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A VENEZUELAN MODEL OF
CODETERMINATION

By

Ricardo Jimenez

A THESIS

Submitted to
Michigan State University
in partial fulfillment of the requirements
for the degree of

MASTER OF SCIENCE

Department of Labor and Industrial Relations

1983

ABSTRACT

A VENEZUELAN MODEL OF
CODBTERMINATION

By

Ricardo Jimenez

"Codetermination" in the form of worker participation in
decision—making at all levels of business, and as a social and
political principle is a theory being discussed by many in Labor
and Industrial Relations. Union and political leaders in Venezuela
have proposed such a system for their country as a humanitarian ap-
proach to Venezuela's economic, political and social needs.

Using Dunlop's definition of the actor and structure of a
codetermination system, this thesis analyzes relevant factors in
Venezuela, to determine into what context codetermination would be
introduced there. It is found that the system is feasible, with
proper education and cooperation: the key role of personnel mana-

ger is redefined for this system.

TABLE OF CONTENTS

Chapter

I.

II.

III.

IV.

INTRODUCTION.

A. Statement of the Problem.
METHODOLOGICAL ASPECTS.

A. Research Design .

1. Conceptual Classification . . . . .

2. Industrial Relations System: Humani-
tarian Approach . .

3. Methodology and Strategy.

CODETERMINATION IN THE WORLD. ITS INFLUENCE ON
THE UNIONS AND POLITICAL PARTIES. THE GERMAN
CASE . . . . . . . . . . . . . . . . .
A. Antecedents

B. Politics and Ideological Fundamentals
C. Problems and Critiques.

THE VENEZUELAN CONTEXT.

A. Socio- Economic Aspects. .

B. Import Substitution as the Strategy Toward
Industrialization . .

C. The Role of Unions in Venezuelan Politics
and its Influence on the Social Environ-
ment in the Last Twenty Years

1. Origin and Development of the Unions in
Venezuela . .
2. Structure of the Unions

CTV: Labor Confederation of Vene-
zuela . . . . . . . .

The Unions in the Venezuelan Situation.
Influence of the Unions in the Political
Parties

#04

Internal Distribution of Power.

5. The Union's Current Situation

6. What is the Future of Unions and Worker.

Participation

21
21
37
43
43
47

59

6O
63
64
66
68
68
73
77

V. CODETERMINATION IN VENEZUELA. . . . . . . . . . 89
A. Antecedents . . . . . . . . . . . . . . . . 89

l. Fundamental Basis of Codetermination
Rights . . . . . 93
2. General Outline for a Global Project
Worker in the Process of Decision-
Making in the Economy . . . . . . . . . 94

a. Levels of Application of the Co-

determination . . . 94
b. The Origin of the Codetermination

Movement. . 97
c. Role of the Union by Branch of In-

dustry . . 98

d. Characteristics of the Future Forms
of Full Codetermination and Partial

Codetermination . . . . .100
e. Ways to Implement the Proposed Sys-

tem . . . . . . .102
f. Training of Union Groups. . . . . .103

B. Actors in the Codetermination Project . . .105
1. Worker Actor . . . . . . . . . . . . . .105

a. Venezuelan Workers Confederation

(CTV). . . . .106
b. Confederation of Autonomous Unions

of Venezuela (CODESA) . . . .108
c. General Workers Confederation .of

Venezuela (CGT). . . . . . . .110
d. Unitary Central Workers of Venezuela

(CUTV) . . . . . . . . . . . . . . .111

2. Employer Actor . . . . . . . . . . . .112

3. Political Party Actor. . . . . . . . . .116
VI. IMPLICATIONS OF THE CODETERMINATION SYSTEM. . .127

A. Workers/Managers . . . . . . . . . . . . .127
B. Education . . . . . . .129
C. The Role of the Personnel Manager . . . . .139

l. Origins of Industrial Relations in
Venezuela . . . . . . . . . . .140

2. Growth and Importance . . . .144

3. The Relationship Between Industrial
Relations Management and the Unions . .146

4. Laws and Implications . . .147
5. The Future of the Unions and. Industrial
Relations in Venezuela. . . . . . . . .149

ii

CONCLUSION .

BIBLIOGRAPHY

Important Gains for Industrial
Relations in Venezuela. .

The Personnel Manager in a C0-
determination System

The Future Role of Personnel Manager in
Venezuela Under Codetermination

111

.151
.155
.159
.166

.172

I. INTRODUCTION

A. Statement of the Problem

 

The fundamental objective of this study is to introduce
as viable for Venezuela, a new theory of management relations.
the theory of codetermination, previously unpracticed in
Venezuelan Labor and Industrial Relations. ”Codetermination”
will mean for us. most briefly, ”workers share decision-making
power on all levels, on an equal basis with management, ren-
dering to staff and management equal influence over organi—
zational policies.”

From the advent of industrial enterprises in modern
society to the present, changes have been taking place in
their structure and organization as a result of the renovation
of mean of production, which was characterized, in its initial
phases, by the use of machines and subsequently by automation.

In conjunction with the technological advances and
changes in organizational structure, the relations between
workers and enterprises have undergone continuous evolution.
Within this framework, we find increasing participation of
workers in the administration of the businesses. This par-
ticipation currently encompasses a great variety of forms:
codetermination in West Germany, worker's councils in France
and Belgium, and worker self-management in Yugoslavia. Like-
wise, worker participation in business administration has been
analyzed in diverse ways according to different ideological

viewpoints. From the revolutionary perspective, capitalist

2
strategy is to implement worker participation to create an
illusion of social justice; worker participation exerts no
influence on the structure of capitalism and has, moreover,
lead to the weakening of class consciousness among workers.

In the case of Venezuela, with its particular socio-
political characteristics, such as its brief experience with
democracy, worker-management relations have been progressive-
ly evolving in the area of worker rights. Social legislation
has been passed by Venezuelan congress and collective bar-
gaining instituted, effecting a beginning toward better living
and working conditions. These mechanisms have not been fully
developed; they are not applied in all business enterprises
and they are fundamentally economic-~socia1 concerns which
figure minimally, for instance, in the collective bargaining
contracts.

Observing these advances in the country's labor re-
lations, we find before us the possibility of a significant
transformation in this area, which could be brought about by
implementing the feasibility a worker codetermination bill,
the feasibility of which will be the focus of this study. The
arousal of worker interest in this is explained by economic.
social, political and ideological conditions in Venezuela.
This study outlines each of these conditions, in an attempt
to reconstruct the specific environment in which the proposed
codetermination model would be introduced.

The proposal for a new codetermination system among

unions, workers and owners is a tremendous challenge for

3
Industrial Relations in Venezuela. The actors in this new
system must alter their traditional roles, which have de-
veloped through the years in favor of worker participation in
the decision-making process and equal worker representation on
board of directors of enterprise. More particularly, the pro-
posal supposes a modification in current union structures and
a substantial change in the power relationship between em-
ployer and employee. Other questions are addressed, such as
whether Venezuelan workers will be adequately educated to
significantly contribute to worker interest as members of
directing boards, and how will the personnel manager's role
change under a new system of codetermination?

To address such various and related concerns, we focus
on the actors: enterprise, represented by FEDECAMARAS (Feder—
ation of Commerce); the worker actors, represented by the four
worker federations, C.T.V.. C.0.D.E.S.A., C.G.T., and C.U.T.V.;
and the political parties with legislative representation.

In analyzing the positions of the actors, we hope to discover
whether or not a program for codetermination has the potential
for trikueral agreement required for implementing the co-
determination model.

The discussion of our thesis that codetermination as
defined is a viable system for Venezuelan labor and industrial
relations is organized into chapters: the first presents
specific questions for study; the second introduces method—
ological devices in our investigation of codetermination.

in particular Professor John Dunlop's conception of the roles

4
of actors in industrial relations systems; the third discusses
the history of codetermation, especially as practiced in West
Germany, and what relation the German system bears to Venezuela;
the fourth chapter provides a critical description of the
Venezuelan economy, its political and social context and the
important part unions have played in the past and present
political environment, in particular as they ally themselves
to various political parties; chapter five establishes a
frame of reference for a proposed bill before the legislature
which would introduce codetermination in Venezuela-—we discuss
the model's characteristics and philosophy and relate it to
the actors who would function within the model; followed by
a brief conclusion, chapter six is a forecast of this co-
determination model in Venezuela, in particular as it relates
to the new role of the manager and to the importance of ade-
quately educating workers in their new role as decision—

maker at all levels of labor and industrial relations.

II. METHODOLOGICAL ASPECTS

A. Research Design

 

The central focus of this investigation is the partici-
pation of workers in an organization's decision—making pro-
cesses. The framework for discussion is: John Dunlop's theory
of participating groups for all industrial relations systems.

The theoretical framework can be described succintly:
workers, employers and the state are ”actors” within a model
fitted to the overall structure of the system; all the actors
(and their ideologies) interact with the system and are in-
fluenced by it.

In October 1980, the Congress of the Confederacion de
Trabajadores de Venezuela (Confederation of Venezuelan Workers
or CTV) approved the development and implementation of mutual
decision-making as a goal for the worker class. The surge of
interest in codetermination (participation in and responsi-
bility for a company's decisions, as mutually agreed upon by
employers and employees), is tied to economic, social, po-
litical and ideological interests. This paper examines the
viability of the project, as well as its influence on change;
just such a study is important for Venezuela, now and in the
future, and could form a new model for all of industrial re-
lations.

As of this writing (1983). no model for codetermination
exists in Venezuela. The proposal for its implementation has

come from the unions; it is still being discussed and no

6
decision has been made as to which codetermination model to
follow, nor have major plans been drawn up to study the
various approaches. Open discussions and debate between
individuals and groups has been ample. Manuel Penalver*
has written that the VIIIth Congress proposed a new model for
economic development. Simultaneously, CTV itself launched its
own model of what role the unions should have in this new
national economic development.1 Penalver adds that CTV's
proposal would establish a new economic and social order, a
new economic development scheme, and an administrative
judicial reform that would bring the state's institutions
up to acceptable levels.
Worker codetermination is a way in which the
worker class can intervene in production with
responsibility and efficiency, so that production
has a just social orientation, without forgetting
the complexities which companies face in the
capitalist system in terms of profits.

This is important for the future of the industrial
relations system, especially for the actors involved, as
Dunlop has mentioned, since a model as radical as this implies
an enormous change in the structure and participation of
unions as their members take an active role in the decision-
making process. It would also change the traditional re—
lationship between employer and employee.

Thus this study concentrates on the actors in the socio-

economic aspects of the Venezuelan case—-the employer, repre-

sented by FEDECAMARAS (Federation of Chambers of Commerce);

 

*
Secretary General of Democratic Action Party.

7
the worker, represented by the biggest central unions: CTV
(Confederation of Venezuelan Workers), CODESA (Democratic Con—
federation of Autonomous Unions), and CUTV (Unified Con-
federation of Venezuelan Workers); andemch of the country's
large political parties. It analyzes the positions these
actors have in the codetermination project, as well as how
various ideologies act, through political parties and the
unions, to shape the concensus required for enacting co-
determination--or whether, indeed, enough of a concensus
exists to make CTV's plans for codetermination practical at

this time.

1. Conceptual Classification

 

There is no agreed upon term in the literature for the
concept of codetermination. It is a concept usually found
under the heading ”Industrial Democracy.” The confusion is
aggravated by the fact that terms used in one language are
sometimes difficult to translate meaningfully into another.3
For instance, the following terms all refer to the same
object:

participatory management; employee representation;
joint district councils; joint industrial councils;
joint production committees; work councils; workshop

councils; work control; comite d'entreprise; co-
determination; self-management.

Another term used is "participative decision-making.” Anron
Lowin's definition is one of the clearest: ”By participative
decision-making, we mean a mode of organizational operations

in which decisions as to activities are arrived at by the

8
very persons who are to execute these decisions.”4

These definitions are products of the politics, ide-
ologies, and points of view various social analysts have on
the subject. This lack of agreement shows that research on
worker participation is unstructured; it also reflects the
fact that various countries have different worker partici—
pation requirements.S Furthermore, the terms industrial
democracy, participative democracy, workers' participation,
and codetermination sometimes do not have the same meaning
for employees and employers. One must see an individual term
or word in the context of rights and duties granted by each
country's constitution, collective agreements, and industrial
practices. Kolvenbach:

This confusion can also be found in the litera-
ture of the late Sixties and early Seventies. It
is only since the middle of the Seventies that
'workers-participation in decision-making processes'
is being understood as participation of workers by
having 'worker directors' as members of the board
of directors of companies.

In this work, the term "worker codetermination” will be
used. The origin of the phrase—-Mitbestimmung--is quoted by
Professor Lyon-Caen, who believes the word is entirely un-
translatable,7 and in each country, the word acquires a new
meaning. For example, in Spanish speaking countries, the
phrase is "Cogestion obrera'. The english phrase defines
”codetermination” such that workers share decision-making
power on an equal basis with management, rendering to staff

and management equal influence over organizational policies.

Codetermination, therefore, pertains exclusively to worker

9
influence at high levels of the organization. It is in this

sense that the term is used here.

2. Industrial Relations System: Humanitarian Approach

 

For some authors, the area of social relations in in-
dustry exerts a profound influence on worker codetermination.8

The best known of these writers is Dunlop; his Industrial Re-

 

lations Systems (1958) focuses on what he terms the ”network

 

of rules" which governs the workplace and the community. The
character of these rules and the manner in which they are
formulated, administered and altered have been the object of
serious study in recent years. Dunlop defined the notion of
a system of industrial relations more clearly than previous

authors: ”The full range of rule-making governing the work-

place is. . . central to an industrial relations system.”9

This analysis, developed by Flanders, has contributed
much to a renewal of explicit theoretical debate in British
industrial relations. ”A system of industrial relations,” he
argues, ”is a system of rules.

these rules appear in different guises: in legis-
lation and in statuatory orders; in trade union
regulations; in collective agreements and in arbi-
trations' awards; in social conventions; in mana—
gerial decisions; and in accepted 'custom and
practice'. This list is by no means exhaustive,
but 'rules' is the only generic description that
can be given to these various instruments of regu-
lations. In other words, the subject deals with
certain regulated or instutionalized relationships
in industry.

From this, one can extract certain characteristics or

10
norms which can be applied to any type of industrial relations
system, it is traditional or codeterminational. However, each
system of rules and each production system, whether capitalist
or socialist, has a special industrial relations "environment.”
Dunlop states, "While national industrial relations systems
can be compared by this type of analysis, there are also
unique industrial relations systems in particular industries
“11

country by country.

Dunlop's Industrialism and Industrial Man Reconsidered,

 

provides concepts which coincide with various aspects of
industrial relations. An example is the continuity of the
original ideas; along with his colleagues, Dunlop emphasizes
that as industrialization proceeds systems of industrial
relations become increasingly trhxutiuz dividing into the

12 The author is indebted to

13

state, management and labor.

Adolf Sturmathal's work on industrial relations systems.

Humanistic Approach

 

The present work places codetermination within the
humanistic model of industrial relations, an orientation
shared by many. Ursula Engelen-Kefer, Chief of Division-
Executive Board, German Confederation of Trade Unions (DGB),
states, "In fact, humanization of work is not as new a con-
cern as its topicality might suggest, and the improvement of
conditions of work has of course long been a major focus of
both national and international trade union activities and

social policy.”14

11
Professor Christos Jecchinis mentions several theorists
and experts (Herzberg, Argyris, Ukut and others), defining

codetermination's humanitarian as well as utilitarian motives,

with a plea for worker participation in management.15

Construction of the model should be as simple as pos-
sible; one component at a time is examined. This model agrees
with Paul Bernstein's:

I. The first necessity is that the organization be
viable, that functionally and economically it can
sustain itself through time. This means it must be
profit-making over the average of a reasonable
length of time. . . And it means that the system of
governance, too, must have its own viability, it
must have a self-reinforcing, self-sustaining (cy-
bernetic) character.

2. Thatthe organization be 'democratic', i.e., that it
be run in such a way that meaningful participation
in decision-making is consistently available to
each member (at least within his area of competence
and concern), and that top decisions and decision-
makers are ultimately accountable to and removable
by the working membership.

3. A 'humanistic' standard, which we defined to mean
that the functioning of the organization not be at
the expense of its members, fundamentally alienating
them, consistently manipulating them or dehumizing
them, and it does not subordinate them to the status
of material factors.

These three points are presented as a model for code-
termination. Union leadership equates the humanization of
work with the freedom of workers from unjustified demands,
dependency, alienation, and lack of self-determination in
the production process, and a refusal to adapt men to so-
called functional techno-economic requirements. Thus Unions

can use their influence to combine humanization with a demo-

cratization of the working life via collective solidarity.

12

Bernstein discovered that to specify as precisely as
possible the democratic criterion involves the further cri-
terion of humanization as it is now conceived.l7 He states
further that six components have emerged which satisfy the
stipulated conditions. Evidence has shown that democrati-
zation (humanization) decays or a crisis occurs when any of the
components is missing. The six minimally necessary components
are:

1. Participation in decision-making whether direct or
by elected representation.

2. Frequent feedback of economic results to all
employees.

3. Full sharing with employees of management—level
information and, to an increasing extent, management-
level expertise.

4. Guaranteed individual rights (corresponding, it
turns out, to the basic political liberties).

5. An independent board of appeal in case of dispute
(composed of peers, as far as possible).

6. A particular set of attitudes and values (type of
consciousness).

These components are all present in any industrial
democracy, but more so in the codetermination systems where

the law guarantees the rights of the worker.

3. Methodology and Strategy

 

This paper's analysis takes place on two levels. First,
a survey is made of the literature from 1970 to 1983 describ—
ing the theoretical framework of the model and its practical
application since its origins. Since codetermination has

meaning only in implementation, and since it has been

l3
practically applied only in West Germany, this existent system
has been analyzed for possible adaptation in Venezuela. Com-
parisons between Venezuelan unionism and the German model will
be made, including remarks on the achievements and problems
of the German model.

Second, is a review of the Venezuelan literature, in-
cluding books, magazine and newspaper articles, and written
reviews of forums, congresses, seminars and investigative
studies done by universities and institutions of social
studies in Venezuela.

How national and international political doctrines
affect the union—management relationship will be discussed,
including their influence on the actors; how the actors shape
the political-economic model will also be examined. It is
hoped by this author that the model investigated here, drawn
from Dunlop, will be implemented in the Venezuelan political-
economic scene through either legislation or collective
bargaining. The model has been introduced to debate among
unions, political parties and business associations through
the efforts of CTV, the largest labor union in Venezuela, and
with the backing of the Accion Democrata (Democratic Action—-

AD) political party.

Premises and Norms of the System

 

Dunlop's work has four basic premises:

1. Each community which becomes industrialized inde-
pendent of politics creates workers and employers.

l4

2. The status of these workers and employers is
defined in greater detail.

3. The National State can not ignore this vital
relationship.

4. Industrial societies necessarily create industrial
relations, defined as the complex relationship
between employers, workers and government
organisms. 9

Therefore, the concept of an industrial relations system
is introduced, such that common and specific problems and
solutions will always exist in the workplace which are dif-

ferent from other aspects of social behavior.20

Structure of the Industrial Relations System

 

It is considered that an industrial relations system
in whatever moment of its development is formed by
certain actors, certain contexts, and ideology

which maintains a unified system and a body of rules
created to govern the actors in the workplace and

in the labor community.

a. The Actors in a System

 

The actors in an industrial relations system are:

--A hierarchy of employers and their organizations
(formal and informal);

--A hierarchy of workers and their organizations
(formal and informal);

-—Specia1ized governmental organisms.

The hierarchies of employers and workers raise rights
and duties, attitudes and norms of behavior of the working
relationship. These are related to the third actor in the
sense that the latter is interested in the work place and the
labor community. The role of the "governmental organisms"
actor will vary depending on its own strength and on the type

of industrial relations' system.22

15

b. The Context of a System

 

The context includes three aspects specifically related to
worker-employer relationships:

--the technological characteristics of the work place
and the labor community;

--the market imperatives and the budget which affects
the actors:

--the situation and distribution of power in society
as a whole.

These three must be understood clearly for the inte-

Z4

grated system to succeedin the complex global context. The

rapidity of change in the technological context will con-
stantly produce variations in the system:25 variations will
occur depending on budget factors such as homogeneity of the

marketplace and the relationship between labor costs and

26

total costs; critical to the context of the individual

system is the local distribution of power, reflected in the

prestige, position and access of the actors at various levels

of decision-making and to the authority of formal power.27

The actors' dynamic relationship is determined by a
series of attitudes, pressures and roles which they exercise
within the global society and the labor system.

The status and role of workers are determined

by the interrelation of these with the hierarchy
of employers, with rival labor organizations, with
the workers themselves, and with governmental
organisms.

The status and role of the managerial heirarchy

are defined on the basis of management's rela-
tionship with the workers' hierarchy and their
organizations in the work place, with rival manage-
ment hierarchies and with governmental organisms.

16

The status and role of governmental organisms
encompasses all aspects from labor legislation

to arbitration and mediation in labor-management
disputes, passing through diverse activities
which seem to increase each day, until it finally
invades managerial function.

The environment of an industrial relations system
within these three contexts is especially significant for
understanding the normative network in the industrial re-

lationship system and the system itself.31

c. The Establishment of Rules

 

Rules or norms established by actors in an industrial
relations system guide their interaction in the work place
and in the labor community. Dunlop establishes the normative
as the central variable of the model. An outline of rules
includes: procedures for establishing them, the rules
themselves and procedures for applying them. The rules take
many forms, for example, policies of management hierarchy,
orders of government agencies, laws of any worker hierarchy,

local customs and traditions.

d. Ideology

The ideology of the industrial relations system

is a body of common ideas which define the role and
the place of each actor and which defines the
ideas of each actor with regard to the position32
and function of the other actors in the system.

While each of the actors in an industrial relations
system has his own ideology, there must be some agreement

among ideas for the system to work. The codetermination scheme

17
proposed by CTV as a possible mechanism for worker partici—
pation, has raised many questions within Venezuela's current
industrial relations system. These questions are related to
the ideologies of the various actors within this system. For
codetermination to work in Venezuela, a concensus of ideas,

33 And although

beliefs and value judgments must be reached.
internal conflicts, tensions and problems between different
groups exist, there must be a limit to the confusion and

34 If the concensus is not preserved sufficiently,

tension.
the dominion of a determined minority can see itself threatened,
or society's institutions could feel incapacitated and unable

35

to carry out their corresponding functions. ”The existence

of a concensus is a means to control the behavior of society."36
With such a consensus official organisms of control become
necessary. For Dunlop, political leaders ”can arrive at trans-
actional solutions to the problems which result from conflicts
of interest, besides giving forms to new transactions accep—
table within society and the theories necessary to explain
and justify them.”37
Within Venezuela's current industrial relations system,
parliamentary representatives from each political party,
representatives of each of the major labor unions and from

FEDECAMARAS have important roles in search of a concensus for

the practical application of codetermination.

18

Footnotes

1Manuel Penalver. ”Vision Sindical," E1 Nacional (Union
Vision, in ”The National," a newspaper). Caracas, Venezuela,
August 3, I981, XXXVIII Anniversary, p. A—l4.

 

2Ibid

3Kolvenbach, Walter. Worker Participation in Europe.
Deventer, The Netherlands: Kluner, 1977, p. 20.

 

4Kuhne, J. Robert. Co-Determination in Business: Workers'

 

Representatives in the Boardroom. New York: Praeger Publishers,
1980, p. 4.

 

51bid.. pp. 2-3.

6Kolvenbach, op. cit., p. 20.

7Professor of Sociology, Munster University, Federal
Republic of Germany.

8Hyman, Richard. Industrial Relations: A Marxist In-
troduction. London: The MacMillan Press, 1975, p. 9.

 

 

9Dunlop. John T. Sistemas de Relaciones Industriales
(Industrial Relations Systems). Spain: Ediciones Peninsular,
1978. p. 19.

 

10Hyman, op. cit., p. 10.

11Dunlop, John T., et a1. Industrialism and Industrial
Man Reconsidered. The Inter-University Study of Human Re-
sources in National Development, New Jersey, 1975, p. 16.

 

 

12Ibid.. p. 17.

13Ibid

14Engelen-Kefer, Ursula. ”Humanization of Work in the
Federal Republic of Germany: A Labor-Oriented Approach.”
International Labour Review, Vol. 113, no. 2 (March-April
1976), p. 227.

 

l9

Footnotes (cont.)

15Jecchinis, Christos. The Ideological Origins-of
Participation. Salonika, Greece: Aristotelion University of
Salonika, 1982, p. 645.

 

 

16Bernstein, Paul. Workplace Democratization: Its In—
ternal Dynamics. Kent State University: Comparative Research
Institute, 1976, pp. 8-9.

 

 

l7lbid., p. 9.

181pm

19Dunlop, op. cit., p. 21 (1973).

201bid., p. 30.

211bid., pp. 30:31.

22Dunlop, op. cit., p. 23 (1975).

23lbid., p. 32.

24Ibid., p. 32.

251bid.. pp. 78-79.

26Ibid.. p. 33.

271bid.. p. 109.

281bid., p. 123.

291bid.. p. 128.

301bid., p. 132.

311bid.. p. 38.

32Dunlop, John T. "Post Scriptum: E1 Industrialismo
y el Hombre Industrial," Revista International del Trabajo
(Postscript: Industrialism and Industrial Man Revisted,
in International Labor Review), no. 6, June 1977, p. 50.

 

20
Footnotes (cont.)

33Ibid.. p. 57.

3411318.. p. 58.

35Dunlop, op. cit., p. 61 (1975).

36Ibid.. p. 62.

21
III. CODETERMINATION IN THE WORLD, ITS

INFLUENCE ON THE UNIONS AND POLITICAL
PARTIES. THE GERMAN CASE.

Let us clarify certain aspects of West German codeter-
mination, by briefly reviewing its history. The relationship
of interdependence between the unions and the political
parties, and the actors'roles, is emphasized.

The importance of the German Model for us is the tre-
mendous relevance and influence of German social democracy
and German Unions in Venezuela over the Venezuelan social
democratic party and its unions. German Unions have an
advising office at the Latin/American Institute for Social
Research (El Institute Latioamericano de Investigaciones
(ILDIS); the institute is sponsored by the Friedrich-Ebert
Foundation of the Federal Republic of Germany. Moreover,
Venezuela's Law Project Bill, which proposes codetermination,

is a close copy of the German law of codetermination.

A. Antecedents

 

Before World War II, Germany had a long tradition of
unionism, especially in the heavily industrialized sectors
of iron and steel production. Relationships between the
unions and the political parties also go a long way back. A
primary characteristic of this relationship was that the po-
litical parties seldom had much control over the trade unions.
Kassalow states ”the famous Gotha Program of the Social Demo-

crat party, adopted in 1915, called upon workers to affiliate

22

with the party, saying that only the party could win the pro-
per political and economic conditions for the proletarian.”1

The political parties were not the only ones to influ—
ence the transformation of labor unions--so did anarchists,
communists, socialists, and, to a lesser extent, the Catholic
Church.

From these currents also came the conflicts in the
First International between two irreconcilable ideological
groups. One side, led by Michael Bakunin, and Anarchist,
differed from the socialists on ideological matters, struc-
ture and procedures, and used terrorism as a political weapon.

Another side, the socialists, led by Karl Marx and his
associates, predicated their philosophy on an emerging in-
dustrialism with the production and commercial units growing
in size at a steady pace. The socialists put considerable
emphasis on the right to vote, while favoring the expulsion
of dissident groups. These differences in tactics, strate-
gies and procedures proved to be irreconcilable, and thus led
to the downfall of the First International.

The same problem arose in the Second International;

the differences were clearly articulated in Marx's Communist

 

Manifesto of 1848. Controversy over this work raged, dif—

 

ferent interpretations of Marxism began to be asserted.

This situation led to another split, between Revolutionists
and Revisionists. Again, the principal issue of disagreement
was over tactics and strategy. The revolutionists believed

the revolutionary objective of abolishing capitalism should

23
be prominently featured. The Revisionists had short term
goals in mind; they concentrated on improvements in the
workers' welfare: work hours, labor conditions, social
legislation, etc.

The German movement was outstanding numerically,
electorally and intellectually, and led the International
Socialist Movement. Rosa Luxembourg was one of the best-
known of the ideologists.

With the development of the socialist political move-
ment, the trade unions in Germany also advanced, nurtured by
the socialists' political branch. Gradually, mass trade union
organizations, guided by competent leadership from the ranks,
became the chief influential force within the socialist move-
ment.

Eventually, as Neil W. Chamberlain states,

many of the socialist parties of Europe abandoned
the principle of a Revolutionary imposition of a
socialist commonwealth, and accepted the 'Revision-
ist' doctrine, that the chances of success lay
through electoral and parliamentary action.

Whereas Luxembourg pointed out that,
the trade unions represent only the group interests
and only one stage of development of the labor move-
ment. Social Democracy represents the working
class and the cause of its liberation as a whole.
The relation of the trade unions to social de-
mocracy is therefore a part of the whole and when,
among the trade union leaders, the theory of 'equal
authority' of trade unions and social democracy
finds so much favor, it rests upon a fundamental
misconception of the essence of trade unionism
itself and of its role in the general struggle for
freedom of the working class.

For its part the Catholic hierarchy was largely unsym—

pathetic to the workers' organized efforts to promote and

24
protect their interests under the emerging industrialism. As
the radicals gained influence over the workers, these workers
adopted an anti-clerical attitude. This changed the Catholic
position toward workers, leading to a more sympathetic pro-

gram. In particular, Pope Leo XIII issued the Rerun Novarum,

 

in 1891. This encyclical stated that wage earners had
certain rights which employers and the state must recognize.
The Church supported Christian unions but not atheist ones.
By 1908 the Christian International (the embryo of the
Christian Democrat party) was founded; this was the first
international ideological dual trade union movement. It was
designed to challenge the International Federation of Trade
Unions controlled by the socialists and, indirectly, the
national and international socialist political movement as
well.

The Bolshevik revolution, however, favored the radical
and liberal movements, and the communists received a sym-
pathetic endorsement. The latter communists turned to dual-
ism, founding separate political parties and defining different
concepts of the class and political struggle.

In the 1920's, a new element rose above all the po-
litical parties in Germany--the National Socialist Party--
and with it World War 11. After the destruction of the
Third Reich, under Allied Occupation in West Germany,
attention was focused on the three major parties in the
Federal Republic: the Social Democratic (SPD), the Christian

Democratic Union (CDU), and the Christian Social Union

25
(CSU) (also known as the Christian Democratic Party of
Bavaria and the Germ Trade Union Confederation (Deutsher
Gewerkschaftsbund--DGB)).

After World War II the SPD and the CDU were given most
of the responsibility for the new German government. They
also controlled the unions. Both parties influenced the
workers based on their positions in traditional and current
affairs. From 1949 to 1959, when the Christian Democrats were
in power, unions in the Federal Republic fell more heavily
under the party's influence: although the DGB had a working
relationship with the CDU, it maintained and continues to
maintain its own share of power. The DGB has always been
closely allied to the Social Democrats ever since the Weimar
period, although the DGB also has members in the Christian
and the liberal unions; thus coincidental partnerships of
one kind or another are not rare.

For some authors, the post-war DGB might have seemed
to be a ”united trade union," where the national interest
of class workers was more important than the interest of
political parties. For instance, DGB supported Christian
Democratic Chancellor Konrad Adenauer in economic matters.
Adenauer in return, with the CDU party, passed the most im-
portant legislative victory of the post-war period, codeter-
mination in the coal and steel industries (1951).

The important relationship between the parties and the
unions is reflected in the proportion of union members in

the SPD Bundestag faction--in 1972, 94 percent. In 1968-69,

26
two former national union presidents and one district presi-
dent were members of top party organizations. Over the post—
war period, 10 percent of the members of the various com-
mittees of experts on advisory bodies to the SPD Executive.
had been union officials.

But, according to various writers, this does not mean
DGB totally controlled party policy-making. Union officials
never acted as a unified block within the party; there were,
inside the SDP, many different wings and positions.

It was also logical for DGB and its member trade unions
to provide important aid to the Social Democratic Party for
membership recruitment and propaganda suppor as well as in-
direct financing.

This situation is also true with the CDU/CSU, although
the Christian Democrats have been the more conservative of
the major parties. It does have a strong labor wing, how-
ever, which frequently takes positions similar to those of
the DGB on policy issues in the labor, social and economic
spheres.

The CDU unions also have an organization in the Bunde-
stag faction called the Employee, or Labor, Group; they have
many more members than any of the wings in the party. The
labor wing of CDU/CSU is more reform-minded than the rest
of the party, and is frequently able to secure compromises on
policy issues roughly midway between the conservative elements
in the party and the DGB. An example of this is the CDU/CSU

Fraktion draft of a codetermination bill, fashioned in 1971.

27
The labor wing of the party fought for the DGB goals of equal
representation of capital and labor on the boards of di-
rectors of large firms in industries.
The labor wing of the CDU/CSU Bundestag Fraktion
has repeatedly demonstrated its willingness to
break party discipline, often voting with the SP0
on issues in labor, social and economic spheres
when the Fraktion as a whole has taken a position
too far from employee interests.

Sometimes the unions and parties do not agree, as when
the SPD assumed control of the government in a coalition with
the Free Democratic Party (FDP) in 1969. One of the most
serious issues between party and unions has concerned codeter-
mination, the measure in which the DGB has expended the
greatest effort in its twenty-five year history. After the
1972 elections an agreement on codetermination was reached
by the coalition of parties (January 1974). The major DGB
demand seemed finally to be met: equal representation for
labor and owners in all large firms.

In the last few years, many different situations have
developed in the social context of the unions and parties.
The 1983 elections saw the Christian Democrats win over the
Social Democrats, showing the political-social dynamic of
this period in history; workers are no longer blindly fol—
lowing their union leaders.

It is also true that there was pressure from the West
German Right, especially among entrepreneurs, to create a
climate of unrest. The conservative press as well as the

conservative wing of the Christian Democrats circulated

rumors against the Social Democrats. This fact, combined

28
with the voters' realization that one party had been in power
for fifteen years (the SPD), and thirteen of those years in
coalition with the liberals, contributed to the creation
of a climate favorable to CDU and CSU.

Another crucial factor was (and remains) high unemploy-
ment in West Germany; more than two and a half million
Germans are out of work. ”Imported” labor has taken over many
jobs formerly held by Germans' the foreigners passively accept
lower wages and are, for the most part, non-union. This
produced a feeling of xenophobia, a phenomenon that usually
increases during times of recession.

Industry leaders have stated that the entrepreneurial
risk must again become profitable. The unions do not want
workers accepting wage cutbacks in order to help their cor-
porations survive as has happened in North America. In the
future, German unions are going to confront a strong pressure
from the economic right on this point. An article in Cambio
(Change) Magazine:

The unions could hardly be expected to agree to a
"social dismount,” in the Ronald Reagan style,
because the unions themselves--Christian Democrats
and Christian—Socialists of Bavaria--have political
wings, as can be witnessed by the fact that the
current Minister of Labor, Norbert Blum, is also a
union official; he would never tolerate any re-

duction for the members of his union, nor a tearing
down of the still newly-implemented codetermination.

Brief History of Codetermination

The current codetermination system in the Federal

Republic of Germany had its origins in Worker Committees

29
established by the Weimar Constitution of 1919 and in the
February Laws of 1920 and 1922 obliging the participation
of two members of the Enterprise Committee, elected through
secret ballot to the Councils of the Administration of So-
cieties (Corporations).
Germany's sensitivity to community aspects of labor-
management relations goes back to 1848-49. Kolvenbach:
The National Constitutional Assembly (Verfassungs-
gelende Nationalversammlung) which met in the
Paulskirche at Frankfurt-am—Main, drafted and dis-
cussed Paragraphs 42 and 43 as amended to the In—
dustrial Code (Gewerbeordnung). The draft provided
that in each factory, the employees had to elect a
"Factory Committee" in which employers and employees
were to be represented.
This historic date illustrates that worker participation
in Germany is not the result of social and economic pressures
which occured in a Germany defeated after the Second World
War, as some authors have suggested, but as a result of a
situation that had deep roots in the country's past.
Paul Malles notes that the Codetermination Act of 1950.
a radical piece of social legislation which divorced, for the
first time, managerial from ownership rights, was introduced
by the Allied Control Council; that is, by governments which
in their countries would hardly have envisaged such a step.
It must be understood that following the defeat of the Third
Reich, the allies deeply distrusted the social and economic
forces personified by German heavy industry magnates whose

role in the rise of the National Socialist regime was only

too well documented.8 (National Socialism did not permit

30
the exercise of industrial democracy, and dissolved the unions
in 1933, installing the authoritarian ”Fuhrerprinzip.")

After the German defeat, the Allied Control Council
reestablished the unions, passing Law 22, on April 10, 1946,
which reinstated the Workers' Committees. The German metal
industry came under the tutelage of "The North German Iron
and Steel Control”; through an agreement with the unions and
Law 27 passed on May 16, 1950, new ”watchdog committees” of
eleven members each were set up in large companies.

Union leaders worried that, after the Occupation, when
plans for decentralization of industry had been finalized,
workers would lose the right to codetermination. Thus, in
the fall of 1950, a large worker protest was organized in the
Rhur region to pressure the Bundestag into passing the Law
of Qualified Codetermination, which was passed in 1951.

The process of codetermination really begins in that
year, and has undergone several modifications.

The first laws on codetermination were implemented in
the Ruhr region where coal mining, iron and steel industries
predominate. The laws established ”supervisory boards”
(boards of directors), composed of an equal number of labor
and shareholder representatives; authorized members of the
supervisory board were to choose an extra member jointly to
make it possible to break deadlocked decisions. The board
was given the final responsibility for company policy. It
also had the critical task of appointing a ”management board”

to supervise day-to-day operations. By the same law of

31

Qualified Co-Determination, coal and steel industries in the
Ruhr were organized with worker councils composed of labor
representatives working with middle management. Workers now
had the power to elect a "labor director” responsible for
labor relations and personnel issues.

Codetermination was extended in modified form to the
rest of the Federal Republic in the Works' Constitution Act
of 1952. Works' councils became part of all major business:
employees could now elect one-third of the top board members
in all joint stock companies with more than 2,000 employees.

In 1972, the Works Constitution Act broadened the power
of workers by guaranteeing them specific ”rights": to inspect
their personnel files and to add comments; to be informed ”in
good time” of all plans for new buildings, work installations
and alterations to the workplace, and of any practices which
might be contrary to ”the well-established findings of scientific
management concerning working methods and conditions appro-
priate to human beings”: to be given full information on
personnel planning and on job vacancies; to ”co—determine”
the hiring of new personnel, personnel transfers, and the
introduction of technical devices measuring their performance,
and pay based on performance.9

A Codetermination Act passed in 1976 increased worker
representation on the highest level to fifty percent in
companies of more than 2,000 employees. This legislation now

affects some seven million workers in 650 companies, repre-

32
senting about 70 percent of German industry. The law stipu-
lates that supervisory boards must have twelve, sixteen or
twenty members, depending on the corporation's size. A super-
visory board is to composed of an equal number of worker and
stockholder representatives. In a company with a 20-member
board, for example, there are ten worker representatives,
seven chosen from the shop floor and company staff including
a senior (executive) managerial employee, and three who may
be union officials from outside the company. In a departure
from the 1951 Act, the 1976 Act also provides for the position
of a labor director, on the same footing as other members of
the management board, i.e., appointed by the majority of the
supervisory board. This new legislation did not affect the
special position of the labor director in the coal, iron and

steel industries.10

B. Politics and Ideological Fundamentals

 

The relationship between union and party runs deep in
the history of Germany's social conflicts; codetermination is
only one example of this. Over the past century, the German
labor movement has sought for the workers not only political
recognition through political parties and industrial recog-
nition through trade unions, but places on the governing
committees of industrial enterprises generally under the
slogan of ”Mitbestimmung.”ll

But according to Jecchines, the original motive for

participation was,

33
. . . not different from that of other social
measures, for in the course of social development,
a number of social measures (i.e., social security,
unemployment benefits, minimum wage, free education,
socialized medicine, and others) were introduced as
a matter of human rights and social justice, long
before their positive contribution to economic
stability became apparent.12
Jecchines points out that the ideological origins of
codetermination rest in a search by trade unionists, social
democrats and Laborites throughout the world for functional
but humane methods and policies, which would bring about
socio-economic reforms and achieve social justice.13
This notion of origins implies a strong world-wide be-
lief in respecting human rights. Guaranteeing the rights of
codetermination and co-participation for employees is es-
sential to such a world movement.
As this author understands it, the rights of people
can only be guaranteed by democracy and freedom; in the same
way that fundamental human rights can be assured only through
the development of democracy, economic well-being can not be
guaranteed without the development of an economic democracy
in the form of the right of codetermination and self-manage-
ment. It is argued that a society can not be fully demo-
cratic as long as a minority directs economic decision
making-~curtailing the majority's democratic participation.
The democraticization of economic and labor life is the goal
given to the democratic labor movement in the latter part of
the Twentieth Century. Only when this objective is achieved

can man's economic rights be fully realized.

In Sweden, the Meidner proposal was passed by the 1981

34
consensus of both the L.O. (Trade Union Confederation) and
the Social Democrats, unions and their Socialist allies en-

14 The archi—

visaged full worker control of private industry.
tect of this proposal, former L.O. economist, Rudolf Meidner,
argued that, although Sweden had acheived political democracy
and the benefits of a ”redistributive welfare state,” a third
task remained--”the fight for economic democracy."15

In the same way, in post World War 11 Germany, inter—
vention by the unions in directing economy required appro-
priate representation of the two existing actors in the
economy, unions and management associations. This represen-
tation was to occupy a place at the side of the Bundestag,
completing the political democraticization of the economic
sector.

Democratic order of the economy was considered a neces-
sary condition for political democracy, since it contributed
stability. It was seen as a complement to and amplification
of democracy, since (in place of formal equality) it gained
the sympathy of the citizens. In this light Guenther Esters
defines the distinct elements of union ideas on the new
economic order:

Socialization: Asreganks expropriation, it modi-

fies relationships of power and makes possible a
new order within the companies.

 

General Economic Planning: It substitutes private
sector interest in pure profit which used to be the
goal of production, orienting it to the needs of the
people.

 

Codetermination of Salaried Workers: Introduced
in all areas of the economy, it assures the in-
fluence of the salaried workers and realizes the

 

35
democratic concept of self—determination of the
human being. According to the specific economy, it
does not aspire to a parliamentary route, but only
to rights of codetermination and control regulated
by determined guidelines.
Thus, from the very beginning, codetermination has been
a political issue. In the early 1920's, German labor's
demand was that industrial democracy work together with po-
llitical democracy.17
German unions have the influence of the Social Demo-
cratic ideals in the fight for implementation of codeter-
mination. The tightness of the organization, union discipline,
reaching the level of obedience to national leadership (with
some notable exceptions) constitute one of the strengths of
the contemporary organization. Party and trade union do not
always speak or move together, but when they do, they con-

18 .One notes the support for

stitute a major political force.
principles of codetermination by the conservative Christian
Democrats (CDU) and the liberal Free Democrats (FDP) coming
under pressure from the trade unions and the Social Demo-
crats when the codetermination acts of 1952, 1956 and 1972
were introduced.19
It is important to point out the alliance between the
German Trade Union Confederation (DGB)(Deutscher Gewerkscha-
ftsbund) and the Social Democratic Party (SPD) especially
between 1969 and 1983 when SPD formed the government.20
In many democratic countries, codetermination is
nurtured by the political environment. In the Federal Re-

public of Germany, the SPD has made itself the champion of

codetermination in the political arena. Its fundamental

36
program, issued at Godesberg says,
democracy requires co—determination for workers
in the companies and in the economy as a whole.
The worker should convert himself from being a
subject of the economy to a citizen of the economy.21

The SDP is not the only party to make co—determination
a rallying cry. The CDU has also identified itself with the
cause. In the ”Berliner Programa," in 1973, it was con-
sidered that ”codetermination for workers is an expression
of Christian social thought and a fundamental of the social
economy of the market," with workers as members of a company's
social ensemble.22

The policies of the liberal socialist governments
of Willy Brandt and Helmut Schmidt have taken this program
into account. Legislative advances have been notable, even
though alliances with the FDP have impeded full implemen-
tation of codetermination. In the seven years between 1969
and 1976, more advances for codetermination were made than in
the seventeen years of coalition governments of the CDU/CSU
(1952-1969).

These successes are recognized by most parties in the
International Socialist movement, which is sympathetic to
codetermination. Indeed, codetermination helps to unify
socialist parties in Europe. Social Democrats of West Germany
and many other countries feel that codetermination is the wave

of the future. It will also create, they believe, a world

of truly free human beings.

37

C. Problems and Critiques

 

We have briefly outlined the roles and ideologies of
actors in a codetermination model; we have discussed their
antecedents as well as the strong relationship which exists
between unions and political parties. The role that each
one plays in economic democracy and the factors of power which
determine the influence of the political party when it carries
out governmental functions, have also been discussed; in par-
ticular, the origins, development and practicability of co-
determination in Germany.

Although codetermination is the lawful system of labor
and management relations in the Federal Republic of Germany,
it is not fully accepted by all the actors in the system; it
continues to have opponents and critics.

Primary opposition to the codetermination laws came
from busines and management. They had been the owners of
capital, and had guided the production process; in effect
they controlled the workers. This was pre-empted by codeter—
mination legislation, which they had sharply opposed. Al-
though somewhat muted today, the criticism continues. Manage-
ment has made several observations, legal and technical, re—
garding the codetermination laws, amounting to an unwilling—
ness to share the right of decision-making which management
has always had in the past, either with unions or with
workers.

The unions have also raised objections to the codeter-

38
mination model. They did not totally agree with the modi—
fications made to the 1976 Act, claiming that the new bill
did not introduce a true parity codetermination, nor did it
allow a vote given to the president [of the board] in case of
a tie vote. The bill did not place an executive officer from
among the workers representatives on the ”watchdog” com-
mittees. The unions felt that the bill allowed a worker
representative to be elected by a majority of salaried
workers, in practice, it still protected the interests of the
directors and stockholders.

Another difficulty has been the election of the Director
of Labor. The Codetermination Act of 1952 calls for a worker
director on the board of management, whose primary tasks
involve industrial relations and personnel matters. No worker
director can be appointed by the supervisory board without
a majority of the workers' representatives (the union) being
in favor of the nomination.23

Most labor directors have managed to work in reasonable
harmony with their colleagues, but they have not supported
the interests of labor, to the detriment of the firms, nor
have they assisted metalworkers and mineworkers' unions in
wage negotiations.24

One of the main sources of data is the Biedenkopf

Report, Mietbestimmung in Unternehmen (1970), one of the most

 

complete studies of codetermination. The report studied
past experiences with the two codetermination systems prac-

ticed in Germany since the end of World War II, (the results

39
of the 1952 and 1976 legislation) and developed detailed pro-

25 Importantly the nine pro-

posals for future legislation.
fessors who developed the report belonged to different po-
litical groups, yet reached unanimity on all essential
points.26
The report was presented to the Bundestag on a positive
note: it identified labor representatives with corporate
interests, and reported a non-existence of tensions, in par-
ticular, less use of strikes. Codetermination, the report
contended, did not compromise the income-production of busi-
ness or its investment policies. There was agreement on the
distribution of benefits and more information to personnel,
although some problems continued with reference to confiden-
tiality (company secrets were not an issue here).
Unfortunately, the Biedenkopf Report has not been
accepted by the political parties as a basis for a solution
of the problems of codetermination. This was true even after
the Christian Democrats had elected Biedenkopf to the position
of Secretary General of their party. John Christo:
Codetermination is not intended to end the company's
ability to give orders to employees. The system is
intended only to ensure that the company's authority
receives “democratic legitimation” through the
consent of the employees. There is a certain ap-
pearance of inevitability about an ideology that
seeks to spread democracy. Mitbestimmung tends to
reduce frustrations and impotence among workers by
giving them steady access to and influence on com—

pany power centers. It gives them the ability to
help determine their own fates.27

4O

Footnotes

lKassalow, Everett M. Trade Unions and Industrial Re-
lations: An International Comparison. Milwaukee, Wisconsin,
University of Wisconsin-Milwaukee, and New York: Random House,
1967, p. 37.

 

 

2Chamberlain, Neil W. Forces of Change in Western
Europe. Maidenhead, Berks., England: McGraw-Hill, 1980,
p. 78.

 

3Luxembourg, Rosa. The Mass Strike; The Political
Party and the Trade Unions. New York: Harper and Row, 1971,
p. 80. Also, The Jhnius Pamphlets. New York: Harper
Torchboods, 1971, p. 80.

 

 

 

4Ibid., p. 80-81.

5Willey, J. Richard. ”Trade Unions and Political
Parties in the Federal Republic of Germany.” Industrial and
Labor Relations Review. October 1974, vol. 28, no. I, p. 50.

 

 

6Rabago, Joaquin. ”Alemania atraves Kholosal” (germany
Through Kholosal), Revista Cambio 16 (Change 17 Magazine),
March 14, 1983, no. 589.

 

7Kolvenbach, Walter, p. 109.

8Malles, Paul. ”The Institutions of Industrial Rela-
tions in Continental Europe," Labor Canada Research and
, Development, December 1972, p. 185.

 

 

9Ibid. For more information, see Works Constitution
Act (Extract), january 1972.

10Schregle, Johannes. "Co=determination in the Federal
Republic of Germany: A Comparative View,” International
Labor Review, vol. 117, no. 1, January-February 1978.

 

11Garson, G. David. Workers' Self—Management in Indus-
try: The West European Experience. New York: Praeger Pub-
lications, 1977, p. 28.

12pp. cit., Jecchinis, p. 645

41
Footnotes (cont.)

131pm.. p. 646.

14Bernstein, Paul. "The Unraveling of Labor-Manage-
ment Relations in Sweden," Personnel Journal, 62:474,
June 1983.

 

15Meidner, Rudolf. "Our Concept of the Third Way,”
Economic and Industrial Democracy (August 1980), p. 359,
In Bernstein, Paul, ”The Unraveling of Labor-Management in
Sweden" (Personnel Journal), 1983, p. 475.

 

 

16Esters, Guenther. ngestion de los Obreros en Ale-
mania (Codetermination of the Workers in Germany). Germany:
Friedrich-Ebert-Stiftung, 1972, p. 21.

 

17Op. cit., Schregle, p. 84.

18Op. cit., Carson, p. 29.

19Op. cit., Jecchinis. p. 654.

20DeWitt, Sherri. Worker Participation and the Crisis
of Liberal Democracy. Colorado: Westview Press, 1980, p. l36.

 

 

21Maerker, Rudolf. Cogestion: Un Modelo de Libertad
(Codetermination: A Model of Freedom). Bonn, Fe. Rep.
of German: Friedrich—Ebert Foundation, 1977, p. 78.

 

22Natutano, G. Barcelo. Empresas y Progreso en el Mundo:

 

Ideas para el Cambio (Business and Progress in the World:
Ideas for Change). Madrid, Spain: Editorial Index, 1979,
p. 92.

 

23Kuhne, J. Robert. Codetermination in Business:
Workers” Representatives infthe Boardroom. New’York:
PraegerlPublishers, 1980, p. 29.

 

 

24Clegg, H.A. A New Approach to Industrial Democracy.
London: Oxford University Press, 1963, p. 54.

 

25For more information about the Biedenkopf Report,
see: Participation in Management: Industrial Democracy
in Three West Eurgpean Countries. W. Albeda, ed., p. 23—33.

 

 

42

Footnotes (cont.)

26Heintzeler, Wolfgang. ”The Codetermination Problem
in Western Europe,” in Aims of Industry. London, p. 13.

 

27Crispo, John. Industrial Democracy in Western Europe:

 

A North American Perspective. Toronto, Canada: McGraw-
Hilliof Canada and Ryerson, Limited, 1978, p. 134-135.

 

IV. THE VENEZUELAN CONTEXT

A. Socio-Economic Aspects

 

This section deals with Venezuelan socio-economic
aspects, but we don't intend to look deeply into Venezuelan
economics, since it is not the principal focus of our work.

Venezuela's neoclassical economic model was inaugurated
in 1958 with the advent of a democratic system and as such,
has its own peculiarities; the economic model has also af-
fected other social factors such as population growth. For
production growth, the development strategy has centered on
using internally-produced consumer items in place of imports.
Consolidation of this strategy in the 1960's brought with it
a new production structure with its corresponding employment
structure. Given the proven existence of hydrocarbon re-
serves and sufficient facilities for exploitation,1 oil pro-
duction can be increased while its costs remain relatively
constant.2 Note that the position of Venezuelan oil in the
world market is significant; its price can vary not only with
demand conditions, but with supply conditions as well. On
the other hand, the oil economy employs only a very small
portion of the economically active population; in 1970, for
example, only 10 percent of the work done was employed in
the petroleum industry.3 Under the former economy, a greater
portion of the population was employed,4 since export was the

principal source of work in the country.

43

44

In 1951, iron was incorporated into the export scheme.
Domestic and foreign companies exported iron until January
12, 1975 when the industry was nationalized: it is now ad-
ministrated by the state-owned Guyana Development Cor-
poration.5

During the 19605 and 19705, premises for national-
ization were created. Taxes on oil profits increased dras-
tically. In 1970, the National Congress passed a law es-
tablishing the government's rights to fix unilaterally the
price of Venezuelan oil; the Law of Reversion passed in 1971
increased governmental control of all oil company activities.
The companies responded by divesting. The quadrupling of oil
prices and the assertion of authority over prices by OPEC,
(Venezuela is OPEC's founder) gave the government the oppor-
tunity for even greater control over the economy. Finally,
on January I, 1976, the oil industry was nationalized. The
effects of nationalization and the increase in the income
derived from the export of crude oil has helped the country's
industrial growth.

As predicted by Neoclassical Economists, an export-
oriented Venezuelan oil industry has led to rapid growth of
per capita income since the beginning of massive oil pro-
duction. In 1935 Venezuela was one of the poorest countries
in Latin America,6 while in 1980, its per capita GNP was
higher than that of any other Latin American country, and only
slightly lower than that of some developed nations.7

The greatest percentage of that income is related,

45

as seen in Table 1 below, to oil income.

Table 1

Tax Incomes
(millions of Bolivares)

 

 

1979 1980 1981
Ordinary Income
(Busines/Services, etc) 48.339 62.597 92.655
Petroleum Sales 33.377 45.381 70.887
Income Tax from 011 sales 25.553 37.951 63.284
Derived from Oil sales 7.724 7.430 7.603
No petroleum sales 14.962 17.316 21.769
Extraordinary Income
(Special Tax) 93 9.811 2.192
Total 48.432 71.508 94.848

 

Source: Ministry of Petroleum and Mining/Central Bank of
Venezuela Preliminary Review of Venezuelan Economy in 1981.
p. 16, Table 21.

The government has spent a significant amount of its oil
profits to improve certain social conditions. For example,
the life expectancy at birth increased from 57 years in 1960
to 67 years in 1980. The infant mortality rate diminished
from 85 per thousand to 42 per thousand during the same
period. The ratio of physician to patient dropped from 1,510
to 930, and of nurse to patient from 2,840 to 370 in the same

years.9 These figures compare favorably with other Latin

46
American middle-income countries. Again, adult literacy
grew from 63 percent in 1950 to 82 percent in 1977; the
number of people enrolled in secondary school went from 21
percent in 1950 to 40 percent in 1979, and from 4 percent to
21 percent for higher education.10
This channeling of government spending toward the
social sector undoubtedly constitutes a base for economic
development, but has little impact on industrial develop-
ment and consequently, on productive capacity in the economy.
Thus, it appears that the government is not establishing a
firm basis for future development which could survive without
the oil. As Cecilia Valente observes, the Venezuelan economy
is a mixed-system economy, relying on state participation and
ownership as well as private and foreign investment.11
Because of this, we can see the important role the
state plays in the nation's economy. It owns the most im—
portant enterprises: oil, coal, steel, electricity, iron,
chemical, aluminum, service-~con5equent1y, the state is the
biggest employer. Taking into account nationalistic feelings,
the main elements of Venezuelan's economic programs and
strategies in the 19705 were classified as follows:

1. More equitable distribution of income.

2. State ownership of the extractive and principal
industries.

3. Venezuelan control of most foreign investment
in accordance with Decision 24 of the Andean
Pact.

4. Use of petroleum-generated revenue to finance
the development of a diversified economy.

47

5. Promotion of non-traditional exports.

6. Support for high world petroleum prices to
assure steady income to finance development
programs.

It is not in the government's interest to support ex-
pansion of the private sector. Writing on this subject.
FEDECAMARAS suggests that the structural problem for Venezuela
is due to excessive petroleum income poorly incorporated into
state enterprises. To restore confidence the state must re—
duce ordinary expenditure in two ways: diminish the actual
bureaucracy, and diminish the loss of state enterprise. In
Venezuela it is necessary for the state to promote the private
sector as a motor for development.13

Well-known Brazilian Economist, Celso Furtado, remarks,
"What is it that we call lost for a public Enterprise? The
enterprise may be lost for inefficiency, but it may be lost
too, because it has down prices or rate or tariff; for giving
public services so low cost for the population that they have

14 These words are a philosophic

low income or resource."
look at the economic position adopted by Venezuela in most of

its economic investments.

B. Import Substitution as the Strategy Toward Industrialization.

 

This section concentrates on the influence of govern-
mental policies on industrialization as a strategy for
economic development, based on petroleum as the leading sec-
tor. Particular interest will be paid to Venezuela's po—

tential for industrialization independent of petroleum.

48
Analysis of the agricultural sector will be omitted, though
it is considered important in development.

In its industrial development the Venezuelan govern-
ment has pursued a course of import substitution; it has
established high tariff and non-tariff barriers to imports.
so that rising industries can take advantage of the inter-
nal market without risk of competition. Domestic industry
on the first stage is dedicated to producing non-durable
consumer goods; subsequent stages of import substitution
would have to produce an intermediate product. However,
import substitution strategies in many countries have
achieved poor rates of growth compared to those in countries
under export promotion strategies.

The export promotion strategy tries to encourage ex-
ports by changing the system of incentives in favor of
exports. This is done with export subsidies, reduction or
removal of duties on imported inputs or reduction of ex-
porter's income tax. Some countries have established duty—
free processing zones, and some employ frequent mini-
devaluations to promote exports.

In the literature, various explanations for the
failure of industrialization based on import substitution
strategies can be found: first, we note little problems
with the production of non-durable consumer goods in the
first stage, which requires labor-intensive techniques and
little sophistication. Without foreign competition, national

industry has few problems in substituting imports of this

49
type. At subsequent stages import substitution becomes
more difficult. Generally, the next step is the final pro-
cessing of assembly—type goods, and from there toward inter-
mediate products and capital. ”To do this, the protective
structure is escalated by the degree of processing, with
final goods more highly protected than intermediate ones.”14
In many cases the foreign exchange costs of the intermediate
goods are greater than the foreign exchange value of the
final products.

Second, the high protective structure of import sub-
stitution contracts import demand. The currency of the
country in question then becomes artificially over-valued.

Third, the small domestic markets of developing
countries do not permit optimaly sized factories; excess
capacity or less-than-efficient minimum-size plants tend to
develop. Oligopolistic or monopolistic market structures
are created. As import substitution proceeds, new activities
are increasingly capital intensive, and inefficiencies in-
crease.

Fourth:

Given the vast disparity in capital-labor ratios
of the industrial sectors of the developed and
developing countries, the opportunity for trade
represents a means for shifting the demand for
labor outward more rapidly than the import-
substitution strategy permits.

Suppose the capital-labor ratio in an exportable goods in—

dustry is 2:1, this ratio is 6:1 in an import-substitutive

industry. The use of more capital in the export industry

shifts the demand for labor upward--this shift would be

50
three times greater if the additional unit of capital were
used in the more capital-intensive import-substitutive
industry.

Last, related to this fourth problem, is that the
system of protection compatible with import substitution
subsidizes the importation of capital goods, promoting
capital-intensive techniques regardless of the country's
factor endowments.

In view of these factors, it remains clear that the
import substitutive strategy is not a very promising impulse
method for industrial development. Nevertheless, this
strategy has been used in Venezuela in a coherent form
since 1958.

In 1958, the Venezuelan government initiated in-
dustrial protection, based on an increase in customs duties,
removal of customs duties for imported capital goods and
raw materials, and public credit for industrial sector in-
vestment. Protectionism provoked internal and external
private sectors to begin the substitution of imports.

To illustrate the sensitivity of investment at the
beginning of the import substitution policy, the following
table shows the evolution of some representative products
after the imposition of protective measures. Not all di-
minished imports can be relegated to national production,
but an immediate increase in internal production is clearly
seen.17 The affirmation is further illustrated with con-

crete data which showing how internal production reacts

51

after barely two years of import substitution.

IMPORTATION

 

(millions of bolivares)18
Protected Sectors 1957 1961
Whole Cream (from milk) 5.24 1.39
Preserved Meat 53.54 17.21
Cigarettes 32.55 0.32
Glass Containers 20.74 11.14
Porcelain Toilets 14.44 2.84
Tires and Aire Chambers 31.93 9.00

Production

 

l9

 

Protected Sectors Units 1957 1961

Powdered Milk Tons 4,487 12,189
Preserved Meat Tons 5,168 11,451
Fruit Juices Tons 17,611 36,576
Cotton Cloth .000 meters 16,716 34,682
Cigarettes Millions 2,831 5,413

Import-substitution has been effective in the final
consumer goods sectors. Naturally, the policy has been com-
pleted in the first stage. Since 1950, manufacturing has
grown more rapidly than the rest of the economy, proving

the success of the first state (See Table 2).

52
TABLE 2

VENEZUELAN GROSS TERRITORIAL PRODUCT BY SECTOR

(millions of bolivares)20

1950 1955 1960 1965 1970a 1974

Agriculture 1,014 1,352 1,987 2,546 3,490 4,030

 

 

Petroleum 3,797 5,514 7.325 8.915 9,195

Manufacturing 1,274 2,267 3,347 5,049 8,015 9,639
77.9 47.6 50.85

Commerce and
Services 5,027 7,498 10,965 18,120 18,854 17,031

Others 1,615 2,694 3,482 3,975 10,515 20.765
GROSS
TERRITORIAL
PRODUCT
(TOTAL 12,727 19.325 27.116 38,605 50.072 58,989

Rate of
Increase 51.8 40.31 42.37

(a) (Millions of 1968 bolivares)
(b) Includes only crude petroleum. Refining process are
included under "Manufacturing."

"The substitution of imports of final goods did not
spark a general industrialization or even move much beyond
the specific protected sectors. The survival of even
these domestic industries requires continued protection."21
Industrialization has so far deepened slightly in steel and
steel products, chemicals, aluminum and aluminum products.

Venezuela is now in the second stage of import substitution,

facing the problems inherent in this; it is not expected at

53
this stage that industry will increase in any great pro-
portion.

Turning from import substitution in Venezuela, we
discuss the constraints that the Venezuelan development
model has imposed on the production and exportation of pe-
troleum and on industrialization through the promotion of
the export of manufacturing goods.

The first and most important constraint is the con-
tinuous flow of foreign capital within the country; it some-
times caused ovevaluation of the nation currency. This seems
to cheapen imports and exports (aside from petroleum) rela-
tively more difficult to develop.

Furthermore, growing profit from petroleum have forced
continual salary increases and onerous contractual rights,
resulting in distorted benefits and salaries in the modern
industrial sector and in the public sector, since both trade
union leaders and management have used the oil industry's
collective bargaining agreements as indicators on which to
base their own settlements. Thus labor costs tend to be
relatively high in the industrial sector; yet this high cost
does not offer any advantage for the export goods manu-
facturer.

So far then, Venezuela economy has not found the way
to independent economic development, and can not do so

while itremahus tied to an import-substitution strategy.

54

Economic theory suggests a change toward the promotion
of exports. Governmental policies would have to be directed
toward counteracting the negative effect of the petroleum
model.

Fortunately, the Venezuelan government has in recent
months begun such a change, and seems to be promoting the
export of goods. Part of the reason for this is the enor—
mous increase in national income caused by the 1973-74
rise in oil prices. This event is reflected in the govern-

ment's Fifth National Plan 1976-1980.

 

The Plan incorporates four fundamental objectives for
development:
1. Governmental expansion in productive activity.

2. The expansion of public activity concentrated in
export-oriented heavy industry.

3. Drastic cutbacks in government spending in the
social sector.

4. Government monopoly on low-degree processing and
no limits on private participation in high degree
processing in petrochemicals, iron, and steel.

For lack of sufficient reference materials, it is not
possible at this time to analyze or evaluate these policies.
though it is important to mention them as a positive effort
for the future.

Venezuela is a typical periphery society, always
adjusting to the industrial world's needs, as will be shown.
One distinguishes here between dependence and dependency;

"dependence” conceived as external reliance, studied as a

55

branch of neoclassical economic theory. ”Dependency,” on
the other hand, is understood as the process by which less
developed countries are incorporated into the global
capitalist system: the conception based onneo-Marxist
formulations of how the world imperialist system functions.
Dependency theory rejects the neoclassical economists'
assumption that the unit of analysis in studying under-
development is the national society. Industrial, advanced
or ”central" countries are viewed as capable of dynamic
development responsive to internal needs, and as the main
beneficiary of global links. On the other hand.

. . . the periphery is seen as having a reflex-

type of development, one which is both constrained

by its incorporation into the global system and

which results from its adaptation to the require-

ments of expansion of the center.

One underscores the fact that dependency theory relies
not only on external constraints in explaining underde-
velopment:

Dependency in any given society is a complex
set of associations in which the external di-
mensions are determinative in varying degrees
and, indeed, internal variables may very well
reinforce the pattern of external linkages.

The establishment and development of the petroleum
industry in Venezuela, dominated by foreign companies,
produced a structural change in the international economic
relationships of the country, and in its entire economic

life. -This change, has not improved its underdeveloped

conditions, instead strengthening its dependence on the

56

great centers of capitalism--accenting the absolute risks
of productive specialization. It was not, therefore, a
change in the sense of independent growth, but rather one
which has swiftly multiplied the economic magnitudes, thus
accounting for the extensive growth of the Venezuelan economy.
In the expansion stage of trans-national petroleum companies,
Venezuela's dependence continually increased. Examples of
this dependence:

1. The petroleum sector is totally dominated by
multinationals; the government has little in-
fluence on production decisions. This is most
relevant since petroleum is the major economic

factor in the country.

2. Oil technology is highly sophisticated, developed
almost completely by home offices of the multi-
nationals, outside Venezuela. This excludes
Venezuelan engineers and scientists, who have no
opportunity to increase their knowledge in these

areas .

3. Venezuela's export market is scarcely diversified.
The U.S. is its major buyer, purchasing around 30
percent of Venezuela's oil (1973 figures). It
must be remembered that Venezuela depends dis-

proportionately on oil for a healthy economy.

57
4. A pattern of external exploitation of the Vene-
zuelan economy by American companies exists. This
takes tow forms:
a) Transference of surplus values, defined as
the total of earnings after taxes minus the total
of investment. This value which, during the

period 1947-1975 represented $4.800 million,24

left
the country, failing to contribute to the growth

of economic activity. And,

b) deteriorating terms of exchange: terms of
exchange in Venezuela deteriorated between 1958

and 1970. Since 1970, the rise in the oil

prices has been greater than the rise in the prices
of imported goods. However the terms of exchange
in 1975 had deteriorated compared to those in

1958.25

Nationalization of the petroleum industry returned
to the Venezuelan government all exploration and mining
rights, ending the physical intervention of North America
in this area.

However, Vegard Bye demonstrates that nationalization
has not fundamentally affected subordinate relationships

in the Venezuelan economy.26

He suggests that: Before
nationalization, Venezuela exported ninety percent of its
petroleum. Prior to nationalization, the government agreed

to sell its oil to the multinational corporations. As of

58

1980, these corporations commercialized 75 percent of Vene-
zuelan oil. The Venezuelan oil holding company has con-
tracted with the multinational corporations for the trans-
fer of technology after nationalization.

What becomes clear from these agreements is

that they only grant the national operating

companies the right to use exactly the same tech-

nology as that used before nationalization,

for exactly the same type of production, in

exactly the same volume as before. Transfer of

new technology must be agreed upon separately.27

Third, some argue that Venezuela has received lower

oil incomes after the first year of nationalization. Ap-
parently the multinationals receive fees through the service
contracts representing more money than the surplus value
they had been taking out of the country.

With regard to the change of direction in develop-

ment strategy outlined in the Fifth National Plan, de—

 

pendency theories contend that this policy aggravates the
national economy's dependence on international commerce;
nevertheless, this is not a critical point for them. What
is important is existing evidence that the promotion of
nationally manufactured export goods and products has tri-
umphed: export has been achieved with the investment of
foreign capital. Note the export of manufactured goods

from underdeveloped countries consists mostly of goods whose

production is controlled by multinational corporations.28

The strategies proposed to overcome dependency and

underdevelopment by these theorists are many and varied.

59
One strategy involves negotiating with central countries
in order to create a New International Economic Order
(NIEO). The creation of such a group would be negotiated
as trade unions negotiate collective bargaining agreements,
with a resulting contract.

An alternative is a profound change in the world
order in which capitalistic values and Russian Communist
values are replaced by those of a humanist society.

Still others argue that the only viable alternative
to dependency is a strategy of "self-reliance,” whether
national or regional, including neighboring countries with
similar aims who find themselves in a similar stage of de-
velopment.

Socialism as well has conceived of an alternative to
dependence and underdevelopment, whether it is on a national
level or on a larger, international one.

All these ideas give a country such as Venezuela a
very wide range of possibilities as it moves to take its

place among modern nations.

C. The Role of Unions in Venezuelan Politics and its

 

Influence on the Social Environment in the Last

 

Twnety Years.

 

In considering specifically the role of Unions in
Venezuela today, we must consider different aspects of the
socio-politico-economic development of the country, and how

they relate to events of the last tenty years. In particular

60
we concern ourselves with 1958, the year in which Venezuela
is born as a democratic political system and implements an
economic model of development. Second, we consider the
aftermath of 1958 within the social context that surrounds
Venezuela as a state society. This discussion is basic to
an understanding of the development of the capitalist pro-
duction model and its effects on various economic factors
of the country influencing the Venezuelan capitalist model.
Moreover, we will discuss how Venezuelan unions may use
their power in the future, and what model they propose for
future worker participation. Since the term ”codetermi-
nation" has a specific meaning for us not defined by early
unions, the phrase "worker participation” will be used most
frequently in this section. This section is based both
on the author's fifteen years as Manager of Industrial Re-
lations in Venezuela, an experience that meant daily contact
with the unions there, and on intense social research on

the subject.

1. Origin and Development of the Unions in Venezuela

 

The union movement appeared in Venezuela in the second
decade of the 20th Century; they called themselves mutual
help societies, and as such were allowed to function during
the dictatorship of General Juan Vicente Gomez; these
societies have never figured as true unions, but as loosely-
knit organizations with social concerns. When Gomez died

the associations became the unions they are now recognized

61
as in Venezuela.

The right of the Venezuelan workers to form unions
was recognized by law in 1936. The Labor Law of that year
also recognized for the first time the right to strike.

By 1943, the union movement had acquired so much strength
that it was recognized as a negotiating power by the petro-
leum companies; for the first time in Venezuelan history,
an industry-wide collective bargaining agreement was
reached between unions and management. Signed in May of
1945, it contained nine clauses, stipulating a five month
duration. As can be seen, the period between 1936 and 1945
was one of consolidation for the unions.

The first sign of dissent in the union movement appeared
in 1946, between left-leaning unions (Trotskyite Communists)
and radical moderates (liberal socialists). The political
division worsened in 1947 (the Red and the Blue unions);
finally, toward the end of 1948, after the overthrow of the
first government democratically elected by universal suffrage
and headed by Romulo Gallegos, the union movement began to
unravel. Since the military government which took over
had little backing among the civilian population--virtually
none from the workers themselves-~it resorted to armed force
to consolidate its power; it then used its power to dissolve
existing unions. The union movement stagnated until 1958
and the overthrow of the dictator, General Marcos Perez
Jimenez.

Union leadership was not as stagnant as it seemed.

62
From exile, union began a campaign against the dictatorship
and the people chosen by Perez Jimenez to take over the
unions. They also convinced the International Labor Organi-
zation leadership not to recognize those who arrived at the
ILO's annual convention as Venezuela's representatives.

Meanwhile, the military government in Venezuela between
1950 and 1957 tried to normalize labor relations by promoting
”independent,” i.e., apolitical, unions.

When Perez JImenez fell on January 23, 1958, union
exiles returned to their country, now more experienced in
international labor relations. They resumed their positions
in union management, taking control of or creating new
governing boards in federations as well as small, local
unions;unnxw of diverse political tendencies now took
advantage of the opportunity for unification, re-joining
the original unions.

According to Cecilia Valente,

support from labor. . . was critical in bringing
the democratic to power in 1958; labor's continuing
endorsement of the ruling administration is one

of the elsgents which hold the Venezuelan democracy
together.

Thus with Jimenez' fall, socio-political conditions
required a social pact that would guarantee the success of
the recently initiated democratic revolution. Employers
and workers, the two most relevent social forces in any in-
dustrialized society, recognized the historical significance

of the time, shortly negotiated and agreed upon a guaranteed

labor peace.

63

The process of agreement that ended in this pact can
be traced through the following events. Immediately after
the fall of Perez Jimenez, the Union Unification Committee
was reconstructed with the cooperation of the Union Secre-
taries of the various political parties; the Committee
would constitute a central-fium.provisional—-governing body
for the recently repressed workers' movement. The following
independent groups and political parties were represented:
Venezuelan Communist Party (PCV), Republican Democratic
Union (URD), Democratic Action (AD), Christian Social
Party (COPEY), and the representative of the governing junta

which was, at the time, in control of the country.*

2. Structure of the Unions

 

The Labor Law, Title VI, Article 171, outlines this
structure:
The right of association in trade unions is
acknowledged to persons of either sex working
in the same enterprise and to those who exercise
the same trade or profession, or similar trades
or professions, or those related, whether of an
intellectual or manual nature.
The Labor Law and its regulations form the structure and
requisites for the unions. Currently, the Venezuelan union
movement is organized into "business" (professional) and in-

dustrial unions. The labor shop is the minimal organized

unit within the union structure. Legally registered unions

 

*In March of 1958, the Venezuelan government announced
the immediate reaffiliation with the International Labor
Organization, from which it had withdrawn during Perez
Jimenez', dictatorship.

64
may also form federations and confederations (Article 193,
of the Labor Law). Relevant points of law will be discussed
in this section.

Three large labor confederations now exist in Vene-
zuela, managed or controlled by the three largest political
parties. Each party has its own ideology, toward the ma-
jority of federations and unions align themselves accord-

ingly.

CTV: Labor Confederation of Venezuela

 

CTV is the oldest, largest and most powerful federation
in Venezuela, with approximately one million members. CTV
was founded in 1941, during the government for Democratic
Action (AD), which gave it major support; since 1958 it
has also been controlled by the AD, although ideologically
it is closer to the Social Democrats. CTV's current presi-
dent, Jose Vargas, is also a senator representing the
Democratic Action party. According to Cecilia Valente in

her book, The Politics, Economics and Labor Climate in

 

Venezuela:

 

The CTV has been compared in style and substance
to the AFL-CIO. One official U.S. labor report
elaborates on the similarity:

The top leadership of the CTV has had

close ties with the AFL-CIO over the years
of exile during the Perez Jimenez dictator-
ship when the AFL-CIO lent them moral and
tangible support. This factor along with
the early dominance of the American-based
firms in Venezuela's economy has contributed
to many terms and concepts parallel to those

65
of the AFL-CIO. Among these parallels:

l. The tendency toward pragmatic
rather than ideological solutions
to problems.

2. An emphasis on formal separation
of the CTV from party affiliation
despite. . . the strong historical
tie between AD and the CTV; and

3. Structural similarities betweegl
CTV and AFL-CIO organizations.

But in spite of AD's control over CTV, representatives
from other parties sit on CTV's governing board, for example,
Rafael Leon, is a member and National Congress deputy for
the Christian Democrat party. Also on the board is a repre-
sentative from MAS (Movement to Socialism), a group with
leftist orientation. Internationally, the CTV is affiliated
with the Inter-American Regional Organization of Workers,
and its parent, the International Confederation of Free
Trade Unions. It maintains active and bilateral relations
with the AFL-CIO in the United States and Canada.

The second most important union in Venezuela is the
Confederation of Autonomous Unions of Venezuela (CODESA)
with 50,000 members. Founded in 1958, most of CODESA's
unions are influenced and supported by the Christian
Democrat party. Not surprisingly, CODESA's influence changes
with the political scene. The Christian Democrats (COPEI)
are now in power, making CODESA more powerful than usual.
Following a unilateral spirit, CODESA's major international
links are to the International Christian Democracy of West

Germany and Italy; it is also linked to the Confederation

66
of Latin American Workers (CLAT) and the Regional Organi-
zation of the World Confederation of Labor (WCL).

The third major union movement in Venezuela is CUTV,
controlled equally by leftists and Communists. CUTV was
founded in 1963 as the result of a separate movement and
dissension among leftist groups. There are approximately
185 CUTV unions, with around 200,000 workers. Its governing
board is the country's brightest and best organized, with
consideerable influence over workers, including those not
affiliated with it. Its greatest influence is among textile,
rubber and metal workers in the zone around Guyana. CUTV
maintains close international relations with socialist and
Third World countries, with the Latin American Workers, the
Permanent Congress for Trade Union Unity (CPUSTAL), and the

Communist World Federation of Trade Unions (WFTU).

3. The Unions in the Venezuelan Situation

 

The influence that trade unionism has on all aspects
of political and economic life in Venezuela is unique in
Latin America, completely different from unions in the
United States.

In its position of power, it represents ninety per-
cent of all other unions organized in the country. It has
had a significant impact on the country in the last ten
years on the political, economic and social levels. In 1978,

under Venezuelan President Carlos Andres Perez, a tripartite

67

consulting commission was established, made up of the presi-
dent of CTV, the president of Fedecamaras--the key private
enterpise organization--and the Minister of Labor, to solve
problems in labor policy. CTV also has strong representation
in the National Congress; it uses this power to approve
social and labor laws, among them the "Law Against Unjusti-
fied Dismissal.”

Economically CTV is very strong, due to affiliate
contributions. CTV controls the largest-grossing bank in
the country, Banco de los Trabajadores (The Workers' Bank),
whose directors are also on CTV's Executive Committee.

CTV's president, Jose Vargas, remarked in a report
presented to the VIIIth Congress: ”In financial matters,
we must recognize that, for the first time ever, the CTV
is assured of its economic independence."32 This is im-
portant, since CTV has from its advent in 1941 depended on
the government's economic help, as well as subsidies from
smaller unions and outside donations. During CTV's Vth
Congress in 1964, the Confederation resolved to create
enterprises that generated work, social development and
housing. Thus arose first the Savings and Housing Credit
Corporation (CORACREVI), founded on September 30, 1965.
The most important financial step taken was the creation of
the Bank of the Venezuelan Workers (BTV--Banco de los
Trabajadores de Venezuela), a move backed financially and

morally by the Venezuelan government, union affiliates to

CTV, and a loan from the AFL-CIO of 27 million bolivares.

68
Based on these two enterprises, CTV has amassed an economic
empire now calculated at over 500 million bolivares.

CTV seeks out the best economic advice, then fixes
economic guidelines or publishes statements of their position
and recommendations on economic matters. Each day, the
newspapers carry examples such as the following:

The Consulting Council of the CTV this week
returns to approve a document elaborated by the
Commission of Economists which points out not
only aspects of the country's economic situation
but also gives in-depth and concrete recommmend-
ations for the restitution or compensation of the
detriorating salary of the workers as a direct
result of the high cost of living.3

Jose Vargas declared in relation to the encyclical,
On Work, by Pope John Paul II:

In the papal message, capitalism is condemned.
Man is pointed out as an end in himself, and
not a means of production.

In Venezuela, the economic policies of the
”Chicago Boys” accentuates this economic

model without even adapting it to conditions
typical of Venezuela. The president of the
CTV feels that the views expressed by the

Pope coincide with the strategy of the ob-
jectives of the CTV. Vargas states, ”The idea
is that the totality be co-ownership.”34

4. Influence of the Unions in the Political Parties

 

Internal Distribution of Power

The Democratic Action Party created CTV at the 11nd
Workers' Congress of 1947; it was declared illegal in 1949.

The union movement, pluralistic and unified under the 1958

69
democratic government, continued until 1961, when Venezuela's
socio-political conditions and the influence of Cuban revo-
lution divided the status quo parties from leftist ones,
producing the CTV. In the following years serious divisions
were produced among the workers, practically ending pluralism
in the country's extent unions. During this time, CTV has
been able to count on the moral and financial support of
Venezuela's largest institutions; it has slowly incorporated
diverse ideological and political currents and a new ex-
pression of pluralism; though lacking the profundity of the
years 1958-59, it is essential, in understanding this study,
to realize how powerfulandlus popular this union is, which
has backed the proposed codetermination law in Venezuela.

The Vllth Congress included in its Executive Committee.
besides the traditional political currents, the MAS (Movi-
miento a1 Socialismo--Movement to Socialism), a leftist
party. In the recently held Vllth Congress, other leftist
parties were included, such as the Moviemiento de Izquierda
Revolucionaria (Leftist Revolutionary Movement) and Van-
guardia Communista (Communist Vanguard). Today, therefore,
CTV represents all political parties. This is possible
only by decision of the majority party, Democratic Action,
which controls the Executive Committee, giving it the

following present structure.

70

Political Forces*

Distribution of Posts in the Directorship of the CTV

 

Principal

Com. Com.
AD 9 7
COPEI 3 3
MEP 2 2
MAS 1 ---
URD 1 ___
MORENA 1 1
MIR -- l
VANGUARDIA

CO-MUNISTA -- l

INDEPENDENTS -- 2
PCV -- ---

l7 17
*Source:

Executive

Chief
Council

45
16
10

78

Disciplinary
Tribunal

4

Revista Sobre Relaciones Industriales y Laborales

 

October/December 1981, No.

7, Caracas, Venezuela.

71

Clearly, political parties currently active in Vene-
zuela favor CTV's strengthening. If the Social Christians
sustain a minority confederation such as CODESA, it is also
true that the biggest union force in politics (Christian
Democrats) is concentrated in the CTV. Moreover, the union
faction or bureau (made up of union directors and repre-
sented in each party's national committee) of AD is the
most important, constituting a determining factor in the
AD. Finally, this faction has permitted AD to vindicate
itself and has contributed to AD's continuing strength.
despite two electoral defeats for the presidency of the
country, in 1968 and 1979. Now, with the proposition of a
new development model incorporating worker participation,
CTV continues to favor the recuperation of the AD.

Note in particular that all unions in Venezuela figure
importantly in the structure of political parties; what is
known as the "syndical faction” is made up of the union
directors and is represented in each party's National Com—
mittee. This influence increases daily and the case of the
AD is a good example; every election year, the union
fraction proposes the party's presidential candidate,
as well as candidates for the National Congress' and
senators. Many union leaders already serve in those capaci-
ties. "Worker" representatives and senators in the National
Congress use their power to approve laws in favor of the
working classes, which basically have a populist and demo-

gogic content. These include the "Law Against Unjustified

72

Dismissal” and laws concerning workers' wages and salaries.

The relationship of the internation Social Democrat's
political doctrines with AD has strengthened especially
during the sixties. One reason is that CTV maintains ties
with CIOSL, a worldwide union organization with offices in
Latin America, controlled by Social Democrats who form part
of the Executive Committee.

What will the future relationship be between Democratic
Action, CTV and the international Social Democrats? It will

center on worker participation as discussed further on.

At this point, the relationships of Venezuelan
political parties, unions and government will be examined.
The AD and the Social Democrat party of Germany, as
was mentioned earlier, have maintained close ties for a
number of years; worker participation as preached by Social
Democrats in Venezuela is the one used in the Federal Re-
public of Germany. Worker participation in Venezuela is
seen as viable in Venezuela because of the ties that already
exist between the AD and CTV. It has already been announced
that ”. . . a group of young leaders [of the CTV and AD]
have been sent to study in Germany and Israel."35
Finally, Cecilia Valente states:
The inextricable bond between labor and
politics in Venezuela is illustrated in the
unions' unique procedures for electing officers
or directors, described here by a leader
with the construction workers' union attending

an American Institute for Free Labor Development
Seminar in Front Royal, Virginia:

73

First one must belong to a

specific industry (construction,
shoes, clothing, transport, etc.).
Next, if one belongs to a po-

litical party. . . we organize

that portion (of party members)

of our industry. This group meets

in the local party headquarters, and
there the nomination of candidates

who will represent us in the industry's
general eelections takes place. The
Executive Committee is determined from
these direct and secret elections;

in the majority of cases, it com-
prises nine slots. The allotment of
directors on the union's Executive
Committee is proportional to the

votes gained by each current of
opinion, that is, each party.
Representatives to Congress are elected
in a similar manner.

 

5. The Unions' Current Situation

 

Together with their political power, the unions have
a new role in the planning of Venezuela's economic develop-
ment. This is particularly important in a country where
the private sector had not bothered in the past to improve
living and working conditions for the workers until forced
to by the pressure of collective bargaining agreements.
The public sector is equally guilty, since none of the
elected governments to date have come up with effective
solutions for the country's social problems, in spite of
huge fiscal resources generated by the country's oil and
mining industries.

Faced with this situation, CTV has proposed through

its economic assessors plans for changing Venezuela's

74
economic structure. It was precisely the unexpected and
steep rise in the cost of living that mobilized CTV at the
end of 1979; the confederation petitioned the National Con-
gress and was able to pass a law for general increases in
wages and salaries as compensation for the rise.

In August of 1981, the Consulting Council of CTV
approved a document put together by its Economic Commission.
It was an in-depth review of the country's economic situ-
ation, with detailed recommendations to correct it, among
them plans to compensate for deteriorating worker salaries.
Jose Vargas:

Venezuela is a state capitalism and
therefore one must recognize the
situation, and not try to resuscitate
Adam Smith and his classic capitalism.37

CTV's present strategy is to radically change the
structure of the state, based on a social pact and empha-
sizing the 1982 proposals. Clearly this is a political
move, since presidential elections will be held in Vene-
zuela in December of 1983. Those most interested in the
outcome are, of course, Jose Vargas, and the Democratic
Action party. It must be kept in mind that Vargas apparently
plans to change Venezuela from a capitalist-producer model
to a socialist model. He has declared: "Conditions in
Venezuela have reached such a point that one must think of
a total change in structure, a new economic model, a revo-
"38

lution, a change to socialism.

Meanwhile, it is interesting to note the rise of

75

leftist parties in unionism. Traditionally, the AD
(Social Democrats) has controlled Venezuelan unionism, but
recently, MAS (formed in 1971 after a division in Communist
Party ranks) has become a genuine force in unionism, along
with other left-leaning parties which have attained con-
siderable power wherever they operate, such as the iron
mining and steelmaking zones.

At the same time, FEDECAMARAS has adopted dialogue
rather than confrontation with the unions. The president

of FEDECAMARAS has declared:

The organized Venezuelan Empresarial
Movement is a progressive movement, Open
[to new ideas], which works for the
consolidation of an economic growth

with social justice, because we know

that with a better distribution of re—
sources and worker participation in the
resources generated by private enterprise,
we will be guaranteeing the survival of our
economic system and affirming democracy.

He further states:

We of FEDECAMARAS are convinced that a
free enterprise can not exist without

a strong and organized union movement
which is capable of discussing, of
analyzing and of coinciding [its goals]
with the Empresarial Movement whose
objectives are the most important and
transcendental of the country.

A. Current Problems in Venezuelan Unions

Venezuelan unionism has its problems: for many,
unionism has lost its position as a leader in the class

struggle and a champion of workers' rights; they see the

76

unions as appendages of the political parties, even though
this situation is prohibited by Article 205 of the Labor
Law:

Organized unions formed by the workers

may not affiliate nor ascribe themselves

to any national or foreign political party

or assoc1at10n.

In spite of this prohibition, Venezuelan political
parties control the unions, using them for propaganda and
proselytizing. Less and less workers affiliate themselves
with unions every day; some groups, of course, never have.

The most important unions, including CTV, have been
accused of becoming bureaucratic and, in some cases, of
actually selling collective bargaining agreements; this re-
fers to management arriving at an agreement with the unions
over contract conditions without consulting the workers.

In January 1982 the powerful Federation of Metal Workers
(FETRAMETAL), controlled by the AD and COPEI, received
approximately $500,000 for a contract with SIDOR (Metalworks
of the Orinoco), the most important iron processing plant
in the Orinoco State. When this fact was uncovered, the
Caracas press gave it enormous publicity because it showed
unscrupulous maneuvers by the unions. Resumen Magazine of
Caracas wrote:

The situation of FETRAMETAL is an

expression of the tragedy of the extremely

high degree of corruption and bureau-

cratization that exists in some sectors

of the workers' movement.4

CTV has been accused of intervening in unions that do

not accept its proposals or directives.

77

Another, better founded, accusation is that union
leadership does not practice internal democracy. Consider
Jose Vargas, president of CTV for seven years now; defeating
others who were never really candidates, he has tried to
create an image of an "eternal leader.“ Vargas and the
other entrenched leaders are now referred to as ”oligarchs
--from a privileged class, hyperpowerful, above the law,
and in a sense, a class Mafia.”42

Charges concerning the unions' financial activities
are stronger and easier to define. They are accused, with
some justice, of refusing to disclose their financial state-
ments, particularly to the workers whose union dues they
collect. It has been claimed that union income received

from private business goes directly into the private bank

accounts of unions leaders or to the political parties.

6. What is the Future of Unions and

 

Worker Participation?

 

The VIIIth Congress and Unity--October 1980

The 1,278 delegates who attended the Congress were
representatives of 24 regional federations, 43 national
federations, the Rural Workers' Federation, the Executive
Committee of CTV, and the Central Council of the union.

Of the 68 federations, the AD dominated with 53, COPEI
and MEP had two each, MAS had one.

78
The united platform was secured through the majority vote
of the AD. The dominant AD party was magnanimous in victory,
presenting a climate of unity and cohesion it has long
sought. A united and harmonious front within the workers'
control is now necessary in view of the newly proposed
worker participation model.

Of course the size of the majority forces favors a
union bureaucracy rather than a true representative base.
The current economic and political situation produces the
need for union unity--unemployment, high cost of living, in—
dustrial insecurity, the government's fiscal and economic
politics. . . all this requires a change of direction.

CTV's own economists, headed by Dr. Maza Zavala, presented
to the confederation's Congress a reference work which
served as an outline to the country's present situation,

Analysis and Diagnosis of Society Today. Previously,

 

through its deputies in the National Congress, CTV had
offered a new development model: FEDECAMARAS had done the

same through the Letter from Maracaibo. In return, CTV

 

called its model The Margarita Manifesto (or Porlamar), with

 

worker participation at its core. The private capital sector,
after the publication of the Letters, grew uneasy, imagining
a precise duplicate of the German model. The question was
whether the model would resemble the accords reached for

the coal and steel industries, or would it be closer to the
Law of July 1976 concerning businesses employing more than

23000 workers--which meant less participation. Would worker

79
participation include all aspects of decision making, or
would it be limited. as is the German model, to problems
and decisions at the personnel level?
The expectations for the future law were enormous, and

worker unity was a radical requirement.

Precedents for the Worker Participation Proposal

The worker participation proposal was new and sudden.
But CTV was quick to respond, and now has a Department of
Worker Participation and Development. In May 1979, a seminar
was conducted on historic models in Germany, Yugoslavia and
Israel. Reports presented at this conference were published

in Worker Participation in the Management of Enterprises.

 

A May 1980 seminar on the “University and Unionism in Vene-
zuela," proposed a commission to study worker participation
in the management of private businesses: the Department

of Worker Participation of CTV formed the commission, which

later published a report enthfled, Thesis on the Participation

 

of Workers in the Venezuelan Economy.

 

The Bases for the Model

CTV has constantly reiterated the need for economic
reform. Industrial development had been adequate for Vene-
zuela until recently, when collective bargaining arrange-
ments began to lose their power and authority. Resolution

of the problems of unemployment, industrial safety, the

80
high cost of living, etc., requires worker participation.
Workers have trained themselves to succeed in such a capa-
city. Venezuela is not ruled by pure capitalism based on
private enterprise, but by state capitalism. The state con-
trols 50 percent of the finances; in spite of this, business-
men make an estimated 2.5 times more money than businesses
in other countries, even though Venezuelan workers are
kept out of the decision-making process.

Guided by these premises, CTV concluded that the
scheme of formal democracy had exhausted itself; defense of
liberties requires a step forward, from formal democracy to
active participation.

Its construction rests on different levels. The
fundamental axis would be worker participation in the
management of all phases of production and social trans-
formation. This would entail participation beyond the eco-
nomic level to include different aspects of community life,
creating for the codetermination system a place side by side
with other political institutions. Such a transformation
would work to elevate the quality of life for everyone in
the country; the economy would be guided by the principle of
optimum social benefits taking precedence over the functions
of the marketplace or the interests of a free enterprise
system.

In the opinion of Jose Ignacio Arrieta, member of
the Executive Committee of CTV and Representative of the MAS,

the Venezuelan model for worker participation:

81

. . . would embrace therefore all the

mothers of ideas, that is to say, the

entire social life [of the country].

However, this particular proposal refers

only to a fruitful arrangement between the

CTV and business management.43

Regardless of this affirmation, worker participation

does not imply any rupture or contradiction with existing
state capitalism. In the introduction of its official
proposal, CTV states its belief that conditions of the capi-
talist system in Venezuela leave room for participation.
That is, participation is compatible with state capitalism

and the regimen of private enterprise, as shown by West

Germany.

Future Problems for Participation

Since little information is available on this point
and worker participation is not now in practice in Vene-
zuela, a full analysis is impossible. Yet since the project
has been presented by CTV, and we understand the current
socio-political context in Venezuela, significant points
can be investigated. The primary aspect is worker training.
Strong industrial unions are a fundamental condition for
worker participation, as is the formation of human resources.
Thus a massive media campaign explaining the idea of worker
participation is necessary, before the establishment of
work-councils. Workers must be educated and trained to
work out problems that will arise as participation filters

into the workplace. Another point, already mentioned, is

82
how to present the concept of worker participation; given
the model's limits; objective and mechanisms are at prresent
very generalized.

It should be remembered that the full reactions of
management have not been seen; it apparently believes that
most worker participation concepts will be applied to state-
run enterprises. But the union wishes to apply the princi-
ples to all industries and enterprises, public and private.
in the country. To do so it will probably be necessary to
create appropriate legislation.

Venezuela, like other Western countries, sees itself
affected by a new model of industrial relations one of whose
objectives is to end the historic hostility between white
and blue collar workers. The evolution of human values
during the last decades and the constant questioning of
traditional socio-political doctrines, the arrival in the
labor market of a great mass of more well trained and de-
manding workers, and Venezuela's stagnation have made an
improvement in working conditions and worker participation
in the decision-making process indispensable.

In Venezuela this is planned on a short-term basis,
using the so-called ”Theory of Worker Codetermination,”
about which almost nothing is known. The first concrete
steps, the first studies and the first attempts, have been
made by the unions. This presents a challenge for the in—
dustrial relations' professional which can be summed up in

two questions: are we prepared to confront the new labor-

83
management relationship? What will be the role of the
industrial relations manager in this scheme?

Figure 1 clearly shows how the actors with their
norms behave in the current Venezuelan model of an indus-
trial relations system. This chart will also show how the
actors previously described will be affected by the adop-
tion of a codetermination model within the economic, poli-
tical and social context of the country. It is to be hoped
that the codetermination model adopted will eventually
be applied not only to large, government-owned, public
sector industries, but also to the medium and small busi-
nesses in the private sector, modifying not only the tra—
ditional worker-employer relationships, but also the econo-
mic production scheme of the country. The graph is an

adaptation of the Dunlop model.

84

 

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Footnotes

1Maza Zavala; D.F. Benezuela: Una Economia Dependante
(Venezuela: A Dependent Economy). (Caracas Venezuela:
Central University of Venezuela. Economic Faculty 1964,
1964). pp. 19-20.

21bid.. p. 19.

3L. Allen. Venezuelan Economic Development: A Poli-
tico-Economic Analysis, (Greenwich, Connecticut: Jai Press,
1977). p. 220.

 

 

4Brito Figueroa. F. Histora Economia y Social de
Venezuela (Economic and Social History of Venezuela).
Caracas: Fundacian Gram Narscal de Apaueha, 1977). p. 105.

5Cecilia Valente. ”The Political, Economic and Labor
Climate in Venezuela.” (Philadelphia, Pennsylvania: Uni-
versity of Pennsylvania, The Wharton School-Industrial
Research Unit, 1979). p. 53.

6Allen, op. cit. p. 102.

7World Bank. World Development Report: 1982. p. 115.

 

8Hassan F. Mostafa. "Economic Growth and Employment
Problems in Venezuela. An Analysis of Oil Based Economy.”
(New York, N.Y.: Praeger Publishers, 1975). p. 41.

9World Bank. op. cit. Tables 21 and 22. pp. 151-153.
10 .
Ib1d., Table 23, p. 155.
ll .
Valente, op. c1t., p. 32.
121616., p. 33.
13Vaughan, Salas Jimenez. ”Luis Herrera Campis, debe

declarar a moratoria general." The Economic Diary. (Caracas:
May, 20, 1983). No. 100. p. 3.

14Pena, Alfredo. "E1 Gigantismo y la Paranoia Arruinaron
la Economia Brasilena.“ (Caracas: The National, newspaper,
May 30, 1983). body c.

86
Footnotes (cont.)

15M. Dreinin. International Economids: A Policy

A roach. Third Edition. (New York: Harcourt Brace
Jovanovich, 1979). p. 362.

 

l6A. Krueger. "Trade Policy as an Input to Develop-
ment.” American Economic Review. Vol. 70, No. 2, May 1980.

 

l7O. Aravjo. ”Situation Industrial de Venezuela” (The
Industrial Situation in Venezuela). (Caracas, Venezuela:
Univerndad Centrad de Venezuela. Editions of Library, 1979).
p. 34.

 

131616.. p. 37

191616., p. 33.

20Allen, op. cit., Tables 3 and 4.
211616.. p. 232.
2ZHeraldo, Munoz. (ed). From Development to Depen-

 

dency: Strategies to Overcome Underdevelopment and In-
equality. (Boulder, Colorado: Westview Press, 1981). p. 25.

231616., p. 27.

24Vergard Bey. ”Nationalization of Oil in Venezuela:
Redefined Dependence and Legitimization of Imperialism,”
Journal of Peace Research., No. 1, Vol. 16, 1979. p. 62.

 

251bid.. p. 62.

26Ibid.. p. 67.

27Ibid., p. 68.

28D. Nayyar. “Transnational Corporations and Manu-
factured Exports from Poor Countries.” Economic Journal.
No. 88, March, 1978. p. 66.

 

29Cecilia Valente M. The Political, Economic and
Labor Climate in Venezuela. (Philadelphia: University of
Pennsylvania: The Wharton School--Industrial Research Unit.
1979). p. 175.

 

 

87

Footnotes (cont.)

30Juan Garay. Legislacion Laboral Practia (Practical
Labor Legislation). (Caracas, Venezuela: Ediciones Legales
Editorial Ley, 4 Edicion, 1976). p. 42.

 

31Valente, op. cit., pp. 188-189.

32Universidad Catolica Andres Bello. Revista Sobre
Relaciones Industriales y Laborales (Labor and Industrial
Relations Reviewj. (Caracas, Venezuela: No. 7, September,
1981). p. 27.

 

 

33Rosita Regalado. "Coincidencias entre la Iglesia y
el Sindicato," El Diario Nacional (The National Daily;
"Coincidences Between the Church and the Union"), (Caracas,
Venezuela: Economics Section, November 25, 1981). p. 22.

 

34Rosita Regalado. ”La CTV y su Influencia.” El
Diario Nacional (The National Daily" ”The CTV and its
Influence”), Economics Section, Caracas, Venezuela, January
1982, p. 13.

 

35lnforme del Presidente de la CTV (Report from the
President of the CTV), Caracas, Venezuela, December 1981,
p. 31.

 

36Valente, op. cit., p. 180.

37Javier Conde. ”Para Vargas, Smith Esta Muerto,”
Diario de Caracas (Caracas Daily; “For Vargas, Smith 15
Dead”), Economic Section, Caracas, Venezuela, October
23, 1981. p. 46.

 

38”Segun Vargas en Venezuela Hay Condiciones para el
Socialismo," Diario de Caracas (Caracas Daily; ”According
to Vargas, There are Conditions for Socialism in Venezuela”).

 

39Raul Rodriguez. ”No Puede Existir Libre Empresa Sin
un Movimiento Sindical Organizado,” El Nacional (The Nation-
al, "Free Enterprise Can Not Exist Without an Organized Union
Movement”), Economic Section, Caracas, Venezuela, October
1981. p. 4.

 

40Juan Garay. op. cit., p. 50.

41Revista Resumen (Resume Magazine), Editorial, February
1982, No. 433, p. 2.

 

88
Footnotes (cont.)

421bid.. p. 12.

43Jose Ignacio Arrieta. ”Unidad, Participacion y
Cogestion,” Revista SIC (SIC Magazine; ”Unity, Partici-
pation and Management”lT November 1980, No. 429, p. 390.

 

V. CODETERMINATION IN VENEZUELA

A. Antededents

 

At the VIIIth Workers Congress in Porlamar, Venezuela
in October, 1980, the executive board of CTV issued a docu-

ment entitled The Porlamar Manifesto; containing critical

 

essays on current Venezuelan society and pointing out
serious balances in politics and social strategies. It
stated the aspirations of the workers' movement in the 805--
the creation of a new model for social development.

The document showed that factors contributing to this
inbalance were: the lowering of worker's living standards,
pronounced and persistent rise in the cost of living as sala-
ries and wages remained low, unemployment and under-employ-
ment, unequal distribution of income, a housing shortage,
and insufficient public services.

Furthermore, the report characterized state capitalism
as an extension of state domination in key economic activi-
ties in the country.

The consolidation of the situation in

the public economic sector will be a capital
entity possessing its own income, investment
potential employment, and spending power com-
parable to the private sector--and in some cases
is superior to it--and a decision-making
power over production processes, exportation,
financing, importation, greater strategic
reach--only the economic field--exercised by
the private economy, independently of the
institutional powers which it possesses as a
state to orient and regular macroeconomical-
ly the process of function and development of

the country forms the singular and dominant
characteristics of the national organization

89

90

which conditions all of the economic
arrangements in Venezuela and which can

be qualified as state capitalism. Any
projected social-economic transformation

in the country must base itself on this
reality, which undoubtedly conditions posi-
tively the developmental plans and programs
and impedes-~favorably--the attempts to
re—take the economy by the old liberal
avenues, through the absolute monopoly of
economic activities by the private sector
and the prevalence of the so-called "Free
enterprise system."

As principal mechanism for economic growth and decisive
actor in the re-distribution of income, the state has
greatly favored use of private capital (which in turn depends
on the state for certain concessions and subsidies), leaving
worker participation to one side.

Examination of the country's situation in recent
decades has shown it necessary to define a new model for
the nation's life. The starting point is democracy in all
areas: institutional, political, economic and social.

The Porlamar Manifesto expresses the belief that po-

 

litical democracy constituted a high priority objective for
the union movement from its beginnings. This explains its
alliance with other advanced Venezuelan social sectors, since
only regimes of public freedom permit a free union movement.
If this is true, current Venezuelan Democracy is insuf-
ficient. It is representative and limited, and must be
transformed into a true social and economic democracy,

an integrated and participatory democracy pushed and stimu-

lated by Venezuelan workers and their organizations.

91

A democratic society which is open,
free, progressive, and nondiscriminatory
is the most authentic and fullest ex-
pression of democracy. The democratic so-
ciety is of necessity, participatory, not
only in the sense that the citizen may par-
ticipate in the decision-making process
which controls his destiny, but also because
this process is an indisoluble part of the
social network and all its organic components.
Society's institutions participate effectively,
integrally and continually in this decision-
making process. It is therefore necessary
to differentiate clearly between a repre-
sentative democracy in which the people
periodically delegate their sovereignty,
their decision-making and their power to
control, and participative democracy in
which without a cessation of functions and
naturally active mechanisms (production and
reproduction systematically of power, con-
trol and execution) the multiple expressions
of the society reveal not only the presence
but the actions of the people. In some
ways. democracy as it is currently prac-
ticed in Venezuela continues to be repre-
sentative, and therefore not fully par-
ticipatory. We the workers proclaim the
need to go to a participatory democracy
integral to popular activity.

The Porlamar Manifesto points out the significance

 

of work as a decisive factor in economic progress; since
workers constitute the fundamental factor in the production
of goods, their participation in decisions affecting the
creation and distribution of wealth is necessary. This
means a transformation of society in which labor acquires a
new dimension through the union movement, demanding the
right to participate at the center of the entrepreneurial
arrangement system.

Organized and institutionalized worker participation

is the principle enunciated by the Porlamar Manifesto and

 

92
should be assimilated into the new model of social develop-
ment for the exercise of economic democracy. This proposal
has socio-political significance because it introduces prin-
ciples and mechanisms of participation into economics which
characterize and make possible democracy at the level of
global society.

Political democratization does not imply the elimination
of power, but rather, the widening of its base, and does not
necessitate anarchy as it does acknowledge lack lines of
command and decision. On the contrary, political democrati-
zation is true legitimatization.3

CTV has said that codetermination is compatible with
state capitalism and private enterprise, a factor which
favors implementation of codetermination. ”The strategic
nucleus of the project consists of the democratization of
Venezuelan society by democratizing the state and private
enterprise."

It should be taken into account that the characteris-
tics and general principles of codetermination do not con-
stitute a definite formula for its use. As of this writing
codetermination in Venezuela is only found as a project,
to be debated and carefully studied so that its faults and
defects are recognized. This would ease any transformation.
On the occasion of the VIIth Congress in 1980, CTV's Depart-
ment of Development and Codetermination and the Latin Ameri-
can Institute for Social Investigations put together an

important document entitled Worker Participation in the

 

93
Venezuelan Economy which served as a basis for the corres-
ponding deliberations at the congress. It contains the
general outlines of the project for worker participation in
economic arrangements and in decision-making procedures in
management. Here the document serves as a guide to dis-
cussion of characteristics and principles for codetermi-

nation in Venezuela.

1. Fundamental Basis of Codetermination Rights

In the model contemplated for Venezuela, codetermi-
nation is based on the rights of the owner and the workers
to participate in the arrangements of a company, equally
with the owners of the property, in constituting essential
elements in the production process. This right to codetermi-
nation was expressed in the following terms:

The Venezuelan workers, who
contribute the most to the production of
the nation's wealth, demand the right
to decide the destiny of their labor
and to participate in the actions of
their companies.

The right to codetermination is contrary to the model
based on co-ownership. The latter expresses the right of
workers to particpate in entrepreneurial arrangements. an

idea derived from the concept that makes workers co-owners

of a company's social capital. The Porlamar Manifesto states

 

that co-ownership is not to be confused with codetermination:

Codetermination is not aimed at
snatching (or tearing down) the pro-
perty of private owners, nor of buying
stocks, because it does not deal with

94

the lure of popular capitalism.
This has been proposed by employers
and has been defeated in many parts
of the world where its establish-
ment has been attempted.5

2. General Outline for a Global Project of Worker

 

in the Process of Decision-Making in the Economy.

 

A description of the characteristics and fundamental
principles of the general characteristics and fundamental
principles of the regime will be given. Next, ideological
pluralism and democracy are discussed. Ideological pluralism
should be reflected in the organisms of codetermination; demo-

cratic methods and principles must exist in the entire system.

a. Levels of Application of Codetermination

Codetermination as a central principal must be carried
out at all levels, including the highest levels, since it

. . . . . 6
is understood as an essential econom1c unit of product1on.

Codetermination in the Work Place.

 

Codetermination is considered necessary at this level
since one of the objectives of the proposed system is the
humanization of work. With codetermination at this level,
it becomes easier to transmit and listen to complaints,
demands or suggestions coming from the workers; their claims

can be individualized without altering labor discipline.

95
All of which will help solve immediate problems such as low
production, absenteeism, noise, inadequate illumination,
monotony of tasks, existence of dangerous or toxic substan-

CES, EEC.

Codetermination in Middle Management Levels.

 

Codetermination is considered necessary at this level
for workers to feel like more than a production factor in
the company. Codetermination at this level insures that
policies concerning personnel and human resources, do not

merely serve immediate economic interests.

Codetermination at the Highest Management Levels.

 

Where the objective is to plan an economy which takes
into account social interests as well as economic growth,
without sacrificing the former for the latter, codetermi-
nation must be integrated at the highest levels in the plan-
ning of the general economy and social policies in the coun-
try. This ensures that economic matters are not paramount,
but instead are considered alongside other national and
social issues.

Analysis of what needs to be done to implement co-
determination at this level led the VIIIth Congress to create
the National Council for Economic and Social Affairs which

stated:

96
We believe and sustain that the
principle of codetermination should
not be restricted only to the field of
business, but should be extended to
other areas of social activity and
public arrangement. It is necessary to
create the structures and mechanisms which
would make possible true participation of
organized and representative sectors of
Venezuelan society in the process of
decision-making in social, cultural and
economic policies, whether global or
sectarian in the national interest.6

This is not a new concept in Venezuela. With the po-
litical change of 1945, the National Economic Council was
created, with representation balanced between capital and
labor. In 1966, a special law established the represen-
tation of workers on the Boards of Directors of Autonomous
institutes, state corporations, and public organisms for eco-
nomic development. But several factors require a revision
of these schemes to make them genuinely effective in re-
sponding to Venezuela's current needs: the close relation-
ship between the State and private sector activities, the
need for large-scale programs and recognition of their com-
plexity, and the workers' natural inclination to avoid de-
viation in the process of socio-economic change.

Based on these considerations, aside from codetermi-
nation (understood as "the organized or institutionalized
participation of workers at all levels of decision-making in
economic activity"), the creation of a National Council for
Economic and Social Affairs was proposed, which, while recog-

nizing the legitimate function, the government, would con-

stitute a hierarchy for assessment and consultation on

97
everything related to the formulation of social and econo-
mic policies, as well as their programming and evaluation.
The council would represent capital, labor, the technical
sector, representatives of legislative power and the national
executive (Republic President). The Porlamar Manifesto
states that this council "should be able to count on suf-
ficient human technical resources to enable it to carry

out its responsibilities effectively.”7

b. The Origin of the Codetermination Movement

The proposed model attributes exclusively to union
organizations the origins of the codetermination movement.
CTV is given the right to codetermination at the highest
levels, that is, representation of the workers at top
management levels. This responsibility is shared with the
National Industrial Union and with the basic union organi-
zation (which will be solely responsible for disseminating
codetermination rights in the intermediate and lower areas
for codetermination).

The Porlamar Manifesto sets aside the idea that the

 

right of codetermination is given to representation by
election of personnel or representatives of diverse labor
categories, since both forms contribute to the weakening of
the union as a unit. The former creates double represen-
tation of workers which can cause a confrontation between
the groups. The latter may produce a weakening in the unions

by causing a large division in the hierarchy of the different

98
labor groups which still have not been able to integrate
themselves. On the other hand, increating these new forms
of representation, employers may become more meddlesome than
under normal union organization.

For these reasons, the Manifesto clearly states that

 

the union organization is the ideal leader in codetermi-

nation.

c. Role of the Union by Branch of Industry

The creation of national unions corresponding to the
branch of industry is considered a necessary requisite for
codetermination. Advantages to this include its effective-
ness in overcoming structural faults which weaken the worker
movement--for example, the existence of isolated organi-
zations conceived under the old labor-management scheme as
compromises between labor and management are not presently
integrated into the economic context of the national system.

Conscious of this unfavorable situation, union leaders
have made serious plans for changing the structure of the
unions to strengthen them and give them a greater capacity
for negotiation.

In 1977, Jose Vargas stated:

We must look at the atomization of
the Venezuelan union movement. The
presence of 800 unions in the entire
republic is not a sign of strength, but
of weakness. The little groupings in
each state, in each region, in each
industry--which met the needs of the
past--today impede the realization of

the large-scale plans of transformation
which we have made.

99

We have been waving the flag of

industrial unionization--a need not

to be postponed, and also an urgent one--
so that the working class will have the
perfect instrument with which to meet the
future. We must proceed to the reform of
the labor law in order to create unique
trade unions according to each industry.

Favorable conditions for the creation of national
unions by branch of industry:
1. State capitalism embraces such a wide range of industries
and services that it will make the creation of national
unions much easier, improving collective bargaining mechanism

and arrangements for worker participation in management.

2. The private industrial sector, which has been operating
in modern industries for the last two decades, allow the old

unionism to be restructured by official communication.

3. Existing conditions for the coming together of workers,
managers and the state have improved greatly in the last few
years. Codetermination at company level depends on the
existence of national unions since:

only this type of unionzation can achieve
among us a sufficient degree of organization,
of independence from the management and of
economic power, as to be able to exercise
codetermination.

On the other hand attaching the right of
codetermination to national industrial
unions will avoid one of the dangers
that has received major attention in
codetermination on an industrial level.
That is, the creation of a corporation
between workers of different companies
within the same industry or activity, or
the workers involved in codetermination
looking only for the interests of a small
group (themselves), losing sight of the
general class interests.

100
d. Characteristics of the Future Forms of Full Co—

determination and Partial Codetermination

Full Codetermination

 

Full codetermination applies to those companies owned
at least in half by the state. It also applies to those
companies in debt to the state and those enterprises with
more than a fixed percentage of active stock belonging to
the state, although the capital belongs legally to private
owners. The project also declares that the term "enterprise/
company” is used only in an economic sense, ignoring other,

legal definitions.

Organization of Companies with Full Codetermination

Creation of a Parity Organ (Directive Board)

 

For companies with a mixed economy, representation on
this board will be one-half state and private ownership, and
one-half worker representatives. The board will have a mini-
mum of six representatives. CTV will name representatives.

taking into account the national union by branch of industry.

Functions of the Directive Board

 

Approval of the annual budget, production plans and

collective bargaining; designation of president and managers.

101
The personnel manager must have unaminous support of the
worker representatives. The board will also decide dis-
tribution of profits, capital investment, company and basic

contract decisions.

Forms of Presidential Designation

 

The president will administer the company and sit
on the directive board, where he will have a double vote in
case of a tie. Depending on the company, the president
will be designated by competitive examination, or by the
board of directors, or by assignment by Venezuela's presi—

dent.

Within these guidelines fora new structure of public
companies based on codetermination, the project also pro-
vides for the creation of a separate, wholly union group,

which would monitor progress and control goals.

Partial Codetermination

 

Partial codetermination will be applied to private
companies, and depend on each company's characteristics. So
far, no rigid guidelines have been established. Differences
between state-owned and privately-owned companies are made
for tactical reasons: there is no essential difference be-
tween their forms of codetermination. Codetermination is

more completely developed in a state-owned company; more

102
resistence to codetermination is expected from the private
sector, and therefore implementation is delayed somewhat.

If the basic foundation of the right

of codeterminationwhhfli justifies this
project does not vary with the fact of
ownership of the means of production,
whether state or private, it is evident
that the theme should be considered with
optimum clarity in view of Venezuela's
realities and practices. At this historic
moment in our country in which principal
industries are in the State's control, it
is urgent to achieve with a short term,
full codetermination in public enterprises
as a democratization of state capitalism,
although this might not be accompanied in
the beginning by an equal amount of co—
determination in private industry. This
possibility of a defense of the current
system based on anachronistic ownership
criteria has even been admitted as a
certainty by some members of the national
company group. In that case it does not
seem practical to hold up an urgently needed
process which is possible to achieve in a
short term sacrificing the unification

of the whole system to a long and arduous
struggle.10

e. Ways to Implement the Proposed System

Legislation

 

The most important and perhaps the only way to imple-
ment codetermination is through legislation. Preserving
fundamental principles of worker participation, the law
should establish to which type of enterprise the two possi-
ble forms of participation will be applied (full or partial).
The organic law should be accompanied by various regulations

adjusting the fundamental priciples to each enterprise or

103

group of companies.

Possibilities of Experimentation in a Limited Area

 

CTV's project outlines a limited experimental plan,
introduced through legislation and implemented through
bargaining agreements, while the general system is taking

shape.

f. Training of Union Groups

It is believed that training is a critical pre-
requisite for the successful implementation of codetermi-
nation.

In order for a codetermination to be

possible, two components are required:

one, the creation of strong national

union, by branch of industry; second,

the training of union officials for

competeni participation in company

matters. 1
Workers and their directors' representatives must possess
sufficient managerial skills, technical knowledge, and eco-
nomic and political education to carry out their duties and
responsibilities in codetermined companies.

Conscious of this, CTV-ILDIS, the commission which
drew up the VIIIth Congress' report on codetermination, in-
cluded supposed guidelines of a training plan for human re-
sources for the participation of workers in matters relating

to the economy in general, and the company's in particular.

Their principal points are as follows:

104

Massive campaign

 

Directed at all workers, the campaign would produce
people who understand the fundamental ideas of codetermi—
nation and who are: capable of determining by themselves
the causes of social differences in Venezuela; capable of
discussing the fundamentalszum objectives of a codetermi-
nation regime, at a general and a company level; conscious
of their company's economic conditions and the constraints

the market places on the company's development.

Training workers for codetermination organizations

 

The project's report provides a more specific profile
of the worker's education. A worker at the national or
business managerial level in a cedetermination system must
know political fundamentals, have a general knowledge of
business administration and accounting and of relevant regu-
lations; he or she must know something of labor law and
economics, social security, and the economics of the in-
dustries in which they are employed. On a practical level,
he should be familiar with collective bargaining.

Workers who are to serve at the middle levels of the
business should have practical knowledge of the problems
in the work place, complimented by knowledge of other

areas, according to their scope of duties.

105

B. Actors in the Codetermination Project

 

Space constraints do not allow as full a discussion
of the actors' positions as is necessary to properly under—
stand the intricacies of their role in a possible co—

determination system in Venezuela.

1. Worker Actor

 

In Venezuela, 1936 marked the beginning of a tenacious
struggle for recognition of the role played by unions in
a modern society and acceptance of them as the legitimate
representatives of the workers. The movement acquired rele-
vancy and a philosophical and organizational development
during the period of restoration of an active, political and
social democracy in Venezuela, from 1945 to 1948. Then,
worker participation advocates were imprisoned, exiled or
assassinated along with member of the heroic political re—
sistance, by the military junta. With the restoration of
political freedoms on January 23, 1958, the union movement
committed itself to the structuring and fortification of
its organizations at all levels. Since that time, the move-
ment has gained both power and prestige by virtue of its
representatives' duties and the seriousness and nature of
its objectives, as well as the uncompromising defense that
it has made of the democratic system and its constant concern

not only for the strengthening of its institutions but for

106

12

deepening social and economic concerns. Particular unions

and their activities are discussed below.

a. Venezuelan Workers Confederation (CTV)

The Venezuelan Workers Confederation was founded in
1935, during the fist Venezuelan Workers' Congress; this
was the birth of the Venezuelan workers' movement. Having
discussed the history of CTV in Chapter IV, part C, we dis-
cuss here its objectives and internal structure.

CTV's objectives are to consolidate the workers' move-
ment in Venezuela, looking out for the legitimate economic,
social and cultural interests of the workers, and to col-
laborate in the structuring of branch unions, national
union federations and global ones. More specifically,

CTV hopes to raise wages, create permanent jobs, protect
national industries and lower the cost of living; it intends
large scale literacy campaigns, hoping to raise the cultural

15 CTV will lobby for advanced social

level of the worker.
and labor legislation and defend the right to organize inde-
pendent unions vis-a—vis the state, political parties

and management.

We can briefly outline CTV's internal structure. CTV's
sovereignty is rooted in the workers' congress, which meets
every three years; the congress is subordinate to the
general council which is, in turn, under the executive

committee.13

108

The National Workers' Congressl4

 

- The National Workers Congress is comprised of
the members of the Executive Committee of the
Confederation

- The members of the Disciplinary Tribunal

- The members of the General Council

- The Executive Committee of National Industrial
Workers Federation

- The Directorship of the Venezuelan Peasant
Federation

- The Executive Committee of Regional Worker Feder-
ations with one delegate for every 3,000 workers
members and an additional delegate for any fraction
thereof greater than 2,000 menbers.

At these congresses CTV authorities are elected, reports are

approved and union policy lines are drawn by the Executive

Committee.

b. Confederation of Autonomous Unions of

Venezuela (CODESA)

The origin of this confederation can be traced to
1936 with the establishment of the National Student Union
(UNE). UNE leaders, in January, 1946, founded the Committee
of Independent Political and Electoral Organization, which
is today the Social Christian Party. (COPEI)15 On July
16, 1945, Father Manuel Aguirre created the Caracas Worker's
Circle (COC) which was the Source of Christian syndicalists,

organizing nationally.

109

By 1948, in spite of the political climate, the
movement campaigned for Democrat Christian Syndicalism.

The Organized Petroleum Workers Union (STOP) and other pe-
troleum unions were founded at this time. (COC continued
to offer courses in union organization during the Perez
Jimenez regime.)

CODESA received the legitimate definitive legal
recognition before the Ministry of Labor in 1964; it is now
affiliated with the World Labor Confederation (CMT) and, at
the continental level, CUSIC (Unitary Committee for Chris-
tian Syndicalists) and the Latin American Workers Confeder-
ation (CLAT). CODESA comprises 250 unions, 11 National
Federations and seven Regional Federations.

The principal purposes of CODESA are to defend the
economic, social, moral and cultural interests of democratic
and christian workers, while maintaing, its autonomy and
following the edicts of syndical democracy. CODESA seeks
”to develop and fortify solidarity among the worker-members
and with the other workers of the world and country, es-
pecially with democratic and christian syndicalists,"16
lending moral and material support. As does CTV, CODESA
aims at creating legislation to protect the worker and
defend Venezuela from political and economic aggression.
CODESA is also concerned with the cultural and technical
education of its workers, looking forward to establishing

a labor university with worker participation.

110

Some particular CODESA proposals include establishing
and building hygenic and economic housing. An effective
agrarian reform is sought, which awards land to the peasants
and lends them technical and economic assistance. Moreover,
CODESA will demand that labor laws and other laws which
serve to protect the workers are enforced, encouraging radi-
cal changes in the current social system, to guarantee justice
and provide workers with access to all services and goods

which secure human dignity.

c. General Workers Confederation of Venezuela (CGT)

The CGT, founded in 1971 as part of CODESA, seeks
material and social gains--improved social security, medical
services, and the formation of saving and consumer co-
operatives. It has also sought to unite the union movement
to popular neighborhood movements. Actually, central CODESA
and CGT differ very little.17

The CGT organizes and co-ordinates member federations,
intervening as their representatives whenever necessary and
serving in an advisory capacity in collective bargaining
situations. The CGT maintains independence from political
parties, the government, and management.18

It proposes to unify all Venezuelan workers of poli-
tical or religious affiliations according to the princi-
ples of syndical democracy. It believes, along with CTV,

that industrial branch unions are the best way to unify

the workers. Significantly, CGT supports the economic and

111
special claims and causes of other union organizations.
Most specifically, CGT rejects speculation affecting
rents and basic necesSity items, and would encoUrage new
jobs, lower cost of living and higher wages; it supports

mandatory social security.19

d. Unitary Central Workers of Venezuela (CUTV)

The CUTV was founded in 1961 during the presidency of
Romulo Betancourt, as the result of a split within CTV into
two bands, official CTV (friendly to the government), and
unofficial CTV (opposing the government). In 1963 the
latter formed the Unitary Central Workers of Venezuela.
CUTV was re-organized in 1967, and is now affiliated with
the World Union Federation (FSM) and, at the continental
level, with the Confederation of Permanent Branch Worker
Unions of Latin America (CPUSTAL); both have communist
leanings. CUTV now comprises 250 unions, twelve national
federations, and seven regional federations, mainly in
textiles, metallurgy, banking and agriculture.

CUTV objectives include the study and protection of
its members' economic, social and cultural interests. It
seeks to maintain a spirit of solidarity and maintains and

regulates a ”resistance fund” in case of conflicts.20

112

2. Employer Actor

 

Fedecamaras (The Venezuelan Federation of Chambers
of Commerce and Business and Manufacturing Associations) is
the largest representative organization for Businesses in
Venezuela. Its members include the majority of chambers
of commerce, associations, and private federations es-
tablished in the country for the defense of private economic
interests. It was founded in 1944 and acquired legal status
with the registry in a judicial record of its constitutional
acts, organized by the Guaira Chamber of Commerce, the
Caracas Chamber of Commerce and the National Association of

Businessmen and Industrialists of Caracas, all of which

voted for a new organization which was then federated.21

On July 17, 1944 "Fedecamaras was instituted as an
open organization to engage continued search for solutions

to the national problems, and with the fundamental task

of orienting individual initiative.”22

The objectives of Fedecamaras, representing Venezuelan

business, are worth quoting fully:23

to base the harmonius development of

national economy within the concept

of free enterprise, through the defense,
impetus, and cooperation of private initiative
in progress made at the national level.

to simulate the social welfare of population,
devoting time, and effort to working in the
public interest, sponsoring social actions
programs which incorporate fundamental
development strategies. . . to work toward

the full incorporation of a provided incentive
for prosperity in different regions of the
country seeking the efective balance of

113

regional development harmonious with

the national development as a whole. .

to harmonize the varying interests of
manufacturers, businesses, and services
through intersectorial understanding,

in such a manner that the growth and
performance of the means of production
make possible the integration of the
diverse components of the national
economy. . . . to defend the democratic
system, both in the area of harmonious
productive process, and in protecting the
physical safety of the people as a cate-
gorical expression of the constitutional
guarantees and other applicable laws

of the republic. . . to declare that it
is the duty of all to lend the support
and sustenance necessary for the perfection
of the democratic system as a valid alter-
native for the full realization of the
human being and the efficient development
of our society on the bases of equality,
justice and mmuty. . . to perfect and
encourage business organizations in the
country so that they may make an even
better contribution to the task of
increasing and improving productivity,
raising the social level of the populace
and the locales or areas in which they
conduct their activities so that the
country may become less dependent on the
economies of other countries.

Serving in the capacity of mediator among the dif-
ferent general interests represented by its constituents
and appearing before the relevant authorities, Fedecamaras
hopes to promote worker-manager understanding within the
law, respecting the rights of both parties.

Fedecamaras created a body of doctrine over its nearly
forty year history, including declarations and charters
justifying private property and the scope of business from
an early economic nee—liberalism through economic ”develop-

mentism" to nationalism as the nucleus of managerial

114

philosophy and the 1980 Maracaibo charter.24

Some aspects of the Charter of Maracaibo interest
us, as the main concepts of private enterprise which de-
fine the objectives and strategies of this in economic,
social and political areas. The charter considers private
enterprise, in pan; a sacred constitutional right, allowing
for an individual's freedom to make decisions regarding his
destiny. Private enterprise is a characteristic of the

capitalist system and market economy which Venezuela is

25

developing. Moreover, it considers the business union

responsible for joining the workers, as the true wealth of
the nation, to effect production. The function of adminis-
tration the charter suggests, is inherent in the role of

the businessman and implies setting goals, the executing

duties and applicating pertinantprocedures.26

Regarding the relation between the employer actor and
the worker:

As the factors of production become
sufficiently organized, conflicts for
the distribution of the social product
are reduced. . . . The social reforms
which have been oriented to the transfer
of the work force toward greater par-
ticipation on the national income, must
be examined within the broad context
which takes into account not only

the affects of a rational redistri-
bution of income, but also the morale
that a better salary may instill in a
worker. From the stand point of dis—
tributive equity, it is advisable to
promote a greater participation of

the workers in the generation of income.
For this, adequate mechanisms should be
adopted which pose no obstacles to the
national production.27

115
Fedecamaras, with the Confederation of Venezuelan
Workers, has enacted guidelines to assure cooperation on
diverse social and economic issues, combined actions of the
institutions will furnish ideas and other valuable con-
tributions, strengthening the social order and encouraging

investment; joint action will also facilitate understanding

in the private sector.28

As far as collective bargaining is concerned:

The fortification of collective
bargaining contracted in good faith
and carried out in like manner with
conviction that has the force of law
is without doubt the best and most
effective remedy to the welfare-state
and paternalistic solutions to worker-
management problems and demogoguery
in whatever form, which have a broad
scope of action in the socio-economic
situation of the workers. Collective
bargaining is in this sense, irreplace-
able in assuring a clear understanding
among the great factors of economic
progress and social advancement.

Regarding understanding among the different sectors
of society, the Maracaibo charter states:
In order to carry out its plans for
development, our pluralistic society
requires a concerted effort and an
untiring search for understanding among
the various components of society,
without one becoming the vassal of
another, and without losing sight of the 30
greater interest of the national welfare.
FEDECAMARAS is currently comprised of 261 affiliated
organizations representing: agriculture, banking, construc—
tion, energY. cattle trade, industry, mining, insurance,

transportation, broadcasting and business.

116

3. Political Party Actor

 

Since CTV has proposed that codetermination be es-
tablished by law, political parties and their parlimentary
representatives will act decisively in the codetermi-
nation process. The parties are the key organization in
Venezuelan politics. They have led the way in the creation
of the current pluralistic democracy and serve importantly

in recruiting for government posts, effecting transfers of

power and forming public policy.31

Since it came about under their auspices, the union
movement is dependent on the parties. This dependent re-
lationship between syndicalism and the political parties
was summarized by Ramon Selva:

The political parties of a Marxist
orientation which gave rise to the
union movement, were the force that
first instilled in worker organi-
zations and especially in their leaders
the dependent nature of syndicalism

on the political parties. The dic-
tatorships later re-inforced this
process of politicization of the
unions. Union leaders thus played

a double role in union activities
while struggling for liberation from
dictatorial regimes while being trans-
formed into political-union leaders
and later into parliamentarians and
syndicalists,

For all their militancy, the political parties of Venezuela
comprise diverse sectors of the population, including the
working class. This has led the parties to elaborate union

principles directly linked with their party ideological

117

lines. These principles are known as the "Union Theses”;

 

formed to guide union activities in economics, politics,
society and education, they sometimes become part of adminis-
trative policy.

This last fact is of particular interest to the pre-
sent study, since no Venezuelan political party, with the
exception of Accion Democratica, has elaborated on the
Union Theses; the principles have not been systemized but
are reflected in various documents, drawn up, in some cases,
for plenary union meetings. These documents may come to be
structured as a single union thesis.

We have restricted the study of the parties to a
review of governmental programs and the union theses to de-
termine whether they contain positions on worker partici-
pation in business administration, which may be disposed
to CTV thought. We concretely review documents of the seven
most representative parties of the country, on the basis

of the party lines in the 1978 presidential campaign.

a. Democratic Action Party (Accion Democratica)

As stated earlier, the only party which has drafted
a union thesis is the Democratic Action Party which drew up
a union thesis in 1959 and more recently in 1980. It pre-
sents a position favorable to codetermination summarized

here.

118

From the time of President Raul
Leoni's adminstration, our struggles
for working class participation in
State politics have resulted in legis-
lation for labor representation in
businesses and entities in which the
state hold more than 50 percent of the
stock. . . . [This] has failed to yield
positive results in the executive boards
of state enterprises and economics
organizations.

In order to reach the objective of
worker codetermination the working class
should prepare its union officers to carry
out the codeterminant administration,
because to base its unionism solely on
economic gains, without adopting the
role of actors in an economic process in
Venezuelan society, it will be incapable
of undertaking such a demanding and
fundamental task as shaping the new
Venezuelan society for which we are fighting.
Wprker codetermination is a project which
may be realized within the framwork of
classical capitalism. A precedent has
already been established in certain western
countries, and in Venezuela, according to
our idiosyncrocies, by conducting a pilot
experiment, for example, in accordance
with our habits and customs, by assimi-
lating experiences without trying to
produce carbon copies of others, we can
achieve this, as we become prepared and
trained by study, discipline and obser-
vation and by registering as a reality
the desire for involvement and the eco-
nomic enjoyment of the workers as well
as contribute to social welfare through
worker codetermination.

b. Social Christian Party (COPEI)

In the document entitled ”Worker and Liberation Move-
ment,” COPEI acknowledged the workers' goal of a reformed
means of production which includes self management.34 The

party's views were also expressed by 1978 Presidential

119
candidate Luis Herrera, in the following:

Worker organization will be stimulated

by better representation of their interests,
participation in decision making, and social
transformation.

The wealth re-distribution policy should
guarantee a just participation of all
agents of production, especially that

of labor. A fund will be created for

the promotion of worker enterprises. The
regional worker participation in the pro-
priety and administration of the enter—
prises will be the decisive factor for

the access to the incentives granted by the
State.36

c. Socialist Movement Party (MAS)
At their national convention in March 1979, union
directors of MAS drew up a document containing proposals

from Toward a New Majority, by the party's political di-

 

rector Pompeyo Marquez. This document expressed the
following:

It cannot be overly stressed that,

for the MAS, the salaried workers of
the city, country, of science and cul-
ture, constitute the main interest of
its activities. . . basing this con-
clusion on the vision of a socialist
society in which the producers are
creators of the social wealth, who
should determine the final destiny of
these riches, and therefore should be
the axes of government and the adminis-
tration of the country and be the key
factors in social self-management, and
self government of the people.

In discussion of new labor legislation, MAS has further
maintained that worker participation implies the incor-

poration of codetermination.38

120

d. Leftist Revolutionary Party Movement (MIR)

This party published an important document entitled

"The Bases for MIR Union Policy" which was revised without
any proposal for codetermination as such in the adminis-
tration of the business. However, during the 1978 campaign,
MIR made the following rather vague pronouncement regarding
its program for the workers:

An economic organization oriented

on new bases requires that the workers

participate fully in the administration
and management of the businesses.3

e. Peoples Electoral Movement Party(MEP)

This party released an important document entitled
"Union Doctrine of the people's electoral movement party”
which was edited together with the party political program
for the 1978 elections; they contained no reference to

worker participation in business administration.

f. Republican Democratic Party (URD)

This party did not formulate a party line in the
1978 elections; in working papers and guides to which we
were able to gain access, we found no proposal for worker

participation in business administration.

121

g. Venezuelan Communist Party (PCV)

At the Sixth Communist Party Congress, entitled
”The Program,” stating party lines on various issues in-
cluding union policies, was edited without any pronounce-
ment on worker participation in business administration.
Likewise its governmental programs for the 1978 elections

had no such proposal.

In December, 1983, Venezuelans will choose a new
government for the country for the next 5 years. The
political parties have presented their platforms to the
electorate; only two of the parties have a chance to win
the election, the Social Democrats (AD) and the Democratic
Christians (COPEI). Only the social democrats include the
idea of a codetermination system in its platform, the so
called “social part” (pacto social). The general secretary
of AD, Manuel Penalves, in an interview, said that ”.
codetermination is an agreement for production which will
be more social; it is part of the social pact."40

Another interesting opinion was from the temporary
president of CTV, Ismario Gonzales, who is also a member of
the Politic Bureau of AD. He said that ”Codetermination is
in the program of AD and it has the support of National
"41

Worker Movement.

On the other hand Eduardo Fernandez, General Secretary

122
of Democratic Christian Party (COPEI), said that the ”Co-
determination topic had its origin in democrat christian
thought and it has been realized in fine form during the
democrat christian goverment in Germany. Here we are the

42 But the democrat christian

pioneer of codetermination.”
platform, the "Economic Challenge,” (Elreto Economico) does
not mention codetermination.

The election will be determined soon; the most re-

43 AD 40%; COPEI 27%;

cent polls show the following division:
Other parties 37%. The two principal candidates for the
president are Rafael Caldera for COPEI and Jaime Lusinchi for
AD. Rafael Caldera was former President of Venezuela from
1964 to 1969 and his party is currently in power. Jaime
Lusinchi is the candidate for AD and in spite of Venezuela's

present economic conditions (the Bolivaire has just fallen),

Lusinchi has the best chance of winning the election.

123

Footnotes

1Confederation of Venezuelan Workers: Porlamar
Manifesto. (Porlamar, Venezuela: October, 1980) pp. 12-
13.

 

2Ibid.. p. 80.

3Schneider-Deters, Winfried. "Direction of Democra-
tically Legitimate Enterprises in Societies with a Pre-
dominantly Capitalist Sociao Economic Order." Worker Parti-

 

cipation in Business Arrangements in Venezuela. (Maracaibo,
Venezuela: University of Zulia. Dept. of Social Economic
Science, Busienss Studies Center, 1980) Vol. I. p. 9.

 

4Confederation of Venezuela Workers. Worker Parti-
cipation in Venezuela Economy. (Porlamar, Venezuela, 1980).

p. 4.

 

 

SCTV Porlamar Manifesto. ob. cit. p. 3.

 

6Worker Participation in Venezuelan Economy, op.
cit. p. 11.

 

7CTV Porlamar Manifesto, ob. cit. p. 81.

 

8Speech given by the President of CTV at the full
session of the Municipal Council of the Federal District,
on the 40th anniversary of the confederation (40 years of
the CTV), published by the Municipal Council, 1977. p. 6.

9CTV Worker Participation in Venezuelan Economy, op.
cit. p. 15.

 

10lbid., p. 17.

11ibicl.. p. 7.

12Confederation of Venezuelan Workers. Diagnostic and
Analysis of Actual Society. (Porlamar, October, 1980).
p. 109.

 

 

13The CTV: History and Fight. ob. cit. p. 3.

14CTV Statutes. ob. cit., p. 11.

124

Footnotes (cont.)

15Chen, Chi-Y1: Economia Social del Trabajo. (Caso
de Venezuela), (Caracas: 1969). p. 259.

 

16Confederation de Sindicatos Autonomos de Venezuela.
CODESA Statutes. pp. 5-8.

 

17Lestiene, Bernard. E1 Sinicalismo Venezolano (The
Venezuelan Unionism). (Urso de Formacion Socio-Politica 26)
(Centre Gumilla, Caracas: 1981). p. 14.

 

18General Workers Confederation of Venezuela. CGT
Statutes. p. 2.

19lbid., pp. 3-4.

20Instituto Nacional de Estudios Sociales (INES).
CUTV Statutes. Taken from the magazine "Unionism in the
World.” No. l4. Department of Documentation and Diffusion.
(Caracas: 1973) Art. 3. p. 2.

 

1Risquez, Elba. ”La Federacion Venezolana de Camaras
y Asociacionis de Comercio y Produccion.” Serie de Publi—
caciones, Pelaciones Ifidustriales en Venezuela. Publicacion
especial de la Catedra de Organizacion Patronal. Separata II.
Centra de Estudies Profenionales de Relauones Industriales,
N.C.A.B. Farultad de Arencias Economicas y Sociales. Excuela
de Cienuas Soaales, Caracas, 1978. p. 1.

 

 

221bid.. p. 5.

Z3FEDECAMARAS. ”Un Sentimiento Nacional” (A National
Feeling) (1944-1981). p. 8.

 

24Risquez, Elba. ob. cit. p. 11.

25FEDECAMARAS. The Maracaibo Charter. (Maracaibo:
August, 1980). p. 11.

 

26lbid.. p. 12.

27Ibid., p. 78-79.

28lbid.. p. 79.

125
Footnotes (cont.)

29lbid.. p. 80

30lbid., p. 90.

31Gil Yepez, Jose Antonio. "El Reto de las Elites,”
Editorial Tecnos, S.A. Madrid, 1968. p.'26.

 

32Silva T. Ramon: Introduccion a1 Estudio del Sindi-
calismo Venezelano. (Instituto nacional de Estudios Sociales,
Departamento de Documentacion y Difusion, Caracas: 1968).

p. 2

 

 

33Accion Democratica, Secretaria Sindical Nacional,
Proyecto Tesis Sindical, (Caracas, Eneso, 1980). pp. 21-22.

 

34Gonzalez, Dagaberto. El Movimiento de las Traba-
jadores y la Liberacion. Edicianes de la Fraccion Parlamen-
taria del Partide COPEI (Caracas: 1978). p. 23.

 

 

35Partido COPEI. Programa de Gobierno frava I
perioda 1974-1983. Publicacion del Partido Socialcrustiano
COPEI. (Caracas: 1978). p. 23.

 

 

361bid.. p. 24.

37Partido MAS. Las Nuevas Tareas en I Movimiento
Sindical. Publicaciones del a M.A.S.

 

 

38Partido MAS. Programa de Gobierno del MAS y su
condicato presidencial el Dr. Jose Vicente Rangell Publi—
cacion del MAS Caracas, 1978. p. 31.

 

 

39Partido MIR. Programa para Transformar a Venezuela.
Publicaciones del Partino MIR. Caracas. Junio.ll978.

 

4OThe Venezuelan President governed with the party
that it carried him to the power. The National Newspaper.
Junio 26, 1983. p. D-4.

 

41The Tributary Reform and the Codetermination Will
Have Priority in the Lusinchi Government. The National
Newspapere. July, 4, 1983. p. C.4.

 

 

126

Footnotes (cont.)

42Caldera will do a government with National Amplitude
and he will renovene the Venezuelan democracy. The National

 

Newspaper. July, 10, 1983. p. D-4.

 

43”ULA Survey.” The World (Caracas) September 28.
1983. p. l.

VI. IMPLICATIONS OF THE CODETERMINATION SYSTEM

A. Workers/Managers

 

The new model of codetermination would radically
change traditional industrial relations in Venezuela.
The system's actors would have to modify their behavior and
relationships according to the new juridical order which
would guide their rights. The legislative process through
which the future law must pass before being approved may
contemplate each actor's status so that a legal code would
be created establishing appropriate rights and obligations
for various possible situations; this must be uppermost
in the minds of the legislators in order to prevent future
problems. A model such as the German Works Constitution
Act could be taken as a reference point, with legal modi-
fications applied for the Venezuelan work environment where
it would be used.

Since little information is available on this point
and worker participation is not in practice in Venezuela
at this time, a full analysis would be extremely difficult
to carry out. However, since the project has been presented
by CTV and a great deal is known about the socio-political
context operating at this time in Venezuela, it is possible
to point out a few aspects.

The primary aspect is the training of the workers.

If one fundamental condition for worker participation is

127

128
the creation of strong unions in industry, the other and
equally important condition is the formation of human re-
sources. It would be necessary, therefore, to implement
a massive campaign using the news network, in order to ex-
plain the idea of worker participation; this would happen
before the setting up of worker councils. It is necessary
to educate or train workers, to give them the knowledge
to work out problems that arise as the participation is
filtered into the workplace.

Another point, already mentioned, is how to present
the concept of worker participation, since the model pre-
sently is very generalized in reference to its limits,
objectives and mechanisms. Using Germany as a reference,
worker participation is limited to personnel problems; eco-
nomic matters are handled only if they fall within the area
of immediate impact on the workers. However, the CTV pro-
ject includes workers in financial decision-making.

But if it is necessary to educate or train the worker,
it is also necessary for companies to train their managers
and personnel executives, to accustom them to the new co-
determination model. Companies should plan courses which
adapt their personnel executives to the new reality of in-
dustrial democracy. Courses designed and taught by spe-
cialists and instructors will help break the traditional
barrier between executive and worker, and will achieve
harmony between the two groups with a common objective in

the company. Courses in quality of work life, sensitivity

129
training, organizational development and organizational
behavior are appropriate here. Studies done in countries
in which codetermination models already exist suggest good
relations and good communications between labor and manage-

ment are keys to success in this area.

B. Education

 

One of the most important aspects of the codetermi-
nation model is education. It plays an important part in
the success of codetermination in any country: in Venezuela,
the project as proposed does not include any educational
guides for workers who will participate in the decision-
making process.

In all the information collected for this study very
little written work was found on how education would be in-
tegrated into the Venezuelan codetermination model. Ap-
parently neither the unions nor the companies have given
thought to the role that education would play for the
workers' representatives in the councils or decision-
making areas of companies.

Without adequate education, workers would find them-
selves at a great disadvantage in giving opinion or voting
on difficult issues. Moreover, it is hightly debatable in
that case whether they could make their wishes understood.
This would be especially serious in a confrontation with
management, trained in universities or specialized insti-

tutes; it would in effect, undermine codetermination.

130

Differences in habitual forms of address or lack of pro-
cedural knowledge could diminish the efficiency of the in-
teraction between workers' representatives and management
directors.1 Polish workers' representatives have complained
that documents presented at work councils contain too many
statistics and not enough analysis, and are written in a
complicated language which some members of the work council
can not easily understand.2 The importance of worker edu-
cation as a prerequisite for successful participation in the
decision-making process has been recognized and stressed
by all interested parties.3

The problem of education and worker participation is
not new. Many authors have stated and underlined its im-

portance for industrial democracy. Viklund wrote in Cur-

rent Sweden, that ”the willingness and ability of union

 

members to assume responsibility and exercise their demo-
cratic rights are directly related to the state of their
knowledge."4
The former president of the Trade Union Federation
(DGB), Ludwig Rosenberg, has pointed out that, "in order
to take on responsibility and achieve real codetermination,
one must have or acquire the necessary knowledge."5
Rosenberg maintains that effective codetermination requires
”special economic and business knowledge,” and that unions
"cannot ever do enough to counteract, through their own

educational work, and the extension of school education,

including economics, the privilege which such knowledge

131
gives to certain circles. . . For knowledge is power--and
power without knowledge is blind and dangerous."6

The International Conference on Trends in Industrial
and Labor Relations, held in Montreal in May 1976, con-
cluded that

it has become commonplace to stress
the crucial necessity of education for
employees as well as for management in
the area of participation; you cannot
participate if you cannot get meaning-
fully--with knowledge--involved in the
decision-kmaking process.

The West German model is instructive here. Extensive
educational and information programs concerning codetermi—
nation which have been in existence for some time now
have clearly contributed to the success of the system,
enabling workers' representatives to participate effectively
on workers' councils and supervisory boards, where they have
apparently managed to match the interests of the enterprise
as a profit-making institution with those of the workers
and society as a whole.8

Foreign visitors to companies in the Federal Republic,
particularly those coming from developing countries, are
often struck by the fact that work council members have a
profound knowledge and understandingcfi?the economic situa-
tion and possibilities of their enterprise.9
.10
Rudolf Maenker.

In order to give workers this formation,
the German unions, as much the DGB--the
organization--as the diverse unions asso-

ciated with it, have created a broad net-
work of formative institutes which offer

132
everything from evening courses for
groups, to weekend seminars, up to
short courses in the unions' schools. 1
and dlplomas from spec1allzed academies.
Consider Table 1.

At the same time, the state gives workers incentive
to pursue these courses, and has laws which make this kind
of education mandatory. In some parts of Germany, special
leaves of absence have been legally institutionalized. The
leave of absence permits the worker to be excused from his
job while he participates in a course of professional in-
formation, whether offered by a union or a political party,

12 While West

and his employer continues to pay his salary.
German unions have assumed the major responsibility for
training workers' representatives, employers have also in-
troduced educational programs, somewhat in competition.13
Charles D. King points out that the union programs
include some advanced and special education which can be
extremely beneficial to labor representatives, especially
training designed for representatives to the boards of co-
determined companies.14
Training needs of workers' representatives for par-
ticipation vary depending on the educational standards of
workers, the level and scope of participation and the type

15

of industry where the participation is exercised. Ger—

many, for example, according to the World Development Re—

16

search (1982), the adult literacy rate is 99%. One con-

clusion is that, although the West German training pro-

133

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134
grams are less extensive than other countries, they can
reach higher goals because of the West German worker's
higher levels of primary and secondary education.17
Another important aspect in the issue of education

is what kind of training the workers need for good parti-
cipation. Olaf Lind18 says,

the total need for training comprises

activities in the following fields:

knowledge of the act and adjacent labor

law, attitudes and valuations regarding

participation, co-operation ability, and

all kinds of business 08erations and

managerial activities.1

As was mentioned before, CTV's project in Vene-

zuela makes no mention of the steps necessary for the
training and education of workers in general nor of union
directors on the theme of codetermination. Under these cir-
cumstances, which can be considered a key to the success or
failure of the future model in Venezuela, some suggestions

arenmde here which could be incorporated into a legal

code.

General Aspects

Given Venezuela's political and social history, it
seems more reasonable to introduce codetermination through
legislation rather than through the efforts of collective
bargaining. Following the approval of the new law (signed
by President of the Republic), two years should elapse.

During this period, the actors in the system--union members

135
and company executives--would train and prepare their
representatives. At the same time, the state would initi-
ate a campaign on a national level to explain the charac-
teristics of the system. Courses, seminars, and conferences
would also be held to disseminate the information to the
largest possible audience.

The scope of the law concerning education needs seri-
ous and long-term planning for its training programs. The
subjects for which education and training may be required
for effective participation of workers' representatives in
various consultative bodies such as works' councils and
their subcommittees (safety, economics, training, etc.)
may cover a wide range, but are mainly related to the actual
functions of these bodies.20

Courses which deal with worker participation could be
incorporated into university level classes in such areas
as business, economics, psychology, industrial engineering,
economics, psychology, industrial engineering, and, of
course, industrial relations.

For workers and union officials who do not have the
opportunity to attend university classes, the ”Institute
for Union Training” will be founded which would have the
status of a college in the U.S. and whose programs would
last two years. This institute would be for the forma-
tion and training of workers' representatives, and would
be underthe supervision of the Minister of Education,

as are all educational systems in Venezuela.

136

The legal base of this institute is already a part
of the National Constitution, in Article 78, which states:

Every person has the right to an education.
The State will create and sustain schools,
institutions and services sufficiently equip-
ped to assure access to education and culture.

The Sixth National Plan for 1981-1985 which is the
planning instrument for the Venezuelan state, decrees:
”Education in rural areas, frontier zones, and marginal
areas of urban zones, and directed at adults, will receive
preferential treatment.”22

The ISCS (Superior Institute for Union Training) will
have as a basic objective the formation of worker leaders
in general, to train and prepare them for worker councils
or boards of directors. The institute will have pro-
fessors recognized in their fields, and will invite national
and international experts to explain current labor philoso-
phy and its application in the world.

Following the ideas of Professor Jecchinis, the pro-
gram will have a core of advanced courses designed to equip
workers with the necessary managerial skills required for
effective decision-making in management.23

A tentative outline of courses is as follows:

First Year

 

First Semester

 

Labor Law
Rights and Duties of Workers under the
Co-Determination Law

Knowledge of Basic Economics (1)

137
Knowledge of Basic Accounting (1)
General Business Operations including
Techniques in Sales
Safety and Health Regulations and Methods of

Preventing Accidents and 111 Health

Second Semester

 

The Functions of Government Departments and
Official Institutions

Evaluation of Personnel Policies including
Manpower planning and Training

Communications and Persuasion Techniques

Economics (11)

Accounting (11)

Appreciation of the Role of the Improved Working
Environment on Worker Satisfaction, Industrial

Peace and Increased Productivity

Second Year

 

First Semester

 

Productivity Techniques
Organizational Psychology
Evaluation of Personnel or Industrial
Relations Department Functions and Policies
Organizational Behavior
Comparative Industrial Relations Systems

(Seminar)

I38
Evaluation of Balance Sheets, Financial State-
ments and Investment Plans and Reports;

Statistics

Second Semester

 

Organizational Development

Appreciation of Production Plans and Reports
Assessment of Technological Change and Automation
Quality Work Life

Collective Bargaining (Seminar)

Basic Understanding of Systems' Analysis

To achieve greater interest and participation from
the unions, directors of the institute will have a repre-
sentative of CTV on their board. This representative, along
with one from the Ministry of Education and from the uni-
versities, will make up the institute's directorate.

CTV, along with the government, will contribute financially
to the support, maintenance and function of the institute.

Students will be worker representatives or union of-
ficials. This is not mandatory, however, as any Venezuelan
citizen over the age of 18 who has a high school diploma
will be eligible for admission (Venezuela has an adult

literacy rate of 82%).24

The program will be free, as are
the other educational institutions in Venezuela (elementary
schools, high schools, and universities). The students may

also receive scholarship support which will come from the

139
unions (50%) and companies (50%).

With the expansion of an educational program, the
number of workers who want to receive training for a rela-
tively long period of time (two years) will increase. At
the same time, the program will follow one of its final
objectives, which is the elimination of the traditional
educational differences between company managers and worker
representatives, as well as the traditional hostility be-
tween these two groups: it is this lack of knowledge which
has caused hostility in the past. In other words, education
can form a bridge between these two sectors, who have
not wanted or have been unable to communicate in the past,
so that they can arrive at agreements for the common

good of both workers and companies in Venezuela.

C. The Role of the Personnel Manager

 

The surge of hundreds of diverse industries in a
country where no economic or human resource planning had
existed before, made the need for planning and administra-
tion of these resources even more important. At the same
time, and as a direct consequence of the need to put these
matters into the hands of experts, departments of industrial
relatives, or personnel or human resources began to appear.

In Venezuela, the arrival of foreign books dealing
with this new concept distrubed the business world. In
many quarters it was understood that personnel manage-

ment did not consist solely of elaborating payroll lists

140
and making payments to social security: it was an increas-
ingly complex activity. The Chief of Personnel could no
longer pretend to be simply a friend to all; he needed to
have a great deal of knowledge to perform his job well.
The work was so complex that it could not be absorbed by
the general manager or an administrator, as had been done
previously. In some companies, especially those who had
always been in the vanguard of business or those with
connections to multinational corporations, a new status
position was created: Manager of Industrial Relations.
An underlying cause for this movement was the fact that the
economic health of the companies depended (and depends)
upon policies of personnel management and an understanding

of those policies.

1. Origins of Industrial Relations in Venezuela

 

As mentioned previously, industrial relations in
Venezuela areclosely connected to the economic model es-
tablished in the country in 1958; particularly in the pe-
troleum sector. Before that, however, North American and
British oil companies had already established personnel
offices and were, actually, the pioneers in Venezuela in
the use of personnel techniques known and used at that time.
The oil companies put into practice personnel offices with
their own subsystems and applications of the most advanced
knowledge and skills of the time, in three areas: 1)

personnel administration; 2) labor relations; 3) human

141
relations.

These personnel offices had (and still maintain) to
some degree these characteristics, since they were original-
ly given the same hierarchy and importance.

It is important to note that the office of Human
Relations also included what is known today as Public Re-
lations. The important office of Labor Relations, then
as now, dealt with all employer-employee relations and
relations between union and management, as well as studies
and discussions of contracts, collective bargaining, and
union-administration relations. Labor relations offices
had an outstanding growth and influence, perhaps giving
more attention to collective bargaining because of the
strong position of the unions in Venezuela. The origin of
unionism itself in the country is tied to the origin of the
petroleum industry--oi1 unions continue to be the strongest
in Venezuela.

At this time, the first collective contract in the
petroleum industry was signed, in May of 1945, containing
nine clauses and stipulated that the contract run only
five months.25

As a consequence of collective bargaining, businesses
in other sectors were creating their first personnel of-
fices. The people in charge of them had little of this new
area and often did not have a university education, but got
along with workers, could organize the companies; social

functions as well as perform the basic functions of making

142
up the payroll lists, carrying out the companies' responsi-
bilities with Social Security, and elaborating the annual
reports that are mandatory under the law. These functions
were far removed from all creativity and the basic functions
usually found in personnel sections. It is important to
point out that the so-called ”head” of Personnel's authority
was quite limited, since the general manager reserved for
himself decision-making power in many areas: new personnel,
promotions, wage increases, firing, and the administration
of "justice" that, according to the characteristics of the
company, ranged from fluapaternalistic to the autocratic in
style.

This situation was completely different in other
countries. Outside of Venezuela, the importance and rele-
vance of industrial relations to the administrative process
was known, recognized, and given the position it deserved
within the enterprise.

The evolution of industrial relations in Venezuela
was strongly influenced by the foreign companies that still
operate there, particularly North American ones, such as
Ford, General Motors, Westinghouse, Intenational Harvester.
Sears Roebuck, IBM, Xerox, DuPont, Goodyear, Procter and
Gamble, and Exxon. These companies practiced their ad-
ministrative policies, including those concerning per-
sonnel and human resources. It is necessary to recognize
that these companies urged industrial relations on Vene-

zuela through their systems and procedural manuals. But

143
it is equally important to point out that many of these
ideas were brought from the companies' headquarters, i.e.,
the United States, without considering whether these sys-
tems were valid or practical in another country which had
its own characteristics and idiosyncracies. Also, no
studies were made prior to a possible application. For
example, the psychological testing often used was designed
for the American work environment; its results and interpre-
tations were not valid for the Venezuelan environment. This
confirms the position taken by author Wendel L. French, in
his commentaries on the validity of the testing.26

However, in spite of criticisms, these companies
(especially the petroleum companies) contributed greatly
to industrial relations.

During this period of growth in industrial relations
in Venezuela, another change was occuring—-a new use of
lawyers as chiefs of management. This marked the beginning
of a new period. The problem was that the lawyers quite
naturally concerned themselves primarily with, legal as-
pects such as collective bargaining contracts, and defense
of company policy in labor board hearings called to con-
sider the firing of one or more workers. As a result, in-
dustrial relation's departments became more and more ”le-

galistic," neglecting personnel functions.

144

2. Growth and Importance

 

As was noted before, the economic growth of the coun-
try and the influence of foreign companies added importance
to industrial relations boom. With the growth of strong
unions over the last twenty years, personnel areas were
amplified. In spite of this development, the power and
authority of the Personnel Manager remained as limited as
it had been in the past.

During this period, new problems appeared in the Vene-
zuelan economic environment, felt through foreign and do-
mestic companies, particularly in their personnel offices.
Absenteeism, turnover, the hiring of qualified workers.
training, new social laws, and the ever-increasing power
and influence of the labor unions had a dramatic impact.

In the late seventies, the unions, federations and
confederations developed a political character and often
functioned as extensions of political parties. In return
for union support, the parties were expected to advance the
unions' positions which would in turn facilitate the
bargaining process.

In the face of this ”new” situation, the companies
realized the need to reorganize their personnel depart-
ments. The old ones could no longer deal with the fast-
paced changes taking place. Ironically, they turned to

the personnel manager, hoping he could effect quick and

145

economical change. He was seen as a kind of "savior,” or
"hero of the day” but this ”hero" possessed neither the
knowledge nor the resources to confront the new panorama.
Despite the bleak situation, something positive remained;
businessmen looked on the personnel managers with new
interest.

At the same time, the official sector, consisting of
state-owned and operated institutes and organizations.
began to copy the structures of private industry, by cre-
ating their own personnel offices in ministries and state
companies. However, the government offices had one pe-
culiarity lacking in the private sector. The position of
Personnel manager was highly politicized, making this per-
son a key man for the party of the government in power,
rather than a professional with skills in this area. What
is important, however, is that at least a personnel office
had come into existence on a government level.

All this is brought to bear on the work of human
resources mangement, which becomes more complex and di-
versified each day. This is reflected in the education and
the formation of managerial careers. Studies in business
administration were begun in 1955 with a course entitled
"Personnel Administration," offered by the University of
Carabobo in its School of Sociology. Later, Andres Bello,
a Catholic University, featured a similar course of study.

Only these two universities grant degrees in Industrial

146
Relations in Venezuela. In the last five years, the trade
schools have offered classes for an associate degree as a
Technician in Personnel Administration. This surge in the
specialty of industrial relations is a consequence of the

demand that has occurred in the market place.

3. The Relationship Between Industrial Relations

 

Management and the Unions

 

The situation for the Industrial Relations Manager
is doubly complicated. It is not only the union with which
he must negotiate, but also the political party behind the
union, which is usually the party that controls the nation-
al government. This means that the Industrial Relations
chief needs to have special skills as a negotiator and
diplomat. Consider the following case.

The political power of the union confronts a business
in a simple labor relations problem by calling for a work
stoppage. As a condition or point of honor, they ask that
the Industrial Relations manager or even the General Manager
of the company be removed. In this way they force the com-
pany to negotiate under pressure because the union's claims
officer and the representative of the Conciliations's Office
of the Ministry of Labor are alsg members of the same po-
litical party.

The influence of the political parties over unions

is a factor of considerable weight in the management of

147

industrial relations in Venezuela. It distorts the ob-
jectives of business and their personnel policies for
workers. This theme is underscored by Arthur M. Whitehill:

Like all social institutions, this pro-

cess influences and, in turn, is con-

ditioned by the economic, social, po-

litical, and legal aspects of the en-

vironment within which it operates.

Venezuelan Unionism presents a challenge for the
future for industrial relations. More than that, it is a
new concept and a new model for industrial relations whose
objective is to end the historical hostility between white
collar and blue collar workers.

Although the labor-management relationship in Vene-
zuela is characterized as non-conflictive, in the last
few years, there has been a wave of strikes and work stop-
pages that have seriously affected production, as is re-

flected in the report of the Ministry of Labor (see Table

1).

4. Laws and Implications

 

It is within the system of industrial relations that
the role of personnel manager is strongly influenced by
legal limits and social pressures. This materializes in
work laws that the personnel manager must know, study, in-
terpret, and apply correctly as one of the most important
functions of his department and of the company. In Vene-

zuela, the relationship between the law and the personnel

148
manager can be said to be borne out of the work laws them-
selves. Article 25 of the Work Law Regulation states:
Those in charge of industrial relations,
personnel, or those who exercise ana-
logous functions, must be Venezuelan
[citizens].

Additionally, following the 1961 Constitution, nu-
merous laws and decrees have been issued which further regu-
late work, workers, and labor conditions (see Table 2).
The Venezuelan labor sector has thus evolved into a com-
plex and sophisticated system. The Ministry of Labor, in
a document dealing with collective contracts, describes
the development:

In the course of 40 years of collective
labor agreements, the legal treatment

at the highest legislative level has

gone forward on an uneven course: ab-
stract and ambiguous at the start; more
definite in later periods; silent in

less remote times; and openly and clearly
defined as of the present.

The industrial relations manager must deal with these
legal limits. It is included in his work system through
state control. The authority of the company in worker re-
lations was previously unquestioned; today it is limited.
This coincides with what Peter Drucker has said in re—
ference to entrepreneurial society and pluralism:

Since the beginning of the century,

the importance of business has decreased
constantly, not because the firm becomes
smaller or weaker, but because the re-
maining institutes have grown much more

rapidly. Society has thus become a
pluralist entity.29

149

5. The Future of the Unions and Industrial

 

Relations in Venezuela

 

Venezuelan unions present a new style in the relation-
ship between management and unions, now and in the future,
and in which industrial relations will be affected and
destined to complete an important mission. This new re-
lationship is worker codetermination in the economic di-
rection and administration of companies, a system already
in use in some countries. In Germany, as we have seen, it
seems to have had positive results.

In Venezuela, there is no direct participation of
workers in the administration. Although the workers'
profit-sharing systems affects all sectors of the economy,
the law explicitly states that this does not imply labor
participation in the management of private corporations.

This does not hold in the case of state companies, a
category which increased considerably in the 19705. 1966
legislation provides that organized labor must be repre-
sented on the board of directors of all autonomous state
institutions, economic development agencies, and enter-
prises in which the state holds all, a predominant per-
centage, or a majority of shares. The director in question
is selected from a list of five submitted by the most
qualified or most important confederation, federation,
or union in the industry concerned. In practice, it is the

leadership of Venezuela's most powerful federations or CTV

150
who sit on the state enterprise boards.

At its annual meeting in 1980, CTV issued its own
manifesto. Codetermination has become a hallmark not
only of the social and political struggle; it signals a new
power structure that sustains Venezuela's unions. The
unions hope to practice codetermination at all levels of
the Venezuelan economy, official and private. As a first
step, they hop to change the relationship between public
enterprise and the unions. The directors of the largest
workers' headquarters in the country believe codetermination
must be instituted in the domestic economic scheme. That
is, state workers would not simply be salaried personnel,
as are those in private enterprise, but also public ser-
vants. Because the state dominates seventy percent of the
economy, it would then be easier for CTV's leaders to im-
plement worker codetermination in Venezuela.

CTV's president, Jose Vargas, believes that since the
state dominates seventy percent of the national economy,
certaincnndnjons already exist to apply codetermination
using an adequate model. With the state as principal po-
ssessor of increased values, the relationship of give-and-
take would transfer from union-business to union-govern-
ment.

This theory raises pertinent questions. After the
introduction of codetermination, would the new labor-
management relationship be different from the traditional

one? Would the role of the personnel manager grow stronger,

151

or would it weaken under the new regime?

6. Important Gains for Industrial Relations

 

in Venezuela

 

Many authors have written about the validity and
current position of the industrial relations manager in
our times. They describe his work as necessary in better
effecting the wide variety of laws and regulations relative
to labor-management relations, health and welfare, legal,
and societal influences. This is particulary valid in the
Venezuelan environment, where the industrial relations
manager must visualize and confront any problem. This means
that personnel departments will have to develop more tho-
rough means of discovering what future problems will be,
rather than waiting for their arrival when it may be too
late.30
One should not be too optimistic about contributions
to research which could increase the importance of the in-
dustrial relations manager. Referring to this, Thomas H.
Patten, Jr., states:
Personnel research may be defined as
equivalent to Industrial Relations re-
search: it is concerned with the analy-
sis of problems, policies, programs,
and procedures that center around and
grow out of the employer-employee re-
lationship.3
Patten cites the contributions of large companies in

carrying out personnel research in the U.S. This, lamen-

tably, does not occur in Venezuela; organizations are more

152
anxious to make profits than to invest in human resource
research.

The importance of an organization's personnel pro-
fessional depends greatly on the level in which this work
is carried out, the company's ph11050phy, and if the per-
sonnel professinal is a generalist or a specialist. The
many roles that the personnel professional can assume in-
clude different and diverse functions in the organization;
he will be able to move from member of the board of di-
rectors or general manager, to consultant or representative
of the company in the public or private sectors.

Venezuela, like other Western countries, sees itself
affected by a new industrial relations model whose ob-
jectives are to end hostility between white and blue col-
lar workers. The evolution of human values during the last
decades and the constant questioning of traditional socio-
political doctrines, as well as the arrival in the labor
market of a great masscfi'better trained and more demanding
workers, have produced the need for improvement in working
conditions and for worker participation in decision-
making.

In Venezuela this is planned on a short-term basis,
using the so-called "Theory of Worker Codetermination.”

The first concrete steps have been taken by the union sector.
This presents a challenge for the industrial relations pro-
fessional: Is he prepared to confront the new labor-
mangement relationship? What will be the role of the in-

dustrial relations manager in this scheme?

153
Table l
LABOR CONFLICTS BY BRANCHES OF ECONOMIC ACTIVITY

FOR THE YEAR 1980

 

 

 

Branch of No. of Labor Affected Man-Hours Lost
Economic Interruptions Workers

Activity

Agrigulture,

Forestry & 2 298 28,448.00
Fisheries

Minining

Exploration 3 119 5.83
& Quarries

Manu-

facturing

Industries 47 23,513 2,015,693.53
Construction 22 12,786 55,537.20
Commerce 19 1,472 25,915.00
Transpor-

tation, Ware- 35 16,091 215,423.06
housing,

Communications

Services 17 4,628 58,207.50
Gas, Electri-

city & Water 1 45 375.00
Non-Specific

Activities 49 9,012 122,875.10
TOTAL 195 67,964 2,523,058.19

 

Source: Memorandum and Report. Ministry of Labor, 1980.

 

154
TABLE II

MAJOR LEGISLATION AFFECTING LABOR IN VENEZUELA

 

Labor Law (Ley del Trabajo), 1936, 12 amended in 1945, 1947,
1966, 1975, in effect in 1978.

 

Decree No. 1563, Regulation of the Labor Law (Reglamiento
de la Ley del Trabajo), dated December 31, 1973, effec—
tive February 1, 1974, replacing Regulation of 1938
and Regulation of Labor in Agriculture and Animal
Husbandry of 1945.

 

 

Law of June 21, 1954, creating the Institute for Training
and Recreation of Workers (Instituto para Capacitacion
y Recreacion de los Trabajadores).

 

 

Decress LaW' No. 440 of November 21, 1958, on collective
agreements by industry (Decreto-Ley sobre los Con-
tratos Colectivosypor Ramas de Industrias).

 

 

Educational Cooperation Law (Ley sobre el Instituto Nacional
de Cooperacion Educativa) of August 22, 1959, and
its Regulation, providing for on-the—job training.

 

 

Law of November 18, 1959 (Ley Organica de Tribunales y Pro-
cedimientos), establishing labor courts and procedures.

 

 

Law of July 14, 1961, providing that wages and 'benefits
due a worker are entitled to a privileged lien on
the personal property of the employer.

Social Security Law of July 11, 1966 (Ley del Seguro Social).

 

Regulation of December 18, 1968, on industrial safety and
hygiene (Reglamento de las Condiciones Higienicas
de Seguridad en el Trabajo).

 

 

Decree No. 585 of April 28, 1971, to issue regulations re-
specting Civil Service Unions (Law of Administrative
Career).

Decrees No. 122 and 123 of May 31, 1974, establishing a
national minimum wage of Bs 15 daily, and providing
for general increases in wages for all workers earning
up to Bs 5,000 per month.

Law Against Unjustified Dismissals of August 8, 1974 (Ley
Contra los Despedidos Injustificados), and its Regu-
lation.

 

Decree No. 877 of April 22, 1975, and its Regulation, pro-
viding for systematic apprenticeship of nunors within
enterprises.

155

7. The Personnel manager in a Codetermination

 

System.

German Experience

As we have noted, in a codetermination system the
Labor Director or Personnel Manager is critically import-
ant. Only a few authors deal with the development and
background of those men in charge of industrial relations
in German companies with a codetermination system.

First, consider that codetermination law arose
in Germany from the size of its unions. Labor Directors
were established in the West German mining and steel pro-
ducing industries by the Condetermination Act of May 21,

1951.32

A labor director, responsible for personnel and
social affairs, must sit on the executive board. The co-
determination act made him the workers' nominee: he could
be appointed or dismissed only with the consent of the ma-
jority of worker members on the executive board. This
caused heated discussions for many years. The 1976 Act
extended codetermination at the company level to all com-
panies with more than 2,000 employees; it also provides
for a labor director but puts him on the same footing as
the other members of the management board, i.e., he is ap-

33 In

pointed by the majority of the executive board.
practice, he is almost always chosen from a trade

union slate, by worker members of the board, who usually

156

renounce entirely their right to influence the choice of
the other directors.34

The executive board appoints or dismisses the labor
manager (like that of the other members of the executive
board). Under the co-management act, this decision may not
be taken against the will of the majority of the workers'
representatives.

Another important point is that under the law the
term of office of executive board members is five years,

renewable at will.35

According to Adams & Rummel, the labor
director's position is one of the most difficult in the
German network of participation. The labor director is
charged by law with carrying out his managerial function

36 Since

in the best interests of the firm as a whole.
he is chosen by workers he is theoretically subject to
extensive loyalty conflicts, but most labor relations di-
rectors have resolved this by functioning as responsible
managers rather than as worker agents per se.37
Another author, W. Albeda, remarks that choosing these
personnel directors has posed a special problem: ini-
tiative is with employee representatives on the company
council, though so far no candidates have been nominated
against management wishes. As for the role and the actions
of personnel director's role, apparently difficulties which
arose shortly after this position had been established by

law have been overcome; the personnel director is now fully

integrated into management; King and Jecchinis agree that

157

38 But there is

loyalty conflicts have been largely solved.
some dissent on both sides: according to the Biedenkopf
Report some stockholder representatives maintain that manage-
ment is not homogeneous because of the special way in which
the personnel director is appointed. Employer organizations
also feel that in the case of parity representation on
supervisory boards, the institution of a labor director,
who in their view is a worker representative, violates the
fundamental principle that economic relations must be con-
ducted by two independent parties. The critical point to
consider is that employers see the labor director as a trade
union man while the unions consider him an employer, with
the same rights and responsibilities as other employers.39
Because these labor director managers have largely
adopted a role similar to other topmanagers, some critics
have suggested that from a worker's perspective. the po-

40 Others point out that peOple

sition has been a failure.
should not be expected to represent and negotiate purely
for worker interests at the top management level. Rather
the aim was to ensure that right-thinking people with
humanistic values would be placed at the top level of day-
to-day managerial decision-making. If this modest ob-
jective is accepted, then the office of labor director has
not been a failure.41
It could be argued, by someone who would not like to

admit that codetermination can work in other countries, that

codetermination has helped Germany to achieve results which

158
other trade union movements have already taken by other
means. H.A. Clegg divides the argument into two parts.
The first concerns tmrmxmel management. Before the war
personnel management in Germany was both primitive and
authoritarian. Since the war it has made important strides
to catch up with America, Britain and Scandinavia. Be-
cause of the emphasis given to personnel management by ap-
pointment of a labor director and because of resources which
have been put at the disposal of labor directors, coal, an
more especially steel industries have been in the vanguard

43

of this movement. Clegg points out that few labor direc-

tors have used their powers to support the interests of
labor to the obvious detriment of the firm.44
One of codetermination's critics, Alfred L. Thimm,
cannot effectively support his view of the role of labor
director, because his criticisms are limited to the par-
ticular case of the close relationship between a union
member or a political party member and the labor director,
but this relationship of influence is possible in any kind
of system, and is not peculiar to codetermination systems.45
We consider the Biendenkopf Reports' definitive con-
clusion that "the much discussed conflicts of loyalty. .
in so far as they ever existed, have disappeared in more

”46 Labor Directors, when interviewed by the

recent years.
commission, asserted that a conflict of this kind no longer
exists because "TMnr[the directors] would resist all pres-

sure from the outside." Their good contact with trade

159
unions were said not to make their work more difficult, but
on the contrary, to contribute greatly to the good will they

claimed to enjoy among workers at the shop level.

8. The Future Role of Personnel Manager in Venezuela

 

Under Codetermination

 

The position of Personnel Director or Industrial
Relations manager in a codetermined business is a challenge,
an extrewmely difficult position in which to succeed.

Even though data is scarce on this point, it is possible to
assert that the position of the labor director in a co-
determination enterprise will be more difficult than in a
traditional enterprise. It will also be more powerful and
carry more status.

In the particular context of Venezuela, there is no
history of labor directors appointed with union acceptance.
The proposed codetermination bill in Venezuela has one ar-
ticle stating that the appointment of a labor director must
have the approval of worker representatives on the board
of directors.

Consider the characteristics a labor director need to
have to perform well. He needs protection from the pres-
sures of powerful groups like the unions, stockholders and
board of directors. This pressure needs to be considered
as the bill is being prepared. In a few words, the law must

define the requirements for the position of labor director.

160

Some of the Requirements That The Law Must Have

1. The Labor Director must be a Venezuelan citizen.

2. He or she needs to have a degree in Industrial
Relations from a well known University.

3. He or she needs to have a minimum of 5 years of
experience in a position of Industrial Relations
Manager.

4. The duration of hhvher duty will be 5 years.

5. The appointment will be made by vote of the
majority of the Board of Directors.

6. Dismissal for cause will be by vote of the
majority of the board of directors.

7. The areas of responsibility of labor manager

will be:
a. labor science
b. health and safety
c. personnel administration
d. training and promotion
e. manpower
f. welfare
g. wage and compensation and incentives
h. collective bargaining
i. other services.

If one accepts the above approach to company-staff
relations, it is clear that personnel management will repre-
sent a major aspect of company policy, fully as important
as sales, production and finance.

Thus, it covers a far wider field than what is usually
known in the industry as "personnel work.” But other im-

portant duties are common to the monotonous job, such as

161

consultation with staff representatives on all personnel
problems. Such consultation or better yet thorough dis-
cussion at an early stage of all present and impending per-
sonnel problems, has proved particularly fruitful. Some
authors say that a conflict of loyalties begins here, but
that now the personnel director is ”fully integrated" in
the mangement and that special conflict of loyalties has
been almost entirely solved.47

Thus, in the long run, the interests of both sides
merge, even though on a day-to-day basis there may be dis-
agreements as to what the workers want and what the organi-
zation can do. The labor manager is, of course, a manage-
ment official and as such must rise above day—to-day con—
tingencies. This may occasionally lead him to oppose un-
reasonable claims outright, in the name of a higher in-
terest.48

The position of Personnel Director under a codetermi-
nation system gives a new dimension to the industrial re-
lations field. It offers a challenge, for people to believe

in a new and more equitable relationship between the workers

and employers.

162

Footnotes

1Legendre, M. ”Quelques aspects des Relations Pro-
fessionnelles" (Some Aspects of Professional Relations)
(Paris: Service d'Etudes pour le Developpement et l'ani-
mation, 1969), p. 26. Quoted by Kenneth F. Walker, in
Participation of Workers in management Arrangements: Prob-
lems, Practices and Perspectives (Berlin, February 1967).

 

 

2Walker, Kenneth F. Participation of Workers in man-
agement Arrangements: Problems, Practices and Perspectives.
Instituto Internacional de Estudios Laborales, 2:26, Feb-
ruary 1967.

 

 

3Jecchinis, Chris. ”Education and Training Require-
ments for Workers' Participation in Mangement: The Ex-
periences of Austria, Denmark, Germany-BRD, and Sweden,”
Inrternational Industrial Relations Association. paris.
France. September 1979, p. 2.

 

4Grange, Sanderson, ed. Industrial Democracy Today:
A New Roel for Labor. New York: McGraw-Hill,ERyerson Ltd.,
1979, p. 179.

 

 

5Rosenberg, Ludwig. ”Codetermination, Socialism and
Education,” The Labor Gazette (Ottawa, Canada, March
1977). Quoting C. Hecchinis, "Education and Training
Requirements for Workers' Participation in Management,”
(Paris, 1979), p. 2.

 

6Grange, op. cit., p. 180.

7International Conference on Trends in Industrial
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by R. Blanpain, quoting C. Jecchinis, ”Education and
Training Requirements for Workers' Participation in
Management." (Paris, 1979), p. 2.

8Jecchinis, op. cit., p. 3.

9Schregle, Johannes. "Co-Determination in the Fed-
eral Republic of Germany: A Comparative View," Internat-
ional Labor Review, vol. 117, l: January-February 1971,
p. 88.

 

 

163

Footnotes (cont.)

10Rudolf Maerker is a social scientist with the
Friedrich-Ebert Foundation, and author of the book, Co-
determination: A Model for Liberty.

 

11Maerker, Rudofl. Co-Determination: A Model for Lib-
erty. Bonn, Federal Republic of Germany: Friedrich-Ebert
Foundation. 1977, p. 73.

 

121bid.. p. 75.

13King, Charles D., and Van de Ball, Mark. Models
of Industrial Democracy: Consultation, Co-Determination
and Workers' Management. Great Britain: Mouton Publica-
tions, I978, p. 161.

 

 

l4lbid.. p. 162.

15Jecchinis, op. cit., p. 3.

16World Bank. World Development Report 1982. London:
Oxford University Press, 1982, p. 155.

 

17King and Van der Vall, op. cit., p. 162.

18Former Managing Director of thw SFO (Bargaining
Organization of Swedish State-owned Enterprises).

19Lind, Olaf. ”Training and the Swedish Law on Employee
Participation in Decision-Making."

20Jecchinis, op. cit., p. 5.

ZlConstitucion de la Republica de Venezuela (Consti—
tution of the Republic of Venezuela). Caracas, Venezuela:
Editorial Ramor, S.A., p. 15.

 

22y; Plan de la Nacion - 1981-1985 (Sixth National
Plan: l98l-l985), Caracas, Venezuela: Taller Grafico do
Cordiplan, 1981, p. 27.

 

23Jecchinis, op. cit., p. 5.

24World Bank, op. cit., p. 155.

164

Footnotes (cont.)

25Revista de Relaciones Industriales y Laborales.
Caracas, Venezuela. UCAB, January-March, 4, p. 21, 1981.

 

26Wendel L. French. The Personnel Management Process,
4th Edition. Boston, MA: Houghton Mifflin Company, p. 237.

 

27Arthur M. Whitehill. Personnel Relations: The Human
Aspects of Administration. New York: McGraw-Hill Co., 1955.

 

 

28Cecilia M. Valente. The Political, Economic and
Labor Climate in Venezuela. Philadelphia: University of
Pennsylvania, The Wharton School-Industrial Research Unit,
1979. p. 108.

 

 

29Peter F. Druker. La Gerencia: Tareas, Responsabili—
dadades y Practicas. Buenos Aires, Argentina: Editorial
Ateneo, 1976, p. 5.

 

 

30George S. Odiorne. ”Personnel Management for the
'80's.” The Personnel Administrator, 24, 12, December 1979,
p. 78.

 

31Thomas H. Patten, Jr. Classics of Personnel Manage-
ment. Chicago, Illinois: Moore Publishing Co., 1979, p.
591.

 

32Friedrich Furstenberg, ”Codetermination and Its
Contribution to Industrial Democracy: A Critical Evaluation.
Industrial Relations Research Association Series, p. 186,
Sept. 5-7. 1980.

 

33Johannes Schregle. ”Codetermination in the Federal
Republic of Germany: A Comparative View.” International
Labor Review, Vol. 117, No. l. p. 83, January-February, 1978.

 

 

34”Zenin Jahre Mitbestimmung” p. 255. quoted in R.J.
Adams & C.H. Rummell. Workers' Participation in management
in West Germany: Impact on the Worker, the Enterprise and
the Trade Union. Industrial Relations Journal, Vol. 8.
No. l, p. 12, I977.

 

 

 

3Slungblutn, Adolf. "The Role of the Labour Manager
in Undertaking Under Co-kmanagement in the Federal Republic
of Germany.” Internationa Labour Review, Vol LXXVIII, No.1,
p. 374, October, 1958.

 

165

Footnotes (cont.)

36See Codetermination Act of 1951. Section 13.
Companies Act. Sections 76 and 84.

37Teuteberg, H.J. "Die Geschicte der Industmeden Mit-
bestmanung in Deutschland.” p. 177, quoted in Workers' Parti-
cipation in management in West Germany: Impact on the Worker,
the Enterprise and the Trade Union. Industrial Relations
Journal, Vol. 8, No. l, p. 12, 1977.

38Albeda, W. Participation in Management. Industrial
Democracy in Three West European Countries. Rodterdam Uni-
versity Press, 1973. p. 27.

39Johannes Schregle. op. cit., p. 92.

40R.J. Adams & C.H. Rummel, op. cit., p. 12.

411bid., p. 12.

42Charles D. King and Mark Van de Vall, "Models
of Industrial Democracy. Consultation, Codetermination and

Workers' Management.” Great Britain: Mouton Publishers,
1978, p. 84.

43Clegg. H.A. ”A New Approach to Industrial Democracy”
Oxford: Basil Blackwell, 1963. p. 56.

 

44lbid., p. 54.

45See Alfred L. Thimm. The False Promise of Codetermi-
nation The Changing nature of European Workers' Partici-
pation. Massachusetts: Lexington Books, 1980. pp. 116-117.

 

46Malles Paul. The Institutions of Industrial Relation
in Continental Eurqpe Labour Canada Research and Development
December 11, 1972. p. 187.

47Clerec, J.M. ”Participation in management” Workers'
Participation in management, some preliminary considerations.
Rottendam University Press. Publications of the Netherlands
Industrial Relations Research Association (N.V.A.) Vol. 1
1973. p. 27-28.

 

48Jungbluth, Adolf. ob. cit., p. 387.

166

CONCLUSION

The various conclusions reached in this work are not
definitive, but contribute to a beginning of the research
into this special field.

The actual and short-run possibility of implementation
and adaptation of a codetermination model in Venezuela,
through legislation, represents a tangible proof of the in-
fluence of worker organization on unions in achieving their
goals.

This work shows that, in the political-social context
of Venezuela, the unions have a tremendous influence in the
normative social context, which is affected by group in-
terests by the strong pressure that unions are imposing
on the passage of a codetermination bill in Venezuela.

The importance of the influence of Venezuelan politic
parties over unions and vice-versa has also been demonstra-
ted; each exerts influence and pressure according to its
respective interests. Also, in this context, it is im-
portant to point out the influence of international ideolo-
gies, the social democrats, christian democrats and so-
cialists, over Venezuelan political parties, which are af-
filiated with different ideological trends in the world.

As an example of the latter point, demonstrated in
this study is the German case, which showed strong influence
of unions in the social-polital environment of that country,

leading to the approval of the first codetermination model

167
in the world. Consequently this points out the charac-
teristic of unions as a political instrument in the class
struggle.

After an analysis of the different actors in the Vene-
zuelan model-~the unions, political parties, economic sec-
tors and the state (in its role of government)--we demon—
strated the vital dependence of the national income on the
oil resources, with the state as the largest employer, so
that the principal characteristic of the nation's eco-
nomy is state capitalism. This has made the Venezuelan
economy one of dependence and, as we saw, underdevelopment.

This study has identified the actors in the future
codetermination model for Venezuela. They are the econo-
mic groups, political parties and unions. A description of
their principal characteristics is included as well as their
position in the codetermination project for the country.

Aside from discussing relevant and historical points,
the present study has described specific steps that have
been taken toward the implementation of the codetermi-
nation project in Venezuela. There is a brief forecast
produced of the system implications over the industrial
relations system, and more specifically, of the important
role that education will play, and the new status for per-
sonnel managers.

We can group our final conclusion into two cate-

gories; specific and general.

168

Specific

a) With respect to the foundation of the rights of co-
determination we find that the worker actor, with his union
association as well as those of political parties, tends
to support the CTV proposal, because the workers need to
have a more active role in the decision-making process.
Workers feel that the human capital is the most important
factor in the productive process.

On the other hand the private sector opposes the CTV
proposal because for them it means the deterioration of the
right to private property; they believe it is exclusively

part of the owners' capital.

b) With respect to the levels of application of the co-
determination system, the union actors and the political
parties actor concur on some points of the CTV proposal:
codetermination needs to be applied in the work place and
at the managerial level. On the other hand the owners dis-

agree with this position.

c) As to codetermination as a way to democratize the eco-
nomy, the actor Fedecamaras is completely negative: they
consider that democracy is strictly a political term and
that it does not have a role in the economic environment.
"Economic Democracy” should only mean a worker share owner-

ship program.

169
d) One positive step pointed out here is the creation of
unions for different branches of industry. With reference
to this point the political party actor has neither agreed

nor disagreed; Fedecamaras disagrees with the move.

e) On the same note the unions and political parties
agree that the codetermination system does not imply de-
terioration of the reformist function of unions collective

bargaining.

f) Likewise it is evident that the future of a codetermi-
nation system for Venezuela will be determined by legis-

lative action, through the collective bargaining process.

g) With reference to training of union officials, the three
actors concur that increased training is necessary for more

productive participation in the codetermination process.

General

We have analyzed those factors which have had vital
influence in the initiation and expansion of the codetermi-

nation project in Venezuela.

a) There exists a homogeneity in the unions and political
parties with respect to the form and rights of the co-
determination system. According to them, the importance of
the human factor and its influence in the productive

process through worker participation in the decision-

170

making process is fundamental.

b) International social democratic ideas and the German
model of codetermination have produced a tremendous in-
fluence over the international workers movement, particu-
larly as it involves codetermination; it has especially
affected Venezuela unionization. This influence shows the
powerful political and social impact we attribute to ideo-
logical positions as an instrument of class struggle and
specifically as an instrument of the workers' movement.
The latter has had a.reflmmust influence in the development

of politic parties.

c) The level of education of worker representatives, par-
ticipating in decision-making will fundamentally determine
the project's success. The level 0f education in the worker
sectior must increase; this is possible through a special
educative plan. This plan will be especially designed for
an increasing participation level of the worker repre-

sntatives on the board of directors.

d) Likewise, the role of personnel manager or director of
industrial relations under a codetermination system acquires
new dimension as it changes from the traditional industrial

relations model.

The new industrial relations manager, under codetermi-
nation, needs to establish a role as communicator and coor-

dinator of workers' feelings and of the enterprise's

171

necessities. For this new role, his preparation must have
a new focus, different from traditional concepts of indus-
trial relations and with an essentially humanistic approach.

In conclusion, the new codetermination model will
influence the sub-system of industrial relations with a new
democratic focus. But a project of this magnitude and
transcendence subjects itself to open and profound public
criticism and must call to its support all national sectors
through a spirit of open-minded negotiations and con-

census .

172

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