Minus The Nemesis
A Collaboration of Some of the Finest Thought on Today's World


Thursday, July 21, 2005
As of late, I have been reading a bit about anarcho-syndicalism and what I think is a parallel to that of co-determination in the sense that employees are given a certain control of their organization. I was reading the latest issue of The Economist and it has a good article on Germany's co-determination laws and an argument that they should be looked at with a more discerning eye.

Upon further reading, co-determination is in reference to two levels of employee participation; they being co-determination at the establishment level and at a level above the establishment. The main focus of The Economist article, as well as this entry, was in reference to that of co-determination at the establishment level and in relation to the supervisory board of companies. Apparently at this level, co-determination is regulated by several different statutes and pertains to the fact there are different portions of the economy as well as different sizes of companies.

In the coal, steel and iron business for example, employees are covered by the Works Constitution Act of 1952. Within this system, which is referred to as parity co-determination, states that of the 501 to 1,999 employees working for it, employee representatives may only occupy one third of the supervisory board. Another, covered by the 1976 Co-Determination Act, states that there should be equal representation from the employee side as well as the company side on the supervisory board. This is in reference to a company with 2,000+ employees. According to the company size, the supervisory board size may be determined. This is typically 12, 16 or 20 members. Within this system, if a second ballot is needed to elect a chairperson, the employee's representatives may only elect a vice-chairperson; this gives the shareholders an obvious advantage because their representation is company side.

Alongside with a harder look at Germany's co-determination laws is a better look at the structure of VW. VW is under scrutiny right now for shady bribery scandals. What is coming under fire of course is co-determination because the workers get to make some of the strategic decisions. What I read is happening, is opportunistic behavior by members of the supervisory board, and the labor portion of the equation not being given the voice that they should have.

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