Should workers have a bigger stake in consumer co-ops?

‘When you see an organisation where the workforce are engaged, you see a difference’

The precarious world of work – with zero hours contracts and the gig economy – has brought calls for new ways to empower workers.

But while the co-operation been held up as a solution for issues surrounding the future of work, there has also been concern about how well workers fare within the movement, for instance in the retail sector.

At last month’s Ways Forward conference in Manchester, Co-operative College vice principal Dr Cilla Ross said: “Some of our consumer co-ops are the worst payers, and there’s an urgent need for proper union organisation.”

Examples include Saskatoon Coop in Canada, which has just reached a tentative deal with unions after the introduction of a two-tier salary scheme sparked a five-month strike.

Alex Bird, from LLP, suggests the solution to such problems lies in switching to a multi-stakeholder model, which would bring more worker engagement.

“Some consumer co-ops are making an attempt at changing their governance slightly, with more worker representation, but it’s a bit half-hearted,” he says. “The result means you don’t get all the advantages of a multi-stakeholder co-op, and keep the disadvantages of consumer co-ops.”

He suggest Eroski, the Spanish retailer which is part of the worker co-op federation Mondragon, points the way forward. Its governance is equally split between workers and consumers.

“When you go into an Eroski store it’s amazing how engaged the staff are,” he said.

Mr Bird says there is a view at Mondragon that an organisation is not a co-op if it is not run by workers.

“I wouldn’t go that far but if the staff aren’t engaged at all then it’s not a co-op – that’s my view. When you see an organisation where the workforce are engaged, you see a difference.”

Looking at the British retail movement, Mr Bird said workers are identified as colleagues and given staff discounts, and attempts are made to engage them on boards. But there is not enough engagement in management or governance structures, he argues.

Alex Bird

There has been some progress, for instance at Midcounties. “It has two seats on the board for staff so there is a lot more engagement.

“It’s a good start, credit where credit is due, but I really like the Eroski model which is 50/50.”

He says one reason to adopt a multi-stakeholder model is that staff have a much greater reason to be engaged in a co-op.

“If a store closes and you’re a customer, you might feel sad but you can shop somewhere else,” he says. “But for a worker, if the shop closes the stakes are higher.”

Even membership doesn’t necessarily mean that much to shoppers at a co-op, he argues. “I’d say only a small proportion of members understand or are engaged in membership,” he says. “For the rest it is just like a loyalty card.”

By focusing on workers, a co-op retailer would benefit from empowered colleagues working more effectively.

This could be achieved by setting up a workers’ council alongside a co-op’s members’ council offering a formal route to a multi-stakeholder structure.

“By empowering staff, by getting them into governance at high level, and by bringing more power down to shop manager level, you can improve the operation.”

Mr Bird says moving decision-making powers to store level would offer managers more local buying power, and would lead to an engaged workforce “driving the spirit of co-operation on the high street”.

“Our stores should be leading in high street development. Our store managers should be high street leaders – but that would mean a complete change in the management system.”

Looking at the global picture, Mr Bird said he was not surprised to hear of the dispute at Saskatoon, and said there was a need for a greater involvement by unions in the co-op movement.

He has been working with Dr Ross and Pat Conaty from Co-operatives UK on the development of the hybrid union co-op model. Inspired by Mondragon, this form is taking root in the US after been adopted by steelworkers in Cincinnati, Ohio.

Related: Unions and co-ops – a new way forward for workers?

Under Spanish law, worker-owners of a co-op are classed as self-employed, said Mr Bird, leaving unions unsure of their role at Mondragon.

“But they came up with a system where the workers are classed as owners but also represented as workers. They set up a separate committee – the social committee – which represents them as workers. And there are separate elections to the board which represents them as investors.

“That model has been taken up by unions in the USA, working with Mondragon. They replaced the union committee with the social committee. So there’s a huge opportunity for unions to get involved.”