FROM THE WORLD OF WORK

Dr. Bronisław Wojciechowski

Organization of employees of the company “Gazolina” in Borysław

Ever since the days of Robert Owen and the emergence of modern industry and the working class associated with it, efforts have been made to create better living and working conditions for all workers, in particular those workers who struggle to put bread on the table as they participate in the enormous and often complicated process of extracting and processing raw material. We do not all have the same idea of what happiness is, but we all feel that earning a decent wage is an essential part of happiness. Without a secure foundation for our material existence, there is no path to a better life, to higher aspirations or to culture.

The struggles of the working class to improve the workers’ living conditions today and to restructure a better social system for the future is in essence a struggle to introduce the broad masses of the proletariat to the treasures of culture. And here and there, against the background of this world-wide struggle between the powers of capital and labor, there are bursts of bright ideas that follow certain principles aimed at the immediate improvement of the living conditions of workers by giving them a fair wage for their labor. These ideas, shining brilliantly from the minds of theoreticians, they go out quickly after illuminating the horizon for a short time with more or less radiance. Sometimes, one or another famous name goes down in history, such as those of 19^th century theoreticians Henri de Saint-Simon and Charles Fourier.

When an idea is born in the mind of a realist, it transforms into an organization that embraces a wide circle of individuals. Then, in the world of capital and exploitation, an oasis is created in which people join against the prevailing views and established customs, in an effort to create a world other than the one surrounding them, a new world which may become a microcosm of the future world of work.  Such was the oil company Spółka Akcyjna “Gazolina” in Borysław. Its organization of employees was born not from a simple theory, but from deep thought, love of work and love of the working class. Several years of painstaking work have shown that the slogan carved at the entrance door to the building of the Society: “Joint Work- Common Yield” was not an empty phrase.

Attempts to create this kind of organization went in different directions. The necessary condition for success was the cooperation between the founder of the organization and of its employees. This cooperation developed slowly and was fraught with serious difficulties which were tempered by the mutual trust between the workers and the manager. Of course, it was difficult to break the distrust of the workers who did not believe that the founder of the enterprise would seriously consider making them co-owners of the company by giving them shares. Rather, it was more understandable to them if he had been trying to improve their fortune by salary, providing better housing, paid holidays, etc.

The worst difficulties came with the distribution of shares. When ten years ago, one of Gazolina’s worker, in addition to the annual salary in cash, was granted a certain amount of shares in the company, he got scared and said to his superior: “It is better to give me my money at once,” so alien to this man’s mind was the possibility of any cooperation between labor and capital. Thus, the impetus to create this new organization was built on two principles. The first principle was the improvement of the employees’ living conditions. The second was sharing the ownership of the enterprise with employees by enabling them to own shares. Let us consider both of these principles, starting with the second, as it is more fundamental.

As you know, the company “Gazolina” is a joint-stock company and is headed by the Supervisory Board, elected by the General Meeting. The Supervisory Board chooses the Executive Committee from among its members. It has quite extensive powers and constitutes the active Management Board of the Company. The chairman of the Executive Committee is the head of the entire enterprise. There were also the proxies, clerks and workers.

When establishing the “Gazolina” company in 1912 (initially as a limited liability company under the name of “Zakład natural gas engineer M. Wielżyński i Ska”), shares in the company belonged in equal parts to 3 partners who put in their savings. They were also its managers. In 1916, the enterprise grew with the creation of a new limited liability company under the name “Gazolina”, which was merged with the former “Natural Gas Plant”. This is where the turning point in the company’s development took place. Not only managers and engineers but also workers were admitted as shareholders, who owned 1 1/2% of the shares.

The fact that employees were allowed to own shares of the company also resulted from the fact that the successful development of the company, thanks to its motivated managers, required a constant expansion of production and fabrication sources, for which significant capital was needed. The founders of Gazolina did not have enough capital. However, they did not want to turn to financial powers to borrow money, because they knew that once they became involved with anonymous capital, the nature of the enterprise would be lost, and they would work for strangers, as so many other companies had done before and still did. Therefore, they turned to those whose daily work was essential to the existence of their enterprise. They gradually tried to base the entire structure of shared interest on them. Hence, the exclusion from the enterprise of capitalist foreign non-Polish financial institutions became the cornerstone of the entire structure.

In 1920, the limited liability company is transformed into a joint-stock company, and the process of transferring shares to labor representatives is accelerated. In this way, from year to year, whether through new issues or through the purchase of shares on the market, with the considerable help of the company, employees increased their ownership. In 1927, all associated employees of “Gazolina” had 30% of registered shares or 48% of the vote. At the same time, the ownership of the founders is decreasing and the number of shares owned by small shareholders employees is increasing. As a result, one of the founders of the company, who in 1913 owned 33% of the company, saw his shares fell to 5% in 1927 and he is now the largest shareholder of Gazolina. The shares of another went from 20% in1916 to 2% in 1927.

Of course, together with the percentage of reduction in the original founder’s shares and the increase in workers’ shares, there had to be a psychological shift in the minds of both founder and workers. A sense of solidarity was growing, based on the apparent fact that individual owners were giving up some of their property rights in favor of the general public in accordance with their ideals. Under these conditions, one can speak of the common interests of the worker shareholders and of the owner shareholders who sit on the company’s management board. Foreign shareholders, for whom the dividend amount they receive is the only proof of their relationship to a company, remain on the sidelines. The real power is represented today by co-owners of the enterprise: workers and owners associated in a special union. This union also includes members of the Council of Authority.

The company’s activities aimed at improving the well-being of its employees followed different paths. Already in 1922, the General Meeting of the Company adopted the first draft of the statute for permanent employees of “Gazolina.” The principles that animated the creators of the statute were reflected in its introduction:

“The goal of each employee is to acquire their own workshop. The agricultural laborer may dream that, sooner or later, he will acquire a piece of land on which to farm as he pleases. A factory worker cannot dream of owning the wonders of modern technology, but he can and should think about becoming a co-owner of the enterprise in which he works. Representatives of capital should strive to collaborate with labor and, as a result, these two groups who are sometimes hostile to one another, will turn into mindful cooperation.”

The original draft of the Statute, adopted in 1922, changed with more experience. The last redaction, dated May 16, 1927, reads as follows:

§ 1. Employees of S.A. “Gazolina” can be divided into permanent and temporary ones.

§ 2. A permanent employee is a person who has been working in the company for at least § 2. A permanent employee is a person who has been working in the company for at least one year, is the owner of registered shares of the company in the number determined by the Management Board of the Company and has been considered a permanent employee. All others are temporary workers. Members of the Supervisory Board are permanent employees.

§ 3. In exceptional cases, the Management Board of the Company may appoint an employee before the end of the year of work in the enterprise, and grant a severance pay for the time served in other enterprises.

§ 4. A permanent employee collects a monthly salary in accordance with the resolution of the Management Board of the Company. The salary should correspond to the average earnings in a given district and occupation.

§ 5. The Management Board of the Company has the right to terminate a permanent employee’s work for three calendar months and, upon termination of the employment relationship, a severance pay of 1/12 of the last monthly salary, without an allowance for an apartment, light and fuel, for each working month from the date of appointment to termination. If the employee had a reduced wage in the last three years prior to the termination, the severance pay is calculated according to the highest monthly wage in these 3 years. Each permanent employee may stop working in the enterprise and demand payment of the severance due to him after 10 years of work as a permanent employee, and an employee with academic education after 5 years of work. The basis for calculating the severance pay for members of the Supervisory Board is the average of the last three years from the sum of royalties and salaries paid.

§ 6. Permanent workers receive their normal wages in the event of sickness lasting up to three months. Longer sick leave may result in the termination of the service relationship, with the use of benefits provided for in § 5. In the event of the death of a permanent employee, his wife or children, and in the absence of these legal heirs, the remuneration provided for in § 5.

§ 7. Permanent employees will use the amounts from the salary adopted annually by the General Meeting in proportion to the amounts earned during the year. The sum of the salary is to be at least as much as the royalties of the Council of Command. Permanent employees receive an allowance for the duration of their vacation, which is to be calculated in proportion to the statutory number of vacation days and in proportion to the net pay (without allowances).

§ 8. Moreover, the Supervisory Board will allocate for permanent and temporary employees a certain number of shares with the consent of the General Meeting on concessionary terms for each issue. These shares will be distributed in proportion to the amount earned during the year.

§ 9. The Supervisory Board determines:

a) that for the period from the date of establishing the employee until December 31, 1926, a permanent employee should have in deposit, by the Management Board indicated, registered shares of “Gazolina” in his name in the amount equal to the sum of the severance pay due on December 31, 1926 divided through 20;

b) that from January 1, 1927, every permanent employee is obliged to purchase, for his monthly wage, a further number of Gazolina’s registered shares and deposit them into the deposit indicated by the Company’s Management Board by December 31 of each year in arrears at the latest;

c) that the shares of “Gazolina” held by the employee pursuant to section a) and b) of this section, as long as the employee works for the company, may not be taken from the deposit or disposed of without the consent of the Company’s Management Board. If the employee disposes of these shares or their part, the employee loses all rights under this agreement and waives any claims against the Company on this account.

§ 10. Permanent workers have all rights under state laws and may not be limited in this respect by any provision of this agreement.

§ 11. A permanent employee acting to the detriment of the Company, intentionally or through negligence, may be expelled by the Executive Committee, however, loses all rights of a permanent employee, in particular the prerogatives under § 5.

§ 12. Each permanent employee, in matters arising from this contract, may submit a complaint to the Board of Governors, which resolves the matter irrevocably.

A characteristic feature of the organization based on this statute is a stable work force because it ensures severance pay corresponding to the number of years of service. At the same time, however, the company imposes an obligation on the permanent employee to have a number of shares in proportion to the benefits due to him in the event he or she is leaving the company. By the end of 1926, the number of shares that each permanent employee had to hold was equal to his severance pay divided by 20: the nominal value of the shares. Starting on January 1, 1927, the obligation of every permanent employee is reduced to his or her purchase of company shares each year for one month’s wage. The acquisition of shares is dealt with by the Union, known as syndicate of employees, which keeps and manages the shares.

Maintaining the causal relationship between the insurance of the living employee, even after leaving the company, and his ownership of shares, became the basis of the entire organization. For if, on the one hand, the company took on its shoulders the burden of severance pay that was growing year by year, on the other hand, it secured dedicated employees interested in the development and success of the company and eager to work. The company was rewarded for creating a production environment in which employees did not feel like slaves and were aware of their rights as co-owners. For 364 days a year, they are subjected to reasonable work discipline, but once a year at the General Meeting, they have the opportunity to advise and decide together about the fate of their enterprise, to criticize the Management Board’s economic principles and, in the event of a bad economy, to reject the Management Board’s trust.

In addition to the benefits provided for in the statute, such as the 13th month wage, efforts were made to provide employees with sound housing. After several years of efforts, significant results have been achieved in this domain. “Gazolina” has built three large houses in Borysław (the first brick houses in this town), where managers and workers employed in the company live. In addition, several acres of land were put at the disposal of employees, located next to their own refinery, on which vegetable gardens were established, similar to workers’ gardens in Vienna.

The earnings of “Gazolina” permanent workers significantly exceed the average earnings in the Borysław Basin. A “shift” worker, receiving a salary in the highest category, earned an average monthly salary of about 300 zlotys per month, with all allowances and with a 14-day notice. A “permanent” worker in “Gazolina” earned an average of about PLN 430 a month, taking advantage of the holiday allowance, the 13th wage, 25% of the allowance for housing, electricity, fuel and salary. More importantly, he was entitled to a 3-month notice and to severance pay in the amount of one month’s wage for each year of service. The benefits received by a “permanent” worker in “Gazolina” significantly exceed the wages of a “shift” worker who is remunerated under a collective agreement that is binding for all industrialists and workers in the oil industry.

The disadvantage of the existing statute is undoubtedly the fact that this organization does not yet cover all employees of “Gazolina.” Certain categories of workers do not benefit from it, especially unskilled workers, whose remuneration is based on the rules adopted in other enterprises. However, further development must and will go in the direction of including all employees of Gazolina in its statute. Efforts in this direction have been made for a long time, both on the part of employees and management. The last months of 1927 updated the issue of defining the rights of temporary workers, listed in § 1 of the general statute, as an intermediate type between “permanent” and shift workers, in accordance with the collective agreement of the oil industry. The draft statute for shift employees, the rules of which have already been adopted by the Management Board, will be approved by the next General Meeting of the Company.

The adoption of this statute will be a major step forward in the company’s current organization. Striving to harmonize internal relations, attention was also paid to the great problem of strikes. It was clear that with the existing structure of the organization, a strike as a weapon became obsolete in the employees’ struggle against the Management Board of the Company. This was reflected in a special agreement with workers, approved by the Trade Unions in Borysław. In the third article of this agreement, we read: If workers in the oil industry or their Unions terminate the oil agreement and submit demands to the Employers’ Chambers, and the Chambers refuse to take their cause into account, it may end up in a strike. However, before starting a strike in the oil industry, the workers of the company “Gazolina” and the above-mentioned unions will start negotiations on the basis of the demands made by the workers, and if the negotiations lead to a successful settlement for both sides, then the Trade Unions will not call the workers of this company to strike.

In practice, when it comes to “permanent” workers, their salaries in “Gazolina” always exceeded the standards demanded by the Trade Unions for all workers in periods of struggle for an increase in wages. No negotiations were needed in this area. As for the “peak” workers, there was always an agreement and the company “Gazolina” had never been subject to an economic strike, which of course had the best impact on the company’s prosperity. It should be mentioned that the company “Gazolina”, due to its nature, does not belong to the Chamber of Employers in Borysław. A characteristic feature of the organization of Gazolina employees is that white collar and blue-collar workers are subject to the same rules. The above-cited statute applies equally to workers and officials, as well as to members of the Company’s Management Board. The consequences are that the system of wages and other benefits is completely uniform and predetermined for all. This rules out arbitrary actions from management and deepens the sense of justice for employees who know their rights and can effectively defend them. All employees are also associated in the “Gazolina” Employees’ Club, which focuses on cultural, educational and social purposes.

This is the general outline of the organization, which is an interesting social experiment. So far, this experiment has shown positive results. In what direction will further development go to show us what the future looks like? The building block of this future is the work of the close and united ranks of Gazolina’s employees who trust in their strength and have become attached to the company’s principles over the years.

“Knowledge and Life”, 1928, No. 2, pp. 115–123.