What Workplace Democracy Looks like in the UK

With a burgeoning labor movement in the United States, it is important to look at what employee ownership could look like. For instance, in the UK, the government has been incentivizing employee ownership trusts (EOTs) since 2014. These EOTs set up a trust to ensure that the ownership of the business is passed onto the employees after the owner leaves. This would entail both a financial stake and a say in how the business is run for every employee. While the structure was initially not too popular, the amount of EOTs in the UK has been steadily increasing since 2020. This quick shift seems to stem from the struggle to find funding post-pandemic and the generous tax benefits the government gives to EOTs. The UK government has created incredibly strong incentives to adopt employee ownership structures.

But what exactly do EOTs look like in regard to workplace democracy? According to a January presentation at Rutgers by UK EOT scholars Andrew Pendleton and Andrew Robinson, the EOT model is based on the employee ownership model of John Lewis, a longstanding employee-owned business in the UK. That models entails giving over 50% of business ownership over to a trust, which collectively holds it on behalf of the employees. This gives employees a much stronger say in how the business should be run. How exactly worker control manifests does differ between businesses. For instance, one of the most popular forms of worker control across EOTs is worker directors, who are democratically elected by the employees and placed on the board of directors. Another example is an employee council, which is elected by the workers and has the authority to appoint and remove trustees, to ensure they are acting in the best interest of the employees. The most common arrangement is employee trustees, where employees are appointed as trustees of the business. This gives them direct control over the trust. In each of these cases, workers are given a significant level of democratic say over their business, ensuring their concerns are taken into account.

EOTs act as a safe way to pass on a business to experienced hands. In fact, in most cases, EOTs achieved similar or improved levels of profitability and productivity compared to their non-EOT counterparts, according to Pendleton and Robinson. This is clear evidence that worker control not only benefits the employees but the company as a whole.