/ The following has been translated from the French publication Sous le drapeau_du SocialismeWe understand that this is the first English translation of this particular document. Needless to say, although this law was actually approved in June last year, it was not put into operation due to the Soviet occupation of Czechoslovakia. We feel that this document is of some importance because it is indicative of the process that was unfolding within Czechoslovakia which prompted the Soviet invasion. The translation was done by M.Rosa. Editors._/
STATUTES OF THE WORKERS' COUNCILS
Provisional legal framework for the establishment and control of the activity of collective structures for democratic control and managerial structures in enterprises. (Approved by the Czechoslovak Government 6.6.68).
The complex process of the renewal of our economy demands the activity and initiative of all enterprises; they must now become autonomous subjects, responsible for their economic activity - not merely objects of control as they have been,
The creation of Workers! Councils as democratic and collective structures for control of the enterprise is an important gauge of whether the enterprise is autonomous and whether autocratic methods of control have been eliminated. The existence of Workers' Councils is proof that the workers are both socialist producers and joint supervisors, directly interested in the firms prosperity. The workers will, consequently, participate in the orientation of the firm's economic policy as well.
The setting up of Workers' Councils does not merely indicate that an important stride has been made towards democratisation of the management and control of firms. Their creation will also ensure a high quality of control, will reinforce tha authority of the management and will put the enterprise on a firm footing.
In the setting up of Workers' Councils all spontaneity must avoided - it is necessary to proceed in a conscientious and organised way so that the democre~tisation of control is ensured continuity and results in a renewal and consolidationof the firm's internal and external relationships. Responsibility must be assumed by the firm's managers and by the nowly-established Workers' Councils; both are agents for guiding and controlling the economy. Workers' Councils are created in the interests of the Workers. Consequently the setting up of these Councils must be effected in close collaboration with the unions,
The setting up of Workers' Councils and the new system of management must in this first attempt, be observed in practice before being regulated by law (anticipated for the end of this year.) An integral purpose of this draft bill must be to inspire the new regulations for the management of business, as well as regulating the judical aspects and methods of control of State enterprises. Concerning the setting up and control of the activity
of collective structures for democratic control and management structures in firms, the Goverrment publishes the following provisional laws (subject to modification in practice):
1. In accord with the principle of the collective ownership of the means of production, the socialist enterprises act independently, one with the other, as units of production in the service of the collective (within the framework of the above principle). These units comprise a Workers' Council 2 being the agency for the democratic control of the firm, and a management, exercising managerial functions. 2
2. The management includes the director and his assistants and, in some firms, higher administrative staff. The composition of management, when proposed by the director, must be approved by the Workers' Council. Those in management must not be, on principle, members of the Workers' Council.
The director regularly takes part in meetings of the Workers' Council. The powers and responsibilities of the director, in all matters not within the Councils' preserve, remain the same.
3. The director of the firm guides and carries out the firms policy; he defines its development programme, organises market surveys, and the firms adaption to these. He sees to any modernisation necessary for the highest quality in production, and to the technical standard and the selling terms of products.
He guides and rationalises all activity within the firm and he creates a rational system of inter-relationships. He solves any problems relating to administrative staff and collaborates with those organs of the Party and the unions with whom the firm draws up any collective agreement. He is answerable to the Workers' Council for all his activities .
4. The Workers' Council, while keeping in mind the conditions of industrial work laid down by the government, decides fundamental guestions relating to the development of any enterprise; in particular the following:
te} the whole conception of the development of the enterprise.
b) the principle orientation of investment activity and investment
projects.
(c) the principles of any formation and division of gross revenue
(including those relating to shares in economic results)
(4) fundamental measures relating to the method of management, org-
anisation (including management's agenda) and the firms internal
relationships.
(e) an end-of-year balance sheet of the firm for which, usually, a
report by an independent agency (e.g. an authorised auditing
office) will be required.
The Workers’ Council can ask that management present other major basic . problems to it. The Council makes decisions on a simple majority of those present.
5. Management is obliged to apply the Councils' advice in concrete decisions. If the Council's view-point is not in accord with the proposals of
management, management must present the scheme again for discussion. If agreement between them cannot be reached, management continues along the lines of its initial proposal. As for large investment, the Council can exercise its right of veto, if such projects are considered too risky or particularly if they threaten the positive growth of wages. In such cases the veto must be approved by two-thirds of Council members. During discussion of the end-of-year balance shect, the Council evaluates managements’ activities.
6. The Workers' Council settles the following questions:
(a) appointment and dismissal of (i) the director (after close con-
sultation with a higher body) and (ii) the director's assistants
(nominated by the director)
(b) approval of wage rises and shares in economic results (in con-
sultation with the director) and any rise in the renumeration of man-
agement whose salaries exceed the base level .
(c) such statutory questions as participation in any association,
disassociation or merger of the firm. These decisions are taken
with a two thirds majority of the Council members.
7.eThe Workers! Council is answerable for all its activities before the assembly of workers. It is obliged to present reports of its activities to them.
8. The appointment of managerial and supervisory workers to vacant posts is made on the basis of an interview. Future regulations concerning these workers, appointed and dismissed by the Council, must consider a longer period of notice of dismissal than before (say, a year usually, for managers of firms) When the workers concerned object to the Councils decisions to dismiss them, the decision must be approved by a two-thirds majority of the Council members.
According to the decision of the Council, the firm draws up a contract with the director, of at least six years duration,.as a rule. This contract defines the rights and duties of the two parties - just as the two determine economic objcctives together - in the spirit of which the manager must direct the firms affairs.
The director can only be dismissed from his post before the date set by the contract, for the following reasons:
(a) if he infringes or violates the legal regulations, exceeds his
powers, and does not respect the decisions of the Workers' Council,
when the latter is within its rights. :
(b) if, due to bad management, there is unfavourable progress, major
losses, violation of the collective contract. or serious neglect of
the needs of the economy.
(c) if there is violation of the activities of socialist enterprise
entailing the loss of confidence of the workers.
Then, the Workers' Council can only decide on the confirmation of a director (or his assistants) in their positions, or dismissal from these positions, on the basis of an analysis of the results of their work, respecting the legal work regulations.
The director cannot be-dismissed even if he proceeds in disagreement with the WeeKers' Counoil, while within the-framework of his powers, con=formins to the legal regulations decided on in the work contracts in har- -vny with the rights mentioned in point 3. above, as long as the firm's economic results have not been adversdy affected.
9. The number of members of the Workers' Council corresponds to the size of the firm - anywhere between ten and thirty members. The duration of = membership will be established by law.
The great majority of members are to be elected by the workers in the firm. Elections are direct and organised in such a way that all branches of respective firms are represented.
It is recommended that workers elect as Council members, those workers whose moral qualities and technical skills would guarantee that the longterm interests of workers, and long-term employees,of the firm, will be properly defended. The members of Workers' Councils ought to have a material interest in the longterm results of the firms economic activity. The choice of candidates among the workers and their direct election by secret ballot will be made through a trade-union intermediary.
10. In large important firms,in those operating in complex marketing conditions, and in those with adwanced technological methods, ten to thirty per cent of the Council members ought to be chosen from among independent specialists, working outside the firm. Agricultrual enterprises (e.g. machine and tractor depots, agricultural construction firms) the co-op erative processing enterprises and commercial enterprises undertaking the purchase of agricultural products, shall elect thirty per centof Council mem~bers from among the representatives of agricultural firms using these services or supplying primary agricultural material.
ll. Those enterprises of great importance to State interests, or firms with a monopoly, appoint their own representatives to the Workers' Council as do State bodies. Principle consumers of the firms products do likewise. But this group of State nominees to the Council must not exceed twenty per cent. 12. When a bank has furnished important long-term credit to a firm it has a right to a representative on its Council, The right of adequate representation is recognised even for other firms if they have invested in a particular firm.
13. Workers' Councils will not generally be introduced into joint-stock companies, or state and public undertaking (e.g. railways, communicatory economy, water and forests) until a official legal ruling settles the new = nature of these enterprises, their mode of control and the participation of the workers.
Workers' Councils ought not to be introduced into firms making a loss, s i.e. in firms in which productivity is consistently declining or in thosk which ere to be shut down.
14. The rights of union organisations as in the Work Codex and other regulations remain intact.
continued on page 5.