‘ Soft-regulation’ and the modernisation Of employment relations under the British Labour government (-97-2000)

1. ‘Soft-regulation’ and the modernisation Of employment relations under the British Labour government (-97-2000) MARK STUART

2. Approach • Explores the way New Labour sought to modernise British employment relations through non-legislative enactments (soft law) • Labour-management partnership (1st term) • Facilitation of workplace change (2nd term) • Trade union modernisation (3rd term) • Soft law allows for wider set of insights into nature of state intervention (though shaped by overall state approach)

3. DATA Research draws from multiple research projects conducted since 2000 to present day. Labour-management partnership: Survey of trade union representatives (MSF) conducted in 2000 (317 responses, 15%); Partnership Fund research in Finance sector Facilitation of workplace change: ACAS project on NHS modernisation (5 case studies during 2002-2004) Trade union modernisation: Evaluation of Union Modernisation Fund (2005-current)

4. Background • IR research has tended to focus on the more ‘formal’ aspects of the role of the British state (ie. Hard law) • ‘New Labour’ policy situated within the British tradition of ‘voluntarism’ (limited state intervention) and recent ideological commitment to Neo-Liberalism. • Emphasis on individual rights, with limited collective changes (NMW; SRP) and not reversal of Tory reforms • But, state intervenes in a myriad ways (Howell), with increased emphasis on ‘soft law’ (benchmarking, encouraging, steering)

5. Labour-management partnership (1) • Promoted during Labour’s first term, 1997-2001 • Based on productive cooperation and end of adversarialism • DTI Partnership Fund (50k for joint projects) – definition of partnership was ‘open and vague’ but seen as ‘call for self regulation between the workplace actors (Terry and Smith (2003) • Industry for partnership flourished • Some academics saw in partnership an opportunity for unions to increase their institutional centrality (Ackers and Payne, 1998); chimed well with idea of the ‘mutual gains enterprise’ (Kochan and Osterman, 1994) • Wide body of research sought to question extent of mutual gains: unions incorporated; benefits to employees limited

6. Labour-management partnership (2) • State support diminished during second term and industry for partnership receded • Opinion divided between those that see the ‘partnership movement…has run out of steam’ (Guest et al, 2008) and the endurance of partnership agreements (Bacon and Samuel, 2009) • 248 partnership agreements between 1990-2007; in 2007 accounted for 10 percent of workers and 1/3rd in public sector • But research shows it is problematic to conflate partnership with agreements • Partnership relates more to culture, policies and practices; good employment relations produces better ‘partnership’ outcomes • State endorsement of partnership did little to change employer culture; though state could attempt this as an employer

7. Facilitating workplace change: the state as employer (1) • Assessment of partnership often points to need for intermediation (Cooke, 1990); and also need to build skills and capacity of key actors (ie. Unions and management) • Advisory, Conciliation and Arbitration Service (ACAS) was a key player (as a state agency) in the ‘Industry for Partnership’ ; played a role in facilitating partnership in NHS change • From 2004 New Labour sought to modernise the National Health Service through the Agenda for Change programme • Large ‘harmonisation’ programme that was to be implemented through partnership working and consultation machinery • But, widespread structural changes meant that at local level consultation machinery was often not working or had broken down

8. Facilitating workplace change: the state as employer (2) • In hospital trusts, organisational mergers had created uncertainty, distrust and tension in consultation forums • Uncertainty over what was negotiation and consultation, what issues were to be covered and protection of local interests meant forums had broken down and senior management were not attending; this made Agenda for Change difficult • ACAS played role in reinvigorating consultation machinery, through ‘workplace projects’, joint seminars and problem solving groups and the like; recognition of difference and benchmarks with ‘good practice’ were key • Consultation became more effective, which in some cases meant more effective employment relations and structures of representation - state role here as employer and facilitator

9. The modernisation of unions (1) • Trade Union Modernisation Fund introduced during New Labour’s third term, from 2006 • Up to 10 million was allocated across three rounds, for match- funded union projects (up to 200k) • 79 projects funded in total involving a large range of trade unions • Seen by some as largely an extension of the Partnership Fund, designed to foster less adversarial union activity and a ‘supply side trade unionism’ (Ewing, 2005) • Rationale was to equip unions with the skills: common place to management in global and competitive market place; need to represent diverse groups of workers (transform; demonstrate) • Themes partnership working, communication, diversity, modern management methods and professional competence; vulnerability

10. The modernisation of unions (2) • UMF projects were varied, and included: new partnership agreements with employers; extensive upgrading of technological capacities; extensive developments in diversity strategies and roles (eg equality representatives); wider ranging programmes of training; development of ‘management tools’ • Key emphasis on internal communications, diversity management and skills upgrading; attempts to engage employers often met with limited success. • Difficult to see the UMF as an exercise in state-sponsored social engineering (or if so, it failed); more ‘social exchange’, new ‘opportunity structure’ • State resources to encourage internal modernisation and climate for innovation - but politically contentious state investment

11. Conclusions: Steering the modernisation of employment relations (1) • Focus on how New Labour sought to modernise employment relations through soft regulation • Can be seen in terms of steering through partnership, facilitation and capacity building (union modernisation) • Can this be seen as coherent – partnership seems to underpin New Labour’s neo-liberal agenda for flexibility and consensus • But, when partnership failed, state steering sought to push the agenda in the public sector, with support from ACAS, and modernise unions to equip them with the right skills for partnership

12. Conclusions: Steering the modernisation of employment relations (2) • Such coherence not evident: partnership was largely rejected by employers (see argument of disconnected capitalism); unions have been able to use the UMF for their own agendas • Focus on soft regulation directs attention to the wider attempts by the state to (re)craft employment relations: state has always intervened in British industrial relations, despite voluntarism, and scholars’ emphasis on the law often results in ‘the exclusion or marginalisation of a much broader range of state actions’ (Howell, 2005). • Soft law directs us to these wider actions, but need to placed in the context of state action and also, ultimately, the relationship between hard and soft law (ie. Absent hard law may result in more soft law; but soft law may need some basic hard laws to work)

13. Conclusions: Steering the modernisation of employment relations