What is a worker co‑operative

Worker Co‑operatives

Unlike some other European countries (Italy, Spain) in the UK there is no legal definition of a worker co‑operative.  Broadly worker co‑operatives are:

"businesses that are owned and democratically  controlled by their employee members using co‑operative principles. They are an alternative to investor owned models of enterprise." 

The worker co‑operative code of governance.

 

Ownership:

A worker co‑operative is owned by its employee-members, although some are structured on the basis of "common ownership". This means members may benefit from profits generated, but they never have access to the assets of the business even if it is wound up.

 

Governance:

In common with other forms of co‑operative, control is normally exercised on a one member, one vote basis.  Some operate a governing body that is elected by and from the membership; others have a flat structure where decisions are taken collectively.

 

Legal forms

Many worker co‑operatives are registered either as companies limited by guarantee or by shares as an alternative to the more traditional legal form for co‑operatives, the industrial and provident society.

 

Social

Worker co‑operatives are operated fundamentally as a business and are not charities.  Most however have a strong commitment to social welfare, sustainability, and support for the community and therefore can be categorized as Social Enterprises.

 

Areas of the economy

Worker co‑operatives can be found trading in all types of industry and commerce.  They are particularly prevalent in: whole food/organic shops, wholesalers, manufacturing, consultancy, web-design and creative industries.  

 

Advantages

• Increased involvement and participation by employee's 
• Increased job satisfaction and reduced chance of industrial relation problems as employee owners have a stake in the businesses
• Sharing business ownership often increases productivity
• Increased stability of employment as employee owners are more likely to take pay cuts/freezes and work through difficult times, rather than make redundancies.