T3-01: Board-level employee representation

6 September 2019, 11:00–12:30

Chair: Mona Aranea


Examining the decline of board-level employee representation in Spain

Sara Lafuente Hernandez, European Trade Union Institute (ETUI)

Since the pioneer German Montan-Mitbestimmung Act in 1951, many European countries have adopted mandatory obligations for private and public companies to introduce workers’ voice in their boards, thus granting some influence of labour in corporate strategic decision-making at the highest level. The concept was at some point so extended that it was even considered a feature of the ‘European social model’ (Kluge, 2005). Spain was for a long time considered one of the ‘privileged’ countries for workers’ voice, on the grounds of its specific laws and collective agreements passed between 1985 and 1993 providing a framework for workers’ participation in company boards of saving banks and some privatized companies.

However, a closer look into the formal regulations underpinning board-level employee representation (BLER) in European countries uncovered significant institutional variation in design, practices and implementation (Waddington, 2018; Waddington and Conchon, 2016). Not surprisingly, international comparative research soon proposed to move focus to ‘functional equivalence’ in industrial democracy institutions (Sorge, 1976), to evaluate institutional performance considering contexts and ideologies, rather than building comparisons from the formal description of institutions in isolation. Institutions are dynamic. Accordingly, BLER emerged in specific contexts and evolved over time. In some cases, it was insufficiently implemented in practice, the original purposes were not linearly fulfilled, or its coverage declined. In other cases, existing formal arrangements did not survive hostile economic and political contexts, particularly the financial crisis, industrial restructuring and labour reforms.

The Spanish case illustrates this last category of countries. However, little is known about this form of workers’ representation in Spain. Legal scholars have mostly examined its legal frameworks (Galiana Moreno and García Romero, 2003; Rivero Lamas, 2006), but the political processes, the functioning and social practice of the institution remain largely unexplored. How did this issue reach the political agenda in the 1980s? How was it practiced for three decades while remaining a well-kept secret until its current dilution? Collective labour rights went visibly under attack in the aftermath of the crisis (Baylos, 2013:26-27); in contrast, board-level employee representation seems to have rather “discretely” melted down in such scenario. Trade unions publicly condemned misuses, bad practices and lack of control over the system of union representation in saving banks’ boards; the claim for workers’ participation in company boards was not formally abandoned, but it did also not mobilize to keep the existing representation when it was erased from public regulations. How to explain these ambiguities, and what do they tell us about industrial democracy institutions and discourses, union priorities and understandings in an adversarial industrial relations’ system and unsupportive macroeconomic context as the Spanish one?

This paper examines the Spanish case of rise and fall of BLER as industrial democracy institution. I will expose the foundations underpinning its legal framework(s) and analyse their formal institutional settings. I will then explore the extent of their implementation and characteristics of their social practice, examining the approach of trade union organizations and representatives towards this and other forms of workers’ participation until today. I argue that the fall of BLER in Spain was rather “mild” and gradual due to the weak institutional foundations of the system, its limited scope and indirect effects of structural change. However, the downfall of the model also reactivated internal debates in trade unions to reconstruct a post-crisis ‘more participatory industrial relations’ model’. This framework of discussion involves workers’ voice in company boards as one of the possible (although not primary) paths towards stronger industrial democracy.

Timid novel experiences in European multinationals involving Spanish trade unionists and current political European developments (i.e. European company law package, ETUC claims for minimum standards on workers’ participation in EU-law companies, and ‘democracy at work’ campaign) could also give new impetus to the agenda on workers’ participation in Spain. In order to realistically grasp the potential of a successful (re-)introduction of workers’ voice in company boards, as one possible declination of industrial democracy, the national political and discursive context needs first to be tackled and better acknowledged. This paper is an attempt to contribute to fill a gap in research, while engaging with current debates on the promotion of workers’ participation and industrial democracy institutions in Europe, particularly its ‘peripherical’ countries.

The research is based on literature review, legal text analysis of laws and collective agreements establishing BLER rights in Spain, and qualitative analysis of CCOO and UGT congress documents, press releases, and in-depth interviews to representatives and union officials.


  • Baylos, Antonio (2013) “La desconstitucionalización del trabajo en la Reforma Laboral del 2012 », Revista de Derecho Social (61):19-41.
  • Galiana Moreno, Jesús M. y García Romero, Belén (2003) “La participación y representación de los trabajadores en la empresa en el modelo normativo espa¬ñol », Revista del Ministerio de Trabajo y Asuntos Sociales (43): 13-30.
  • Kluge, Norbert (2005) “Corporate governance with co-determination – a key element of the European social model”, Transfer 11(2): 163-177.
  • Rivero Lamas, Juan (2006) “La Sociedad Europea y la experiencia española sobre derechos de información y participación de los trabajadores”, in Ficari, Luisa (ed) Società Europea, Diritti di informazione e partecipazione dei lavoratori, Giuffrè Editore : 69-126.
  • Waddington, Jeremy (ed.) (2018) European Board-Level Employee Representation. National Variations in Influence and Power. Kluwer Law International: Alphen aan den Rijn.
  • Waddington, Jeremy and Conchon, Aline (2016) Board-Level Employee Representation in Europe. Priorities, Power and Articulation. Routledge: New York.
  • Sorge, Arndt (1976) “The Evolution of Industrial Democracy in the Countries of the European Community”, British Journal of Industrial Relations, Vol. XIV (3):274-f.


Transnational representation at company boards

Inger Marie Hagen, Fafo Institute for Labour and Social Research, Oslo

Board level employee representation is well established in a number of European countries. In some countries, the arrangement is anchored in company law, while in others the provisions are found in either labour law or in collective agreements. The different arrangements have however one important feature in common: the arrangements are part of national law and thus – the right to representation is given to employees working in the country in question only. Employees in foreign-based subsidiaries have no right to representation at group board level (‘konsern’) even if national legislation might provide for representation in the subsidiary in the country at hand. However, three countries make up the exception to this rule:  France, Denmark and Norway. In addition, in Germany and Sweden, the legal situation might be interpret as permitting transnational representation if the trade unions comply and in both countries, examples of transnational representation exist.

This paper looks at this transnational arrangement with a Nordic perspective. So far 29 groups have been identified, 24 in Norway, 2 in Denmark and 3 in Sweden. Three key questions are addressed.

First, why transnational representation established? There is no mandatory provision on representation in neither country and thus, the workers need to organize a demand for representation. The next step is to transform the arrangement into a transnational arrangement. Did the employees, the management, the shareholder elected board members or the trade union take the initiative?

Secondly, how was the representatives elected? All three countries are characterize by a ‘single channel system’, e.g. at company level the trade union representatives (from the local branch of the national trade unions) represent the employees in relation to the management. Never the less, BLER election methods varies. E.g., when to elect a Swedish representative from the Swedish subsidiary to the board of a Norwegian group – does Swedish (appointed by the trade union) or Norwegian rules (elected by all employees in company) apply?

Thirdly, how do the representatives evaluate the arrangement and especially the role of their foreign colleagues? If – and how - do the representatives cooperate and what is the role of the trade union (if present in company)?

The data is mainly qualitative (interviews with BLERs in different groups) supplemented by two quantitative survey, one by the European Trade Union Institute (ETUI) and one by Fafo.  The paper argues that in order to understand the role of BLERs at different level, the analysis need to include both an industrial relation framework as well as insight from corporate governance. The paper is based on a project is funded by ETUI.

Key words: co-determination, board level employee representation, transnational representation, trade unions, qualitative analysis

Workers on the board and long-term investment in German companies

Sigurt Vitols, Berlin Social Science Center (WZB)
Robert Scholz, Berlin Social Science Center (WZB)

» Full paper: ilera-2019-paper-289-Vitols.pdf

An increasing amount of research is showing that companies are becoming more short-term in their investment time horizons, i.e. companies are sacrificing long-term investments (even though they would be profitable) in order to increase their short-term payments to shareholders in the form of dividends and share buybacks. Up to now, this literature has not examined the influence that board-level employee representation (BLER) may have on company investment time horizons. Using a unique six-component measure of codetermination strength in German companies, the Mitbestimmungsindex (MB-ix), this paper shows that BLER has a positive influence in lengthening company investment time horizons.

Subscribe to RSS - T3-01: Board-level employee representation