Job preservation through the creation of worker cooperatives: Lessons for trade unions

A new ILO publication presents a series of lessons learned by trade unions and cooperatives in their efforts to prevent the closing of enterprises through buyouts. It provides examples of success stories and documents the enabling conditions that led to success.

QUEBEC (ACTRAV Info) – Employees at failing businesses should be given the opportunity to make a buyout bid and transform the firm into a cooperative, says a new ILO publication. “Job preservation through worker cooperatives: An overview of international experiences and strategies” was released by the ILO Bureau for Workers‘ Activities (ACTRAV) and the ILO-COOP unit at the International Summit of Cooperatives in Quebec City, being held from 6 to 9 October 2014.

The publication is a review of the lessons learned by trade unions and cooperatives in their efforts to prevent the closing of enterprises through buyouts. It provides examples of success stories and documents the conditions that led to success.

The authors, Natalia Delgado, Claude Dorion and Pierre Laliberté, argue that a substantial proportion of workplace closures take place in enterprises that have the potential to be economically viable, but end up going out of business because of the economic context or the lack of cash flow. In such circumstances, it might be advisable for workers, with union support, to make a buyout bid and convert the workplace into a worker-owned cooperative.

The book makes the point that it is important for trade unions to be proactive. They can do this by:

• securing access to the company’s financial and economic information,
• developing a good command of bankruptcy procedures (and of workers’ rights under those procedures),
• having access to the expertise to assess the viability of the salvaged enterprise, and
• being able to inform workers about the options open to them.

The authors point out that if it is true that most failing enterprises cannot be salvaged, workers in those that have economic potential should be given a chance at preserving their jobs.

The book was part of the discussions at the Quebec International Summit of Cooperatives on the role that cooperatives can play in providing an alternative development path to ensure more and better employment.

For more information, contact:

Pierre Laliberté,Senior Specialist on Workers’Activities,
Editor of the International Journal of Labour Research(IJLR)
Tel:+41 22 799 75 95