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Spain’s system of employee representation in corporate governance has been shaped by the experiences of General Franco’s authoritarian regime which ran the country between 1939 and 1976. Although a worker participation law was passed in 1962, it was widely criticised as ‘pure propaganda’. The corporatist structures that dominated Spain’s industrial relations tended to ensure that power and authority in the workplace remained exclusively in the hands of employers. Certainly the promotion of trade union and individual worker rights were not part of the Franco workplace agenda although a rigid, corporatist system was imposed on employers and employees.
However Spain’s 1978 democratic constitution that followed the end of the country’s dictatorship makes it clear that the state is under an obligation ‘to promote the participation of all citizens in economic life’. Two years later workers were guaranteed information and consultation rights, the right to participate in the management of the country’s social services. At the same time they were also obligated to cooperate with employers in improving productivity.
Since 1995 firms employing more than 100 workers and smaller enterprises involved in dangerous activities have been required to establish health and safety committees with parity of representation between management and workers.
But no legal provision exists in Spain that requires a permanent presence of employees on company boards in the private sector. Nor are there any co-decision rights in the firm between employer and employees, except for the fixing of holiday periods. Any moves to worker representation in corporate governance have to be made through voluntary negotiation in collective bargaining.
However, in 1986 a national agreement was made between the government and the UGT trade union federation that provided for trade union representation in state-owned enterprises that each employ more than 1,000 workers. Under this agreement unions can participate in management either through holding minority representation at board level or through the creation of an information and control committee where management and unions hold equal representation. Workers through their unions also sit on the boards of Spain’s saving banks. The two most representative trade unions, CCOO and UGT, are entitled to send one representative each to sit on the boards of the banks.
By contrast the private sector companies in Spain are firmly under the control of either shareholders or family owners. Trade union efforts to advance the cause of worker participation at board level in private firms failed to make much progress during the 1980s through collective bargaining. The works councils that exist in Spain have not been brought into the decision-making processes of companies either. Moreover, the degree of consultation in the privates sector remains limited. In 1999 as many as 88 per cent of companies did not discuss work related problems with their employees while 72 per cent failed to consult them on work organisation issues. It seems that the arrival of democracy in Spain has not made of an impact on the country’s authoritarian corporate culture and practices.
In fact, the trade unions in Spain have found it difficult to overcome the legacy of the past. Without the establishment of a framework of legal rights to worker participation, they have struggled to develop permanent and robust systems of workplace participation through negotiation with employers. The absence of law has meant that genuine forms of worker participation have been vulnerable to high unemployment, neo-liberal policies to make labour more flexible and corporate strategies that seek to drive down labour costs. This has tended to make the Spanish unions defensive and passive in their attitude to the issues of boardroom worker representation.
Moreover, the widespread use of temporary employment contracts as well as the dominance of employment in fragmented and small firms in agriculture, retail, hotels and construction has not helped unions to develop a credible programme for worker participation. The dependence of corporations on financing through the banking system coupled with the persistence of an aggressive neo-liberal strategy by employers has added to the obstacles in developing systems of worker participation at board level. Unless the Spanish government legislates to make such representation compulsory on companies, it seems most unlikely the present authoritarian methods of corporate governance are going to change very dramatically.
On the other hand, there has been a wide-ranging debate in Spain on the need for company law reform, mainly aimed at improving the position of shareholders and institutional investors in particular and ensuring greater transparency in business activities. But this development suggests Spain is developing a neo-liberal approach towards the reform of corporate governance. The question of employee representation on company boards is hardly discussed or even mentioned.
This is causing particular problems for those parts of the state sector which are being moved into the hands of private owners. As a result of such privatisation Spain is experiencing a decline in what limited worker participation exists. As a result the trade unions are taking a renewed interest in a demand for a compulsory participation law. But in the present political climate this seems unlikely to make much progress.
source: Robert Taylor (2004) in ETUI and Hans Böckler Foundation, The European Company - Prospects for board-level representation
DOCUMENTS: - BRIEF OVERVIEW: Company law and existing legislative provision for employee participation in Belgium (by A. Büggel).
(pdf)
 COUNTRY REPORT SPAIN: Workers' participation at board level
(by Armando F. Steinko)
prepared within the project "Prospects for participation and co-determination under the European Company Statute" - more about this project
download country report (pdf, 145 kb) download whole report (pdf, 1.3 MB)
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(3) Transposition process
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SEEurope report: Transposition of the SE Directive in Spain (Final update: December 2006) By Armando Fernández Steinko, Universidad Complutense de Madrid
The transposition of the Regulation on employee involvement was finally approved by the Congress (lower house) with the support of all groups except the Conservative Party (Partido Popular).
The amendments proposed by the Congress were related to:
a.) the need to adapt some minor aspects of the Spanish Law on the Prevention of Risks in the Workplace (Ley de Prevención de riesgos laborales) of 1995 to the Regulation; and
b.) the need to introduce into the preamble of the transposition reference to §129.2 of the Spanish Constitution related to the promotion of company participation, the promotion of cooperatives and the access of employees to the ownership of the means of production.
The Socialist Group stressed that the Directive is the result of the agreement of the social partners at the European level. The amendments proposed by the Conservative Party (Partido Popular), which has a majority in the Senate but not in the Congress, were not approved.
The arguments of the Conservative senator Azpiroz Villar were almost identical to those of the Spanish employers’ association. He made a long polemical speech questioning the real meaning of the “involvement” of employees, on the grounds that all employees belonging to a firm are in one way or another already “involved” in the firm’s activities. He accepted the possibility of incorporating assessors representing labour in the special negotiating body, but expressed his doubts about the “unnatural” possibility of non-employees being part of the SNB. He also stressed the differences between the Spanish and “German” traditions of industrial relations in order to demonstrate the “unnatural character” of the Directive from the point of view of Spanish industrial relations. He also expressed his doubts about confidentiality issues, since technological and other sensitive issues and industrial secrets are becoming more important in modern competitive contexts.
SEEurope report: The SE Regulation and Directive - The current state of the transposition process in Spain (Country report, update: June 2006)
(by Armando Fernández Steinko)
The transposition of the SE Regulation was finally approved by the Congress (lower house) at the beginning of 2006. The parliamentary discussions were not significant as the proposals of the parliamentary groups were mainly technical. Congress approval of transposition of the Directive at committee level is expected in June 2006. It can then be sent to the Senate (upper house) and return to the Congress after the summer for definitive approval. Download report as pdf
SEEurope report: The SE Regulation and Directive - The current state of the transposition process in Spain (June / July 2005) (by Armando Fernández Steinko)
Download report as pdf.
Documents
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- TRAINING WORKSHOP ON SE DIRECTIVE
The workshop for UGT trade unionists was organised in May 2004 by the consulting firm Labour Asociados in Madrid. The new government’s General Director of Labour (Esteban Rodríguez Vera), Norbert Kluge (ETUI), Armando Fernández Steinko (universidad Complutense de Madrid), Antonio Ferrer (UGT responsible for participation) and a representative of the employers’ organisation were invited to the closing session. more
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(5) Other relevant information (Info-Box)
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