The crisis puts employee shareholder’s participation at risk
During his inaugural speech at the conference “Exercising Employee Shareholder’s Rights in European Companies” which took place in Rome last week, DirCredito General Secretary Giampaolo Paiardi said that the recent economic crisis puts at risk the participation of employees to the capital of their company.
Other reasons for a possible decrease in this kind of participation are the deep changes affecting the labour market. For example, the increasing number of temporary workers certainly doesn’t promote tight links with the firms they are working for and hasn’t proven to be necessarily positive for the economy. This is problematic as employee ownership is an important strategic element that can improve workers’ productivity who usually feel more motivated when they share their firm’s financial results.
It is also clear that employee ownership can help sustaining employee’s revenue and thus consumption which is crucial in times of economic troubles. Managers should give up with short-term view and invest on real value including employee ownership which can promote the long-term sustainability of the economy.
It is now obvious that autoregulation failed. This is why a new kind of governance with employees’ shareholders being able to fully exercise their rights in the firm is needed. A proposal that emerged from the conference is that trade unions should promote agreements that rule employee ownership and limit the risks of such a practice, especially if shares are parts of workers’ salary.
Another finding was that social partners and national governments should open discussion in order to promote actions that support financial participation at transnational level, harmonizing not only the legislation but also the tax reliefs provided for its application.
Some very interesting examples of the effects of employee ownership have been given by participants. In Spain for instance, firms applying this system created on average significantly more jobs than those which doesn’t. In Ireland, workers’ participation was one of the reasons that prevented Ryanair, a very anti-union airline, to acquire Aer Lingus.
Please find more info as well as the meeting’s presentations here.