26. Associations in the Field of Labor
36. The Business Enterprise
36a) Nature and Economic Role
The business enterprise is the result of the union of three elements:
i) Management, which coordinates the different activities toward a common objective
ii) Capital, in the form of financial resources, raw materials, facilities, machinery, and technology
iii) Work, which is becoming more and more specialized and segmented
Under the conditions that prevail after the Industrial Revolution, these three factors cannot be supplied by one person alone, save in very small workshops. The business enterprise is thus the basic cell of economic production, just as the family is the basic cell of civil society (and a consumer unit at the same time).
The fundamental characteristics of the business enterprise are the following:
· It is a human community, born of man’s need to unite with others to produce goods and services: “Employers and workers are not irreconcilable antagonists, but cooperators in a common endeavor.”1
· An enterprise combines diverse activities, which are coordinated for a common purpose. As in the human body, each member has a specific role, but all the functions are combined in the perfect final unity of the body.
· It is a community of interests, represented by the production of goods and services in order to obtain benefits. “To ignore this mutual bond and strive to break it is a sure sign of being driven by a blind and irrational despotism.”2
· It is a community of life, since the employees spend many hours of their life together, weathering crises and difficulties in solidarity, and rejoicing together in the firm’s success, which affects their future and their families.
The business enterprise is something more than a mere means of earning one’s living and keeping the legitimate dignity of one’s state in life, of securing one’s independence and that of one’s family. It is something more than a technical and practical collaboration of thought, of capital and of the many forms of labor for the benefit of production and progress. It is something more than an important factor in economic life, more than a simple, however praiseworthy, help to the development of social justice. If it were no more than this, it would still be insufficient to establish and promote the complete order, because order is not such if it does not affect the whole of life, and of material, economic, social and, above all, Christian activity, outside of which man remains always incomplete.3
The Church acknowledges that technical and industrial development, which characterizes our world, requires the creation of new companies and the expansion of existing ones.4 But we must clarify the scope of this living and working environment.
First of all, business enterprises or companies are institutions of private law, since individuals by their own nature have the entrepreneurial ability to form and manage them. Government should not intervene in the sphere of private enterprise, except in circumstances when such intervention is required by the common good. The role of the state is to provide the conditions that will allow individuals to exercise their initiative and promote business enterprises.5
In any case, companies cannot act as independent and unrelated fragments of the economic and social fabric of a people. “By its own end, each individual enterprise is closely linked to the whole national economy.”6 Therefore, every enterprise must comply with the general economic norms, which apply to each country. This general economic framework, within which enterprises operate and develop, is the responsibility of the government.
Nevertheless, to decide what is more helpful to the over-all economic situation is not the prerogative of individual productive enterprises, but pertains to the public authorities and to those institutions that, established either nationally or among a number of countries, function in various sectors of economic life.7
The doctrine of the primacy of the human factor of work over the instrumental means of production applies to the enterprise as well. Businessmen have their own role: to create new sources of wealth and jobs. This is their specific contribution to the common good of the nation. At the same time, they must strive to give work a human face and make the enterprise a community of life.8 Besides, they should not forget that “a man’s life does not consist in the abundance of his possessions” (Lk 12:15). This will prevent the temptation of greed, of forgetting that matter is subordinated to the spiritual nature of man. Greed is a form of slavery that is incompatible with human dignity: “You cannot serve God and mammon” (Lk 16:13).
36b) Human Relations in the Enterprise
The relationship between employers and workers should be that of mutual support in an undertaking whose success would benefit all the members of the enterprise. Workers will consider the company as their own to the extent that they participate in its benefits and in the decision-making process.
We, no less than Our predecessors, are convinced that employees are justified in wishing to participate in the activity of the industrial concern for which they work. It is not, of course, possible to lay down hard and fast rules regarding the manner of such participation.… But We have no doubt as to the need for giving workers an active part in the business of the company for which they work—be it a private or a public one.9
As the Pope says, it is not possible to give hard and fast rules for labor involvement in management decisions. At the same time, the unity of administration that is needed for effective management must be safeguarded.10 In general, the concrete channels of labor’s participation will depend on the situation of the company.11
A human conception of the enterprise should respect the authority and necessary effectiveness of the “unity of administration,” without debasing workers to mere silent and passive executioners of orders from above. For this, the sense of responsibility of the workers must be heightened. Besides, their human and technical formation must be upgraded, so that they can have access to new technologies and participate in the management of the enterprise. Thus, by reducing physical strain and reaching positions of higher responsibility, citizens will progressively increase their participation in the common good.
Therefore, reciprocal cooperation and differentiation of functions characterize human relations within the enterprise. This requires dialogue and concern for the personal situation of each one. That is the only way for the worker to find the personal value of his work:
It is only in this perspective that man … can find again his own deep meaning, thus being enabled to express his talents, collaborate, participate and cooperate in the smooth operation of the enterprise, of which all are, together, collaborators and architects.12
On the other hand, the role of management is not limited to applying dehumanized administration techniques. Managers must have, as something inherent in their function, the gift to understand, communicate, and get along well with others, so that they can give a personalized character to the common work environment:
So many conflicts and antagonisms between workers and employers often have their roots in the unproductive soil of the refusal to listen, rejection of dialogue or undue postponement of it. Time spent meeting your employees personally, making your relations with them more human and giving your firms a dimension more fit for men, is not time wasted.13
Pope John XXIII had earlier expressed the same ideas about the humanization of the workplace:
This demands that the relations between management and employees reflect understanding, appreciation, and good will on both sides. It demands, too, that all parties co-operate actively and loyally in the common enterprise, not so much for what they can get out of it for themselves, but as discharging a duty and rendering a service to their fellow men.14
36c) The Employment Contract
(1) Salary and its determination
Salaries are just in themselves, provided they are understood not as the valuation of work—which as such is not an appraisable merchandise—but as the means provided to the worker for his sustenance. The salary is the most common way of fulfilling the elementary demands of justice in the employer-worker relationship.
Whether the work is done in a system of private ownership of the means of production or in a system where ownership has undergone a certain “socialization,” the relationship between the employer (first and foremost the direct employer) and the worker is resolved on the basis of the wage, that is, through just remuneration for work done.15
As regards the criteria for the determination of the just salary, the human factor has priority. Thus, justice demands that “the worker must be paid a wage sufficient to support him and his family.”16 The circumstances of the company and the demands of the common good should also be taken into account for the determination of the proper wage.17
The employer must determine the salary in proportion to the worker’s contribution within the company,18 and depending on the means and situation of the latter.19 The common good that we are referring to here is that of the nation and, from a higher perspective, that which concerns the resources of the international community to which the nation belongs.20 Such common good follows the socio-ethical principle of the “common use of goods.”21
(2) Family salary
The worker’s salary must cover not only his personal needs, but his family’s as well.22
Just remuneration for the work of an adult who is responsible for a family means remuneration that will suffice for establishing and properly maintaining a family and for providing security for its future. Such remuneration can be given either through what is called a family wage—that is, a single salary given to the head of the family for his work, sufficient for the needs of the family without the other spouse having to take up gainful employment outside the home—or through other social measures such as family allowances or grants to mothers devoting themselves exclusively to their families. These grants should correspond to the actual needs, that is, to the number of dependents for as long as they are not in a position to assume proper responsibility for their own lives.23
36d) Other Benefits
The different systems of social security and insurance complement the salary in order to cover all the personal and family needs of workers. Insurance should cover cases of accident, sickness, old age, marriage and birth of more children, forced unemployment, etc. These benefits should be extended to farmers as well.24
Within the sphere of these principal rights, there develops a whole system of particular rights that, together with remuneration for work, determine the correct relationship between worker and employer. Among these rights there should never be overlooked the right to a working environment and to manufacturing processes that are not harmful to the workers’ physical health or to their moral integrity.25
36e) Partnership and Profit-Sharing
Unlike the employment contract, the partnership contract establishes that the ownership, profits, and management of the firm belong to all the partners. If applied to all the members of the enterprise in its full extension and up to the last consequences, this contract is practically unfeasible. Still, it is advisable to implement a wise hybrid of both, combining their respective advantages and avoiding their drawbacks.
The popes have mentioned three new elements to be introduced in the salary system: participation in profits, participation in management, and participation in ownership. This is sometimes called reform of the structures. Current Christian sociologists have pointed out the following advantages of this combination of measures.26
· It puts an end to the supremacy of capital over work, of private interest over common interest. It ensures that labor has its share in the management of the economy, and contributes to the humanization of capital-labor relations.
· The other methods that have been tried to modify labor-capital relations are insufficient (employers’ paternalism, workers’ militant syndicalism, state intervention, cooperatives). These methods, far from eliminating the proletariat, have consolidated it.
· The juridical structure of the enterprise, especially big stock corporations, no longer corresponds to the social reality. The ownership of these companies belongs to the stockholders, who delegate their authority to a board of directors, who in turn delegate the day-to-day management to hired managers. These managers are the ones running the company de facto, but not de jure.
· The partnership contract stresses the close cooperation between capital and labor.
· The partnership contract suits better the working class’s heightened consciousness of its own dignity and responsibility, of its culture and progress.
Combining the partnership contract with the employment contract would alleviate some of the deficiencies of the latter. The former gives workers a greater share in the management and profits of their company.
We consider it more advisable, however, in the present condition of human society that, so far as is possible, the work-contract be somewhat modified by a partnership-contract, as is already being done in various ways and with no small advantage to workers and owners. Workers and other employees thus become sharers in ownership or management or participate in some fashion in the profits received.27
The expression partnership contract is no longer used to refer to ownership-sharing and profit-sharing arrangements between workers and employers. Still, the basic principle of labor’s priority over capital remains valid. At present, different ways can be tried to give workers an effective participation in the administration of the company: co-ownership of the means of production, participation in management, profit-sharing, intrapreneurship, stock options, etc.28
36f) Participation in Management
A positive aspect of workers’ participation in the management of their company is that work becomes more personalized. Strictly speaking, workers are not entitled to such participation, but they have the right to take an active part in the determination of the agreements that affect them. Also, management should take into account their experience and aptitudes, which can provide valuable insights.
Obviously, any firm that is concerned for the human dignity of its workers must also maintain a necessary and efficient unity of direction. But it must not treat those employees who spend their days in service with the firm as though they were mere cogs in the machinery, denying them any opportunity of expressing their wishes or bringing their experience to bear on the work in hand, and keeping them entirely passive in regard to decisions that regulate their activity.29
Unlike participation in management, collectivization—the transfer to the state of the ownership of the means of production—would not bring any improvement for the worker as regards the personalization of work.
Thus merely converting the means of production into State property in the collectivist system is by no means equivalent to “socializing” that property. We can speak of socializing only when the subject[ive] character of society is ensured, that is to say, when on the basis of his work each person is fully entitled to consider himself a part-owner of the great workbench at which he is working with every one else.30
Pope John Paul II talks about being part-owners, not about self-management, or the takeover of management functions by the labor force. He urges the participation of workers in the management and/or in the profits of the enterprise. He does not set concrete guidelines, but he stresses that “recognition of the proper position of labor and the worker in the production process demands various adaptations in the sphere of the right to ownership of the means of production.”31
Therefore, the tenets of what we could call “strict” capitalism must be subject to continuous revision. A reform is needed that will respect human rights in their wider sense, especially labor rights. Nevertheless, the Pontiff warns that “these many deeply desired reforms cannot be achieved by an a priori elimination of private ownership of the means of production.”32
36g) Work and Rest
We have seen in the previous chapter that some activities, by their own essence, take precedence over work. Man is not meant for work, but work for man. Laboramus ut non laboremus, “we work so that we do not have to work,” as the classics put it. Hence the need for rest, which will allow time for the fulfillment of family, social, and religious duties. Rest is not to be understood as only a means for greater productivity. It is work itself that has to be understood as a means for the integral development of the personality of the worker.
While devoting their time and energy to the performance of their work with a due sense of responsibility, they should nevertheless be allowed sufficient rest and leisure to cultivate their family, cultural, social and religious life. And they should be given the opportunity to develop those energies and talents, which perhaps are not catered for in their professional work.33
The Church commands Christians, as a precept, to observe Sunday rest and to attend Mass on Sundays and holy days of obligation.
37. Labor Unions
37a) A Natural Right
Trade or labor unions are the associations that are constituted by workers of the same sector in order to defend their professional interests. They are a concrete application of the natural right of association. This right is based on the unifying force that work exerts on those who work together.34 And this is also the origin of their essential functions: “Their object is the representation of the various categories of workers, their lawful collaboration in the economic advance of society, and the development of the sense of their responsibility for the realization of the common good.”35
Now, the essential purpose of labor unions also constitutes their limit: their activities should not be employed or manipulated for political decisions that are taken outside of them. “Unions do not have the character of political parties struggling for power; they should not be subjected to the decision of political parties or have too close links with them.”36
On the contrary, labor unions must contribute to the common good of the country through their specific function. They should not close themselves to dialogue or act as an obstacle for other forces. They must pursue their just demands, but they must be realistic and take into account the actual social and economic possibilities. It is the struggle for social justice that legitimizes labor unions:
Catholic social teaching does not hold that unions are no more than a reflection of the “class” structure of society and that they are a mouthpiece for a class struggle that inevitably governs social life. They are indeed a mouthpiece for the struggle for social justice, for the just rights of working people in accordance with their individual professions.37
Pope John Paul II clarifies that this “struggle” should be a stand for a just benefit, never against the others; work is, above all, a bond of unity among men, and there lies its social strength: the strength to build a community.
Salaries, collective bargaining, and work conditions are the essential issues included today under the heading social justice and, as a consequence, the main items in the agenda of labor unions.
37b) Freedom of Labor Unions
The Magisterium of the Church warns against one of the dangers of trade unionism: the depersonalization of the individual members of the union. In that case, unions would be drifting from their proper end.
If the labor union as such, by virtue of the political and economic evolution, were ever to assume a sort of patronage over the worker, or the right to dispose at will of the worker, of his strength, or of his property, as happens in other places, the very concept of labor union—an association for mutual help and defense—would have been altered and destroyed.38
To safeguard the proper ends of the labor unions, the internal and external freedoms of the workers must be assured. There is external freedom when it is possible to create different associations, without being forced to join a sole, official union. There is internal freedom when there is freedom within the association, so that no one is forced to adopt resolutions that are incompatible with faith or morals, or with one’s convictions.
Pope Leo XIII also defended the worker’s natural right to enter into associations with his fellow-workers. Such associations may consist either of workers alone or of workers and employers, and should be structured in a way best calculated to safeguard the worker’s legitimate professional interest. And it is the natural right of the workers to work without hindrance, freely, and on their own initiative within these associations for the achievements of these ends.39
There is need to foster a spirit of loyal cooperation among the different associations, putting the common good above private interests. On the other hand, each member should be encouraged to take a personal and active role in the union.40
37c) Nature and Activities of Labor Unions
It is the responsibility of labor unions not only to defend the economic welfare of workers, but also to care for their human and moral uplifting. The exclusive pursuit of material welfare would serve only to widen the rift and strife between the different social groups and between workers and employers. Peace is in itself a spiritual good, and requires that spiritual values be given priority. Humans can enjoy material goods only by dividing them, and one’s possession excludes everybody else’s. Peace, on the other hand, as a common good and by its own nature, tends to spread, to be shared with others. And it is possible only in the sphere of the spirit, the meeting ground of all people.
A very unfortunate way of helping workers, therefore, would be that of people who, while attempting to improve their living conditions, would only succeed in helping them attain the ephemeral and fragile goods of this world, while neglecting to prepare their spirits for moderation by recalling the Christian goods.41
“Class struggle” is one of the principles that Christians must avoid in their involvement in labor unions. In general, any attempt to transform the protection of legitimate labor interests into an instrument to oppose those who are playing a different role in economic life must be eschewed. A better solution would be for labor unions and employers’ associations to establish joint committees, which serve as channels for negotiation and mutual understanding.42 It should not be forgotten that, beyond their different roles in production, labor and capital are united by a stronger bond: their cooperation in the enterprise and their service to the whole community.
Also, it would be unacceptable for a labor union to flex its muscle as a pressure group in disregard of the common good and, more concretely, of public order. This would be a corruption of the intrinsic nature of the labor union, which is ordained to the good of all citizens, transforming it into a sort of “group or class egoism.”43
Their activity, however, is not without its difficulties. Here and there the temptation can arise of profiting from a position of force to impose, particularly by strikes—the right to which as a final means of defense remains certainly recognized—conditions that are too burdensome for the overall economy and for the social body, or to desire to obtain in this way demands of a directly political nature. When it is a question of public service, required for the life of an entire nation, it is necessary to be able to assess the limit beyond which the harm caused to society becomes inadmissible.44
State intervention in labor issues should have a subsidiary nature; it is justified only when the efforts of labor and capital, through their legitimate representatives, are insufficient. The rights of the men involved in work precede those of the state. Any attempt to interfere with the activity of unions under the pretext of “reasons of state” is completely unwarranted.
It is likewise important to promote vocational training and skill improvement and development courses for all professionals.45
Cooperation with socialist unions may be lawful in certain specific cases, provided the following conditions are met: “The cause to be defended must be just; it must be a temporal agreement; and the necessary precautions must be taken to avoid the dangers that could follow from such an agreement.”46 The Church urges the establishment of unions that are inspired by Christian principles. In any case, Catholics cannot leave aside their faith and convictions when they participate in union activities.47
38. Professional Corporations
38a) Usefulness, Nature, and Functions
The social doctrine of the Church recommends the formation of autonomous organizations, which occupy an intermediate position between the individual and the state. They are not imposed from above, but are freely constituted through the diverse functions and professions whereby human activity is naturally channeled. The Church praises them as builders of the moral order in the economic world.48 These organizations or bodies enable workers to participate in the fashioning of the social fabric.
The reign of mutual collaboration between justice and charity in social-economic relations can only be achieved by a body of professional and interprofessional organizations, built on solidly Christian foundations, working together to effect, under forms adapted to different places and circumstances, what has been called the Corporation.49
These corporations already appeared in the guilds of the Middle Ages, and are the ancestors of our labor unions. Being different for each profession or trade, guilds became a source of solidarity for all those exercising the same profession. To this aspect of mutual protection, modern labor unions have added a militant attitude against the liberal sociopolitical system, which places capital over labor. Guilds and the professional corporations or associations that preceded labor unions were more interested in fostering professional training and a more effective output among their members. Their bond was precisely their common professional dedication, in the same way that the bond of living in the same place leads to the municipal corporation.
One of the main functions of these professional corporations is to prevent class struggle; they include both workers’ and employers’ associations, allowing them to cooperate for the common good. Work and capital are united while respecting each other’s rights.
It is easily deduced from what has been said that the interests common to the whole industry or profession should hold first place in these guilds. The most important among these interests is to promote the cooperation in the highest degree of each industry and profession for the sake of the common good of the country. Concerning matters, however, in which particular points, involving advantage or detriment to employers or workers, may require special care and protection, the two parties, when these cases arise, can deliberate separately or as the situation requires reach a decision separately.50
Corporations, like labor unions, by their own nature take precedence over the state. They offer workers a channel for their responsible participation in their companies, and a platform for voicing their demands and positions on general political measures that affect the national economy.
38b) Guilds
In ancient times, artisans’ guilds embodied the functions of the professional corporations. In modern times, we can still learn from one of their main characteristics: the personalizing nature of professional relations within the guild, which can be incorporated in our business enterprises.
39. Cooperatives: Usefulness, Nature, and Functions
The cooperative is another way of promoting professional interests. Several enterprises or units of production of the same sector can group together to improve the technology of their means of production, to improve the standards of living and the professional qualifications of their members, etc. The attention and assistance they receive from the state is justified by their contribution to national progress and by the human values they foster.
Cooperatives are especially advantageous for farmers.51 Among the functions they perform in this sector are the following:
· Higher earnings
· The improvement of working conditions
· Greater job stability
· A greater stimulus for initiative in work
· The achievement of economies of scale
· The availability of professional formation and education52
Footnotes:
1. Pius XII, Address, May 7, 1949.
2. Ibid.
3. Pius XII, Address to the Catholic Union of Industrialists, Jan. 31, 1952.
4. Cf. GS, 64.
5. Cf. CCC, 2431.
6. Pius XII, Address, Jan. 31, 1952; cf. CCC, 2432.
7. John XXIII, Enc. Mater et Magistra, 99.
8. Cf. John Paul II, Address to Workers and Entrepreneurs at Nou Camp, Barcelona, Nov. 7, 1982.
9. John XXIII, Enc. Mater et Magistra, 91.
10. Cf. Ibid., 92.
11. Cf. Ibid., 93.
12. John Paul II, Address to Christian Entrepreneurs and Managers, Nov. 24, 1979.
13. Ibid.
14. John XXIII, Enc. Mater et Magistra, 92.
15. John Paul II, Enc. Laborem Exercens, 19.
16. Pius XI, Enc. Quadragesimo Anno, 71; cf. CCC, 2434.
17. Cf. Pius XI, Enc. Quadragesimo Anno, 68.
18. Cf. John XXIII, Enc. Mater et Magistra, 71.
19. Cf. Pius XI, Enc. Quadragesimo Anno, 72.
20. Cf. Ibid., 71.
21. Cf. John Paul II, Enc. Laborem Exercens, 19.
22. Cf. Pius XI, Enc. Quadragesimo Anno, 71.
23. John Paul II, Enc. Laborem Exercens, 19.
24. Cf. John XXIII, Enc. Mater et Magistra, 135.
25. John Paul II, Enc. Laborem Exercens, 19; cf. CCC, 2432.
26. Cf. Van Gestel, La Doctrina Social de la Iglesia (Barcelona: Herder, 1964), 259–262.
27. Pius XI, Enc. Quadragesimo Anno, 65.
28. Cf. John Paul II, Enc. Laborem Exercens, 14.
29. John XXIII, Enc. Mater et Magistra, 92.
30. John Paul II, Enc. Laborem Exercens, 14.
31. Ibid.
32. Ibid.
33. GS, 67.
34. Cf. John Paul II, Enc. Laborem Exercens, 20.
35. Paul VI, Ap. Letter Octogesima Adveniens, 14.
36. John Paul II, Enc. Laborem Exercens, 20.
37. Ibid.
38. Pius XII, Address to Italian Christian Labor Association, Mar. 11, 1945.
39. John XXIII, Enc. Mater et Magistra, 22.
40. Cf. Ibid., 65.
41. Benedict XV, Letter to the Bishop of Bergamo, Mar. 11, 1920.
42. Cf. Pius XII, Address, Feb. 2, 1945.
43. John Paul II, Enc. Laborem Exercens, 20.
44. Paul VI, Ap. Letter Octogesima Adveniens, 14.
45. Cf. John Paul II, Enc. Laborem Exercens, 20.
46. Pius XI, Sacred Congregation Statement, June 5, 1929.
47. Cf. Ibid.
48. Cf. John XXIII, Enc. Mater et Magistra, 37.
49. Pius XI, Enc. Divini Redemptoris, 54. The term corporation is not taken here in the sense of business enterprise, but as a professional association.
50. Pius XI, Enc. Quadragesimo Anno, 85.
51. Cf. John XXIII, Enc. Mater et Magistra, 143.
52. Cf. GS, 71.
36a) Nature and Economic Role
The business enterprise is the result of the union of three elements:
i) Management, which coordinates the different activities toward a common objective
ii) Capital, in the form of financial resources, raw materials, facilities, machinery, and technology
iii) Work, which is becoming more and more specialized and segmented
Under the conditions that prevail after the Industrial Revolution, these three factors cannot be supplied by one person alone, save in very small workshops. The business enterprise is thus the basic cell of economic production, just as the family is the basic cell of civil society (and a consumer unit at the same time).
The fundamental characteristics of the business enterprise are the following:
· It is a human community, born of man’s need to unite with others to produce goods and services: “Employers and workers are not irreconcilable antagonists, but cooperators in a common endeavor.”1
· An enterprise combines diverse activities, which are coordinated for a common purpose. As in the human body, each member has a specific role, but all the functions are combined in the perfect final unity of the body.
· It is a community of interests, represented by the production of goods and services in order to obtain benefits. “To ignore this mutual bond and strive to break it is a sure sign of being driven by a blind and irrational despotism.”2
· It is a community of life, since the employees spend many hours of their life together, weathering crises and difficulties in solidarity, and rejoicing together in the firm’s success, which affects their future and their families.
The business enterprise is something more than a mere means of earning one’s living and keeping the legitimate dignity of one’s state in life, of securing one’s independence and that of one’s family. It is something more than a technical and practical collaboration of thought, of capital and of the many forms of labor for the benefit of production and progress. It is something more than an important factor in economic life, more than a simple, however praiseworthy, help to the development of social justice. If it were no more than this, it would still be insufficient to establish and promote the complete order, because order is not such if it does not affect the whole of life, and of material, economic, social and, above all, Christian activity, outside of which man remains always incomplete.3
The Church acknowledges that technical and industrial development, which characterizes our world, requires the creation of new companies and the expansion of existing ones.4 But we must clarify the scope of this living and working environment.
First of all, business enterprises or companies are institutions of private law, since individuals by their own nature have the entrepreneurial ability to form and manage them. Government should not intervene in the sphere of private enterprise, except in circumstances when such intervention is required by the common good. The role of the state is to provide the conditions that will allow individuals to exercise their initiative and promote business enterprises.5
In any case, companies cannot act as independent and unrelated fragments of the economic and social fabric of a people. “By its own end, each individual enterprise is closely linked to the whole national economy.”6 Therefore, every enterprise must comply with the general economic norms, which apply to each country. This general economic framework, within which enterprises operate and develop, is the responsibility of the government.
Nevertheless, to decide what is more helpful to the over-all economic situation is not the prerogative of individual productive enterprises, but pertains to the public authorities and to those institutions that, established either nationally or among a number of countries, function in various sectors of economic life.7
The doctrine of the primacy of the human factor of work over the instrumental means of production applies to the enterprise as well. Businessmen have their own role: to create new sources of wealth and jobs. This is their specific contribution to the common good of the nation. At the same time, they must strive to give work a human face and make the enterprise a community of life.8 Besides, they should not forget that “a man’s life does not consist in the abundance of his possessions” (Lk 12:15). This will prevent the temptation of greed, of forgetting that matter is subordinated to the spiritual nature of man. Greed is a form of slavery that is incompatible with human dignity: “You cannot serve God and mammon” (Lk 16:13).
36b) Human Relations in the Enterprise
The relationship between employers and workers should be that of mutual support in an undertaking whose success would benefit all the members of the enterprise. Workers will consider the company as their own to the extent that they participate in its benefits and in the decision-making process.
We, no less than Our predecessors, are convinced that employees are justified in wishing to participate in the activity of the industrial concern for which they work. It is not, of course, possible to lay down hard and fast rules regarding the manner of such participation.… But We have no doubt as to the need for giving workers an active part in the business of the company for which they work—be it a private or a public one.9
As the Pope says, it is not possible to give hard and fast rules for labor involvement in management decisions. At the same time, the unity of administration that is needed for effective management must be safeguarded.10 In general, the concrete channels of labor’s participation will depend on the situation of the company.11
A human conception of the enterprise should respect the authority and necessary effectiveness of the “unity of administration,” without debasing workers to mere silent and passive executioners of orders from above. For this, the sense of responsibility of the workers must be heightened. Besides, their human and technical formation must be upgraded, so that they can have access to new technologies and participate in the management of the enterprise. Thus, by reducing physical strain and reaching positions of higher responsibility, citizens will progressively increase their participation in the common good.
Therefore, reciprocal cooperation and differentiation of functions characterize human relations within the enterprise. This requires dialogue and concern for the personal situation of each one. That is the only way for the worker to find the personal value of his work:
It is only in this perspective that man … can find again his own deep meaning, thus being enabled to express his talents, collaborate, participate and cooperate in the smooth operation of the enterprise, of which all are, together, collaborators and architects.12
On the other hand, the role of management is not limited to applying dehumanized administration techniques. Managers must have, as something inherent in their function, the gift to understand, communicate, and get along well with others, so that they can give a personalized character to the common work environment:
So many conflicts and antagonisms between workers and employers often have their roots in the unproductive soil of the refusal to listen, rejection of dialogue or undue postponement of it. Time spent meeting your employees personally, making your relations with them more human and giving your firms a dimension more fit for men, is not time wasted.13
Pope John XXIII had earlier expressed the same ideas about the humanization of the workplace:
This demands that the relations between management and employees reflect understanding, appreciation, and good will on both sides. It demands, too, that all parties co-operate actively and loyally in the common enterprise, not so much for what they can get out of it for themselves, but as discharging a duty and rendering a service to their fellow men.14
36c) The Employment Contract
(1) Salary and its determination
Salaries are just in themselves, provided they are understood not as the valuation of work—which as such is not an appraisable merchandise—but as the means provided to the worker for his sustenance. The salary is the most common way of fulfilling the elementary demands of justice in the employer-worker relationship.
Whether the work is done in a system of private ownership of the means of production or in a system where ownership has undergone a certain “socialization,” the relationship between the employer (first and foremost the direct employer) and the worker is resolved on the basis of the wage, that is, through just remuneration for work done.15
As regards the criteria for the determination of the just salary, the human factor has priority. Thus, justice demands that “the worker must be paid a wage sufficient to support him and his family.”16 The circumstances of the company and the demands of the common good should also be taken into account for the determination of the proper wage.17
The employer must determine the salary in proportion to the worker’s contribution within the company,18 and depending on the means and situation of the latter.19 The common good that we are referring to here is that of the nation and, from a higher perspective, that which concerns the resources of the international community to which the nation belongs.20 Such common good follows the socio-ethical principle of the “common use of goods.”21
(2) Family salary
The worker’s salary must cover not only his personal needs, but his family’s as well.22
Just remuneration for the work of an adult who is responsible for a family means remuneration that will suffice for establishing and properly maintaining a family and for providing security for its future. Such remuneration can be given either through what is called a family wage—that is, a single salary given to the head of the family for his work, sufficient for the needs of the family without the other spouse having to take up gainful employment outside the home—or through other social measures such as family allowances or grants to mothers devoting themselves exclusively to their families. These grants should correspond to the actual needs, that is, to the number of dependents for as long as they are not in a position to assume proper responsibility for their own lives.23
36d) Other Benefits
The different systems of social security and insurance complement the salary in order to cover all the personal and family needs of workers. Insurance should cover cases of accident, sickness, old age, marriage and birth of more children, forced unemployment, etc. These benefits should be extended to farmers as well.24
Within the sphere of these principal rights, there develops a whole system of particular rights that, together with remuneration for work, determine the correct relationship between worker and employer. Among these rights there should never be overlooked the right to a working environment and to manufacturing processes that are not harmful to the workers’ physical health or to their moral integrity.25
36e) Partnership and Profit-Sharing
Unlike the employment contract, the partnership contract establishes that the ownership, profits, and management of the firm belong to all the partners. If applied to all the members of the enterprise in its full extension and up to the last consequences, this contract is practically unfeasible. Still, it is advisable to implement a wise hybrid of both, combining their respective advantages and avoiding their drawbacks.
The popes have mentioned three new elements to be introduced in the salary system: participation in profits, participation in management, and participation in ownership. This is sometimes called reform of the structures. Current Christian sociologists have pointed out the following advantages of this combination of measures.26
· It puts an end to the supremacy of capital over work, of private interest over common interest. It ensures that labor has its share in the management of the economy, and contributes to the humanization of capital-labor relations.
· The other methods that have been tried to modify labor-capital relations are insufficient (employers’ paternalism, workers’ militant syndicalism, state intervention, cooperatives). These methods, far from eliminating the proletariat, have consolidated it.
· The juridical structure of the enterprise, especially big stock corporations, no longer corresponds to the social reality. The ownership of these companies belongs to the stockholders, who delegate their authority to a board of directors, who in turn delegate the day-to-day management to hired managers. These managers are the ones running the company de facto, but not de jure.
· The partnership contract stresses the close cooperation between capital and labor.
· The partnership contract suits better the working class’s heightened consciousness of its own dignity and responsibility, of its culture and progress.
Combining the partnership contract with the employment contract would alleviate some of the deficiencies of the latter. The former gives workers a greater share in the management and profits of their company.
We consider it more advisable, however, in the present condition of human society that, so far as is possible, the work-contract be somewhat modified by a partnership-contract, as is already being done in various ways and with no small advantage to workers and owners. Workers and other employees thus become sharers in ownership or management or participate in some fashion in the profits received.27
The expression partnership contract is no longer used to refer to ownership-sharing and profit-sharing arrangements between workers and employers. Still, the basic principle of labor’s priority over capital remains valid. At present, different ways can be tried to give workers an effective participation in the administration of the company: co-ownership of the means of production, participation in management, profit-sharing, intrapreneurship, stock options, etc.28
36f) Participation in Management
A positive aspect of workers’ participation in the management of their company is that work becomes more personalized. Strictly speaking, workers are not entitled to such participation, but they have the right to take an active part in the determination of the agreements that affect them. Also, management should take into account their experience and aptitudes, which can provide valuable insights.
Obviously, any firm that is concerned for the human dignity of its workers must also maintain a necessary and efficient unity of direction. But it must not treat those employees who spend their days in service with the firm as though they were mere cogs in the machinery, denying them any opportunity of expressing their wishes or bringing their experience to bear on the work in hand, and keeping them entirely passive in regard to decisions that regulate their activity.29
Unlike participation in management, collectivization—the transfer to the state of the ownership of the means of production—would not bring any improvement for the worker as regards the personalization of work.
Thus merely converting the means of production into State property in the collectivist system is by no means equivalent to “socializing” that property. We can speak of socializing only when the subject[ive] character of society is ensured, that is to say, when on the basis of his work each person is fully entitled to consider himself a part-owner of the great workbench at which he is working with every one else.30
Pope John Paul II talks about being part-owners, not about self-management, or the takeover of management functions by the labor force. He urges the participation of workers in the management and/or in the profits of the enterprise. He does not set concrete guidelines, but he stresses that “recognition of the proper position of labor and the worker in the production process demands various adaptations in the sphere of the right to ownership of the means of production.”31
Therefore, the tenets of what we could call “strict” capitalism must be subject to continuous revision. A reform is needed that will respect human rights in their wider sense, especially labor rights. Nevertheless, the Pontiff warns that “these many deeply desired reforms cannot be achieved by an a priori elimination of private ownership of the means of production.”32
36g) Work and Rest
We have seen in the previous chapter that some activities, by their own essence, take precedence over work. Man is not meant for work, but work for man. Laboramus ut non laboremus, “we work so that we do not have to work,” as the classics put it. Hence the need for rest, which will allow time for the fulfillment of family, social, and religious duties. Rest is not to be understood as only a means for greater productivity. It is work itself that has to be understood as a means for the integral development of the personality of the worker.
While devoting their time and energy to the performance of their work with a due sense of responsibility, they should nevertheless be allowed sufficient rest and leisure to cultivate their family, cultural, social and religious life. And they should be given the opportunity to develop those energies and talents, which perhaps are not catered for in their professional work.33
The Church commands Christians, as a precept, to observe Sunday rest and to attend Mass on Sundays and holy days of obligation.
37. Labor Unions
37a) A Natural Right
Trade or labor unions are the associations that are constituted by workers of the same sector in order to defend their professional interests. They are a concrete application of the natural right of association. This right is based on the unifying force that work exerts on those who work together.34 And this is also the origin of their essential functions: “Their object is the representation of the various categories of workers, their lawful collaboration in the economic advance of society, and the development of the sense of their responsibility for the realization of the common good.”35
Now, the essential purpose of labor unions also constitutes their limit: their activities should not be employed or manipulated for political decisions that are taken outside of them. “Unions do not have the character of political parties struggling for power; they should not be subjected to the decision of political parties or have too close links with them.”36
On the contrary, labor unions must contribute to the common good of the country through their specific function. They should not close themselves to dialogue or act as an obstacle for other forces. They must pursue their just demands, but they must be realistic and take into account the actual social and economic possibilities. It is the struggle for social justice that legitimizes labor unions:
Catholic social teaching does not hold that unions are no more than a reflection of the “class” structure of society and that they are a mouthpiece for a class struggle that inevitably governs social life. They are indeed a mouthpiece for the struggle for social justice, for the just rights of working people in accordance with their individual professions.37
Pope John Paul II clarifies that this “struggle” should be a stand for a just benefit, never against the others; work is, above all, a bond of unity among men, and there lies its social strength: the strength to build a community.
Salaries, collective bargaining, and work conditions are the essential issues included today under the heading social justice and, as a consequence, the main items in the agenda of labor unions.
37b) Freedom of Labor Unions
The Magisterium of the Church warns against one of the dangers of trade unionism: the depersonalization of the individual members of the union. In that case, unions would be drifting from their proper end.
If the labor union as such, by virtue of the political and economic evolution, were ever to assume a sort of patronage over the worker, or the right to dispose at will of the worker, of his strength, or of his property, as happens in other places, the very concept of labor union—an association for mutual help and defense—would have been altered and destroyed.38
To safeguard the proper ends of the labor unions, the internal and external freedoms of the workers must be assured. There is external freedom when it is possible to create different associations, without being forced to join a sole, official union. There is internal freedom when there is freedom within the association, so that no one is forced to adopt resolutions that are incompatible with faith or morals, or with one’s convictions.
Pope Leo XIII also defended the worker’s natural right to enter into associations with his fellow-workers. Such associations may consist either of workers alone or of workers and employers, and should be structured in a way best calculated to safeguard the worker’s legitimate professional interest. And it is the natural right of the workers to work without hindrance, freely, and on their own initiative within these associations for the achievements of these ends.39
There is need to foster a spirit of loyal cooperation among the different associations, putting the common good above private interests. On the other hand, each member should be encouraged to take a personal and active role in the union.40
37c) Nature and Activities of Labor Unions
It is the responsibility of labor unions not only to defend the economic welfare of workers, but also to care for their human and moral uplifting. The exclusive pursuit of material welfare would serve only to widen the rift and strife between the different social groups and between workers and employers. Peace is in itself a spiritual good, and requires that spiritual values be given priority. Humans can enjoy material goods only by dividing them, and one’s possession excludes everybody else’s. Peace, on the other hand, as a common good and by its own nature, tends to spread, to be shared with others. And it is possible only in the sphere of the spirit, the meeting ground of all people.
A very unfortunate way of helping workers, therefore, would be that of people who, while attempting to improve their living conditions, would only succeed in helping them attain the ephemeral and fragile goods of this world, while neglecting to prepare their spirits for moderation by recalling the Christian goods.41
“Class struggle” is one of the principles that Christians must avoid in their involvement in labor unions. In general, any attempt to transform the protection of legitimate labor interests into an instrument to oppose those who are playing a different role in economic life must be eschewed. A better solution would be for labor unions and employers’ associations to establish joint committees, which serve as channels for negotiation and mutual understanding.42 It should not be forgotten that, beyond their different roles in production, labor and capital are united by a stronger bond: their cooperation in the enterprise and their service to the whole community.
Also, it would be unacceptable for a labor union to flex its muscle as a pressure group in disregard of the common good and, more concretely, of public order. This would be a corruption of the intrinsic nature of the labor union, which is ordained to the good of all citizens, transforming it into a sort of “group or class egoism.”43
Their activity, however, is not without its difficulties. Here and there the temptation can arise of profiting from a position of force to impose, particularly by strikes—the right to which as a final means of defense remains certainly recognized—conditions that are too burdensome for the overall economy and for the social body, or to desire to obtain in this way demands of a directly political nature. When it is a question of public service, required for the life of an entire nation, it is necessary to be able to assess the limit beyond which the harm caused to society becomes inadmissible.44
State intervention in labor issues should have a subsidiary nature; it is justified only when the efforts of labor and capital, through their legitimate representatives, are insufficient. The rights of the men involved in work precede those of the state. Any attempt to interfere with the activity of unions under the pretext of “reasons of state” is completely unwarranted.
It is likewise important to promote vocational training and skill improvement and development courses for all professionals.45
Cooperation with socialist unions may be lawful in certain specific cases, provided the following conditions are met: “The cause to be defended must be just; it must be a temporal agreement; and the necessary precautions must be taken to avoid the dangers that could follow from such an agreement.”46 The Church urges the establishment of unions that are inspired by Christian principles. In any case, Catholics cannot leave aside their faith and convictions when they participate in union activities.47
38. Professional Corporations
38a) Usefulness, Nature, and Functions
The social doctrine of the Church recommends the formation of autonomous organizations, which occupy an intermediate position between the individual and the state. They are not imposed from above, but are freely constituted through the diverse functions and professions whereby human activity is naturally channeled. The Church praises them as builders of the moral order in the economic world.48 These organizations or bodies enable workers to participate in the fashioning of the social fabric.
The reign of mutual collaboration between justice and charity in social-economic relations can only be achieved by a body of professional and interprofessional organizations, built on solidly Christian foundations, working together to effect, under forms adapted to different places and circumstances, what has been called the Corporation.49
These corporations already appeared in the guilds of the Middle Ages, and are the ancestors of our labor unions. Being different for each profession or trade, guilds became a source of solidarity for all those exercising the same profession. To this aspect of mutual protection, modern labor unions have added a militant attitude against the liberal sociopolitical system, which places capital over labor. Guilds and the professional corporations or associations that preceded labor unions were more interested in fostering professional training and a more effective output among their members. Their bond was precisely their common professional dedication, in the same way that the bond of living in the same place leads to the municipal corporation.
One of the main functions of these professional corporations is to prevent class struggle; they include both workers’ and employers’ associations, allowing them to cooperate for the common good. Work and capital are united while respecting each other’s rights.
It is easily deduced from what has been said that the interests common to the whole industry or profession should hold first place in these guilds. The most important among these interests is to promote the cooperation in the highest degree of each industry and profession for the sake of the common good of the country. Concerning matters, however, in which particular points, involving advantage or detriment to employers or workers, may require special care and protection, the two parties, when these cases arise, can deliberate separately or as the situation requires reach a decision separately.50
Corporations, like labor unions, by their own nature take precedence over the state. They offer workers a channel for their responsible participation in their companies, and a platform for voicing their demands and positions on general political measures that affect the national economy.
38b) Guilds
In ancient times, artisans’ guilds embodied the functions of the professional corporations. In modern times, we can still learn from one of their main characteristics: the personalizing nature of professional relations within the guild, which can be incorporated in our business enterprises.
39. Cooperatives: Usefulness, Nature, and Functions
The cooperative is another way of promoting professional interests. Several enterprises or units of production of the same sector can group together to improve the technology of their means of production, to improve the standards of living and the professional qualifications of their members, etc. The attention and assistance they receive from the state is justified by their contribution to national progress and by the human values they foster.
Cooperatives are especially advantageous for farmers.51 Among the functions they perform in this sector are the following:
· Higher earnings
· The improvement of working conditions
· Greater job stability
· A greater stimulus for initiative in work
· The achievement of economies of scale
· The availability of professional formation and education52
Footnotes:
1. Pius XII, Address, May 7, 1949.
2. Ibid.
3. Pius XII, Address to the Catholic Union of Industrialists, Jan. 31, 1952.
4. Cf. GS, 64.
5. Cf. CCC, 2431.
6. Pius XII, Address, Jan. 31, 1952; cf. CCC, 2432.
7. John XXIII, Enc. Mater et Magistra, 99.
8. Cf. John Paul II, Address to Workers and Entrepreneurs at Nou Camp, Barcelona, Nov. 7, 1982.
9. John XXIII, Enc. Mater et Magistra, 91.
10. Cf. Ibid., 92.
11. Cf. Ibid., 93.
12. John Paul II, Address to Christian Entrepreneurs and Managers, Nov. 24, 1979.
13. Ibid.
14. John XXIII, Enc. Mater et Magistra, 92.
15. John Paul II, Enc. Laborem Exercens, 19.
16. Pius XI, Enc. Quadragesimo Anno, 71; cf. CCC, 2434.
17. Cf. Pius XI, Enc. Quadragesimo Anno, 68.
18. Cf. John XXIII, Enc. Mater et Magistra, 71.
19. Cf. Pius XI, Enc. Quadragesimo Anno, 72.
20. Cf. Ibid., 71.
21. Cf. John Paul II, Enc. Laborem Exercens, 19.
22. Cf. Pius XI, Enc. Quadragesimo Anno, 71.
23. John Paul II, Enc. Laborem Exercens, 19.
24. Cf. John XXIII, Enc. Mater et Magistra, 135.
25. John Paul II, Enc. Laborem Exercens, 19; cf. CCC, 2432.
26. Cf. Van Gestel, La Doctrina Social de la Iglesia (Barcelona: Herder, 1964), 259–262.
27. Pius XI, Enc. Quadragesimo Anno, 65.
28. Cf. John Paul II, Enc. Laborem Exercens, 14.
29. John XXIII, Enc. Mater et Magistra, 92.
30. John Paul II, Enc. Laborem Exercens, 14.
31. Ibid.
32. Ibid.
33. GS, 67.
34. Cf. John Paul II, Enc. Laborem Exercens, 20.
35. Paul VI, Ap. Letter Octogesima Adveniens, 14.
36. John Paul II, Enc. Laborem Exercens, 20.
37. Ibid.
38. Pius XII, Address to Italian Christian Labor Association, Mar. 11, 1945.
39. John XXIII, Enc. Mater et Magistra, 22.
40. Cf. Ibid., 65.
41. Benedict XV, Letter to the Bishop of Bergamo, Mar. 11, 1920.
42. Cf. Pius XII, Address, Feb. 2, 1945.
43. John Paul II, Enc. Laborem Exercens, 20.
44. Paul VI, Ap. Letter Octogesima Adveniens, 14.
45. Cf. John Paul II, Enc. Laborem Exercens, 20.
46. Pius XI, Sacred Congregation Statement, June 5, 1929.
47. Cf. Ibid.
48. Cf. John XXIII, Enc. Mater et Magistra, 37.
49. Pius XI, Enc. Divini Redemptoris, 54. The term corporation is not taken here in the sense of business enterprise, but as a professional association.
50. Pius XI, Enc. Quadragesimo Anno, 85.
51. Cf. John XXIII, Enc. Mater et Magistra, 143.
52. Cf. GS, 71.