The management of industrial relations
How Has The Management Of Industrial Relations In Britain Changed In The Last Three Decades? What Does This Tell Us About The Respective Roles And Influence Of Employers, Management, Trade Unions And The State In Industrial Relations?
This paper attempts to examine the changes which have taken place during the 1980s, the 1990s and the period 2000-2010 within the field of industrial relations. According to Edwards (2003:9)
The employment relationship is by definition a relationship between an employee and an employer... this direct relationship may be mediated by the two other key institutions to IR, the trade union... and the state.
Therefore this essay will also seek to explore the respective strategies, roles and powers of these actors.
The paper has two sections; the first one represents the 1980s and the 1990s whereas the second one represents the period from 1997 into the last decade. In the first section the essay starts by describing the interventionist role that the Conservative government of Margaret Thatcher adopted when it came in power in 1979. The legislations passed by the government constitute the reason of the development of very confrontational industrial relations throughout the two decades as they caused an imbalance of power in favour of the management and against trade unions. After seeing the legislative initiatives launched by the government the paper will attempt to describe the advantageous position of managers and employers who managed to re-exert managerial prerogative and to impose harsh managerial strategies. With the power always on their side managers imposed their own “rules” in the employee relations and showed a preference for individualism (employee/management relationship) rather than collectivism (union/management relationship) as they saw benefits such as greater flexibility and greater control over employees. Managers in the UK also start placing attention to HRM policies in the 1980s and seek to implement them in an effort to achieve business goals. But evidence suggests that they failed to implement appropriate Human Resource Management strategies. After that this paper will examine the decline in union membership, in unions' ideology and therefore the decline of their overall power.
In the second section of the essay we will study the period during which “the New Labour” was in power. In its effort to put an end to the special relationship it had with the trade unions in the past and to promote neo-liberalism the “New Labour” kept most of the legislation of the previous government but also established its own. Its main goal was to promote workplace “partnership” which meant that all actors; employers, employees, trade unions and government would work in collaboration to obtain mutual benefits. The strategies implemented by the government in order to promote workplace “partnership”, on the one hand helped in fostering employee involvement and communication within the workplace and on the other hand helped unions to reassert some of their lost power.
During the period 1979 and 1997 the government clearly allied itself with the side of managers and employers in an effort to protect capitalism (Salamon 2000:92). Later on we will see that the alliance between employers and government against trade unions and the unequal distribution of power meant the beginning of an adversarial employment relationship and industrial relations.
Committed to its liberalist/laissez-faire ideologies the Conservative government of Margaret Thatcher which came in office sought to achieve one goal: to aid management to reassert its authority and power by constraining the power of trade unions. By adopting a very interventionist role the government proceeded with the launching of eight legislations within thirteen years and targeted at curbing unions' ability to organise, their ability to pursue industrial action and particularly strikes and it interfered with their internal affairs (Salamon 2000:103).
Salamon (2000:65) itemises a number of laws passed by the government during the period 1989-1997 and which account for the decline of the power of trade unions: The Thatcher Conservative government abolished the closed shop and removed the statutory recognition procedure. It prohibited secondary industrial action. Trades unions were required to ballot union members and proceed to industrial action only with the consent of the majority. The government legally enforced the trade unions to use the ballot process for their national elections. Although the costs of conducting ballots were initially subsidised by the government, the Trade Union and Employment Right Act of 1993 put an end to the provision of funds but the procedure was still legally required (Salamon 2000:152). Furthermore they were considered responsible for unlawful actions authorised by union's officers, committees or shop stewards unless they denounced them. Unions were deprived of their right to punish members who opted not to partake in industrial action even if it was legal. In addition to all these, it was easier for employers to fire employees who took part in strikes. In addition to the legislative restrictions that the government imposed on trade unions it also proceeded with the abolishment of tripartite institutions on which the trade unions were represented such as the MSC and the NEDO (Salamon 2000:65).
During the 1980s and 1990s managers saw the balance of power shifting towards their side. This was due as we have seen to national legislation suppressing trade unions. Salamon (2000 :248) argues that this reassertion of power as well as the economic climate with the economic recession, the high rates of unemployment and the competition taking place at the international level prompted managers to adopt a managerial style called macho management. Purcell (1982) cited in Salamon (2000:248) explained macho management as the style of tough managers who neglected and scorned trade unions and whose ultimate interest was to manage and establish order. They were characterised by a great unwillingness to change their policies, to negotiate and to make concessions and they preferred dealing directly with employees rather than through unions.
This desire to deal with employees on a individual basis also accounts for the a shift from collectivism to individualism. In other words managers used to have to deal with employee issues through their intermediaries that is to say bodies that represented them, such as trade union whereas now they have to confront employees directly (Salamon 2000:66) . Salamon (2000:82) also explains that the new strategies initiated by the management during the period meant that employees were now engaged through individual contracts and whose terms and conditions were different than the rest of their colleagues and that their reward was dependent on their individual performance. Salamon (2000:66) explains that managers embraced individual employment relationships rather than collective ones as they were more flexible.
This flexibility and this emphasis on individualism was also explained by managers' attempt to introduce Human Resource policies which made their apparition in the UK in the early 1980s and promised managers what they sought: organisational effectiveness and increased performance (Salamon 2000:234) by eliciting employee commitment. According to Salamon (2000:235-236), these strategies were also ways of enhancing managerial authority because employees were directly now accountable to managers, managers were more able to obtain control and now had the freedom to design strategies that would limit empowerment conceded to employees, and set some boundaries to the terms and conditions of the employment contract. Generally from now on they had more freedom in the decision-making while at the same time employees were committed to them.
Once more Salamon (2000:239) explores the possibility that managers took advantage of HR practices in order to manipulate employees and claims that in reality managers' only desire is to be able to do their work with the slightest possible confrontation from employees. Kessler and Purcell (2003) claim that there is little evidence, from the WIRS data, demonstrating that organisations were willing or had the potential to use HRM strategies. Instead during the period most managers opted for Bleak House strategies. They also claim that managers mostly resorted to opportunistic and cost minimisation strategies. On the same tone, Blyton and Turnbull (2004:129) explain that the economic downturn during the 1980s and 1990s, the acute international competition, the low skills equilibrium in which the UK was entrapped and the feelings of job insecurity made it impossible for employees and employers to develop the trust needed for the implementation of HR practices and therefore the management relied on opportunistic and pragmatic strategies.
The issue of employee voice and most particularly employee representation elicited great attention by the government and the management when the European Court of Justice held in 1994 that the legislative initiatives of the government run counter to the EU directives and that the UK had ended up not respecting employee collective consultation rights. The Conservative government was enforced to amend its regulation which had come to mean that managers should either recognise unions at their workplace or/and set up other forms of collective representative bodies elected by the employees. This prompted some organisations too set up work or company councils. The creation of these councils raises three issues. First of all, they might be a threat to employee rights because managers might use them to by-pass trade unions. Secondly, they are not legally recognized so they have no rights and thirdly, employee representatives in these councils have not the training or experience of trade union officials and might therefore not elicit the attention and the respect of the management (Salamon 2000:188). As an example Salamon (2000:189) presents the case study of Bristol & West, a non-unionised company which in 1994 introduced the “partners' councils” which were employee representative bodies which allowed employees to express their opinion on the firm's Human Resource issues. Although the councils were reserved only for employee representatives the company tried to ensure that there was a professional or manager with them.
However, according to Ackers and Payne (1998) cited in Salamon (2000:260), it turned out that the reassertion of managerial authority , the HRM strategies introduced aiming at promoting individualism and employee voice and participation and the decline of powers of trade unions did not give to managers what they sought: order, cohesion and employee commitment. That is why they turned to the “workplace “partnership approach in pursuit of these goals.
The government's hostile position towards the trade unions as well as the harmful measures it took against trade unions had as subsequent repercussion the decline of union membership. This is illustrated by the figures presented by Salamon (2000:67) according to which during the period 1879-1998 union membership dropped by 5,5 million and by the figures provided by Blyton and Turnbull (2004: 139) which demonstrate that during 1979 and 1997 the number of trade union members fell by over 41 per cent. Nevertheless Salamon (2000:109, 111) also reckons that union membership experienced a striking decline in membership in the 1980s and 1990s because of the changes that took place in industrial and employment structures. The economic conditions of the time meaning low inflation and high levels of unemployment kept workers away from joining unions. Unions used to recruit as members full-time male manual workers who worked in large manufacturing firms as well as the public sector. The shift for the manufacturing sector to the service sector, the reduction in the size of firms, the rising female and part-time employment had meant that the trade unions not only lost members but they also had to turn to other types of industries and organisations, in order to seek members, which had not been easy because these organisations had no tradition in union organisation. Diamond and Freedman (2001) cited in Blyton and Turnbull (2004: 143) mention that many unemployed union members had no inducement in maintaining their membership because trade unions were not concerned by people who were on welfare while Cully et al. (1999: 212-213) cited in Blyton and Turnbull (2004:143) argue that other employees contested the unions' ability to offer benefits and that is illustrated by the WERS98 data according to which only a 46 per cent of union members believed that trade unions actually provided them with benefits.
The trade unions' collective consciousness was also negatively affected by the government's legislative measures aiming to (Salamon 2000:152)
promote ‘responsible' unionism, ‘return the union to its members' and protect the individual member against union ‘tyranny'.
Through the Employment Act of 1988 union members obtained individual rights to inspect the unions financial data to ensure that funds were not spent on illegal actions, to resort to the help of court in case the union would be pursuing unlawful industrial action affecting the member, to be protected from being punished by the trade unions whenever they refused to partake in industrial action even if it was lawful. Salamon (2000:153) argues that now the individual member had the right to refuse to accept and to call into questions decisions of the unions even if they were taken democratically. The individual member could go against the unions. Salamon (2000:124) also argues that the ideologies on which trade unionism relies with the most important one its “collective solidarity” had also declined due to the fact that trade unions started offering “modern services” to employees individually.
The decline in union membership and collective solidarity that have been already discussed overwhelmingly account for the erosion of power of trade unions. Nevertheless other factors have also contributed. Trade unions found themselves not only confronted to managers and employers who have always been reluctant to cooperate but they also had to face the government's hostility (Salamon 2000:111). Moreover the trade unions were further alienated due to the shift from the concept of collectivism endorsed by trade unions to the concept of individualism embraced by the managers who introduced HRM practices such as direct manager/employee consultation and information or performance-related pay.
Salamon (2000:118) discusses the loss of the power of conducting collective bargaining by trade unions due to three main reasons. First their collective bargaining power was curbed by the legislation launched by the Conservative government. Secondly there was the decentralisation of collective bargaining, meaning that the terms and conditions obtained in collective bargaining were no longer applicable across an industry. Furthermore the managers tended to prefer deciding the terms and conditions of employees based on an individual basis as well as to opt for a system of remuneration based on the individuals' performance or ability. Millward et al. (2000:197) cited in Blyton and Turnbull (2004:150) claim that during the period 1984-1998 the proportion of employees covered by collective bargaining dropped from 70 per cent to 40 per cent.
During the 1980s and the 1990s trade unions were on the defensive. They tried to survive during the 1980s and early 1990s because of the unfavourable economic, political and organisational conditions. In other words they had no choice but to make concessions in order to be become more attractive to managers. These concessions included the establishment of single-union agreements with no strike activity and employee councils (Salamon 2000:130).
In 1997 The “New Labour” came in power with the intention to promote its neo-liberalism strategies. In the past the Labour party had close links with the trade unions with the most significant one their financial contributions to the party (Salamon 2000:122). However when it took over in 1997 it attempted to distance itself from the trade unions and in its intention to do so, it maintained most of the legislative initiatives of the predecessor government. Nevertheless it launched two laws in support of the trade unions. The first of them was the National Minimum Wage Act of 1998 which allowed for the introduction of a national minimum wage (Salamon 2000:68). The second one was the Employment Relations Act in 1999 which allowed for the establishment of a statutory procedure permitting union recognition, provided that an employer could not refuse to employ, punish, fire or discriminate against an employee who is or intends to join a trade union or has taken or intends to participated in industrial action. The legislation provided for time off from work for trade union officials of independent recognised trade unions without pay loss in order for them to respond to their responsibilities within the union and also allowed for union members to be accompanied by trade union officials during grievance and disciplinary procedures (Salamon 2000: 197). The labour government also signed the social protocol of the treaty of Maastricht and as a result the European Working Time directive as well as the European Works Council directive became part of the UK law (Hyman 2003:54). In addition, the government passed legislation regarding part time employment and parental leave.
From the late 1990s towards the beginning of the 2000-2010 period the UK workplace experienced the emergence of the notion of “partnership” a notion that alludes to the idea that the state, employers, employees and trade unions can collaborate in order to achieve common targets and benefits (Salamon 2000:21). The emergence of the workplace partnership approach was allowed when the “New Labour” came in power. This approached seemed to be desired by the main actors involved in industrial relations who saw it as the solution to their concerns. The government was determined to eradicate the conflicts in the UK workplace, trade unions saw it as a way of striking an alliance with the management and the government in the pursuit of common benefits and the management saw is as way of achieving order and cohesion at the organisation level as they wished (Salamon 2000:260). Salamon (2000:263) highlights two attributes of the “partnership” approach which are the commitment for actors to cooperate in order to enhance organisational effectiveness and performance and the recognition that employers and employees have different interests and that is why they should use employee voice and communication mechanisms in order to foster their relationship.
Blyton and Turnbull (2004: 253) mentions that during the last years the Labour government's wish to promote the aforementioned “partnerhip” and the European social policies and Britain's effort to put in place the EC Information and Consultations Directive have resulted to an acute interest in various forms of employee involvement and participation. Apart from the improvements that took place during the previous two decades in the matter employee voice and employee representation with the set up of work councils (Salamon 2000:188) , the new government's decision to accept the European Work Council Directive has strengthened even more employee voice but most particularly the adoption by the management of direct forms of participation. Kersley et al (2006:139) searched for evidence of direct forms of communication such as face to face meetings, written two-way communication and downward communication and found out that 63 per cent of all workplaces offered face- to- face meetings as well the opportunity for feedback, and that this figure covered 67 per cent of all employees. They also argued that the WERS2004 data demonstrated that there was a decline in union representation and an increase in direct forms of communication. Although union membership and union recognition had fallen between 1998 and 2004 this decline was much smaller than during the 1980s and 1990s. Between 1998 and 2004 methods of employee representation dropped from three-fifths to approximately one half. On the contrary direct forms of communication were more common and sometimes they had increased (Kersley at al. 2006:143)
This emphasis on employee involvement and participation is illustrated by the case study provided by Marchington and Wilkinson (2008: 407) who mention the example of Midbank a firm which won a Saturday Times award for implementing high commitment Human Resource policies and facilitating Employee Involvement and direct and indirect methods of Participation. More precisely, some of the forms of information dissemination as well as employee participation they adopted were the presence of a single union, consultation forums and company newspaper to which employees could contribute. Within the context of partnership Johnstone et al (2007) cited in Marchington and Wilkinson (2008:417) give us the case study of NatBank which signed a partnership agreement in 2000 with the recognised union (Unifi) in their effort to ameliorate the union-management relationship , to contribute to organisational effectiveness and performance, to work for the interest of employees, shareholders and customers and to commit to the implementation of best practice HRM. The partnership has so far proved to be a success with some of the advantages being a better decision making, and improved employment relations thanks to better communication.
From 1997 trade unions were given the opportunity to reassert part of their lost power and influence due to the favourable legislation launched by the “New Labour”. Trade unions were now able to abandon their defensive position of the 1980s and 1990s and to adopt one more proactive position. Salamon (2000:21) argues that trade unions considered “partnership” at work as a way of developing a more positive and proactive relationship with managers and play the part in order for the idea of “social partnership “ to successfully work. This would simultaneously allow them to defend their members' interests and to contribute on their part to the workplace and society (Salamon 2000:21). Munro and Rainbird (2004) present the example of the UNISON/employer partnership, a partnership concerning workplace learning and explain that the partnership does not only generate benefits for union members but it also generates benefits to employers who provide cost-effective and high quality development to employees through this partnership. The government also seems to be placing great emphasis on this partnership as it has passed legislation (Employment Act of 2002) allowing to Union Learning Representatives to take paid time off in order to carry out their duties and most significantly it has set up the Union Learning Fund. Moreover in 2007 the government conceded the management of the fund to Unionlearn within the TUC acknowledging in this respect the important role of unions in governmental strategies.(Hoque and Bacon 2008).
This essay has endeavoured to examine the changes in the roles and in the exertion of power of the actors involved in industrial relations, and most particularly the roles of the government, of the trade unions, of the management and of employers, during the 1980s, the 1990s and the period 2000-2010. It has demonstrated that during the 1980s and the 1990s the legislative agenda of the Conservative government led in very confrontational and adversarial industrial relations as it increased the gap between employers' power and trade unions' power. Macho management, shift from collectivism to individualism and the attempt of the introduction of HRM practices are the most important processes of the period. In 1997 the “New Labour” which was elected in power committed itself to implementing the European social model, by promoting fairness and social justice in UK industrial relations as well as harmonisation by promoting the model of “workplace” partnership.
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