A worker cooperative is owned and controlled by its workers. This definition seems to be clear. You, I and several other workers put up equal or equitable capital to start up or purchase a business. None of us have any greater say about planning, operation, decision making, sharing of profits or losses and any other aspect of the business. It is an equally shared responsibility based on either majority, consensus or a combined determination of how various responsibilities are performed.
In Canada, a number of businesses have incorporated as worker cooperatives; they are technically and/or legally defined as worker cooperatives. In Nova Scotia the Cooperatives Act requires 3 persons and/or a mix of persons, other cooperatives or corporations to set up a coop. However, they may not necessarily conform to the substantive definition of a worker cooperative outlined above. Here are several examples.
The first example is a health care business incorporated as a worker co-op. Within 2 years of its startup the worker owners decided there was not enough work or revenues to add more worker owners to the coop. However, the current staffing of non worker owners --traditional employees-- is around 50 health care personnel. There is no intent by the original "worker owners" to include any of their employees and or contractors to become worker owners. The current objective of the two families involved as owners is to retire and have their children take over the business. Another example, a forestry co-op, has a similar condition. There are 3 worker owners and about 12 paid staff. Work is seasonal and staffing varies from year to year. Recently they made a policy to accept new worker owners after sustained employment of 6 years with the coop. There is no policy or effort to educate the hired workers about becoming a member and how a worker coop functions. The main reason given for these policies by existing owners is they did not want to lose control of their business. Both of these "worker co-ops" have been successfully operating for over ten years. What really exists is an employment cooperative with separate management and/or ownership from the workers.
The next example: multiple stakeholder co-ops classified as worker co-ops. For instance, a worker co-op was formed by a number of forestry wood lot owners. They included a limited number of workers on their Board of Directors. Workers elect representatives from their ranks while the woodlot owners have individual representation to the board. The woodlot owners control the board with their majority essentially determining policy and management of the business. These are or have been in existence in Canada and the United States for a while. Research and history shows these cooperatives have little participatory democracy or economic equality for workers.
The last example is a worker cooperative formed with a trust controlled by a third person or organization including worker voting rights that effectively negates the workers ownership and/or control. This approach was tried in the U.S. and currently in Canada. Worker cooperatives are formed and their investment is transferred to a legal trust. The end result is again a separation of workers from management. In the U.S., these early trusts have been used to maintain a business at the workers expense. These trusts excluded worker rights and later they lost their investment. The trust format is not an Employee Stock Ownership Plan (ESOP) but similar to it.
Now one might ask how to determine an authentic worker cooperative. Simple. Look at the organizations by-laws and determine if the following elements are included. Is there a requirement that new employees or contracted workers become eligible to be equal owners. Coupled with that requirement is there a specific time frame in which it will occur such as 6 months, a year or some other reasonable time requirement. Another element is an educational requirement to inform any employee or contracted person about what a worker cooperative is and their roles as worker owners. Other aspects such as participation in day to day decision making while not an owner helps prepare for future ownership and an indication of intent. So, by looking at the intent of the existing worker-owners and their by-laws you can determine whether or not the basic ownership and control by workers is real.
If you can add to these "best practice" qualifications for worker co-ops we would like to hear from you.
Amaranth And Associates & Amaranth Co-operative Enterprises Ltd. PO Box 448 Wolfville, Nova Scotia, B0P 1X0 CANADA 1-902-542-4002 ( Fax & Voice ) Email: jcline@glinx.com Homepage: http://www.glinx.com/users/jcline/
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