CONCLUSIONS






W FINANCIAL PARTICIPATION

CONCLUSIONS - ADVANTAGES OF THE FINANCIAL PARTICIPATION - The so called Psychological Element in the alleged Increase of the Production The financial participation of the workers has as main characteristic a non objective element to what has been agreed to assign as Psychological Element, covering this element, in a large extent, the arguments both in favor and against of the financial participation of the workers. This is the reason for which, and in our understanding, and before continuing the analysis of the study developed in the scope of this project, we propose a detailed analysis of this element. We think that is essential the development of a study within the restricted psychological scope in order to determinate until how far the introduction of the financial participation will carry advantages or disadvantages. This study should be linked with the psychological motivation for the introduction of a motivating agent and for its action, or effects, in the long run. Transposing, or applying, through concrete elements, the related proposal into the reality of the financial participation. Frequently, the financial participation is associated with to an increase of the production. This conclusion is based on statistical data, though in the elapsing of this work, such figures were not transmitted. It has been referred that, in fact, and in the Irish case, and regarding the financial participation of the workers in the capital - share options - it has been welcomed by the workers. They were eager for being constantly informed of their shares’ value. As an example it has been pointed out the case of the Bank of Ireland. Such example presents clear indications of the interest of the workers and that such interest acts as a motivating element and that this interest result in an increase of the presented outcome. In the remaining cases and forms of financial participation we did not get evidences that something similar occurs, nor such has referred. Resuming what has been previously related, the development of a study/Project within the psychological/sociological scope, in a large scale, in order to determine how an element, supposedly motivating, acts within a group or groups of workers, though for a determined period of time. On the basis of the experiences related the analyses developed by the project’s experts, within the scope of the research carried through within its’ context, it has been concluded the following, and from an objective point of view: That it will be possible, for punctual cases or periods of short and medium term (one year or two, the maximum), that the financial participation leads, effectively, to an increase of the production, therefore this psychological element - the motivation - can exist in a determinate moment or period of time, but and taking into attention the existing systems of negotiation, such will end, inevitably, by forgot. Proof of what we say, we point out the case of the application, in large scale, of schemes of financial participation, as it happened in the Nordic countries, namely in Sweden and later in the Finland, this last one when, in the 70’s occurred a generalized application. To what has followed years where the index of application of the financial participation diminished drastically. Currently, the financial participation appears in certain cases and in the 90’s, where there is only one case to register - the example of the Nokia. Like this, in our understanding, the financial participation must be associated to the concrete application of several elements of negotiation or revitalization of its’ application. In this sense we can see that, for certain periods of time, it will be possible, in fact, to be verified all the characteristics or advantages attributed to the financial participation. Reiterating a little bit what has been referred, and in order to give emphasis to what has been presented, the systematic use of the financial participation will lead that the advantages, pointed to the application of the financial participation, will end by being without content, therefore is inevitable that the outcome of the financial participation will be assimilated, on the part of the workers, as part of their wage. Concrete cases where such has occurred, as it is the case of Malta. Due to this we support the financial participation linked to the presentation of a concrete objective, to concrete circumstances. This argumentation seems us sufficiently clear in what concerns to the Gainsharing, independently the form it assumes. If we are facing an immediate financial participation this could, no doubts, overcome the presented obstacles and could lead to the opposition of the trade unions therefore these always look for that production increase be rewarded through the wage increase. Besides that, in these cases it could be extremely difficult to make the distinction of the figure of the financial participation from other similar realities, such as production bonus, that is applied in several countries and, in the scope of this study, with special incidence in Portugal. There is the possibility, and from a legal point of view, of the reiterated practices (basis of the German Roman legal system) that could difficult the distinction of the financial participation from the attribution of subsidies. Because of this work be objectively independent and in perspective that we admit that can be able to cause polemics, we propose the introduction of the financial participation not in a reiterated way, i.e., whose application must appear with some time breaks so that the negative aspects are not verified but yes the positive aspects that come from the financial participation. One thing is certain, this could be extremely arguable, especially near the trade unions’ organizations. INTER-PARTS RELATIONS There is, also, another aspect that, usually, is presented as a favorable element and that consist in the improvement of the relations between the social partners. From a theoretical point of view we do not present any objection to such argument. However, in what concerns what we have conclude during the work carried through, we present some reserves before the fact of the financial participation be able to be, often, used as a negotiation instrument associated to the wages. On the other hand, and also result of this work, we present one of the most useful case of cooperation between partners in what concerns the establishment of good inter-parts’ relations. As can be noticed from the reading of the report presented by the Irish partners, there is, and regarding the progress of this labor relation side, the development of joint cooperation initiatives. This cooperation appears in the pursuing of appeals it their bases in that sense. In order to reiterate what we have presented, we can mention the Portuguese example, specially due to the historical circumstances that it presents, illustrating our example with the case of the company General Cables Cel Cat, which, since always, kept a good level of relationship Inter-parts. FINANCIAL PARTICIPATION AT CRISIS SITUATIONS This instrument can very be very important at times of special crisis. We have conscience that this statement could be not subscribed by all the parts, but such will be supported by the resultant experience of the work carried through, as well for the studies accompanied it. In situations of particular difficulty there are cases where the financial participation has been the used instrument as way to save employment. As an example we can relate the case of Finland where, due to the serious economic difficulties, the value of the wages was kept. In another case, more extreme, where there was the clear notion, on the part of the workers and obviously the employers, that if they did not accept a reduction of the wages’ values the company could close, and where it was the turn to the use of the financial participation that had allowed to overcome the situation. In a situation of a crisis conjuncture, financial participation can, also, be used as an instrument, during certain period of time, destined to the increase of the production and for such fact, it will be an element that will be able to help to exceed a negative situation. Before crisis situations, the financial participation could be used as the chosen measure to face such situation, therefore the motivation and all the usually connected advantages will be, effectively, in full application. One thing is certain, that fact, by itself, will not decide all the difficulties, but it could be a booster element of a great value; proof of what we state is the case of Ireland. - DISADVANTAGES OF THE FINANCIAL PARTICIPATION- THE LOSS OF INFLUENCE OF THE TRADE UNIONS This chapter, and like the previous one and inevitably, cannot be immune to be subject or aim of criticizes. However, once more, we reiterate that this work was guided by an independent objective analysis, having the basis the result of the previous study carried through. There are, inevitably, factors that, frequently, are presented as factors for the non promotion of the financial participation: one of which we can admit as potentially negative, also assuming, a subjective element. One third note that we would like to present, still, in this chapter, comes from the position of the parts regarding financial participation. We present, now, the corresponding analysis of this topic: One of the negative factors, many times related with the application of the financial participation expresses the possible affectation that the trade unions could be subjected to once the workers, due to the application of the financial participation, would start negotiating directly with the employer and, still, regarding to some forms of financial participation they would assume the position of employer. Everything, at least, from a mere theoretical point of view. In fact, we do not understand that this is like that, at least from a generalized point of view. We admit that the issue might be pertinent and even admissible from a theoretical point of view, but before the practices we think that the arguments presented are not sufficiently strong to support this thesis. In reality, and retaking the beginning of this analysis, when we referred the Volitive element and its functioning in what concerns to the increase of the production, we do not believe that the fact of applying the financial participation, such will be able to be reflected in the reduction of the trade unions’ role, and we quote what one of the project’s partners stated:" people in their daily life do not have such reality permanently in mind". Such would be the subjective element that we referred previously. We admit, still, as possible such argument for the small and medium size companies that, and having the basis of the experience of several countries, the unionised universe presents, by itself, some difficulties. SECURITY IN THE APPLICATION OF THE FINANCIAL PARTICIPATION In what concerns the second obstacle, usually presented in the promotion or application of the financial participation we would like to stress the fact that the security guarantees that should be attached to these instruments, deserve, no doubt, a bigger reflection. In this point, the criticism or criticisms are based, mainly, in the financial participation of the workers in the capital, i.e., that form of financial participation that leads the workers to hold part of the company’s capital - shares - and also the cases of creation and management of funds. In fact, only in these cases and only from the point of view of the real risk for the workers, we can understand the reserves that were presented. Before developing the analysis of this point, we have to point out that we just conceive these risks when, effectively, through any other tie different from the one result of the professional activity, the worker is in connected to the future of the company. In these cases there is an effective risk, on the part of the workers, of losing part of the values, that is the reason why it is, without doubts, essential to assure these advantages through mechanisms or funds that present real guarantees. In what concerns the most problematic cases - shares - we admit that only when these are linked to other guarantee instruments, such as its association to insurances that guarantee that the share will not go, in any case, under the nominal value, otherwise we will have serious doubts. If we analyze this aspect from an objective point of view, such will be an individual risk and has been agreed by all that financial participation must be based on an individual criteria, even understanding that the protection or intervention of the trade unions would be out of the action area of these organisms. This is, also, a risk and that is the reason for the uncertainty factor be higher. APPROACH TO THE FINANCIAL PARTICIPATION In this chapter, and for methodology reasons, we present a criticism to the lack of analysis or work regarding the issue of the financial participation, on the part of certain social partners within the European Union. There are certain social partners that assume, in what concerns this subject, positions that consubstantiate a refusal, pure and simple, in discussing the substance of the financial participation, or even assume a neutral position or not even assume a position. These are the assumed positions, both for macro social partners and national social partners. In this point we would like to present a direct criticism mainly to employers, once they are more reserved than trade unions in what concerns this matter. - FINANCIAL PARTICIPATION AND THE INSTRUMENTS OF SOCIAL DIALOGUE - In this point we come across with the great diversity and heterogeneity of systems and instruments of social dialogue, all over Europe. For a better understanding of what is being presented here, we suggest a detailed consultation of the reports where it can be found a detailed and casuistry analysis of each country involved in this project. In this substance and if we abstract ourselves from the referred diversity, we can distinguish a certain homogeneity of opinions in what concerns certain points. The introduction of the financial participation must be based on an individual sphere, in the maximum through company agreements. This interpretation leads us to two reflections that must be understood as complementary aspects of what we already related: We understand that going towards the individual sphere, the regulation of the financial participation must be pondered in a careful way - such will lead, certainly, to the situation where the individual less prepared to react and analyze the pretension that the employer presents to him. It still has to be analyzed the position of the non unionised individuals and their preparation to react and regulate such situation. This actuation is, also, and in our understanding, little surprising due to the experience that has been developed and especially the one that comes from previous work developed within the scope of the collective labor relations and that the trade unions look for, whenever possible, to include in the scope of the matters they negotiate. We do not think as being neglected, still in this scope, the introduction of the financial participation through flexibility mechanisms, i.e., the existence of a general frame of admission, what could be taken nationwide or sectorial agreements, where it would be established a frame, or the forms, of financial application, within the scope of certain factors and according with a methodology, result of the agreement of the social partners. We think that an agreement among the social partners, on this matter, is essential, though there are cases where this reality is regulated, being necessary to deepen such reality. To this purpose, and still retaking the conclusion that the financial participation should be introduced on an individual basis, we come across with the question of the financial participation being introduced, without any intervention on the part of the organisms of representation of the workers, if are not created, in an urgent way, instruments regulating the application and introduction of the financial participation, like there is in some countries of the E. U. - DEVELOPMENT OF THE FINANCIAL PARTICIPATION - Conceptual factor It is urgent a clarification of the content of the concept of financial participation. We think as being negative the inclusion in that the gainsharing, independent of the formulation with the financial participation through the distribution of shares. It is urgent to make a clear distinction not of the forms, therefore this already exists, but of terminology. From the experience of the elaboration of this project, the reactions of negativism that exist are placed, essentially, to the level of the financial participation through shares or funds, this due to the fact that the workers are associated, too much, to the future of the company; on the other hand, this argument is frequently presented through an analysis excessively politics of the opposition to what these understand as position anti capitalist. The supporters of the financial participation argue that the promotion of this must be made through the strict application of the recommendation of the Commission, of 2002, but in what concerns the application of concrete measures, we think that this argument should be completed, otherwise this approach becomes deficient. Still, two arguments had been presented and that are, in our understanding, valid though one can be sufficiently discussed: 1. A uniformisation of the tax policy within the European Union, which for all is accepted, nevertheless the difficulties for all recognized regarding this matter; this problematic is strongly connected to the promotion of the financial participation through the European Works Councils, topic that we will focus further ahead. The fiscal issues are important condition for the development of the financial participation within the European scope that is the reason for the appeal in order to strength the efforts towards this aim. 2. It has been also presented as an argument against the application of the financial participation and that, from a theoretical point of view, we admit as valid, the generalized application of the financial participation. Understanding generalized application not as the counterpoint of the application to specific sectors of the company, as has happened in several cases, but still an application more selective consisting in the application of individual character, therefore the generalized application can lead to situations where certain individuals benefit of something for which they had not contribute. The increment, the profit in the company is evaluated in general what can originate that the financial participation lose, in part, its reason of existence. Result of this generalised application there are strong theoretical arguments in the sense that financial participation gets to the situation the workers monitoring one another. Such can lead to dubious situations in what concerns to the point of view of the legality. There is the reason why in the Irish case all the attempts to overcome this aspect were succeeded, therefore such will be able to lead to discrimination cases. 3. Before the unanimity regarding the fact of existing a clear distinction between wage and any other form of financial participation, we think that this must be used as a stimulation to specific and innovative actions. However this point will once again be covered when we analyze the connection of the financial participation with the instruments of collective bargaining. 4. In what concerns the voluntary character that must be underlying to the forms of financial participation we think that understand the voluntariness as the basis principles of the application of all and any form of financial participation. - SOCIAL PARTNERS VS. FINANCIAL PARTICIPATION - In view of the development of this project we have to point out that we agree, in the generality, with the studies developed until the present a date. There is a marked division, on the part of the trade unions, in what concerns to the acceptance of the financial participation. Analyzed in a more detailed way, what exists is a negative reaction to any type of involvement or " gluing" of the worker to the property of the company, many times translated in the financial participation of the workers in the capital - shares. Through the work developed we were able to try that, despite the initial reserve before the application of the financial participation, this one is moved away not in its conception, but yes in what respects the used forms. These should suffer adaptations so that the rights of the workers are not affected. - THE EUROPEAN LEVEL - We think to be useful, in the first place, to draw the current picture for, later, presenting the conclusions, result of the work developed on this matter. Currently, and at European level, the presented picture, in this substance, is very fragile, without clear positions on the part of both the social partners. We are facing, even, cases of refusal in stating opinion on this matter. We think that this situation is one of the most criticisable ones. It is essential a clarification in the position taking, in this substance. Such displays, in great measure, the reflex of the national situations, therefore many social partners do not have a position on the financial participation. This is a point that will be analyzed further ahead with the developments of the financial participation: to make that the social partners to think over this question that assumes extreme importance in a modern frame. We have the conviction that when such happens the promotion of the financial participation, or at least the determination of future ways and a clearer orientation, will be carried through. Resuming the European scene, we would like to point out the existence of a document, agreed by ETUC - European Trade Union Confederation - which is criticisable. For what has been given to know, such happened due to the fact that this document is dubious and not clear, without any argument or deep analysis. That is the reason why, in our opinion, it is necessary a deeper reflection on this aspect. In what concerns the partners directly involved in this project, the EMF - European Metalworker’s Federation - does not have, until the present date, a document on the financial participation. They are, at this moment, dealing with this question, as part of the element: variable payment. On purpose of this question we would like to point out that the financial participation is just one of the modalities of the elements of variable payment and that the reality, treated as a whole, covers other figures. These figures, despite the existence of an inaccuracy in what concerns the elements of the financial participation of the workers, are not considered as financial participation, we are referring to subsidies, commissions of service, production and qualification bonuses, among others. Due to the fact that Portugal is one of the countries where these variable forms are more applied leads that Portugal assumes the leading place, being the country with higher number of changeable elements of the payment. Going back to what we have already expressed, the EMF - European Metalworkers’ Federation - is, at this moment, trying to determinate a set of guiding lines for the financial participation of the workers. Like happen within ETUC, the diversity of opinions or approaches regarding the matter of the financial participation exist also within EMF. With very marked chams that leads to the fact that discussions are not easy. In addition, we would like to present a suggestion in order to treat this substance in a pluridisciplinary way, not only at the level of the collective bargaining, but also through other existent committees, which leads us to following topics: the EWC - European Works Councils and the enlargement of the European Union. - THE FINANCIAL PARTICIPATION AND THE EUROPEAN WORKS COUNCILS - The situation in this frame is, without doubts, very problematic and the recommendation of the Commission in the sense how this question should be dealt with, in our opinion, has not deserved the adequate treatment. Effectively, there are cases of introduction of forms of financial participation through the existing EWC. We are referring, and just as an example, to the case of the EWC of the Siemens, by which has been introduced the distribution of shares and the creation of the respective mechanisms of guarantee. Raised this question near the several intervenors (please note: this matter, due to its scope, lead to the analyze of the question from different sides) the presented result was sufficiently negative due to the unnecessity to deal with this matter within the EWC, denying the understanding of the ones who developed this work. To add to that, there are some reflections that we think that deserve to be presented: There are well-grounded fears that the involved people in the EWCs, despite the fact that this note should note be applied generically, will not be prepared to face and to deal with these instruments and connected matters; Currently, if there is an interest, on the part of the employers, in applying forms of financial participation through the European works councils, it will be sufficiently facilitated, taking into account the way of functioning of the EWCs; While there is not a harmonization of the fiscal substances at European level the bet in the application of the financial participation will be lesser, though, and as already related, exist concrete cases of introduction of the application, through this instrument; It is necessary an urgent effort of training, in this matter, so that all have the conscience of the impact and the interaction between both the realities. - FINANCIAL PARTICIPATION AND ENLARGEMENT - This matter did not have the amplitude that it deserved, that is the reason why the statements presented can be partial. We want, still, to point out that the SIMA looked for, through contacts, developing actions in order to get, in what concerns this question, a clearer picture. It has been stated to us, and from a global point of view, that will not be advisable, taking in attention the present conjuncture, the development or the introduction of mechanisms of financial participation, this due to the fragility of the systems of social dialogue social present in some candidate countries and even due to the fragility of some social partners. It is, in fact, essential a strengthening and a development of training initiatives and concrete actions. The distrusts that exist in this frame represent a risk in the attempt to use the instruments of financial participation as part of the wage despite that, even facing the difficulties that some countries have, the shares are quickly alienated. Such is not to neglect, once such situation already occurred by the time of the privatization. In these countries the attribution of shares of some companies occurred and what happened, almost immediately, was the alienation of those shares in order to obtain capital. This situation is not unique for the candidate countries. Identical situations had occurred in Portugal and in Finland, though in a smaller scale and in different still that in a lesser scale and a different framing. We would like to raise another question that perhaps does not fit within the aim of this project, but which is important to analyze - the fact of the worker, in a perspective of the labor law, be presented as always as the weak in a paternalistic way, once they are not prepared for the application of the financial participation. This, being an objective element, overpass the scope of the labour law. It appears, still, another question linked with the obligatoriness or not of the intervention of the trade unions, therefore this domain exceeds already this frame. Frequently it is presented the lack of social and economic conditions of the candidate countries, as alleged reasons for the non introduction of the financial participation. It is certain that, and taking into attention the results of this work and the Irish example, in our opinion, such idea will tumble. Often Ireland, or the ones presenting the Irish case, the example how the financial participation increased in Ireland facing a set of factors including serious economic difficulties, high levels of unemployment, what allowed that everything was accepted by the workers. Identical situation occurs in the case of the candidate countries. It is, without a doubt, of primordial interest, that the analysis is made on a casuistry way. Having in mind the conditions of each country, it will allow to decided or not for the application. This is the reason for, with the experience outcome from the execution of several projects, proceeding to a strength of the action near the candidate countries, strengthening also the essential elements. Like this the introduction and application of the systems of financial participation could be an instrument for the development of the country.