OPERATION AT THE NATIONAL LEVEL

185

institutions, ad hoc agencies are established. Authorities set
up with very general objectives exist side by side with others
set up for more limited purposes. While some bodies are
purely advisory, others are also or mainly charged with
administrative, regulatory or supervisory duties. Finally,
it is not uncommon to find that some agencies, although
provided for under relevant texts, have not actually been
set up, or, if they have been set up, have lost their practical
importance whereas new agencies have been established and
have replaced the old.
In other words, there is a whole range of agencies which
are being tested, and whose real significance cannot be grasped
merely by examining their basic documents. The following
are a few typical examples.

Higher Labour Councils
An important role has been played by chambers of commerce—public institutions with compulsory membership in
some countries, private institutions with voluntary membership
in others—which not only defend commercial and industrial
interests but also give advice on economic questions.
Towards the end of the last century or in the early part
of the present century, some countries instituted similar
agencies in the social field with the task of advising Governments in the preparation and application of social legislation.
In many countries, including Belgium, France, Italy
and the Netherlands, this task was assigned to Higher Labour
Councils, whose work has made a real contribution to the
progress of social legislation. As a general rule, the statutes of
these Councils provided simply that they should include
representatives of employers and workers. In fact, it was
the employers' and workers' organisations which appointed
their representatives to serve on them. In all the countries
mentioned the Labour Councils have ceased to function and,
as will be seen later, they have given way to institutions
with much wider terms of reference.
However, labour councils still play an important part in
those countries which are endeavouring to develop or moder-

186

CO-OPEBATION IN INDUSTRY

nise their social legislation. This is so, for example, in Egypt,
Greece, Iran, Turkey, etc.
In India, the Tripartite Labour Organisation, which was
set up in 1942, has continued steadily to develop its fruitful
activities ; its executive organ, the Standing Advisory Committee, in particular, has collaborated in the preparation of
most of the new social legislation.
Following the Indian example, similar institutions have
been set up in Burma, Ceylon, Malaya and Pakistan.
In the Philippines, a Joint Advisory Council has to assist
the Government in the preparation of social policy and the
Secretary for Labour in the administration of labour legislation and, generally, to help in maintaining social peace.
Chambers of Labour and Similar

Institutions

In some countries the legislature has set up, on the model
of chambers of commerce and industry, other occupational
chambers, in particular, chambers of labour.
The Austrian chambers of labour were set up in 1920,
suppressed in 1938 and reconstituted by the Act of 20 July
1945, but the principles on which they are based date from
the Eevolution of 1848. Similar in structure to and established
in the same districts as the chambers of commerce and industry,
the chambers of labour are public institutions operating under
the supervision of the social administration but enjoying full
autonomy. Their purpose is to defend the economic interests
of the workers and salaried employees and to promote any
measures calculated to raise their economic and social position.
To this end, they must undertake studies, formulate opinions
and make suggestions on all social questions and on all economic
or financial questions directly or indirectly affecting workers
or salaried employees. Draft legislation must be submitted
to them for comment before it is introduced in Parliament.
They have to assist the pubhc authorities and the latter are
obliged to give them all necessary information and, if need
be, to request their co-operation.
The chambers consist of 48 to 144 members elected by the
wage earners concerned, by direct secret ballot on the basis of
proportional representation. They are divided into workers'
and salaried employees' sections.

CO-OPEKATION AT THE NATIONAL LEVEL

187

The chairmen of the labour chambers and 20 members
deputed for that purpose form the assembly of labour chambers,
a co-ordinating body, which may also examine certain economic
and social questions of national importance. The secretariat
of the assembly is provided by the chamber of labour for
Vienna.
The chambers of labour and the assembly of chambers are
invited, together with other representative bodies, to appoint
representatives to the joint committees with equal representation which the public authorities set up to examine questions
of common concern to employers and workers.
The chambers of labour are extremely active and are in
close touch with the Austrian Trade Union Organisation.
They have commented on much legislation in draft and have
afforded direct assistance to salaried employees and workers
(legal assistance, organisation of courses and conferences, etc.) ;
moreover, they have had much influence on economic policy,
especially through the joint committees set up under the
auspices of the Government. For instance, they played an
outstanding part in drafting the various wages and prices
agreements. 1
In the Saar Territory, a Bill concerning the institution
of a chamber of labour is under consideration. 2
In Luxembourg, an Act of 4 April 1924 instituted Ave
occupational chambers—a chamber of agriculture, a chamber
of handicrafts, a chamber of commerce, a chamber of salaried
employees and a chamber of labour. This Act provided for
co-operation between two or more chambers, and, therefore,
between representatives of workers and employers. In practice, however, the occupational chambers have made little use
of this provision.
Subsequent efforts were directed towards superimposing
on these chambers a joint agency to ensure direct co-operation
between the two parties. In 1935 a Higher Economic
Council, which later became the National Economic Council,
was instituted for this purpose. In addition, a tripartite
National Labour Conference was instituted by an Order of
10 November 1944 to assist the Government in its task of
economic reconstruction. I t consists of 21 members, with an
1
2

See Jahrbuch der Arbeitericammer in Wien, 1948.
Arbeit und Wohlfahrt, Mitteilungsblatt des Ministeriums für Arbeit
und Wohlfahrt, 1950, No. 12, pp. 161 et seq.

188

CO-OPERATION IN INDUSTRY

equal number of substitutes, seven representing the State,
seven representing employers and seven representing workers.
At present the Conference is being reorganised. I t is hoped to
establish it on a firmer basis by linking it more closely with the
occupational chambers. 1
Eeference has already been made to the Constitutional
provisions of some of the Lander in Western Germany which
provide for the institution of occupational chambers on the
basis of equal representation of both sides. 2 A Bill drafted
by the German Trade Union Organisation is intended to make
this system general throughout the Federal Eepublic. The
organisation would be based directly on the works councils in
undertakings and would be supplemented by the institution of
economic councils both in the Länder and at the Federal
level. 3
The employers' organisations are opposed to the institution
of occupational chambers and are seeking the retention of
the existing chambers of commerce and industry. They are
in favour of voluntarily instituted joint regional agencies. On
the other hand, they support the proposal to set up economic
councils consisting of equal numbers of representatives of
each side. 4
I n the Free Town of Bremen, an economic chamber with
equal numbers of employers' and workers' representatives was
formed pursuant to an Act of 23 June 1950. I t consists of
36 members, 18 representing employers and 18 representing
workers, nominated by their respective organisations. Apart
from its advisory functions, the chamber has the right to
initiate legislation.
National Economic Councils
National Economic Councils were set up in a number of
countries in the inter-war period. 5 In some countries the
economic councils consist mainly or exclusively of experts,
as is the case, for example, with the Council of Economic
1
2
3

Communication from the Luxembourg Government.
See p. 182.
" Der Gesetzesvorschlag des D.G.B. zur Neuordnung der Wirtschaft",
in Die Quelle, July 1950 (published by the German Federation of Trade
Unions).
4
Schweizerische Arbeitgeberzeitung, 8 Dec. 1950, p. 1072.
5
See Methods o] Collaboration between the Public Authorities, Workers'
Organisations and Employers' Organisations, op. cit., pp. 295 et seq.

CO-OPEBATION AT THE NATIONAL LEVEL

189

Advisers set up in the United States under the Employment
Act of 1946 1 and the Economic Council in Brazil. 2
Generally, however, the problem has been found to be
more complicated. In many countries it is held that, to give
technical advice not only to Governments but also to Parliaments, the representatives of the different interests involved
should be enabled not only to press those interests but also,
by joint discussion, to elucidate the points suitable for regulation, the idea being, however, not to replace one political
Parliament by an " economic chamber " 3 , but to supplement
the political organisation, whose prerogatives are fully safeguarded, by an organisation representing occupational interests.
In several countries, the national economic council is the
principal if not the sole agency for co-operation between the
public authorities and employers' and workers' organisations
in the economic field.
In Argentina, the National Economic Council, set up in
1947 for the purpose of " co-ordinating and supervising the
application of laws and standards which have repercussions
on the economy and finances of the nation ", is merely an
interdepartmental organ under the executive authorities, but,
since 1949, there has also been a national Board for Economic
Co-operation, constituted on a tripartite basis, as an advisory
body of the Council.
The Board is presided over by the chairman of the National
Economic Council ; the Minister of Industry and Commerce
acts as vice-chairman.
I t includes the following permanent representatives : two
representatives of agriculture, two representatives of stockraising, three representatives of industry, two representatives
of commercial interests, one representative of importers, and
two representatives each of agricultural workers, industrial
workers, commercial employees, the General Confederation
of Labour and consumers.
The Board may ask the Ministries to appoint special
representatives when it has to examine questions within their
1

L.8., 1946—U.S.A. 1.
Industry and Labour, Vol. IV, No. 4, 15 Aug. 1950, p. 176.
3
See, for Fascist Italy, Methods of Collaboration, op. cit., pp. 58 et seq.
In Portugal, the Technical Corporative Council was replaced by a Commission
for Economic Co-ordination under a Legislative Decree of 30 Oct. 1950
(Boletim do Instituto Nacional do Traballio e Previdencia, 31 Oct. 1950).
2

190

CO-OPEEATION IN INDUSTRY

competence.
The Economic Council may attach special
committees to the national Board for Economic Co-operation,
where necessary, and may determine the number of members,
provided that such committees shall include representatives of
each of the economic sectors concerned which has permanent
representatives on the Board.
In any event, committees have to be established for the
study of the following questions : (a) development of production, (b) development of exchange, (c) organisation and
rationalisation of trade, (d) development of housing and
building generally.
The committees, in turn, will be able to appoint specialised
subcommittees. The committees will submit proposals and
plans and will comment on those which are submitted to them
for examination. The decisions of the committees will be
placed before the national Board for Economic Co-operation
which, in turn, will decide which of them must be submitted
to the National Economic Council.
The national Board for Economic Co-operation and its
committees will be entitled to ask the competent Ministries
for the information necessary to enable them best to fulfil
their mission. None of this information and none of the
proposals or plans will be published without the express permission of the National Economic Council.1
In Ecuador, the National Economic Council, for which
provision was made in the Constitution, is an independent
tripartite body which has the right to initiate legislation on
economic questions. 2 I t must also advise the President of
the E epublic when he takes emergency measures. In such
cases, he must first consult the Council, and must publish its
report when promulgating the necessary Decrees. If he disregards an unfavourable opinion given by the Council he must
explain his reasons for so doing to Parliament. 3
The Council is represented on several Constitutional bodies,
as, for example, the Technical Budgetary Commission and the
Council of State. 4
In other countries, for instance, Prance, Belgium and the
Netherlands, the Economic Council is regarded as the central
1

Boletín Oficial, Buenos Aires, 11 Aug. 1949.
Constitution, Article 58.
3
Ibid., Article 80.
4
Ibid., Articles 135 and 145.
2

00-OPERATION AT THE NATIONAL LEVEL

191

organ in a general system of economic organisation, in which
employers' and workers' organisations take part on an equal
basis.
The French Economic Council was set up under
Article 25 of the Constitution ; its functions, etc., being
defined by the Act of 27 October 1946, which was superseded
by that of 20 March 1951. 1 In fact, this institution is
not a new idea. A National Economic Council had already
been established in 1925, reorganised in 1936, suspended
in 1939 and finally abolished in 1940 ; immediately after
the end of hostilities it was replaced by a Council for
National Economy. Now, under the new Constitution, the
Economic Council is recognised as one of the " institutions of
the Bepublic ".
The Council consists of 169 members, most of them nominated by the big organisations representing economic interests.
Some of them represent experts and technicians.
Any Bills, Decrees and regulations concerning economic
and social affairs, with the exception of the budget and international conventions relating to economics or finance, may be
referred to the Council for consideration. I t must be consulted
when regulations are drawn up for the purpose of putting
into force Acts which have been submitted to it for an expression of opinion. I t may also consider, on its own initiative,
any Bills concerning economic and social affairs and examine
economic, social and financial questions. I t may undertake
enquiries and studies and formulate, as a conclusion, opinions
and suggestions.
I t has organic ties with the public authorities. The Economic Council reporters must be heard by Parliamentary
Committees and may, in some cases, attend the debates. The
Ministers have access to the Economic Council, Members of
Parliament may attend its meetings and the chairmen and
reporters of Parliamentary Committees may attend meetings
of the Council's committees. 2
In the intention of the legislature, the Economic Council
was to be, first and foremost, the central advisory organ of
1
2

Journal officiel, 24 Mar. 1951.
Labour-Management Co-operation in France, op. cit., pp. 42 et seq.
See also DURAND and JAUSSAUD, Traité de droit du travail (Paris, 1947),
Vol. I, pp. 332 et seq.

192

CO-OPERATION IN INDUSTRY

the Government. Hence, under the organic Act, it must be
consulted on the following questions :
1. National economic plans for full employment and the
rational utilisation of material resources. (The Council reports
yearly on the development of these plans and suggests amendments.)
2. The economic situation. (Twice a year, the Council
reports on the increase or decrease of national income and
on measures likely to raise the level of production, consumption
and exports.)
3. Official estimates of national income, before they are
submitted to the National Assembly.
Further, and in order to avoid overlapping in consultation
on economic questions and also a certain inequality which
may now exist, the Council has to co-ordinate the specialised
councils attached to various Ministerial departments.
The Council's work has been considerable.
From its
inaugural meeting on 26 March 1947 until the meeting of
22 December 1949, the Council studied :
61 Bills or draft enactments submitted to the Economic
Council by the National Assembly ;
nine Bills or Decrees submitted to it by the Government ;
60 Bills examined under its powers to act on its own
initiative ;
50 general questions studied on its own initiative.
In view of the manifold aspects of parliamentary activities,
it would be tedious to enumerate all the different problems
which the Council has had to consider. Among the opinions
it has given may be mentioned, as examples, those concerning
the Labour Code for overseas territories, the Act concerning
collective agreements and conciliation and arbitration, the
statute for public undertakings, etc.
Studies and enquiries occupy a particularly important
place in the Council's work. They have covered, for instance,
prices and wages, the structural reform of undertakings 1 ,
the supervision of cartels, trade agreements, etc., the FrancoItalian customs union, etc.
1

See, for instance, " Les travaux du Conseil économique sur la réforme
de l'entreprise " in Bévue française du Travail, Nos. 6-7-8, June-July-Aug.
1950, pp. 285 et seq.

CO-OPEEATION AT THE NATIONAL LEVEL

193

In many cases, Parliamentary institutions have acted
either partially or wholly in accordance with the observations
made by the Council. The discussions of the Economic
Council are public and are regularly published. Apart from
its influence in the strictly legislative or regulatory sphere,
the Economic Council's work affdrds the public an abundant
source of documentation and educational material whose
influence on public opinion, difficult though it is to estimate,
is nevertheless evident.
By virtue of its very composition, the Council tends to
crystallise public opinion about the questions with which
it deals.
For instance, in the Bill concerning collective agreements
and the settlement of collective disputes which it submitted
for an opinion to the Economic Council at the end of 1949,
the Government contemplated the introduction of a system
of compulsory conciliation and arbitration. The Council
unanimously rejected the principle of compulsory arbitration,
and it was this firm attitude on the part of the Council which,
among other considerations, persuaded Parliament to abandon
the idea of compulsory arbitration in the final text of the Act,
while maintaining the system of compulsory conciliation for
collective disputes. 1
More frequently, however, opinions in the Council are
divided, especially when it is dealing with fundamental
questions. The Council's discussions on the report concerning
reform of undertakings, mentioned above, reflects particularly
clearly the different tendencies of French opinion.
In Belgium, a Central Economic Council was set up under
the Act of 20 September 1948.2 This Act provides for an
economic organisation parallel to the social organisation.
Whereas, in the social field, there is a network of joint committees 3, at the head of which will be a National Labour
Council—at present, the General Joint Council is performing
its functions—in the economic field, the Central Economic
Council already set up in 1949 is intended to have established
below it a system of occupational councils, of which the first
two were set up in January 1951. 4 The whole system is based
1

Industry and Labour, 15 Apr. 1950, pp. 290 et seq.
i . # . , 1948—Belg. 8.
3
L.8., 1945—Belg. 5.
4
See p. 121.
2

194

CO-OPERATION IN INDUSTRY

in the undertakings on works councils, which exercise, at the
same time, functions of a social, technical and economic character and will be linked, therefore, with both the National
Labour Council and the occupational councils.
The Economic Council, the occupational councils and the
National Labour Council are purely advisory. Employers'
and workers' organisations are represented on a footing of
complete equality.
The Central Economic Council consists of 22 members
appointed from candidates nominated by the most representative organisations in industry, agriculture, commerce
and handicrafts, 22 members appointed from candidates
nominated by the most representative workers' organisations
—including consumers' co-operatives—together with an equal
number of substitutes and six other persons well-known for
their scientific or technical ability and co-opted by the other
44 members. The chairman, secretary and deputy secretary
of the Council are appointed from candidates nominated by
these 50 members.
The Council has the duty of submitting opinions or proposals to Ministers or to the legislative Chambers with regard
to problems relating to the national economy (either on its
own initiative or at the request of the said authorities), in
the form of reports setting out the various points of view
expressed by its members.
I t would certainly be premature, when the Council has
functioned for only some 18 months, to assess the results
achieved by this institution. However, the following passages
extracted from a report published by the secretary of the
Council which gives a survey of the work undertaken throw
some light on the matter.
The first meetings of the Central Council were devoted to problems
of administrative organisation ; staffing arrangements for the secretariat, methods of functioning of the Council, staff regulations,
standing orders, etc.
During long and laborious discussions on these questions the
representatives of the workers as a whole opposed the employers'
representatives. This gave rise to the impression that the Council
being composed of equal numbers of both sides was hardly conducive
to the development of a spirit of co-operation.
Happily, where committees were set up to draw up draft opinions
on questions referred to the Council by Ministers the atmosphere
improved. The members were more concerned to find solutions for
the problems raised, freely and impartially, rather than by adhering
to two opposing groups.

CO-OPERATION AT THE NATIONAL LEVEL

195

Thus, the committee which had to decide what information of
an economic character the head of the undertaking should communicate to the works council contrived to work in an atmosphere of
clear understanding.
In order to begin the examination of this thorny question in a
genuinely objective spirit, the committee endeavoured, first of all,
to make clear the reasons why one side demanded this information
on production costs and why the other side were categorically opposed
to it. After a few meetings, the committee reached unanimous agreement on this formula : at the end of the year the head of the undertaking would furnish his works council with information, in the
form of indices or percentages, on the global items making up the
production costs. This result represented a real effort to compromise
on both sides. But, at the plenary meeting of the Central Council,
some representatives of the workers considered that their delegates
had gone too far in their concessions and a different opinion was
given with regard to the information to be furnished, not at the end
of the year but during the financial year. Thus, the Central Council
was unable to confirm the entire agreement reached in committee.
Nevertheless, the opinions presented to the Government represent
a successful achievement, considering the particularly delicate nature
of the question under review.
Another discussion took place regarding the constitution of the
first occupational councils. Practical difiQculties regarding representation induced a majority of the members of the Central Council
to propose to the Minister that he should proceed by stages to
institute the occupational councils, including all the interests affected.
Moreover, the Central Council unanimously approved an opinion
on the unemployment problem to be submitted to all the Ministers
of the Ministerial Committee for Economic Co-ordination. An opinion
on coal prices was approved by a majority, while a minority statement was supported by a number of members. Here again, the fact
that the Central Council was constituted on a basis of strict parity
hardly exercised any noticeable influence on its members' opinions.
The work being done in the various committees is evidence of a
real spirit of co-operation, and there is no opposition between the
whole body of employers' representatives and that of workers'
representatives. This is true, for example, of the committee which
has to examine the problems involved in the implementation of the
Benelux arrangements, the committee engaged in assessing the
national interests involved in the various demands in favour of
regional interests presented by the different maritime ports of the
country, and the committee which is examining the difficulties of
the different economic activities of the country in the struggle
against foreign competition.
Therefore, while the results of the first year's working of the
Central Council have not been spectacular, their importance is none
the less real, because the examination of the great economic problems
of national concern has been conducted in a genuine spirit of impartiality and mutual understanding. 1
I n t h e Netherlands, a n Economic a n d Social Council was
instituted b y t h e Act of 27 J a n u a r y 1950 relating t o economic
1
Charles ROGER, Secretary of the Central Economic Council : " Le Conseil
central de l'économie ", in Industrie, No. 7, July 1950, pp. 428 et seq.

196

CO-OPERATION IN INDUSTRY

organisation, which provides also for the establishment of
industrial agencies grouping together either undertakings
performing identical or related functions (horizontal organisations), or undertakings performing different functions but
connected with one or more specific products (vertical organisations). 1
As under the Belgian system, these agencies are public
institutions independent of the central administration and
based on collaboration between the most representative
organisations of employers and workers. However, contrary
to the case under the Belgian law, the Netherlands Legislature
has conferred on the same agencies competence in both the
social and economic fields and has not only endowed them
with advisory functions but has also given them powers to
issue regulations and to exercise supervision. I t is thus intended
to give the national economy an organisation of its own, while
preserving its autonomy. I t will be remembered that works
councils complete this system at the lower level. 2
So far, only the Economic and Social Council has actually
been set up. This Council consists of 45 members, two thirds
of them nominated in equal numbers by the employers' and
workers' organisations. The remaining 15 are designated by
the Government and the president is appointed by Eoyal
Order after the Council has been consulted. He is chosen
from among its members. Two vice-presidents chosen from
among the members of the two groups other than the one.
from which the president is selected are designated by the
Council.
A steering committee is set up, with the president and
vice-presidents at its head ; its membership is to be determined having regard to the various tendencies represented
by the employers' and workers' organisations. The Council
has a permanent secretariat. It may set up committees for
the study of special questions.
Each member has one vote ; he votes freely and is not
bound by any mandate or instruction. A two-thirds majority
is required for the adoption of regulations, and a simple
majority for other decisions. Eepresentatives of the Government may attend sittings in an advisory capacity.
1
Staatsblad, K 22. See also Industry
15 Apr. 1950, pp. 282 et seq.
2
See p. 58. et seq.

and Labour, Vol. I l l , No. 8,

CO-OPEBATION AT THE NATIONAL LEVEL

197

Its mission being to promote national interests while safeguarding the interests of the national economy and of those
who take part in it, the Council exercises regulatory, supervisory and advisory functions.
With regard to all the questions for which legislation
makes it competent, the Council may issue such regulations
as it deems necessary for the performance of its functions. I t
also co-operates in the application of legislation and may
promulgate regulations for this purpose.
Legislation determines the persons to whom the compulsory stipulations in such regulations shall apply and any
penalties which may be imposed ; regulations providing for
penalties require Government approval.
Proposed regulations must be published in draft and the
parties concerned will be given an opportunity to comment.
The draft will be discussed and voted on in public meeting,
but the Council may suspend this rule if there is good reason,
in which case the resulting regulations require approval by
the Government.
The Council is to supervise the operation of the other
agencies which may be set up at the industrial level under
the Act and exercises general supervision over the application of the legislation concerning works councils.
Finally, the Council is the advisory organ of the Government. On its own initiative or at a Minister's request, the
Council must give its opinion on the application of a law or
on any other question of an economic or social character.
Unless it is contrary to the public interest, Ministers are
required to ask for the Council's opinion on any important
action they propose to take.
With a view to preparing its opinions, the Council may
set up committees. At the request of a Minister, it must set
up committees for examination of certain questions
The opinion given is that of the majority of the members,
but it must mention the opinion of the minority, who may
subjoin a special report if the opinions recorded therein were
effectively expressed in the Council or committee.
It should be remembered that the Council, before making a
decision or issuing an opinion on a social question, must give
the Foundation of Labour an opportunity to express its view. 1
1

See p . 177.

198

CO-OPEEATION IN INDUSTRY

PARTICIPATION OF EMPLOYEES' AND

WORKERS'

ORGANISATIONS IN PUBLIC ADMINISTRATION

While the co-operation of employers' and workers' organisations with the legislative authorities is important in the
solution of certain questions of a general nature or of principle,
their participation in administration, which necessarily involves
many questions of detail, is eminently important from a
practical point of view and so serves to illustrate clearly the
real value of tripartite co-operation.
Social

Administration

The participation of employers' and workers' organisations
in administrative measures applying labour legislation was
already widely accepted in the inter-war period x and is now
recognised in most countries.
In fact, the legislature often leaves it to the parties to
adapt the general rules laid down by legislation to the needs
of the various industries or occupations represented by
employers' and workers' organisations. A few examples will
suffice to illustrate this point.
Protection of Labour.
Laws concerning hours of work and related questions such
as weekly rest periods, night work, general holidays, holidays
with pay, etc., frequently provide that the help of representatives of the parties shall be obtained when the details of
application are worked out ; for instance, in the matter of
exemptions, permissible overtime, distribution of working
hours, holiday periods. The same is true of enactments for
the protection of particular groups of workers, such as women
and children, homeworkers, etc.
In several countries, the organisations concerned are
directly consulted ; sometimes, even, their previous agreement
is necessary. In others, special bipartite or tripartite agencies,
established on a permanent basis—such as the labour councils
in the Scandinavian countries and in Finland or the joint
committees in Belgium—co-operate with the public authorities.
1

See Methods of Collaboration . . ., op. cit., pp. 229 et seq.

CO-OPEKATION AT THE NATIONAL LEVEL

199

Problems relating to industrial safety and hygiene are
frequently submitted for consideration by agencies either
instituted ad hoc, like the Industrial Safety Conferences in
the United States x, or established on a permanent basis in
the undertakings, for groups of undertakings and at the
national level, as in Belgium.2
Employment.
Vital importance attaches at the present time to employment problems—problems concerning arrangements for placing
persons in employment or migration of workers and measures
for fitting the worker to carry on his occupation (vocational
guidance, apprenticeship, vocational training. and refresher
courses, etc.). Hence, it is not surprising that employers'
and workers' organisations are called upon to co-operate with
the public authorities in the solution of all these problems,
a t t h e national, regional or local levels a n d also a t t h e level

of the different industries or occupations.
Many instances of such co-operation will be found in
reports published by the Office 3, but special interest attaches
at present to the attempts made in certain countries to solve
manpower problems in co-operation with employers' and
workers' organisations under the plans or programmes intended
to mobilise or effect the full utilisation of material and human
resources in order to ensure full employment by systematically
developing national production. 4
Social Security.
A detailed examination of this problem will be found in
the Office publications on social security. 5 The manner in
1

Monthly Labor Review, Aug. 1950, pp. 207 et seq.
International Labour Review, Vol. L U I , Nos. 5-6, May-June 1946,
p. 400.
3
See International Labour Conference, 30th Session, 1947, Eeport
V ( l ) : Employment Service Organisation (Montreal, I.L.O., 1946); 31st
Session, 1948, Eeport V ( l ) : Vocational Guidance (Geneva, I.L.O., 1947);
33rd Session, 1950, Report I X (1) : Vocational Training of Adults including
Disabled Persons (Geneva, I.L.O., 1949).
4
See pp. 205-215.
6
See, especially, International Labour Conference, 34th Session, 1951,
Eeport IV (1) : Objectives and Minimum Standards of Social Security (Geneva,
I.L.O., 1950) ; and International Labour Office, Studies and Eeports, N.S.,
No. 23 : International Survey of Social Security (Geneva, 1950).
2

200

CO-OPEEATION IN INDTJSTBY

which such co-operation is effected depends to a large extent
on the type of social security system adopted* If social security
is administered directly by the State, the role of the organisations will be essentially advisory. On the other hand, if social
security administration is entrusted to autonomous institutions,
industrial organisations not only have advisory functions but
often participate in the management of these institutions.
Thus, in some countries, the management of social insurance
institutions devolves directly on insured persons and employers ;
in others, it is assumed jointly by insured persons and the
State ; finally, in yet other countries, it is entrusted to representatives of insured persons, the employers and the State. 1
Whichever method is adopted, the different systems of
social security generally reflect a desire to associate the representatives of the persons concerned as closely as possible with
the operation of the machinery which is instituted.

Economic

Administration

Some of the economic measures do no more than promote
or guide economic activities ; but a great many others are
adopted in order to organise or control the economy or, at
least, certain economic sectors.
Measures to Promote and Guide Economic

Activity.

Two kinds of measures, those which are intended to promote the development of the national economy in general or
of some of its branches and those which relate essentially to
the improvement of methods of production, are closely
related.
Measures relating to the national economy in general or to
certain branches. I t is, above all, in the underdeveloped
countries and iû countries lacking equipment, that Governments are trying to give a new stimulus to economic life,
so as to raise the standard of living. Hence, they seek to
encourage the establishment of new industries and the modernisation of existing industries.
1
International Survey of Social Security, op. cit., p . 63 ; Objectives and
Minimum Standards of Social Security, op. cit., p. 114.

CO-OPERATION AT THE NATIONAL LEVEL

201

To assist Governments in the application of this policy,
special agencies are frequently instituted with which employers'
and workers' organisations are called upon to co-operate.
In India and in Pakistan, this function is entrusted to the
Advisory Council of Industries.
The Indian Central Advisory Council of Industries was
set up in 1948. It has to advise the Government on industrial
policy, to review periodically production in important industries and to advise on means of securing the best use of
existing capacity ; it must also advise the Government on the
allocation of scarce raw materials and on the import of capital
equipment and raw materials ; finally, it has to deal with
such other problems as may be placed before it by the
Government.
The Council consists of 68 members, including representatives of the Central Government, Parliament, the provinces
and the larger States, together with representatives of
employers a n d workers. 1

In Pakistan, a similar Council was set up in 1949. It is
organised according to the same principles and performs
similar functions. 2
In both cases, committees have also been set up to study
problems peculiar to certain industries. 3
In a number of the Latin American republics, institutions
for the encouragement of industry have been functioning for
several years. These agencies not only have advisory functions
but may also finance certain industrial projects by granting
credits or engage directly, especially on an experimental basis,
in new industrial undertakings.
The first institution of this kind was set up in Chile in
1939 4, and several other countries have followed this example,
as, for instance, Venezuela, in 1946, Bolivia and Ecuador, in
1948, and Colombia in 1950.
Generally, the institution includes representatives of
Government, employers and workers. In Chile, for instance,
the Council of Management of the Corporation consists of
1

Industry and Labour, Vol. I, No. 7, 1 Apr. 1949, p. 265.
Government of Pakistan, Ministry of Education and Industries (Industrial Division), Kesolution No. 1 (1-16) (52-49), of 13 July 1950.
3
Industry and Labour, Vol. I l l , No. 11, 1 June 1950, pp. 417-418.
4
Herman FINER : Chilean Development Corporation (Montreal, I.L.O.,
1947).
2

202

CO-OPEBATION IN INDUSTRY

25 persons, including the Minister of Economy and Commerce,
as chairman, representatives of the Senate and Chamber of
Deputies, representatives of certain agricultural industrial and
credit institutions, etc., representatives of the Chambers of
Commerce and the Confederation of Workers of Chile, etc. 1
The purposes of the Corporation are to draw up a general
plan for the promotion of national production, to carry out
studies, to conduct, in accordance with the results obtained
in such studies, experiments in production, to support national
production, to encourage the consumption of national products,
and to obtain a greater participation of Chilean interests in
industrial and commercial activities, etc. 2
Measures concerning production methods. In some countries,
agencies have been set up to examine general problems affecting
industrial production. This is so, for example, in the United
Kingdom, where a National Production Advisory Council,
regional boards for industry and district committees were set
up during the last war.
The Council, of which the Chancellor of the Exchequer
is chairman, has to advise the Ministers concerned upon
industrial conditions and general production questions and on
such subjects as may be transmitted to it by the Eegional
Boards for Industry. I t is, in a manner of speaking, the
counterpart of the National Joint Advisory Council, which is
competent for social questions and is presided over by the
Minister of Labour and National Service. 3
The Production Council consists of representatives of the
Federation of British Industries, the British Employers' Confederation and the Trades Union Congress, together with the
chairmen of the regional boards. Representatives of Ministries
attend the Council's meetings when matters concerning them
are discussed.
The regional boards examine industrial questions within
their regions and consider steps which may be necessary to
bring regional resources in capacity and labour into fuller
use. They provide a link between the central Government
and local industry.
1

F I N E R : op. cit., pp. 64-65.

Idem, pp. 14-15.
See pp. 179-180.

CO-OPERATION AT THE NATIONAL LEVEL

203

The boards consist of representatives of employers and
workers chosen in the same way as are those on the Council
and, unlike the Council, of regional representatives of a number of departments.
The district committees are instituted by the regional
boards in cases where certain questions are best examined at
the local level. They consist of equal numbers of representatives of both sides and deal only with questions referred
to them by the regional boards for examination. 1
In the majority of countries, the various aspects of production problems are studied and discussed by special committees
or councils. Often, they are attached to agencies with general
terms of reference, as, for example, economic councils, but
it is not uncommon to find them instituted ad hoc under the
Ministries concerned or their subordinate services.
The problem of productivity—apart from the manpower
problem studied by agencies competent for social matters—
is dealt with by special committees set up in recent years,
particularly in Belgium, France and the United Kingdom.
The National Industrial Production Commission set up in
Belgium under a Decree of 7 September 1950 consists of 16
members : five representatives of the employers, five from the
most representative organisations of the workers, two from
higher education establishments, two representatives of the
Ministry of Economic Affairs and the Middle Classes, and two
of the Ministry of Labour and Social Welfare.
The functions of the Commission are essentially advisory.
Its duties are : to study the theoretical question of industrial
production and of the methods to be employed in this connection ; to suggest methods of increasing industrial production,
in particular, the despatch of study missions abroad, invitations
to foreign experts to collaborate, the granting of subsidies
to certain approved works or studies concerning industrial
production, and the dissemination of information concerning
industrial expansion ; to answer any requests for advice or
information which may be addressed to the Commission by the
authorities. 2
In France, a National Committee on Productivity has
been set up under the Minister for Economic Affairs. I t has
1
2

Government and Industry, op. cit.
Industry and Labour, Vol. IV, No. 11, 1 Dec. 1950, p. 436.

204

CO-OPEBATION IN INDUSTRY

to draw up a general programme of action to improve French
productivity ; to prepare measures for the practical application of this programme ; to co-ordinate the action of the
administrative departments and agencies concerned with such
action ; to comment, at the request of the Government,
on draft legislation or regulations likely to affect productivity ; to submit to the Government any suggestions relating
to the improvement of productivity. The Committee includes
representatives of the Government, the Commissioner-General
of the Plan or his representative, the Secretary-General of
the Inter-Ministerial Committee for Questions of European
Economic Co-operation or his representative, the President and
Director of the French Association for Increased Productivity
and fifteen persons appointed either by reason of their particular competence or on the basis of proposals made by
employers' and workers' organisations.
A smaller committee, consisting of the representatives
of public administrations sitting on the National Committee on
Productivity, and the President and Director of the French
Association for Increased Productivity, co-ordinates the
activities of the various Ministerial departments with regard
to the clarification and application of technical assistance
agreements concluded between France and other countries.
Studies relating to general conditions affecting increased
productivity which have been decided upon by the National
Committee will be undertaken by a group of experts appointed
under the Commissioner-General of the Plan.
Particular studies decided upon as a rule by the National
Committee will be carried out by the Ministries concerned,
which may set up working committees for this purpose in
co-operation with the Commissioner-General of the Plan.
Independently of the studies mentioned above, the
National Committee on Productivity may appoint reporters
to study particular questions.
The Committee and the group of experts are empowered
to request the competent administrative departments to give
all information and do such work as they deem necessary.
Also, they may obtain the temporary assistance, for particular
tasks, of officials made available at their request by decision
of the competent authorities. 1
1

Journal officiel, 1 July 1950.

CO-OPEKATION AT THE NATIONAL LEVEL

205

In the United Kingdom, a series of agencies have been
set up, either by the Government in collaboration with experts
and representatives of employers' and workers' organisations,
or, independently of the Government, by employers' organisations or trade unions. These different agencies have to study
the problem of productivity in its various aspects. Thus,
in January 1947, an Advisory Council on Scientific Policy was
set up and, on its recommendation, a Committee on Industrial
Productivity was established to examine, in particular, the
practical aspects of the problem.
Under the auspices of the Anglo-American Council on
Productivity, productivity teams representing management,
technicians and workers have visited the United States to
study their corresponding industries. The Council has also
instituted a number of committees to study the technical
aspects of productivity.
I t may be observed finally, that, on the initiative of the
Engineering Advisory Council, more than 20 trade associations
in that industry have worked out mutual aid schemes or taken
some other form of action to increase efficiency and reduce
costs. Special committees for this purpose have been set up in
other industries. The General Council of the Trades Union
Congress, also, has organised conferences to examine the
problem of productivity. 1
Organisation and Control of the National

Economy.

In a large number of countries, the economy has been
subjected to a certain degree of control and, in several others,
the Government has guided the economy towards certain
objectives which it intends to reach by successive stages.
When the war broke out these measures were governed
by the needs of the moment. Immediately after the war they
were dictated by the tasks of reconstruction and, while the
recovery of some degree of economic equilibrium later made it
possible for the relaxation of some controls, various considerations of a lasting character have continued to militate in
favour of the retention of others.
Planning measures. Whereas, in Argentina, the Economic
Council and its advisory organ, the Board for Economic
1
Second Report of the Committee on Industrial
H.M. Stationery Office, 1950).

Productivity

(London,
14

206

CO-OPERATION IN INDUSTRY

Co-operation, to which reference was made earlier 1, assist the
Government in the preparation of its economic policy, in other
countries agencies have been set up with the specific duty of
drawing up economic plans. The few examples given below
illustrate particularly clearly the preoccupations which have
led the different Governments to take these measures.
In India, both under the Central and provincial Governments, and similarly in Pakistan, planning commissions have
been set up with the duty of drawing up a balance sheet of
national resources and of preparing a plan to ensure that the
best utilisation may be made of them. An advisory council,
on which industry, commerce and labour are represented, and
committees of experts in which the organisations concerned
also participate, have been constituted to guide the commissions in their discussions.
The problem of national reconstruction is also the subject
of special regulations in Greece. By virtue of an Act of 15 June
1950, a Ministry of Co-ordination was set up with the duties
of fixing directives for economic and social policy, of preparing, firstly, a reconstruction programme and then of
supervising its application. An economic council composed
of the Ministers concerned, a council of experts and a council
formed of representatives of the various interests (labour,
industry, agriculture, etc.) have to assist the Minister.
In the Netherlands, a planning office and a planning
commission have to assist the Government in the preparation
and drawing up of plans for the purpose of co-ordinating
governmental activities relating to economic, social and
financial questions. While the planning office is a governmental
agency of a technical character responsible mainly for the
preparation of these plans, the commission, consisting of
10 to 30 members, including also representatives from the
economic sphere, is the advisory organ of the Minister concerned and of the directors of the planning office. Working
committees study the different parts of the plan. 2
In Norway, in 1945, an inter-Ministerial committee was
entrusted with the preparation of economic plans. A central
co-ordinating council is the advisory organ of the Government.
Under the chairmanship of a Government representative, the
1
2

See p . 189.
Act of 21 Apr. 1947, Staatsblad, H 127 and I 494.

CO-OPEBATION AT THE NATIONAL LEVEL

207

council consists of representatives of the main sectors of the
economy, nominated by the most representative organisations,
three representatives of the Federation of Labour, one representative of the Employers' Association and one each of the
Price Directorate, the Labour Directorate and the Central
Bureau of Statistics.
The co-ordinating council has had to examine a great
variety of questions, among which may be mentioned the
rate at which the Norwegian krone should be stabilised, the
relationship between wages and prices, the problem of prices
stabilisation, taxation policy, etc.
Although there were dissents on specific matters, a surprising
degree of unanimity has obtained
in view of the many interests
represented on the Council.1
This system is completed by the institution of joint
industrial councils which examine the conditions affecting
a number of specific economic branches. 2
In the United Kingdom, an Economic Planning Board was
set up in July 1947 under the chairmanship of the Chief
Planning Officer. The Board consists of representatives of
the Ministries chiefly concerned, expert members of the Chief
Planning Officer's staff, three employers, and three trade
union representatives.
The Board has to advise the Government on the best use
of economic resources, both for the realisation of a long-term
plan and for remedial measures against immediate difficulties.
In carrying out its task, it has to consider the economic
situation, to draw the attention of the Government to difficulties occurring in industry and to make practical suggestions
for their solution. 3
In France, the Decree of 3 January 1946, which decided
that there should be established a modernisation and equipment plan, instituted a number of agencies, intended firstly
to prepare the plan and then, later, to implement it. These
were a directing body, the Planning Council, and a number
of bodies to carry out the work—the Commissioner-General's
Office, the working and co-ordination committees and the
1

GUXENSON : op. cit., p.

See p. 129.
Government and Industry, op. cit., p . 7.

263.

14»

208

CO-OPEBATION IN INDUSTRY

modernisation committees. The whole of this organisation
was responsible to the Prime Minister.
Presided over by the Minister of State responsible for the
plan, assisted by the Minister of Economy and Finance as
vice-president, the Planning Council includes members sitting
as of right and members nominated by the Government. The
former are the representatives of the various central services
concerned. The members nominated by the Government
include five representatives of industrialists, four representatives of trade unions, four representatives of persons engaged
in agriculture, two representatives of overseas territories,
one representative of scientific research and one expert. The
vice-president of the National Council for Credit and the
Secretary-General of the Inter-Ministerial Economic Committee attend the Council in an advisory capacity.
The task of the Council is to propose the plan and the
means of carrying it out to the Government.
The services of the Commissioner-General's Office, which
centralises and co-ordinates all activities of the plan, are
under a Commissioner-General responsible for preparing the
proposals to be submitted to the Planning Council for examination. He may carry out all investigations he considers desirable ; he may approach public administrations and, with their
collaboration, employers' and workers' associations, industrialists and all other organisations or persons he may see fit
to consult.
In work of a technical character, the CommissionerGeneral is assisted by the working and co-ordination committees and the modernisation committees. He provides
liaison between the Planning Council and the committees in
order that the work of the committees shall keep within the
framework of Council directives.
The working and co-ordination committees, which consist
of high officials belonging to the Ministries represented on the
Planning Council, are responsible for directing the work of the
Commissioner-General's Office.
The modernisation committees, which are established for
each of the products that the Planning Council decides are
suitable for modernisation studies, include representatives of
the administration, experts and representatives of trade associations (employers, workers and technical and managerial staff).1
1

Cf. Labour-Management Co-operation in France, op. cit.

CO-OPEBATION AT THE NATIONAL LEVEL

209

Some twenty-five modernisation committees, bringing
together, in the case of each essential activity, representatives
of the administration and the most qualified persons engaged
in that activity—altogether more than 1,000 agriculturists,
industrialists, workers, technicians—have been constituted.
On the basis of their work, the draft of a plan was drawn up,
intended to give to the French economy, by renovating its
equipment and modernising its production methods, the means
to achieve, at one and the same time, an improved standard of
living, full utilisation of manpower and the financial independence of the country. The draft was submitted to the Planning
Council by the Commissioner-General at the end of 1946. The
Council approved the plan on 7 January 1947, and, on its
recommendation, the Council of Ministers decided to adopt
the plan and to put it into application immediately.
The Commissioner-General, in his report of December 1949,
defined the nature of the plan as follows :
In a democratic country, desirous of leaving to both producers
and consumers the greatest possible degree of initiative and freedom
reconcilable with the imperative needs of national life, there could
be no question of complete planning. The modernisation plan avoids
being a complete plan but also amounts to more than a mere assembling of partial plans found to be more or less compatible.
By a compromise in which minor are subordinated to essential
considerations, it outlines and proposes to the nation common
objectives, it endeavours to supply the necessary means for attaining
those objectives, but it relies on the action of those concerned themselves to make use of these means and to realise those objectives.
Guiding the efforts of all and the plans of everyone towards
national objectives and ensuring that all shall advance in line together,
the plan itself concentrates on a limited but not arbitrarily chosen
number of operations which are indispensable for constituting the
framework of a developing French economy, while at the same time
having regard to the general conditions which will enable
the plan
to assist the advancement of the economy as a whole.1
Concerning the results obtained at the end of the first
three years the Commissioner-General made the following
statement :
Soon it will be three years since the modernisation plan began
to operate : put into application by decision of the Government and
carried out by means of annual credits voted by Parliament, it has
benefited also by the method of concerted economic effort, a method
originated by the plan—in fact, a method of collective action rather
than of planning in the usual sense of the term.
1

Rapport du Commissaire général sur le plan de modernisation et d'equipment de l'Union française, Réalisations 1947-1949 et Objectifs 1950-1952,
'aris, Dec. 1949.

210

CO-OPERATION IN INDUSTRY

The task was common to all concerned and each has come to
look upon it and to carry it out as if it were his own plan. The
work is thus outside and above the scope of any dispute between
liberalism and the theory of control.
Thanks ta the efforts it has inspired, entailed or co-ordinated,
not only has the great lack of essentials experienced immediately
after the liberation in the daily life of Prance and of every French
citizen been gradually overcome, but, less than four years after the
end of hostilities, national production, increased by more than one
third since 1946, has brought industry almost to its maximum interwar level, that of 1929, and agriculture to the average level for the
years 1934-1938.
He added, however, that Marshall aid had greatly contributed to present levels of production, employment and consumption, and that the major problem to be faced was that
of enabling the country's production, finance and exports to
do without that aid in less than three years' time.
The preparation of a second plan was decided upon by the
Act of 17 August 1948 concerning economic and financial
recovery and by the Act of 8 April 1949 authorising investment
expenditure for the current year.
The plan involves two main lines of action in the next few years :
(a) In some essential sectors, the completion of specific operations of equipment intended, in short, to make available to our
country the means of production and transport necessary for increasing its production ;
(b) For the rest, a general effort to modernise, aiming, by
utilising both our natural advantages and the technical progress
made in the world, at increasing the productivity of the various
branches of French activity and placing them so far as possible on
a basis to enable them to compete, if not with the United States, at
least with the most developed countries of Western Europe.
There is, indeed, no solution for France's problem, in the eyes
of all who are ready to respond to the call of the future by safeguarding external independence and internal liberty, except in
combining an increase in the means of production available to
creative initiative with dissemination throughout the economy of
technical and organisational methods which will make it possible,
hy higher productivity in company with full utilisation of manpower,
to obtain with these resources
increased production with a minimum
of expense and effort.1
Measures of control. The economic difficulties experienced
in the last few years by most countries have obliged Governments to introduce certain controls. Admittedly, an increasing
number of countries have found it possible to return to a
régime of greater economic freedom ; nevertheless, no Govern1

Bapport du Commissaire général . . ., op. cit., p. 47.

CO-OPEBATION AT THE NATIONAL LEVEL

211.

ment can renounce such controls in the face of economic or
political necessity.
In many cases, these measures are accepted voluntarily
and, if they are imposed by the Governments, the latter
generally take care beforehand to consult the organisations
concerned. In both cases, therefore, co-operation between
the public authorities and employers' and workers' organisations is best able to ensure that measures of economic control
shall be fully effective.
Eef erence has already been made to the agreements reached
in several countries on the stabilisation of prices a.nd wages. 1
In the agencies responsible for the control and fixing of prices,
employers' and workers' organisations are generally represented, either directly or through the medium of economic
councils or chambers as in Austria, Norway, the United
Kingdom and other countries.
For many other questions : credit, investments, exchange
control, distribution of raw materials or particular products,
etc., special bodies, councils or commissions have been set
up in many countries. A few examples will suffice.
In Austria, employers and workers participate, through
the occupational chambers, in the control of imports and
exports, in the distribution of raw materials, trading in which
is regulated, etc. A central economic agency, with which the
presidents of the occupational chambers and of the Trade
Union Confederation are associated in an advisory capacity,
co-ordinates the various measures of economic control. A
particularly striking example of practical co-operation is
afforded by the plan for the distribution of electrical power
during the winter of 1950-1951, which was drawn up by
agreement between the competent authorities, the occupational chambers, the Trade Union Confederation and the
industrialists' organisations. In anticipation of a possible lack
of power during the winter and in order to avoid any interruption of production as a result, the plan is intended to
share current between the various undertakings grouped
according to their requirements. 2
In Norway, several directorates, assisted by special committees or depending on the industrial advisory committees,
1

See pp. 178-179.
Monatsberichte des oesterreichischen Instituts
Sept. 1950, p. 429.
2

für

Wirtschaftsforschung,

212

CO-OPBEATION IN INDUSTRY

have been set up for the purposes of price regulation, export
and import control, control of industrial supply, housing, etc. 1
Emergency measures. At times of national economic or
political crisis—as observed earlier—the co-ordination of
economic activities entailing measures of control becomes a
problem of paramount urgency, whose solution demands the
full co-operation of all and, especially, of the employers' and
workers' organisations representing the active forces of the
nation. This was exemplified particularly during the last
war. At the present time, when several countries are rearming or mobilising their national resources, Governments are
faced with similar problems.
In the United Kingdom, some control measures dating
from the last war have been temporarily maintained, although
directed towards different objectives. IÑTow, the Government
has asked Parliament to consent to its powers being established
on a permanent basis. In the King's Speech to the Houses of
Parliament, on 31 October 1950, it was declared that, in order
to defend full employment, to ensure that the resources' of the
community should be used to best advantage and to avoid
inflation, legislation would be introduced to make available
to the Ministers, on a permanent basis but subject to appropriate Parliamentary safeguards, powers to regulate production, distribution and consumption and to control prices. 2
In Switzerland, at the end of 1950, the Federal Council
instituted a co-ordination committee to study certain economic
problems occasioned by adoption of the rearmament programme. Consisting of representatives of the Government, the
armed forces and the employers' and workers' organisations
particularly concerned, it has to examine, in particular, the
problem of raw materials and the question of the distribution
among public and private undertakings of the orders put
in hand pursuant to the rearmament programme. 3
I n the United States, the Defence Production Act was
promulgated on 8 September 1950. By virtue of this Act,
the President is authorised, among other things, to establish
ceuings for prices and wages, and to set up an office for the
settlement of labour disputes likely to hinder national defence.
1

GrALENSON : Of. dt.
Parliamentary Debates, House of Commons, Official Keport, Vol. 480,
No. 1, 31 Oct. 1950, col. 7.
3
Schweizerische Arbeitgeberzeitung, 12 Jan. 1951, p. 21.
z

CO-OPEEATION AT THE NATIONAL LEVEL

213

The Act gives the President power to issue regulations
having the force of law. But the legislation intends that the
objects of the Act shall be realised, above all, by means of
programmes and agreements drawn up voluntarily by the
different sectors of the economy.
Thus, especially with regard to the fixing of wages and
prices, the President may consult the representatives of
industry, commerce, agriculture, labour and other groups with
a view to encouraging the drawing up between the parties,
with the approval of the President, of such agreements and
programmes.
To ensure price stabilisation, the President has powers
to enable him to prevent inflation and to preserve the value
of the national currency, to stabilise the cost of living and the
costs of production, to prevent profiteering, etc., and preserve
the purchasing power of the people and to prevent economic
disturbances and disputes from impairing the effective mobilisation of national resources and national unity and morale.
The powers thus conferred are to be exercised with full
consideration of the maintenance and furtherance, so far
as practicable, of the American system of competitive enterprise (including independent small-business enterprises), of
a sound agricultural industry, of sound working relations
(including collective bargaining) and of the American way
of life.
In order effectively to ensure stabilisation of prices and
wages and to avoid any interruption of production, procedures for the settlement of collective disputes likely to
affect national defence shall be instituted. Firstly, the parties
must endeavour to effect a settlement in the national interest
through collective bargaining and the full use of mediation
and conciliation facilities. To this end, the President is
authorised to initiate voluntary conferences between management, labour and such persons as the President may designate
to represent the Government and the public. He may also
take such action as may be agreed upon in any such conference and may be appropriate to carry out the provisions
of the Act.
In any such conference, due regard must be given to
terms and conditions of employment established by prevailing
collective bargaining practice which are fair to labour and
management alike and which are consistent with stabilisation

214

CO-OPERATION IN INDUSTRY

policies established under the Act. No action may be taken
which is inconsistent with the provisions of existing legislation, and, in particular, with the Fair Labor Standards Act
of 1938 1 and with the Labor-Management Eelations Act of
1947.2
Under pain of criminal sanctions, no person may be
employed under the Act who engages in a strike against the
Government or who is a member of an organisation of Government employees that asserts the right to strike against the
Government or who advocates or is a member of an organisation that advocates the overthrow of the Government of the
United States by force or violence. 3
Before this Act was actually passed, the President instituted a National Security Eesources Board, with which
employers' and workers' organisations were associated. Two
representatives of organised labour were appointed to serve
as assistants to the chairman of the Board and an advisory
committee consisting of representatives of employers, agriculture and the public was attached to the Board. 4
The Board and its advisory committee are still in existence,
but their importance to the mobilisation programme has
diminished as a result of the establishment, under the Act,
of the Office of Defense Mobilisation which is responsible
for the mobilisation programme as a whole. After a period
of uncertainty and adjustment, during which labour representatives temporarily withdrew from the mobilisation programme, machinery for co-operation has been established.
A National Advisory Board on Mobilisation Policy, composed of sixteen members equally representative of industry,
labour, agriculture and the public, directly advises the President on general policy. The Director of the Office of Defense
Mobilisation is chairman of the Board. Furthermore, one of
the Director's principal assistants is a representative of labour.
Under the authority of the Office of Defense Mobilisation
is the Economic Stabilisation Agency, which is responsible
for price and wage stabilisation. The Administrator of this
agency has an eight-member labour-management advisory
committee, and a labour leader acts as his special assistant.
1

L.S., 1938—U.S.A. 1.
*L.S„ 1947—U.S.A. 2.
»Public Law, 774, 81st Congress, Ch. 932, 2nd Session (H.E. 9176).
* Monthly Labor Review, Aug. 1950, pp. III-IV.

CO-OPERATION AT THE NATIONAL LEVEL

215

The Wage Stabilisation Board set up within the agency consists of 18 members appointed by the President. Six of these
members represent the general public, six represent labour
and six represent management. The Board advises the Administrator on all labour disputes affecting the national defence,
and its decisions are binding if the parties agree beforehand
to submit their dispute to the Board.
Manpower policies are made by a joint labour-management
committee under the co-chairmanship of the Secretary of
Labor and the Director of the Office of Defense Mobilisation.
Decisions of the committee are carried out in the Office of
Defense Mobilisation by a Manpower Policy Committee and
in the Department of Labour by the Office of Defense Manpower. The latter Office has issued an order providing for
the establishment of labour-management committees in
13 regional centres and in other areas where manpower problems arise. These voluntary and advisory committees are
to study manpower needs and resources in their respective
areas, promote maximum and uniform use of manpower and
encourage co-operation of labour and management groups
and communities in providing needed facilities, such as housing and transport.

CO-OPERATION

BETWEEN

PUBLIC

AUTHORITIES

UNIONS IN COUNTRIES WITH PLANNED

AND

TRADE

ECONOMIES

Economic Functions of the Trade Unions
The part played by the trade union movement in directing
social and economic life has changed in sympathy with the
evolution of national economic systems. Two main phases
may be distinguished : first, a period of transition, during
which the different branches of the privately-owned economy
pass one by one into public ownership, and, secondly, the
period of the nationalised and planned economy.
Transition from Private Ownership to a Nationalised
Planned Economy.

and

During the first period of the régime in the U.S.S.R.
(ST.E.P.), the trade unions, which constituted the best organised and most active group of the workers, directed the

216

CO-OPEBATION IN INDUSTRY

Labour Commissariat and the Supreme National Economic
Council. They participated in the management of State
undertakings.
Subsequently, under the five-year plans,
the management of these undertakings was entrusted to
directors appointed by the competent authorities, but the
trade unions continued to be represented in the central
economic organs of the State and in the agencies responsible
for the preparation of plans. 1
I n other countries, particularly Bulgaria, Czechoslovakia,
Hungary and Poland, the principle of out-and-out planning
was adopted from the beginning. In 1945, the Governments
proceeded to draw up economic plans spread over several
years, which were intended both to ensure national reconstruction and to place the economy on a new basis.
During the first period, the trade unions co-operated
with the State in the organisation of the economy and, at
the same time, acted as the legally recognised representatives of
the workers in their relations with private employers.
The trade unions were represented both in the planning
agencies and in the agencies entrusted with the direction of
nationalised undertakings and collaborated closely with the
responsible Ministers in the committees which had to prepare
the way for the transfer of the fundamental branches of the
economy to State ownership. In Hungary, for example,
the drawing up and execution of the triennial plan adopted
in 1947 were entrusted to a Council for Planned Economy,
which included members appointed on the basis of nominations
made by the Trade Union Council. In Czechoslovakia, the
United Trade Union Organisation was represented on the
National Economic Council and on its committees, which
had to prepare the economic plan and to assist the Government in its implementation.
The role of the trade unions in the organisation of economic
life, during this first phase, is clearly illustrated by the recent
legislation enacted in the German Democratic Eepublic.
Under the terms of the Constitution, the State, through
its legislative organs and with the direct assistance of the
citizens—and, particularly, of the trade unions—draws up
the general economic plan (Article 21). The regulation of
production in the undertakings is ensured by collaboration
1

Methods of Collaboration...,

op. cit., pp. 85 et seq.

CO-OPEBATION AT THE NATIONAL LEVEL

217

with the staff who exercise this right through the trade unions
and the works councils (Article 17).
In the nationalised undertakings, the manual and nonmanual employees are convened to staff meetings and called
upon to discuss the plans and to make suggestions. The
obligations of the staff and of management with regard to
the fulfilment of plans which are in force are fixed annually
by the works collective agreements in accordance with directives issued by the central committees of the trade unions
and approved by the Central Trade Union Council and the
Ministry of Labour.
In private undertakings, the employers and the trade
union works committee must conclude agreements regulating
the workers' participation in management. These agreements
must also conform to the directives issued by the Central
Trade Union Council in collaboration with the Ministry of
Labour and with the authorised representatives of the private
sector of the economy after approval by the competent
authorities. 1
Régime of Nationalised and Planned Economy.
At the present time, the public authorities assume sole
responsibility for drawing up economic plans and for directing
national economic life.
Thus, in Poland, the Decree of 1 October 1947 relating
to the national planned economy gives the Council of Ministers
power to lay down, on the basis of proposals by the National
Planning Office, directives regarding the fundamental tasks
of and the methods of executing the national economic plan
(Article 2). The plans are prepared by the Office with the
collaboration of the competent Ministers. They are promulgated by legislation. The organisation and supervision of
the execution of the plans in the respective sectors is the
responsibility of the Ministers assisted by the Planning Office
as the co-ordinating agency.
In Czechoslovakia, the Planning Act of 22 February 1949
has abolished the Economic Council.2 The newly-established
1
Labour Act, 19 Apr. 1950 (Industry and Labour, Vol. IV, No. 5,
1 Sept. 1950, p. 212) ; Collective Agreements Order, 8 June 1950 (Industry
and Labour, Vol. IV, No. 9, 1 Nov. 1950, p . 371).
2
Industry and Labour, Vol. II, No. 4, 15 Aug. 1949, p . 190.

218

CO-OPERATION IN INDUSTRY

Planning Office is directed by a president, holding the rank
of a Cabinet Minister, assisted by a Committee of Experts.
Likewise, the Statute for Nationalised Industries promulgated
in July 1950 abolishes the administrative councils and entrusts the direction of each branch of industry and of each
undertaking to single directors. 1 The committees of the
Central Trade Union Council, which functioned in direct
relationship with the different ministerial departments, are
also dissolved.2 The situation is similar in the other countries
of Eastern Europe.
This economic machinery, of course, cannot function
without the active co-operation of all the workers. Thus,
after the declaration in Article 162 of the Czechoslovak
Constitution that the preparation and execution of the uniform economic plan is one of the principal functions of the
Government, there follows immediately a statement that, in
the accomplishment of its tasks the Government must rely
on the creative initiative of the working population and of
its organisations. In other words, the trade unions are called
upon to ensure to a large degree the execution of economic
plans. In all these countries, they assume legal responsibility
by virtue of the collective agreements or labour contracts
which they conclude with the heads of undertakings. Furthermore, they have to create the conditions which will make
effective implementation of the different economic measures
possible. To this end, they have an educational function to
fulfil ; in particular, they are responsible for training the
workers and preparing for the training of future economic and
administrative leaders. Moreover, they participate in the
psychological and economic measures which, in various ways
already described, are designed to give the workers a direct
interest in the execution of economic plans. 3

Social Functions of the Trade Unions
While performing the functions described above, the workers' organisations must also seek " to improve constantly and
1

See pp. 166-167.
Lidové Noviny, No. 291, 13 Dec. 1948, Prague.
3
See pp. 97-102.
2

CO-OPEBATION AT THE NATIONAL LEVEL

219

systematically the material and cultural situation of the
workers ". 1
In so far as the State assumes responsibility for economic
organisation it relies to a corresponding degree on the trade
unions to settle certain social questions. Thus, the rules and
regulations of the Eevolutionary Trade Union Movement of
Czechoslovakia assign the following duties, among others, to
the trade unions :
. . . to ensure that due regard is had to the needs of the workers
when legislative and administrative measures are under preparation
or in course of administration by the economic, social, health and
cultural authorities, whenever the interests of the workers are
involved ;
to represent the workers and to arrange for the defence of their
interests before courts of law, public insurance institutions and in
all other cases concerning employment relations ;
to set up and administer welfare, health and cultural establishments for the workers ;
to promote the vocational training of the workers ;
to provide for the protection of the workers' health by establishing sanatoria and convalescent homes and organising recreation
after work ;
to secure the application of laws and regulations regarding
industrial safety and the protection of the workers ;
to undertake and to develop collective supply arrangements for
workers both inside and outside undertakings.2
I t is evident, therefore, that the trade unions co-operate
with the State in the social field and, at the same time, find
that they enjoy a certain degree of autonomy, particularly
with regard to the creation and administration of social
institutions.
In the U.S.S.E., to a certain extent, the State has also
delegated some of its powers to the trade unions. The Central.
Trade Union Council has power to promulgate orders and
regulations concerning labour legislation and social insurance
in agreement with the competent authority of the State and
Central Committee of the Communist Party. Under the rules
and regulations of the Soviet trade unions promulgated in
1949, the Central Trade Union Council of the U.S.S.E.—
. . . prepares, and submits for Government examination,
proposed legislation relating to wages, protection of labour, social
security, and social and cultural services for the benefit of the
1
Article I of the Polish Trade Union Act of 1 July 1949; 'see Industry
and Labour, Vol. I l l , No. 4, 15 Feb. 1950, p . 132.
2
Industry and Labour, Vol. I I I / N o . 8, 15 Apr. 1950, p . 298.

220

CO-OPERATION IN INDUSTRY

workers ; it issues directives, regulations and instructions relating
to the application of existing labour
legislation ; it directs the operations of public social security.1
Furthermore, the Central Trade Union Council, in collaboration with the occupational federations concerned, is responsible
for the central administration of social insurance and labour
inspection.
The social insurance division of the Central Trade Union
Council ensures the over-all direction of all systems of social
insurance in the U.8.S.E. Further, this division also assumes
responsibility for the administration of short-term insurance
(accident, sickness, maternity, etc.), and long-term insurance
(disability, old age, etc.) being administered by the Ministries
for Social Welfare of the Federated Eepublics, but the administration is decentralised. Generally it is the trade union
organisations in the undertakings which are made responsible. 2
With regard to labour protection and safety, a dual role
devolves on the trade union organisation. First, after the
abolition of the Labour Commissariat, labour inspection was
entrusted to the higher organs of the trade unions. I t is now
ensured by the inspection services of the central committees of
the various occupational federations, while the Central Trade
Union Council operates five scientific institutes and fifteen
specialised laboratories engaged in scientific research on
industrial health and safety. Secondly, at the level of the
undertaking, a " social control " service is instituted, under
the auspices of the works councils' numerous " activists "
to supervise labour protection and safety. 3

V Pomoshch F.Z.M.K.,

See KOCHANOVSKOV : op.

Industry and Labour, Vol. I I , No. 7, 1 Oct. 1949, p . 307.

No. 10, May 1949.
cit.

CHAPTEE IV

CONCLUSIONS
Among the various aspects of the problem of co-operation
studied in the preceding chapters, that of co-operation at the
level of the undertaking is probably the most important at
the present time. Co-operation at this level, being particularly
closely associated with the problem of productivity, is a
matter of concern in almost all countries, and, in view of
the important possibilities for social progress to which it gives
rise, is a problem which demands a prompt solution equitable
to all concerned.
The problem of co-operation at the level of the industry
is engaging attention, above all, in those countries which are
installing new industries or undertaking the modernisation or
re-equipment of existing industries or which have decided to
give their industry a new charter within the framework of
a general economic reorganisation plan. In other words, the
importance of this question is evident both in countries which
are already industrialised and in other countries which are
still undergoing industrialisation.
At the national level, the association of employers' and
workers' organisations in the preparation and application of
social policy is accepted as a fact in the majority of countries.
In a large number of countries they are being increasingly
called upon to participate also in the development of economic
policy. It is sufficient to recall the post-war reconstruction
programmes, the repercussions of the policy of full employment on economic policy, the industrialisation efforts made
in underdeveloped countries and, finally, the recent rearmament policy, all of which factors, and especially the lastmentioned, emphasise the necessity for continuous and
conscientious co-operation, on the part of all the elements
in the economy, directed towards a common objective :
the intensified and co-ordinated development of national
productivity.

222

CO-OPERATION IN INDUSTRY

The first point, therefore, which would appear to emerge
from this comparative study is that the principle of co-operation
is now recognised in the majority of countries.
However, whatever value may be attached to such a
recognition of principle, it is the application of the principle
which, in practice, gives it real importance. The ways in
which the principle is applied are extremely varied.
To ensure co-operation between employers and workers
at the level of the undertaking, provision is made, in an
increasing number of countries, for the institution of agencies
whose competence is limited to single undertakings and which
are generally referred to as works councils, works committees
or production committees. Leaving aside those countries in
which only the trade unions determine relations between the
management and staff in every respect, the generally accepted
view is that the desired objectives will be more directly and
more surely attained by the constitution of special agencies,
quite separate from the industrial organisations although
having close contacts with them.
There is no doubt that there are considerable differences
between one country and another with regard, particularly,
to the methods of instituting the committees, their structure
and the extent of their powers. In some countries, the committees owe their existence to collective agreements, in others
to legislation. In one case, they may consist exclusively of
staff representatives ; in another case, they are joint agencies
including both the employer and delegates of the staff.
With regard to their institution and structure, the selection
of appropriate methods is largely governed by national
conditions. The point whose international significance
must be emphasised is that works committees do actually
exist in a large number of countries.
With regard to functions, it is generally admitted that
the committees should be competent in respect of social
questions which do not belong to the field of collective
bargaining between employers and trade unions. I t is nevertheless recognised—and this is the most distinctive feature of
the new institutions—that the committees are competent to
discuss with the employer questions relating to the organisation and methods of production. In fact, the full utilisation
of the knowledge and experience of all elements in production
is in the interest both of the employer and of the workers.

CONCLUSIONS

223

On the other hand, differences are to be observed with
regard to economic functions. In certain countries, the committees have the right to receive regular information concerning
the operation of the undertaking, to be kept informed of the
business results attained and to put forward the views of
the staff in the organs which direct the undertaking, particularly in the boards of directors of limited companies. In
other countries, these rights are not accorded to them.
It may be observed that, in contrast to the functions of
a social character by virtue of which the committees are
sometimes accorded powers of management or supervisory
powers, their economic functions—when they have such functions—are generally strictly advisory.
It is not a question of changing but of enlightening the authority ;
it is not a question of discussing a decision but of helping to prepare
that decision in order that it shall be more effective ; it is not
a
question of hindering the responsible head but of helping him.1
At the same time, it is recognised that the worker—
. . . needs to know for whom and for what he is working, to see
his own task in relation to the common work,
and not to be treated
as a mere technical factor in production.1
However, in some countries, the staff is represented—and
sometimes in a ratio of 50 per cent.—on the administrative
boards of undertakings and, accordingly, participates directly
in management.
In any event, the functions of the works committees,
however they may be delimited, must be sufficiently wide to
enable the parties to examine together the problems of the
undertaking and to reach understanding on as broad a basis
as possible.
At the level of the industry, also, agencies for co-operation
are set up either by agreement or by legislation ; but here
again, as at the level of the undertaking, the results are more
important than the methods adopted. Likewise, their powers
range from mere consultation on social and technical matters
to direct participation in the management of certain industries.
But, whether their role be limited or extensive, it has been
observed that wherever they are set up these agencies make
1
M. DELSINNE : " D u contrat de travail au contrat d'association",
in Le Progrès Social, Dec. 1950, p. 11.

224

CO-OPERATION IN INDUSTRY

an effective contribution towards the promotion of good
understanding between the parties.
Finally, at the national level, the aim is to associate
employers' and workers' organisations in the preparation and
application of the Government's social and economic policy.
The classical method, most generally employed at the present
time, is consultation with the organisations concerned, but it
is becoming ever more widely recognised that the institution
of particular agencies ensures that this co-operation may be
continuous and so permit of a better utilisation of the knowledge and experience of the parties concerned.
Eeferençe has been made in this report to the many different ways in which efforts are made to attain this object.
As they are having recourse to experimental procedures, the
Governments frequently prefer to appeal to the goodwill of
the parties concerned rather than to lay down strict regulations.
In some cases, they rely entirely on agreements between the
parties. No less frequently, however, enactments and even
Constitutions integrate the different agencies in institutional
State machinery. In any event, whatever juridical status they
may possess, the agencies which are shown to be of practical
utility tend to become permanent institutions, whereas those
whose activities do not lead to concrete results are condemned
to disappear even though they were originally set up by virtue
of legislation.
Eeference has also been made to the different tendencies
which appear in the assignment of functions to these agencies.
I n some countries, special agencies have been set up to deal
with social questions and to deal with economic questions.
I n other cases, both kinds of functions are entrusted to the
same institutions. In view of the interdependence of these
two series of problems, however, efforts are made in nearly
every case to co-ordinate the activities of these numerous
institutions by setting up central bodies, a tendency which
is intensified at times of political or economic crisis. In short,
it has been observed that, in a large number of countries,
the value has been recognised of setting up permanent agencies
in the form of economic or social councils or similar bodies,
through which employers' and workers' organisations may
be consulted.on questions of social and economic policy.
Moreover, this co-operation is not only related to general
or legislative measures but also to measures taken for the

CONCLUSIONS

225

application of policy. Various examples have been given
illustrating the participation of employers' and workers'
organisations in public administration. This principle, already
generally recognised in the labour field, is tending now to
be extended also to economic administration, which is becoming ever more important in all countries.
What are the practical results of the various measures
which have been summarised above ?
An attempt has been made to take account of the progress
made at the level of the undertaking, at the level of the
industry and at the national level, but, in general, it would
be premature to draw any final conclusions. Indeed, these
experiments are mostly of recent date and many of them
are still in their early stages. Some, however, now date back
several years and the mere fact that they have lasted so long
has enabled them to become ever more firmly established as
an essential feature of the economic and social system. Gradually, therefore, they pass from the experimental to the
institutional stage.
On the other hand, from the established facts there emerge
certain essential elements which govern the smooth functioning of these institutions, as, for example, the degree of trade
union organisation, the psychological atmosphere of cooperation, the technical training of the parties.
Eeal co-operation is possible only if genuine trade unions
exist. I t will be remembered that workers' organisations have
often shown scepticism if not hostility towards the works
committees, which they suspected, rightly or wrongly, of
serving different aims from their own. But co-operation in
the undertaking is not directed towards the same objectives
as collective bargaining, the essential function of the trade
unions. In fact, while collective bargaining may, under certain conditions, facilitate the co-operation of the staff with
the employer, such co-operation could not be intended, with
any chance of success, as a substitute for collective bargaining.
This fact is now recognised in most of the relevant legislation and agreements.
The trade union federations, at the level of the industry,
and, at the national level, central groups, in particular, confederations, are the parties called upon to co-operate. The
existence of well-organised independent groups, therefore, is
the indispensable condition of effective co-operation, whether
is

226

CO-OPEBATION IN INDUSTRY

it be at the level of the undertaking, the level of the industry
or at the national level and, therefore, in proportion as the
basis of this organisation is broader and firmer so are the
results of co-operation more certain.
However, this condition alone would not ensure cooperation between the parties concerned in the absence of
certain psychological factors, that is, in the absence of an
" atmosphere of co-operation ". Emphasis has been laid on
the importance of the " human factor " in the success of
every effort to increase production. Eeference has also been
made to the complicated nature of the measures intended
to ensure social and economic security. There is need, therefore, for genuine mutual understanding, which will enable
the employer to place confidence in his " collaborators " and
in their accredited representatives and which will enable the
latter to comprehend the factors on which this collaboration is based. Obviously, it is not possible to speak of cooperation if there is no mutual desire to co-operate.
But such a psychological atmosphere is not simply the
result of a particular " policy " ; it presupposes also an adequate knowledge of the questions which are the subject of
co-operation ; the employer, for his part, must understand
the mentality of the workers and their aspirations, while
the workers must have knowledge of the technical and economic problems of production.
It has been observed that the trade unions have generally
fully understood this last aspect of the problem ; in several
countries, they endeavour, by their own methods, to complete the technical training of their members and particularly of those who are called upon to participate in the
various committees or councils. The Governments of many
countries support these efforts by organising conferences,
courses, visits to undertakings and by all kinds of measures
to provide instruction and training.
In other words, the problem of co-operation is not solved
by enacting a law or by concluding an agreement. Admittedly,
regulations are necessary to make co-operation possible but
other things are necessary to make it effective. But this
problem is not purely national, it is also international.
Co-operation between employers and workers and, in particular, co-operation between public authorities and employers'
and workers' organisations, requires a sustained effort if it

CONCLUSIONS

227

is to succeed. Accordingly, it is necessary that the persons
concerned should have full factual information, be aware
of the circumstances which contribute to the success of any
institution and comprehend the reasons for failure. That is
to say, the experience gained in one undertaking should be
of benefit to other undertakings, that gained in an industry
to other industries and that gained in one country to other
countries.
The Conference of the I.L.O. in New York in 1941 already
took account of this major aspect of the problem and invited
the Governing Body to take the necessary measures to provoke
" exchange of information between Governments and national
organisations of workers and employers . . . so as to facilitate the widest possible development of the principle of
co-operation " and " to aid interested countries to make use
. . . of the most suitable methods " in this connection. The
Governing Body also requested the Governments " to provide
the Office not only with a record of structural developments
but with adequate information on the operation of the machinery, both where it is successful and where it falls short of
achieving its purpose, so as to permit comparative analysis ".
The reasons which inspired the Conference ten years ago
still hold good today. It might even be said that they are
still more cogent. But, it should be added that, in order
that such exchanges of information may serve a useful purpose, it is necessary that they should take place on a permanent basis, that the information should be centralised and
that opportunities should be given to the parties concerned
to meet together at regular intervals. It seems, therefore,
that every possibility should be explored for giving effect
to the suggestion of the Conference in New Tork that the
experience of co-operation gained in the various countries
should be " pooled ".

APPENDIX
SELECTED R E F E R E N C E S 1
Publications of the International Labour Office
DOCUMENTS OF THE INTERNATIONAL LABOUR CONFERENCE
26th Session : Methods of Collaboration between the Public Authorities,
Workers' Organisations and Employers' Organisations (Geneva, 1940).
30th Session : Eeport VII, Freedom of Association and Industrial Belations
(Geneva, 1947).
31st Session : Reports VIII (1) and VIII (2), Industrial
Belations
(Application of the Principles of the Right to Organise and to Bargain
Collectively, Collective Agreements, Conciliation and Arbitration and
Collaboration between Public Authorities and Employers' and Workers'
Organisations) (Geneva, 1947 and 1948).
32nd Session : Report V (Supplement), Industrial Belations (Collective
Agreements—Conciliation and. Arbitration—Co-operation between Public
Authorities and Employers' and Workers' Organisations) (Geneva, 1949).
33rd Session : Report IV (Supplement), Industrial Belations (Collective
Agreements—Conciliation and Arbitration—Co-operation between Employers' and Workers' Organisations) (Geneva, 1950).
34th Session : Report VI, Co-operation between Public Authorities and
Employers' and Workers' Organisations (Geneva, 1951).
DOCUMENTS OF SPECIAL AND REGIONAL CONFERENCES
Conference of the International Labour Organisation, New York and
Washington, D.C., 1941, Wartime Developments in Government-EmployerWorker Collaboration (Montreal, 1941).
Third Conference of American States Members of the International
Labour Organisation, Mexico, 1946, Eeport IV, Industrial
Belations
(Montreal, 1946).
DOCUMENTS OF THE INDUSTRIAL COMMITTEES
Building, Civil Engineering and Public Works Committee, 2nd Session,
Report IV, Industrial Belations (Geneva, 1949).
Inland Transport Committee, 2nd Session, Report I I I , Industrial
Belations in Inland Transport (Geneva, 1947).
1
This list is by no means exhaustive. The sources mentioned are those which were
most frequently consulted in the preparation of the present study.

APPENDIX

229

Iron and Steel Committee, 2nd Session, Report IV, Labour-Management
Co-operation (Geneva, 1947).
Metal Trades Committee, 2nd Session, Report IV, Labour-Management
Co-operation (Geneva, 1947).
Petroleum Committee, 2nd Session, Report IV, Industrial Relations
(Geneva, 1948).
Textiles Committee, 2nd Session, Report I I I , Industrial
Relations
(Geneva, 1948).
STUDIES AND BEPOKTS

New Series
The Chilean Development Corporation. By Herman FINER. 1947. 83 p p .
Labour-Management Co-operation in United States War Production.
1948. 405 pp.
Labour-Management Co-operation in France. 1948. 237 pp.

Series A.

Industrial

Relations

Studies on Industrial Relations, Vol. I (The Siemens Undertakings, the
Lens Mines, London Transport Undertakings, French Mines in the Saar,
Bata Shoe Factory). 1930. xii + 263 pp. Also published in German.
Studies on Industrial Relations, Vol. II (Zeiss Undertakings, Fiat Factory,
Philips Factory, Sandvik Steel Works). 1932. v + 162 pp. Also published
in German.
Industrial Relations in Great Britain. By J. H. RICHARDSON. 1933.
New Edition, 1938. xi + 290 pp.
Studies on Industrial Relations, Vol. I l l (Canadian Railroads, Pequot
Works of the Naum Keag Steam Cotton Co., La Samaritaine Department
Store, Norwegian Azote Company, Industrial Relations in Luxembourg).
1935. viii + 183 pp.
Joint Production Committees in Great Britain. 1943. iv + 74 pp. Out
of print.
British Joint Production Machinery. 1944. v + 273 pp.

Series B.
Works Councils in Germany.

Economic Conditions
By Marcel BERTHELOT.

1924.

140 pp.

TEXTS OF LAWS BECENTLY PUBLISHED IN THE
" LEGISLATIVE SERIES "
Austria.
Federal Act of 28 March 1947 to establish a system of representation
for the employees of establishments (Works Councils Act) (L.S. 1947—
Aus. 2).
Belgium.
Order of 9 June 1945 to issue rules for joint committees (L.S. 1945—
Bel. 5).
Order of the Regent of 25 September 1947 to establish bodies for the
supervision of safety and hygiene in underground mines and quarries
(L.S. 1947—Bel. 5).

230

CO-OPERATION IN INDUSTRY

Act of 20 September 1948 to make provision for the organisation of the
economic life of the country (L.S. 1948—Bel. 8).
Bulgaria.
The Rules of Employment in Industrial Undertakings
(19 August 1947) (L.8. 1947—Bulg. 1).

Regulations

Czechoslovakia.
Decree of 24 October 1945 respecting works councils and undertakings
councils (L.8. 1945—Cz. 1).
Act of 20 March 1948 to amend and supplement certain provisions of
the Decree of 24 October 1945 respecting works councils and undertakings
councils (L.8. 1948—Cz. 2 (A)).
Act of 21 July 1948 to amend and supplement certain other provisions
of the Decree of 24 October 1945 (L.S. 1948—Cz. 2 (B)).
Act of 25 October 1948 respecting the State wages policy (L.8. 1948—•
Cz. 4).
Finland.
Act of 21 June 1946 respecting production committees (L.8. 1941—
Fin. 1).
France.
Ordinance of 22 February 1945 to institute woiks committees {L.8.
1945—Fr. 8).
Decree of 2 November 1945 to issue public administrative regulations
under the Ordinance of 22 February 1945 to institute works committees
(L.S. 1945—Fr. 8(B)).
Act of 16 May 1946 to amend the Ordinance of 22 February 1945 ins'tituting works committees (L.S. 1946—Fr. 8).
Act of 7 July 1947 to introduce the system of proportional representation
in the election of employees' delegates in undertakings (L.S. 1947—Fr. 4).
Germany.
Law of 10 April 1946 on works councils (L.S. 1946—Ger. 3).
India.
Act of 17 March 1947 to make provision for the investigation and
settlement of industrial disputes, and for certain other purposes (L.8.
1947—Ind. 1).
Luxembourg.
Grand-Ducal Order of 8 May 1925 concerning the institution of workers'
delegations in industrial undertakings (L.S. 1925—Lux. 1).
Netherlands.
Act of 4 May 1950 containing provisions relative to works councils
(L.S. 1950—Neth. 2).
Poland.
Decree of 6 February 1945 to institute works councils (L.8. 1945—
Pol. 2 (A)).
Order of the Minister of Labour and Social Welfare of 7 May 1945 to
issue rules governing the election of works councils and workers' delegates
(L.S. 1945—Pol. 2 (B, D)).
Order of the Minister of Labour and Social Welfare of 7 May 1945 to
issue model standing orders for works councils (L.S. 1945—Pol. 2 (C)).
Decree of 16 January 1947 to amend the Decree of 6 February 1945
instituting works councils (L.S. 1947—Pol. 1 (A)).

APPENDIX

231

Order of 29 April 1947 to regulate the elections of works councils and
workers' delegates (L.8. 1947—Pol. 1 (B)).
Order of 19 August 1947 regulating the elections of works councils and
workers' delegates (L.S. 1947—Pol. 1 (Q).
Spain.
Decree of 18 August 1947 to establish joint boards in undertakings
(L.8. 1947—Sp. 3).

BECENT ARTICLES AND ÏTOTES PUBLISHED IN THE
" INTERNATIONAL LABOUR E E V I E W "

Volume LIU.
Nos. 1-2, January-February 1946 :
p. 75 : Nationalisation and the Hole of Labour in the Czechoslovak
Economy ;
p. 81 : Joint Committees in Belgium.
Nos. 3-4, March-April 1946 :
p. 222 : Joint Production Committees in Norway.
Nos. 5-6, May-June 1946 :
p. 379 : Labour-Management Collaboration in the Canadian Construction Industry ;
p. 397 : The Welfare Functions of the French Works Committees ;
p. 400 : Safety and Health Committees in Belgian Undertakings.
Volume LIV.
Nos. 1-2, July-August 1946 :
p. 75 : National Eeorganisation in France ;
p. 86 : Advisory Councils in Great Britain ;
p. 93 : Industrial Eelations in France.
Nos. 5-6, November-December 1946 :
p. 321 : Collaboration of Employers and Workers with Government
Departments in Great Britain ;
p . 364 : The New French Constitution : the Economic Council ;
p. 367 : New Industrial Eelations Act in Ireland ;
p. 369 : Collaboration between the Government and Bepresentativea
of Employers and Workers in Great Britain.
Volume LV.
Nos. 1-2, January-February 1947 :
p. 115 : Staff Begulations for Nationalised Industries and Public
Services in France ;
p. 122 : Meetings of Eepresentatives of Employers' and Workers'
Organisations in the British Coal Industry.
Nos. 3-4, March-April 1947 :
p. 247 : Industrial Eelations in Hungary ;
p. 284 : The Tripartite Working Parties in Great Britain.
No. 5, May 1947:
p. 425 : Company Councils in Sweden.
Volume LVI.
No. 4, October 1947 :
p. 454 : Industrial Eelations in France.

232

CO-OPEBATION IN INDUSTRY

Volume LVII.
Nos. 1-2, January-February 1948 :
p.
1 : Eecent Social Developments in Finland, by Nulo A. MANNIO
(see p. 8 et seg.) ;
p. 72 : Establishment of Works Committees in Italy.
No. 3, March 1948 :
p. 234 : Tripartite Conference in Austria.
No. 4, April 1948 :
p. 365 : Works Committees in Denmark.
No. 5, May 1948 :
p. 491 : Nationalisation in Great Britain ;
p. 496 : Status of Works Councils in Belgium.
No. 6, June 1948 :
p. 626 : Industrial Policy in India ;
p. 632 : Organisation of the Belgian Coal Industry ;
p. 640 : Conciliation and Mediation in the United States.
Volume
LVIII.
No. 1, July 1948 :
p. 70 : Works Councils in Czechoslovakia ;
p. 74 : Advisory Councils in the Iranian Petroleum Industry.
No. 5, November 1948 :
p. 660 : Industrial Eolations in France ;
p. 662 : Co-operation between Employers' Organisations and the Public
Administration in Poland.
No. 6, December 1948 :
p. 768 : Improvements in Methods of Production in the United
Kingdom.
Volume LIX.
No. 1, January 1949 :
p. 63 : The Czechoslovak Five-Year Plan.
No. 2, February 1949 :
p. 192 : Labour-Management Co-operation in the Undertaking. Recent
Surveys in France, the United Kingdom, the United States
and Canada.
No. 6, June 1949 :
p. 633 : Works Councils, by Jean D E GTVRY.
Volume LXI.
No. 1, January 1950 :
p. 49 : The Economic and Social Activities of Trade Unions in Poland.

NOTES PUBLISHED IN " INDUSTRY AND LABOUR "
Volume
No. 1,
p.
p.
p.
No. 3,
p.

I.
1 January 1949 :
12 : Further Economic Organisation in Hungary ;
15 : Joint Councils for Negotiation in British Industries ;
37 : General Trade Union of Bulgaria.
1 February 1949:
89 : Extension of Nationalisation in Czechoslovakia.

APPENDIX

233

No. 6, 15 March 1949 :
p. 221 : Economic Organisation in Belgium ;
p. 227 : Management and Labour in Belgium.
No. 7, 1 April 1949 :
p. 262 : National Undertakings in Hungary.
No. 8, 15 April 1949 :
p. 314 : New Conciliation Procedure in Hungary ;
p. 334 : Congress of Hungarian Trade Unions.
No. 12, 15 June 1949 :
p. 475 : Collective Agreements in Hungary.
Volume II.
No. 4, 15 August 1949 :
p. 190 : Planning in Czechoslovakia ;
p. 193 : Workers' Representation in Hungarian Undertakings.
No. 5, 1 September 1949:
p . 229 : New System of Labour Organisation in Czechoslovakia.
No. 11, 1 December 1949 :
p. 429 : Works Councils in Belgium.
Volume III.
No. 2, 15 January 1950 :
p. 50 : Development Council for the United Kingdom Clothing
Industry.
No. 3, 1 February 1950 :
p . 86 : Production Problems in Czechoslovakia.
No. 4, 15 February 1950 :
p. 127 : The Trade Union Movement and Labour Productivity in
Hungary ;
p. 132 : Trade Union Organisation in Poland.
No. 8, 15 April 1950 :
p. 282 : Economic Organisation in the Netherlands ;
p. 298 : Trade Union Organisation in Czechoslovakia.
No. 10, 15 May 1950 :
p. 381 : Works Councils in Belgium.
No. 12, 15 June 1950 :
p. 448 : Creation of a Tripartite Labour Conference in Pakistan.
Volume IV.
No. 5, 1 September 1950 :
p. 211 : Works Councils in Belgium.
No. 7, 1 October 1950:
p. 282 : New Regulations concerning Czechoslovak State Undertakings;
p. 284 : Works Councils in the Netherlands.
No. 8, 15 October 1950 :
p. 328 : Workers' Councils and Management Councils in Yugoslavia.
No. 9, 1 November 1950 :
p. 370 : Works Committees in France.
No. 10, 15 November 1950 :
p. 402 : Works Councils in Bolivia.

234

CO-OPEBATION IN INDUSTRY

No. 11, 1 December 1950:
p. 438 : Labour-Capital Consultative Councils in the People's Eepublic
of China.
Volume V.
No. 7, 1 April 1951 :
p. 252 : Industrial Eolations in Belgium.

Other Publications
Argentina.
KEOTOSCHIN, Ernesto. Instituciones de Derecho de Trabajo, Depalme,
Buenos Aires, 1947.
Australia.
Executive Conference on Partnership in Production, Melbourne, 1949,
Partnership in Production, Proceedings, Melbourne, Institute of Industrial
Management, 1949.
Belgium.
Confédération des syndicats chrétiens, X V m e Congrès, Co-gestion,
Brussels, 1947.
Fédération des industries belges :
Les Commissions paritaires pour employés et leurs décisions, Brussels, 1949.
Les conseils d'entreprise : Commentaires à l'usage des chefs d'entreprises,
Brussels, 1950.
Méalisations sociales dans l'industrie belge, Recueil de 15 monographies
et enquêtes, Brussels, 1950.
Fédération générale du Travail de Belgique, Vers la démocratie sociale
par l'accession des travailleurs à la gestion économique, Brussels, 1946.
LALOIEE, Marcel. Les relations sociales au sein des entreprises, Paris, 1947.
NEUVILLE, Jean. Les pouvoirs du conseil d'entreprise, Brussels, 1950
(special issue of Clartés syndicales, April-May 1950).
Canada.
Department of Labour, Labour-Management Co-operation Service
Industrial Democracy at Work, Ottawa, 1946.
Handbook of Suggestion Plans, Ottawa, 1946.
A Stitch in Time, Ottawa, 1949.
Partners in Production, Ottawa, 1949.
The Stories of Five L.M.P.C.'s, Ottawa, 1949.
Go-operation Works Here, Ottawa, 1950.
Chile.
BEAVO, Octavia Cornejo. Tendencias modernas del movimiento de asociación profesional, Santiago de Chile, 1948.
Czechoslovakia.
BERGER, Oldrich. Velké dilo, Prague, 1949.
FIEELINGER, Z., and others. La Tchécoslovaquie sur une route nouvelle,
Prague, 1947.
KoTEK, Dr. Josef. Závodni a podnikové rady, 1947.
Ministry of Labour and Social Assistance. Czechoslovakia's New Labour
Policy, Prague, 1949.
NESPOR, Dr. Zdenek. Znârodnëni dolû a prùmyshi, Prague, 1948.
Le nouveau régime de travail en Tchécoslovaquie, Prague, Orbis, 1949.
ZAPOTOCKÎ, Antonin. Nova Odborovâ politika, Prague, 1949.

APPENDIX
Denmark.
" Industrial Eolations in Denmark ", Socialt Tidsskrift,
1947.

235

Copenhagen,

France.
BAYART, Philippe. Comités d'entreprise, Rousseau & C le , Paris, 1946.
CHAMBELLAND, P. Les comités d'entreprise, fonctionnement et résultats
pratiques, Eousseau & C le , Paris, 1949.
Chambre syndicale de l'industrie du Bas-Rhin et des régions limitrophes. Les comités d'entreprise, les délégués du personnel. Textes officiels,
études et commentaires divers, Strasbourg, 1946.
CHAEPT, P. La constitution des comités d'entreprise dans les industries
de la sidérurgie et des métaux non ferreux, Jouve, Paris, 1944.
Confédération générale du Travail. Les comités d'entreprise et les délégués
du personnel, Paris, 1946.
DURAND and JATJSSAUD. Traité de droit du travail, Dalloz, Paris, 1947.
Fédération des travailleurs de la Métallurgie (C.G.T.). Les comités
d'entreprise : principes d'orientation, d'organisation et de fonctionnement,
2nd ed., Paris, 1947.
JAMES, E. Les comités d'entreprise, Librairie générale de droit et de
jurisprudence, Paris, 1945.
MÉBIGOT, Jean-Guy. Essai sur les comités d'organisation professionnelle,
Librairie générale de droit et de jurisprudence, Paris, 1943.
Ministère du Travail et de la Sécurité sociale. Guides de législation
sociale, I et II (special issues of Bévue française du Travail devoted to works
councils and staff delegations), 1948.
Institut de Science économique appliquée, Paris. La participation des
salariés aux responsabilités de l'entrepreneur, Collection Pragma, Paris,
Presses Universitaires de France, 1947.
PETIT, R. Les comités d'entreprise, Librairie sociale et économique,
Paris, 1946.
W ALINE, P . " Les relations entre employeurs et salariés dans la France
d'aujourd'hui ", Journal des Associations patronales suisses, Nos. 32/33,
11 and 25 August 1950.
Germany.
BACHMANN. " Kritische Gedanken über das Mitbestimmungsrecht der
Betriebsräte ", Bechi der Arbeit, Vol. II, No. 4, May 1949.
" Der Gesetzesvorschlag des DGB zur Neuordnung der Wirtschaft ",
Die Quelle, July 1950.
DIETRICH, G. P. The Trade Union in the Beconstruction of Germany,
Office of Military Government (U.S. Zone), Manpower Division, Visiting
Expert Series, No. 6, Berlin, 1949.
DEATH. " Über die Zulässigkeit deutscher Betriebsrätegesetze und die
Gewährung eines Mitbestimmungsrechts ", Becht der Arbeit, Vol. I, No. 4,
1948.
FISHER, Paul. Works Councils in Germany, Office of the High Commissioner for Germany, Office of Labor Affairs, Visiting Expert Series, No. 18,
1951.
FITTING, Karl. " Die Probleme des Betriebsverfassungsrechts : Eine
rechtsvergleichende Darstellung ", Bundesarbeitsblatt, No. 12, December
1950, Nos. 1, 2, 3, 4, January-April 1951.
FITTING, Karl. " Kontrollratgesetz Nr. 22 und deutsche Betriebsrätegesetzgebung ", Hecht der Arbeit, Vol. I, No. 3, 1948.
GERICKE. " Betriebsobmann oder einköpfiger Betriebsrat ", Becht der
Arbeit, Vol. II, No. 2.

236

CO-OPEBATION IN INDUSTRY

HÜBNER. " Der Betriebsrat als Sperrinstanz im bayerischen Kündigungs
schutzverfahren ? ", Becht der Arbeit, Vol. I l l , No. 2, February 1950.
Industrial Relations in Germany, 1945-49 (H.M. Stationery Office,
Cmd. 7923), London, 1949.
KAUFFMANN. " Fragen zur Betriebsrätewahl ", Becht der Arbeit, Vol. I,
No. 3.
MEISSINGER. " Begriffsklärung zum Mitbestimmungsrecht ", Becht der
Arbeit, Vol. I l l , No. 2, February 1949.
MEVES. " Die besonderen Bestimmungen in den Betriebsrätegesetzen
der westdeutschen Länder für die Betriebe und Verwaltungen des öffentlichen Dienstes ", Becht der Arbeit, Vol. I I , No. 12, December 1949.
EOESCH. " Das Mitbestimmungsrecht der Betriebsräte und der Betriebsgewerkschaftsleitungen in der Ostzone ", Becht der Arbeit, Vol. I I , No. 5,
May 1949.
SIEBERT and HILGER.

Arbeitsrecht.

Heidelberg.

STADLER, K. E . " Kampf um das Mitbestimmungsrecht in Deutschland ", Arbeit und Wirtschaft, Vol. 4, No. 6, 1 January 1946.
Israel.
MUENZNER, Gerhard. Labor Enterprise in Palestine : A Handbook of
Histadruth Economic Institutions, Sharon, New York, 1947.
Italy.
BARASSI, Lodovico. Il Diritto del Lavoro, Milan, 1949.
Confederazione generale dell'Industria Italiana. I consigli di gestione,
Eome, February 1947.
Netherlands.
Foundation of Labour. The Netherlands Builds a New Road to Industria'
Peace through Voluntary Co-operation, The Hague.
Norway.
BROEK, Gilbert de. Les relations industrielles en Norvège, Comité tripartite pour les questions internationales de politique sociale, Oslo, 1951.
GALENSON, Walter. Labour in Norway, Harvard University Press,
Cambridge, Mass., 1949.
Poland.
Central Committee of Trade Unions :
Sprawoedanie, z dzialalmoêci Komisji Central/ne) Zwiazków Zawodowych,
Warsaw, 1949.
Structure of the Trade Unions in Poland, Warsaw, 1948. (Also published
in French under the title La structure des syndicats polonais.)
Ministry of Justice. Prawo pracy, Warsaw, 1949.
Ministry of Labour and Social Assistance. La politique sociale en Pologne,
Warsaw, 1948.
Sweden.
CHRISTENSON, Torsten (Union of Swedish Employers) and FLYBOO,
Ture (Confederation of Swedish Trade Unions). Works Councils in Sweden.
(A reprint of articles which appeared in the Anglo-Swedish Beview, December
1950 and January 1951.)
KRISTENSON, Eobert. Co-operation between Unions and Management in
Time Study and Work Methods in Sweden, 1948.
LÉGER, Charles. La' démocratie industrielle et les comités d'entreprise en
Suède, Armand Colin, Paris, 1950.
PLANUS, P . Patrons et ouvriers en Suède, Pion, Paris, 1938.

237

APPENDIX

Union of Swedish Employers (Svenska Arbetsgivareföreningen). Les
conditions sociales et les rapports entre patrons et ouvriers en Suède, Stockholm,
1948.
Switzerland.
KELLEKHALS, Werner. Arbeiter-Kommissionen,
Basle, 1949.

Buchdruckerei Haupt,

U.S.S.B.
ARAKELIAN, A. Industrial Management in the U.S.S.B., Washington,
1950.
ASKEEOV, A. A., and others. Sovietskoie gosudarstviennoie pravo, Moscow,
1948.
DEUTSCHER, Isaac. Soviet Trade Unions : Their Place in Soviet Labour
Policy, Royal Institute of International Affairs, London, 1950.
KOCHANOVSKOV, Ivan. Pfehled socialmiho pojistëni SSSB, Prague, 1949.
OSIPOV, A. P. 06 ustave profesional'nykh soiuzov SSSB, dokled na X
s'ezde profsoiuzov (Report concerning the status of trade unions in the
U.S.S.R. presented to the Xth Congress of trade unions), Moscow, 1949.
Union of South Africa.
Works Councils and Committees, their Object and Functions,
Development Foundation of South Africa, July 1950.

National

United Kingdom.
British Institute of Management. Organising for Output, London, 1950.
CLEGG, Hugh, Labour in Nationalised Industry, Interim Report of a
Fabian Research Group, Fabian Research Series, Ño. 141, Fabian Society,
London, 1950.
" Joint Consultation in Action ", Ingot, Publications Department of
Richard Thomas & Baldwins, Ltd., London.
Labour Party. Industrial Democracy, Labour Publications Department,
" Towards Tomorrow " Series, No. 1, London, 1948.
Ministry of Labour and National Service :
Industrial Pelotions Handbook, London, 1944 (reprinted 1946).
Industrial Pelotions Handbook, Supplement No. 3, Joint Consultation in
Industry, London, 1949.
Peport of Conference on Joint Consultation, Training Within Industry and
Personnel Management, London, 1948.
Government in Industry, Survey of Machinery for Consultation and Cooperation, London, 1948.
PLANUS, P. Comités d'entreprise en Angleterre, Pion, Paris, 1946.
ROPEE, Joseph I. Joint Consultation and Besponsibility in Modem
Industry, Workers' Educational Association, Study Outline No. 19, London,
1950.
SCOTT, W. H. Joint Consultation in a Liverpool Manufacturing Firm,
Liverpool University Press, 1950.
WALINE Pierre. Les relations entre patrons et ouvriers dans l'Angleterre
d'aujourd'hui, Marcel Rivière et C te , Paris, 1948.
WAXPOLE, G. S. Management and Men, Jonathan Cape, London, 1944.
United States.
American Management Association :
The Union's Pole in Production Management, Production Series, No. 189,
1950.
Getting and Using Employees' Ideas, Production Series, No. 165.

238

CO-OPERATION IN INDUSTRY

BAKKE, E. W . Mutual Survival, the Goal of Unions and Management,
Harper and Bros., New York, 1947.
BBAUN, Kurt. Union-Management Co-operation, Brookings Institution,
Washington, D.C., 1947.
British Trades Union Congress. Trade Unions and Productivity, London,
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CHAMBERLAIN, Neil W. The Union Challenge to Management Control,
Harper and Bros., New York, 1948.
COOKE, Morris Llewellyn, and MUKEAT, Philip. Organised Labor and
Production : Next Step in Industrial Democracy, Harper and Bros., New
York, 1940.
DE SCHWEINITZ, Dorothea. Labor and Management in a Common Enterprise, Harvard University Press, 1949.
GOLDEN, Clinton S., and RUTTENBERG, Harold S. The Dynamics of
Industrial Democracy, Harper and Bros., New York, 1942.
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Press, Stanford, Cal., 1948.
LINDBLOM, C. E. Unions and Capitalism, Yale University Press, New
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The Human Problem of an Industrial Civilisation, New York, 1933.
The Social Problem of an Industrial Civilisation, Boston, 1945.
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Employer-Employee Co-operation, New York, 1942.
Should Labor Be Given a Direct Share in the Management of Industry t
New York, 1946.
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(A series of case studies of individual industries or undertakings. Publication was started in 1948.)
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politiques, n° 22), Paris, 1951.

PUBLICATIONS OF THE INTERNATIONAL LABOUR OFFICE

Conventions
and Recommendations
1919 -1949
Published in the year of the 30th anniversary of the International
Labour Organisation, this volume contains reprints of the authentic
texts of the Conventions and Eecommendations adopted by the
International Labour Conference in the course of the thirty-two
sessions held from 1919 to 1949.
The Conference, which is composed of delegates representing
the Governments, employers and workers of the Member States,
adopts minimum international standards which are formulated in
special international treaties called Conventions, and in Becommendations. These are based on careful fact-finding and discussion.
As a two-thirds majority of the Conference is required for their
adoption, they represent the general agreement of informed world
opinion. The decisions of the Conference are not automatically
binding. Governments must submit the Conference standards to
their national legislatures. If a legislature accepts a Convention, the
Government is bound to ratify and apply the Convention and to
submit annual reports, showing how it is applying it, which are
scrutinised by special I.L.O. committees.
During the period from 1919 to 1949, 98 Conventions and 87
Eecommendations were adopted by the Conference. Of the Conventions, 65 are now in force—i.e., legally binding on two or more
countries, and altogether over a thousand ratifications have been
registered. These figures do not, however, provide a measure of the
degree to which the international regulations contained in the texts
have become law in the different countries ; in many cases the
standards laid down have been embodied in national legislation to a
great extent even though ratification has not taken place.
The Conventions and Eecommendations deal with such matters
as employment service organisation, wage regulation, hours of work,
child labour, vocational training and apprenticeship, the employment
of women, industrial health, safety and welfare, social security,
freedom of association, industrial relations, labour inspection, the
conditions of seamen, labour policy in non-metropolitan territories,
migration and labour statistics.
An index by subjects is included in the volume
Geneva, 1949. XVI + 924 pp.

Price : §5 ; 25s. ; 17 Swiss francs

PUBLICATIONS OF THE INTERNATIONAL LABOUR OFFICE

Model Code of Safety Regulations
for Industrial Establishments
for the Guidance of
Governments and Industry
Standards applying to construction, equipment and working
conditions in industrial establishments, brought together as a
contribution towards eMminating danger to life and securing the
safety and health of workers. The Code was approved by a
Tripartite Technical Conference which met at Geneva in SeptemberOctober 1948; in June 1949 the Governing Body of the Office
authorised the Director-General to distribute it to Governments.
In order to facilitate keeping the collection up to date it has been
published in looseleaf form with a cloth-covered binder. An index is
included.
SUMMARY OP THE TABLE OF CONTENTS
Chapter

I.
II.
III.
IV.
V.
VI.
VII.
VIII.
IX.
X.
XI.
XII.
XIII.
XIV.
XV.
XVI.

General Provisions.
Premises of Industrial Establishments
Fire Prevention and Protection.
Machine Guarding.
Electrical Equipment.
Hand Tools and Portable Power-Driven Tools.
Boilers and Pressure Vessels.
Furnaces, Kilns and Ovens.
Handling and Transportation of Materials.
Dangerous and Obnoxious Substances.
Dangerous Radiations.
Maintenance and Repairs.
Health Protection.
Personal Protective Equipment.
Selection of Workers, Medical Service, Medical Aid.
Safety Organisation.

Appendix

I.
II.
III.
IV.

Minimum Spindle Diameters and Recommended Speeds for
Abrasive Wheels.
Protection of Presses.
... Maximum Allowable Concentrations of Harmful Substances.
Dangerous Radiations.

Geneva, 1949. XXXV+524 pp.

Price : $4 ; £1 ; IG Swiss francs