Employment Relations in Britain Mick Marchington , Jeremy Waddington and Andrew Timming

1. Employment Relations in Britain Mick Marchington, Jeremy Waddington and Andrew Timming

2. Lecture outline • Context and key themes • The role of the state and shifts in British IR policy • British union movement • British employers’ and employers’ associations • British styles of human resource management (HRM) • Collective bargaining • Employee involvement and participation • Fairness at work • European Union (EU) membership and consequences • Networked organisations/outsourcing • Conclusions

3. Context of British industrial relations • Population of approximately 59 million (UK), 80% employment rate • Most men work full time; more than 40% of women work part time • Major shifts in the sectoral division of workers – about 75% of British employees work in the service sector • Growth in foreign direct investment and related employment practices • Membership of European Union (EU) influences labour practices and standards • Increasing number of migrant workers, particularly amongst low-wage earners • In 2010 the unemployment rate was c.8% of the labour force

4. The role of the state • Industrial relations have in the past been characterised British IR as ‘voluntarist’ because of the comparatively low level of legal regulation • Yet this characterisation is increasingly misleading: “The British state has in fact been a central actor in the construction, maintenance and reconstruction of industrial relations institutions” (Howell, 2005: 3)

5. Key themes • Especially since 1979 the British system has been radically reformed by interventionist legislation characterised by labour market re-regulation and attempts to foster a competitive ‘enterprise culture’ • Reforms were initiated by Conservative Governments between 1979 and 1997. Many were maintained by the 1997-2010 New Labour Governments. How would you characterise the approaches of the post-2010 Conservative-Liberal Democrat coalition government? • Combined with broader macro-economic trends and shifts in the labour market, such reforms have had profound effects on British industrial relations

6. The ‘voluntarist’ system • Voluntarism arose out of trade union immunity legislation such as the Trade Disputes Act 1906 • Principal features of voluntarism included: • non-legally binding collective agreements • voluntary union recognition by employers • low level of formalisation of industrial relations structures • voluntary framework of state-provided dispute resolution facilities (no power of the State to arbitrate) • This voluntarist system was supported by employers and unions

7. The state:from voluntarist to interventionist • In an attempt to reverse economic decline, governments from the 1970s onwards legislated industrial relations reform • The most radical of these reforms were those of the Conservative Thatcher Government (1979-1990) which aimed to reduce the power of the unions • Some have characterised this point in British history as the shift from a voluntarist to a neo-liberal interventionist state

8. Broad shifts in state economic policy • Economic policy: • 1945-1979: Keynesian consensus on state-directed income redistribution and full employment • 1979-1997: Radical shift to neo-liberal reform including deregulation, flexibilisation of the labour market and control of inflation • 1997-Current: Continued focused on inflation control; recent challenge of the Global Financial Crisis and the subsequent challenge to recover from and cut the deficit

9. Dispute settlement • The state has long provided conciliation and arbitration services to supplement voluntary collective bargaining and dispute procedures • Since 1975 these services have been offered by the independent Advisory, Conciliation and Arbitration Service (ACAS) under the Employment Protection Act • ACAS is a governmental agency governed by a tripartite council, of employer and union nominees with a balance of independent members e.g. academics • ACAS offers industrial relations advice as well as conciliation and non-compulsory and non-binding arbitration services to the parties to individual and collective agreement disputes

10. Broad shifts in state public-sector policy • Following the election of the Conservative Thatcher government in 1979, there was a decisive shift in public sector policy as neo-liberal reforms aimed to limit public expenditure and the size and role of the state • Privatisation of major parts of the public sector between 1979-1997 reduced the size of the public sector from 30% to 22% of the labour force while public sector pay was restrained • Privatisation and deregulation of the public sector had profound effects on employment relations, including the fragmentation of work across organisational boundaries • The British state remains a large employer, employing approximately one quarter of all workers in Britain in 2008

11. The 1997-2010 New Labour Government • 1997-2010 Labour Governments modified, but did not fundamentally change the framework of the IR laws introduced by the Conservatives between 1979-1997 • Key changes include the introduction of a national minimum wage in 1999 and the Blair Government’s opt-in to the Maastricht EU Social Protocol, which has strengthened statutory employment rights • Such changes constitute a slight shift towards workers’ interests and towards juridification in the regulation of minimum employment standards

12. History of early British unionism • As Britain was the first country to industrialise, it probably has the longest history of unionism • Early unions were formed by and were exclusive to skilled craft workers; some began before in the nineteenth century • Widespread unionism of semi-skilled, unskilled and female manual workers began in the late nineteenth century • Prior to World War II, the majority of unionised white-collar workers were in the public sector • After 1960, substantial numbers of private sector white-collar workers were also unionised

13. British unionism since WWII The level and density of unionisation has fluctuated since the end of World War II Three post-war phases can be identified: • 1948-1968: Membership grew from 9.3 million to 10.2 million; union density moved between c.42% and 50% during this time • 1970s: Membership grew markedly as white collar workers unionised. Total union membership reached all all-time high of 12.6 million in 1979, with density peaking at about 56% • 1979-: Between 1979 and 2008 union membership fell by 5 million members to 7.6 million, with union density falling from c.56% to c.28%

14. Decline in strikes • Along with the decline in unionisation there has been a decline in strike activity • From a peak of 3906 strikes with almost 11 million working days lost in 1970, the number of strikes fell to 116 in 2005, resulting in only 157 000 working days lost • Wages and pay-related issues still underpinned more than half of the strikes in 1999 • In the twenty-first century, a greater proportion of strikes are ‘defensive strikes’ • Decline of strike action in Britain may be steeper than elsewhere due to the restrictive legislation introduced by the Conservative Thatcher government

15. How can we explain the fall in British union density? • There is no agreement on the relative effects of forces that have contributed to the fall in British unionism, yet it is generally accepted that these forces include: • macro-economic context • changing composition employment and of the labour force • management resistance and workplace practices • state labour policies • issues internal to unionism • 1997-2010 Labour Governments did not reverse these trends and actively encouraged private-sector involvement in the public sector

16. Contemporary British unionism • In 2008, there were only 193 unions (a massive decrease from 1348 unions in 1920 – a result of both union mergers and falling union density) • Union membership is concentrated within fourteen unions accounting for over 80% of total union membership, with the three largest unions representing just over half of all unionised workers • Within the labour force there are marked variations in union density: • In 2007, unionism in the public sector was 59%* whilst union density in the private sector was only 16% • Non-manual workers are more likely to be unionised than manual workers • Unionism is slightly higher amongst women (30%) than amongst men (c.26%) • Full-time workers are more likely to be unionised (30%) than their part-time counterparts (22%) • Workers over the age of 50 are more likely to be unionised (35%) than workers aged under 25 years (10%) -------- * All such percentages are estimates; measuring union density is not an exact science!

17. Trade Union Congress (TUC) • The TUC was established in 1868 and is Britain’s one main union confederation • 58 unions representing almost 6.5 million workers are affiliated with the TUC (2008) • The TUC is not directly involved in collective bargaining but instead primarily: • lobbies governments on union issues • provides services to affiliated unions • adjudicates disputes between affiliated unions • In response to declining membership, the TUC has focused on organising strategies and establishing partnerships with employers in recent years, but with only limited success

18. The Union Movementand the Labour Party • British unions were instrumental in the establishment of the Labour Party in 1906 • Since the mid-1980s the Labour Party has increasingly distanced itself from unions, as it increasingly secured funding from the business sector and elsewhere • Individual unions choose whether to affiliate themselves with the Labour Party; some unions do not affiliate

19. Employers’ associations in Britain • The Confederation of British Industry (CBI) was formed in 1965 and is the peak organisation of employers in Britain • The CBI does not participate in collective bargaining, but lobbies the government and EU on employer-related issues and claims to represent the views of 200 000 employers, who employ approximately half of the UK workforce • There are 80 employers’ associations in the CBI. They typically offer one or more sets of services to their members including IR advice, training and lobbying services • Whilst once prominent in the voluntarist system of industrial relations, employers’ associations no longer play a central role due to the enhanced power and autonomy of individual employers

20. Employers in Britain • Since the 1980s, British employers have exercised greater managerial power driven by higher levels of competition in product markets and reductions in unionism • There is diversity in the mix and balance of individual employer strategies to achieve control, productivity increases and cost reduction, for example: • pragmatic/opportunistic approach (cost-driven strategy), vs. • high-commitment approach (flexibility and employee commitment)

21. Human resource (HR) management in Britain • One-third of workplaces with more than 10 employees have a personnel or HR specialist • The principle responsibilities of British HR managers are concerned with grievance and dispute handling, recruitment and selection, staffing and employee consultation • More than 60% of private-sector workplaces have a personnel/HR presence on the board of directors, though this varies between sectors and with organisational size • Membership of the relevant professional organisation, the Chartered Institute of Personnel and Development (CIPD), has risen nearly tenfold since the 1970s. Internationally, the CIPD is the second biggest organisation of this sort. Only the equivalent US organisation is larger • There is an increasing focus on the ‘business partner’/strategy role of HR managers. There are threats to their role from the increasing role of line managers, specialist consultants, outsourcing and shared services arrangements

22. History of collective bargaining in Britain • Collective bargaining has a long history. By the end of WWI, multi-employer bargaining for manual workers was well established and industry-level negotiations were encouraged by the state • Before WWII, there were centralised negotiations across entire industries (there were some exceptions); this left little room for workplace bargaining • A shift occurred after WWII with the rise of single-employer bargaining and by the mid-1970s collective bargaining was decentralised throughout much of the private sector

23. Changing collective bargaining • In 1970, collective bargaining covered around 70% of the British workforce. By 2006, coverage had declined to around 27% • There are variations between sectors, with the public sector having the highest coverage (83%) and the private sector the lowest (14%) • The shape and character of collective bargaining also varies in relation to the level of bargaining, the size and structure of the unit of employees covered by an agreement and the scope of the subjects determined by collective bargaining • Little multi-employer bargaining remains. Single unionism and ‘single-table’ bargaining (where all unions negotiate together) has increased since 1990, with single-table bargaining occurring in 60% of workplaces in 2004

24. Employee involvement and participation (EIP) • The nature and extent of EIP programs has fluctuated over the past century • The current form of EIP which gained momentum in the 1980s differs substantially from earlier variants as it is: • Individualist and direct (as opposed to collective and through representatives) • Initiated unilaterally by management (not through consultation) • Directed at securing individual employee commitment to and identification with the employer

25. Fairness at work • A national minimum wage was first introduced in 1999, as a positive contribution to fairness in the workplace • Relative pay inequality has not been addressed and has been institutionalised in the form of bonuses and performance-related pay • Gender inequality remains evident; only a little progress has been made on this front beyond some redress in the form of the national minimum wage • Increased immigration raises challenges in preventing and resolving disputes over racial discrimination at work • Workplace bullying and harassment more generally is an issue of increasing importance

26. European Union (EU) membership • The UK joined the European Economic Community (EEC), as it was then, in 1973 • At the time the move was generally favoured by employers on the grounds of market benefits, and resisted by the unions • Unions shifted their position after the Conservative Thatcher government implemented anti-union laws, which were less favourable to workers and unions than the EEC’s social policy measures • The subsequent faltering progress of European social policy and the increasing prominence of neo-liberal policy objectives in the European Commission has led many unionists to reassess their view of the EU

27. Consequences of European Union membership • Legislation originating from the EU influences UK labour law and industrial relations in two main fields: • Individual employment rights • Information and consultation rights • Since the reversal of the UK opt-out from the EU Social Chapter in 1997, a range of new rights have been enacted in UK legislation, including the regulation of working time, a right to urgent family leave, a right to parental leave, a right to equal treatment for part-time workers and protection for fixed-contract workers • Provisions for information and consultation, including works councils, are yet to have much practical effect

28. Employment relations and networked organisations • The growth of outsourcing fragments the concept of employment relations and creates special challenges for individuals working for subcontractors in terms of: • Employment security • Pay and benefits • Employee voice • There is a challenge for those who try to theorise about IR and HRM to explain multi-employer networks

29. Conclusions • Since 1979, the IR system has experienced substantial change from a voluntarist system to one of increased state intervention • Despite increased juridification, there is still not a strong and centrally regulated IR system. This has resulted in employer autonomy to pursue either a: • Low-road/contract approach of cost-minimisation • High-road/status approach of high-commitment • Union density fell to half of its peak in 1979 and unions are struggling to find a clear identity and new roles • EU membership continues to influence domestic IR legislation