SocialismToday           Socialist Party magazine

Issue 173 November 2013

Collective bargaining in the shadow of recession

The Workplace Employment Relations Study reveals a continuing contraction in the coverage of collective bargaining. In light of falling living standards and the government’s assault on statutory employment rights, JIM HORTON assesses the implications of the survey’s findings for trade unions and their members.

The Workplace Employment Relations Study (WERS), Employment Relations in the Shadow of Recession (2011), provides data on employers’ reactions to the recession, the impact on union membership and representation, and the on-going decline in the scope of collective bargaining. Much of the WERS’s findings will come as no surprise to union activists. The key question is: how should trade unions respond?

According to the study, wages were frozen or cut in 42% of workplaces – 63% in the public sector, 39% in the private sector. This has been combined with increased workloads, particularly in public administration, transport and communications, and financial services. Nearly a fifth of workplaces made, mainly compulsory, redundancies. Forty per cent of workers felt insecure in their jobs. In large workplaces, over 40% rated relations with management negatively.

The WERS also shows a marked increase in shift work, annualised hours and zero-hours contracts, particularly in the service sector, hotels and restaurants, and education. A quarter of workers in retail are on or below the national minimum wage, in hotels and catering two-fifths – sectors where union membership and collective bargaining coverage are low. Forty-six per cent of all workers work at least 40 hours a week, one tenth work more than 48 hours.

This situation demands a militant response by trade unions, not only to defeat the austerity programme of the coalition government, but also to combat the employers’ offensive in the workplaces. Yet, in terms of membership and workplace influence, unions are in their weakest position since the 1930s.

Trade union density is currently 26%, half its peak of 1979. The optimism generated by a survey earlier this year showing an increase in union membership (up 59,000), for the first time in a decade, was tempered by statistics revealing a decline in membership of about 250,000 (3.8%) between 2009 and 2012. (Labour Research, September) The biggest decline was in the public sector, 217,000 (5.3%), where there have been massive job losses. In the private sector, it was 38,000, down 1.5%.

Decades of union support for social partnership policies in the workplace and reliance on New Labour governments have failed miserably to accrue any sustainable benefits for workers or stem falling union membership and a weakened shop-floor organisation. Over the years this has contributed to the big shift from wages to profits as a proportion of GDP.

Yet, with over six million members, the trade union movement remains a potentially powerful force, retaining its latent capacity to shape events in Britain in favour of working people. But, clearly, the issues identified in the WERS have to be addressed. To a great extent, that depends on how unions respond industrially and politically to the government/employer offensive raining down on the working class.

Ebbs and flows

Historically, the bargaining power of trade unions has tended to ebb and flow in accordance with developments in the economy, with periods of economic growth favouring expansion in union membership and influence, and recessions knocking back the advance of the labour movement. However, it would be mistaken to assert some sort of mechanical relationship between the economy and trade union prospects.

The WERS 2011 does not make any statistical comparisons with the situation prior to 2004. Successive WERS surveys since they began in 1980, however, have charted a seemingly inexorable decline in the number of workplaces where pay, terms and conditions are determined by negotiated agreements between trade unions and employers, suggesting a problem which is more than conjunctural.

There is a complex dialectical relationship between developments in the economy, the class struggle and the size, strength and confidence of the union movement. The end of the long post-war economic upswing in the early 1970s triggered a huge wave of industrial action. During the preceding decades, trade unions had massively expanded their membership, extending their bargaining power at national and, particularly, local level. A strong and confident labour movement engaged in the class battles of that period, initially scoring victories, but also suffering some defeats. By the end of the decade, union membership had peaked at 13 million. A couple of years later the number of shop stewards was at an all-time high.

The WERS paints a very different picture of the state of trade union influence in the workplace during the current recession. Even before 2008, union membership and collective bargaining coverage was either falling or stagnating. The onset of recession found the unions in a weakened state, allowing the employers to set the agenda.

Workplace representation

The survey shows the percentage of all workplaces with any union presence declining from 29% in 2004 to 23% in 2011. The decline was most pronounced in the private sector, particularly manufacturing, with a drop from 23% to 14%. In private services the corresponding figures are from 20% to 14%. In stark contrast, union presence in the public sector remained stable at 90%.

Although the percentage of workplaces with recognised unions fell from 24% to 21%, the WERS describes the fall as statistically insignificant because union membership is overwhelmingly high in the public sector, with 91% workplace recognition – compared to just 11% in the private sector.

Overall, the number of workplaces where pay and conditions are set in agreement with the unions has fallen since 2004 from 16% to 13%, and the number of employees covered from 29% to 23%. The TUC has rightly expressed caution about these figures, given that they are based on workplaces with five or more employees and unions are most prevalent in larger workplaces. According to the TUC, 42% of employees working in large workplaces had their main terms and conditions negotiated by a union. Nonetheless, the overall trend is clear.

The WERS shows public-sector workplaces covered by collective bargaining falling from 70% to 58%, and the number of public-sector employees covered from 69% to 44%. It also identified a contraction in the scope of bargaining, particularly in the private sector. The proportion of unionised private-sector workplaces that negotiated on pay, hours and holidays, the three areas included in the statutory recognition procedure, fell from 29% to 17%.

These downward trends are even more dramatic when compared to the first WERS, published one year after the election of Margaret Thatcher’s Conservative government. In 1980, the percentage of all workplaces recognising unions was 64% – 50% in the private sector. By 2011 this had fallen overall to 21%, which shows just how limited were the statutory recognition procedures enacted by the last Labour government. In the same period, the percentage of all workers covered by collective bargaining has fallen from 82% to only 23%.

Backing legal rights with action

At its annual congress this year, the TUC reaffirmed the need for unions to increase membership and collective bargaining. It agreed to support unions via the TUC Organising Academy, to provide support and briefings to reps and officers, and to target younger workers in non-union workplaces. Particular emphasis has been placed on education and promoting the organising model of trade unionism. While welcome, is this enough to turn the tide on union membership and collective bargaining coverage?

In their Institute of Employment Rights publication, Reconstruction After the Crisis: A Manifesto for Collective Bargaining, Professor Keith Ewing and John Hendy QC propose the establishment of a ministry of labour to encourage sectoral collective bargaining as a route to economic recovery and improved living standards. Under the proposals, multi-employer agreements would determine pay and conditions for all workers throughout each industrial sector regardless of whether particular employers recognised unions.

Socialists would not oppose this practical measure. In reality, however, state support for collective bargaining has only ever been conceded in response to mass industrial action, or the fear of it, and the development of militant trade unionism. The authors refer to similar proposals made in the late 1930s but, while that period was similar economically to today, it was also different in many ways, including the significant 40% increase in union membership between 1933 and 1939.

Hendy correctly states that the measure would require commitment from government, but such support is unlikely from any major party today. They are all committed to austerity and retaining anti-union laws, including New Labour. The Labour Party long ago completed its transformation into a fully-fledged capitalist party – media characterisations of ‘Red’ Ed Miliband notwithstanding. In the past, although the leadership were in the pockets of the capitalist class, there existed a mass, active rank and file – resting on a socialist foundation – which, at times, was able to influence policy in the interests of the working class.

Moreover, like statutory individual employment rights, state support for collective bargaining would not in itself guarantee better terms and conditions, particularly in the longer term, or a sustained economic recovery. Experience shows that collective bargaining must be backed by a preparedness to take industrial action if gains for workers are to be achieved and maintained.

Historically, after initial violent resistance to the emergence of the trade union challenge to the perceived right of bosses to grind down workers, the employers and political establishment adopted a pragmatic approach to industrial relations, based on their class needs at a particular time and the prevailing strength and combativeness of the working class. Invariably, employers accept negotiations when unions are strong, but revert to imposition when workers organisations’ are weak.

Rising militancy

It was union struggles for recognition at the end of the 19th century, following the removal of criminal sanctions from strike action in 1875, which laid the basis for the system of collective bargaining we have today. This was not granted willingly by employers. Strikes, lockouts and the hiring of scab labour by employers had characterised industrial relations. A Royal Commission was established in 1891 to examine the causes of industrial conflict. Only reluctantly, as an alternative to class warfare in the factories and workshops, did the government accept the commission’s support for voluntary agreements between unions and employers. This approach generally remained in place until the 1980s.

The advent of formal collective bargaining represented a compromise between employers, who wanted to maintain their managerial prerogative, and militant workers, who sought the more radical solution of workers’ control. In time, many employers warmed to collective bargaining because, generally, it allowed them to negotiate with ‘responsible’ union officials rather than workplace militants. Many leaders of the old craft unions, who had become increasingly remote from their members in terms of salaries and lifestyle, also preferred negotiation to the ‘disruption’ of strike action.

The collective bargaining system came under strain from 1910. The pre-war years of the ‘great unrest’ saw millions of workers take unofficial action to gain by strikes what their leaders had lost through negotiation. The syndicalist alternative of workers’ control and management of industry gained an echo among the best militants. During the first world war, with national trade union leaders signing up to laws banning strikes, collective bargaining shifted to the shop floor, particularly in engineering, shipbuilding and munitions, encouraging the formation of a potentially powerful shop stewards movement which organised widespread industrial action.

The end of the war saw mass industrial unrest which, at its peak, surpassed the pre-war strike wave. Between 1918 and 1921 works committees and joint industrial councils (JICs) were created for collective bargaining purposes across most industrial sectors, as the ministry of labour hastily implemented the Whitley Committee proposals as a means of channelling workers’ demands into safe avenues.

The reversion to national level bargaining, and with it the marginalisation of the shop stewards, paved the way for wage cuts, particularly following the defeat of workers’ struggles in the 1920s, most notably the 1926 general strike. These defeats were not automatic. They were down to the mistakes and betrayals of the leaders of the workers’ movement, including by those who were in a position, potentially, to provide an alternative to the official leadership.

The period of growth in industry-wide collective bargaining drew to a close. The great depression of the 1930s resulted in mass unemployment and a haemorrhaging of union members. With a weakened trade union movement, particularly at shop-floor level, many employers ceased participation in the JICs, and terminated the recognition of shop stewards. Widespread victimisation and blacklisting followed.

Seeking to avoid a repeat of the workplace militancy of 20 years earlier, state-backed, industry-wide collective bargaining was rapidly revived at the beginning of the second world war. This went alongside the extension of the wages council system and shop steward bargaining, although the latter did not prevent some industrial disputes in defiance of laws banning strikes.

By 1946, out of 17.5 million workers in industry and services, 15.5 million were covered by voluntary or statutory national-level negotiations. Union members’ demands for workers’ control of the newly nationalised industries prompted government agreement to collective bargaining, extending coverage to workers in education, health and other public services.

The economic expansion and near full employment of the 1950s engendered a broad political consensus on industrial relations policy. A decade later, however, the political establishment viewed with alarm the growing strength and membership of the trade unions, particularly the increased bargaining power of shop stewards. Unofficial industrial action became common in response to workplace grievances, and to secure pay deals in excess of those negotiated nationally by union leaders.

The machinery of national negotiations, and the incorporation of union leaders into the state, was designed to channel industrial relations into safe avenues. Instead, there was a surge in industrial militancy led by a rejuvenated shop stewards movement over which the national union leaders exerted little control.

In 1964 the capitalist state established another Royal Commission to examine industrial relations. Reporting in 1968, the Donovan Commission denounced a fragmented bargaining system resulting from increased shop steward bargaining power. However, it rejected legal regulation of trade unions, recommending instead greater recognition of and facilities for shop stewards by employers, and their integration into the formal bargaining structures of the unions to allow union leaders greater control over activists. Aiming to prevent walkouts over shop-floor grievances, the commission proposed formal workplace disciplinary and grievance procedures, unfair dismissal rights with legal redress to employment tribunals, and a new arbitration and conciliation body to intervene in industrial disputes.

Anti-union laws

By the mid-1970s many of the commission’s recommendations were in place. Previously, sections of the political establishment had sought punitive legal sanctions against union workplace power. With a succession of anti-union laws enacted in the 1980s and early 1990s, Thatcher succeeded where the Labour government of Harold Wilson (1964-70) and Tory government of Edward Heath (1970-74) had failed.

The attack on workers’ collective rights stemmed from the bosses’ drive to restore company profits at the expense of the pay and conditions of the working class at the end of the post-war economic upswing. This meant curbing the power of the trade unions, particularly in the workplaces. Abandoning statutory incomes policies, Thatcher returned to voluntary collective bargaining – but with the position of employers immensely strengthened in the neoliberal free market and backed up with draconian anti-union laws.

The wanton destruction of Britain’s manufacturing base, coupled with mass unemployment in that period, took its toll on union membership and collective bargaining, particularly in the private sector. This was not inevitable. Millions of workers battled against Thatcher’s anti-working class policies. The government could have been defeated. Instead, important union bastions, most notably the miners and printers, were allowed to go down to defeat – above all, because of the abject failure of the TUC leaders - which negatively impacted on the whole labour movement.

Rather than take up the cudgel against the employers’ offensive, the union leaders turned to the defeatism of ‘new realism’ in the 1980s, partnerships, service unionism, and faith in a ‘social Europe’ in the following decades. The turn towards the organising model over the last ten to 15 years was an acknowledgment that the service model could not be sustained in a period of falling or stagnant membership and declining union influence in the workplace. But the legacy of the 1980s employers’ offensive continues to influence current employment relations.

Re-energising the union movement

From the 1940s to the 1980s, collective bargaining was the main way of regulating employment relations and the pay and conditions of most workers in Britain. Over the last few decades, while undermining collective rights, especially workers’ capacity to take industrial action, successive governments have individualised employment rights (mostly emanating from the EU), on pay, hours and equality. However, the social Europe model still supported by most trade union leaders as a means of safeguarding employment rights is being rapidly dismantled by the institutions of the EU and member states.

In Britain the coalition government has cynically used the recession to erode the individual statutory employment rights once heralded as an antidote to collective bargaining – but which could never attain the level of protection won through a combative trade union movement. In particular, the introduction of employment tribunal fees of £1,200 to pursue unfair dismissal and discrimination cases will effectively remove legal redress from thousands of workers. Workplace health and safety is also being sacrificed on the altar of profit, with protective regulations being repealed or weakened, and cuts to the Health and Safety Executive.

The decline in collective bargaining coverage can be halted. A Unions21 survey three years ago revealed that the most important reason workers gave for joining a union was collective strength. However, one in five non-members cited their perception that unions did not achieve anything as an important reason for not joining. The core issue for workers in unionised and non-unionised workplaces is the defence of and improvement in contractual pay and working conditions. The data contained in the WERS confirm that, to date, unions overall have been unsuccessful on this score, and have failed to prevent the erosion of statutory employment rights.

The 30 November 2011 public-sector strike gave a taste of how industrial action could revitalise the trade union movement. Applications for membership in the run-up to the strike increased significantly for participating unions, and many members became more active, taking on shop steward and health and safety rep positions. Workers across the country are fighting back. A 24-hour general strike against austerity could rekindle that process.

Collective bargaining has always been a compromise, a necessity for employers when unions are strong, and a poor substitute for workers in the absence of genuine workplace democracy. Ultimately, only democratic workers’ control and management of the economy, along with a socialist plan, can guarantee sustained decent pay, good working conditions and safe workplaces. Militant trade unions and a new mass workers’ party can play a vital role in the struggles to achieve this.

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