Changes in collective bargaining since the 1980s HR Management

From the late 1970s to the mid-1990s the British economy suffered cyclical economic recession and volatile levels of unemployment. Although unemployment has, according to government figures, been generally falling since the late 1980s (note the increase in 1992 due to recession), the greatest increase in employment has been in part-time labour and low-paid, low-skill private sector work (Clark, 1998). Such structural changes, combined with the election of successive Conservative governments from 1979 to 1997, hostile to the ethos of collective action by trade unions, have prompted substantial change in the nature of collective bargaining in both the public and private sector.

It is important to note that such changes have resulted from joint pressures from industry, the government and trade union inability to defend their presence in the workplace. It was a combination of such factors that prompted substantial changes within the scope and influence of the collective bargaining process.

Recent workplace studies (Gregg and Yates, 1991; Cully et al., 1999; Gall and McKay, 1999) found that, while the nature, scope and processes of collective bargaining have changed, collective bargaining remains an important vehicle for fixing pay and conditions in the public sector, and for a substantial minority of employees in private manufacturing. However, it is of little importance for the private service sector. Overall, they agree that the following trends have emerged.

  • Decentralisation of bargaining

There has been a growing trend towards the decentralisation of collective bargaining, away from multi-employer/industry level to organisation or plant level. This trend continued during the 1980s and 1990s with encouragement from successive Conservative governments during this period who attempted to promote the practice in the public sector. Indeed, the 1990 White Paper Employment for the 1990s stated that plant- or company-level negotiations result in more ‘realistic pay settlements’ and thus, avoid wage inflation.

Support from government legislation during this period, constraining industrial action, has also acted to dissipate further any union resistance to plant bargaining. There are no indications that the current Labour administration will take any action to reverse this trend, having declared that they will not be making any substantial adjustments to the labour legislation enacted by their Conservative predecessors (McIlroy, 1998).

From the corporate stance, decentralised bargaining offers the opportunity to link pay and productivity together at local level where regional variations and conditions can be accounted for accurately by local management and trade union officials. The weakened state of contemporary trade unions ensures that they are less able to resist managerial strategy to utilise local bargaining to review labour costs and reform working practices, for example the introduction of new technology, flexible working practices, etc. (Sisson, 1987).

There is a need for a note of caution regarding whether decentralised bargaining is a useful strategy for all corporate structures and also regarding the true extent of the ‘decentralisation’ process. Considering the issue of decentralisation in more detail, Kinnie (1990) found a false image of local autonomy in bargaining, suggesting that local management are subject to head office directive even when there is an appearance of local autonomy.

This is supported in more recent work, with Cully et al. (1999) commenting that ‘the pay setting process is often handled beyond the workplace and may be opaque to managers at a local level’ (p. 106). So, whilst there can be little doubt that there has been a shift in bargaining levels which has complemented contemporary corporate strategies to downsize, focusing upon local profit centres, enabling employers to gain more control in the workplace (Sisson, 1987), the extent to which local management achieve independence and autonomy in the bargaining arena is questionable.

Changes in collective bargaining since the 1980s 473

  • Flexibility issues

The introduction of flexible working has been made possible by the deregulation of the labour market, the weakness of trade unions to resist such change, the growth of managerial prerogative and market pressure to cut costs (Pollert, 1988; Legge, 1995). Where changes aimed at the introduction of flexibility within the labour process are being negotiated, the following points have become evident:

  • If a company introduces flexible working, not subject to statutory regulation, such changes usually form an overlapping agreement to become part of a complete package which constitutes a flexibility agreement. The terms and conditions of contemporary flexibility agreements evidently will depend on such factors as the state of union–management relations, the bargaining environment and the nature of technology employed.

The implications for collective bargaining of flexibility agreements are as follows:

  • Trade unions are no longer bargaining terms and conditions for a specific craft or activity. Flexibility between tasks blurs lines of demarcation such that the possession of a specific skill or talent is no longer exclusive as tasks are spread throughout the workforce. Thus, bargaining leverage is reduced.
  • As employees undertake a wider range of tasks throughout the labour process, fewer ‘core’ workers are required with an increasing dependence upon numerically flexible labour, thus leading to redundancies and a consequent fall in trade union membership and growth in unemployment.
  • The growing links between flexibility bargaining and pay increases mean that there is a growing trend to bargain around issues of exchange, for example for wage increases in exchange for changes in work organisation, manning levels and redundancies.

This latter point is of some importance. This notion of exchange between improved pay and acceptance of changes in working methods is reminiscent of productivity bargaining during the 1960s. In return for accepting flexibility agreements, employees have been offered a range of benefits including pay increases, enhanced status and greater job security. Trade unions have been forced to bargain for better conditions on the basis of making concessions allowing significant changes in the labour process.

Indeed, a reflection of this stance can clearly be seen in the current government’s attitude toward the 2002–3 firefighters’ dispute where agreement to changed working practices is deemedessential before meaningful negotiations can occur.

As with many other issues discussed, there is a robust critique of the ideas surrounding the flexible workforce idea. In a succinct, critical review of the flexibility debate, Pollert (1988) and Legge (1995) argue that this is not a new strategic attempt by employers to establish a labour force suitable to meet the needs of changing markets. Rather, employers have always made ad hoc attempts to make labour more flexible, but have been hampered by state and union regulation of terms and conditions of employment.

Recently, employers have been able to take advantage of a weakened labour movement to introduce greater flexibility, encouraged by governments sympathetic to such changes. Moreover, Legge (1995) argues that flexible working arrangements have largely been introduced in an opportunistic fashion, with the emphasis upon short-term cost savings rather than as any constituent of a longer-term strategic change to working practices.

So, while there is some evidence concerning the development of flexible working and the inclusion of flexibility agreements in the bargaining forum, there is only a limited indication of a link between improved productivity and flexibility initiatives (Edwards, 1987). This, together with the critique of flexibility, suggests that, while flexibility issues are undoubtedly an important HRM initiative to effect change in the labour process, with implications for collective bargaining, caution is required in interpreting the extent of such change.

This is particularly pertinent in respect of what degree the utilisation of flexibility represents a strategic or coherent approach to fragmenting the labour force, or to undermining collective coverage. Successive Labour administrations from 1997 have offered continued support for flexible working, but have claimed to recognise that there is a need to ameliorate the worst effects of such initiatives. It was intended that the statutory protection offered in the Minimum Wage Act (1998), the Employment Relations Act (1999), the Employment Act (2002) and the recognition and adoption of EU Directives would go some way towards offering vulnerable labour greater protection.

Moreover, there has been a clear focus upon the development of ‘family-friendly policies’ which facilitate parents in achieving a so-called ‘work–life’ balance where work and family commitments can be effectively accommodated. It is recognised that statutory provision obviates the need for collective bargaining (if not for collective representation to ensure that rights are observed: see below) and is indicative that the Labour government has chosen a path which focuses mainly upon individual rights rather than the restoration of collective rights and any ensuing collaboration with trade unions.

However, such agreements may be used as a ‘floor of rights’ in some organisations, whilst scope exists for unions to police the provisions and ensure they are properly represented within the collective bargaining agenda or act to support individual employees pursuing their new rights.

  • Contemporary bargaining initiatives

Since the reform of collective bargaining in the 1980s, a number of discrete initiatives have emerged which have, on the whole, enabled management to reform the bargaining process quite considerably. A number of these are briefly considered:

  • Single-union deals are largely associated with Japanese management strategies, given their initiation within Japanese subsidiaries locating on greenfield sites in the UK (Salamon, 1992).

The single-union agreement occurs where management grants recognition to only one trade union to represent employees in the bargaining process. The major objection to single-union deals is the promotion of what Salamon describes as a ‘beauty contest approach’ between trade unions. Management outline the envisaged approach to industrial relations and a personnel strategy, inviting trade unions to state how they might measure up to the managerial view of employment relations – with the reward being a new pool of members during a time when trade unions are experiencing decline.

As such, the relationship between management and union becomes one in which unions must offer to fulfil the behavioural expectations of management, in order to be granted recognition, rather than prioritising the needs of the membership. Regarding the collective bargaining process, there will be some employees whose interests will not be best served by a union which has no history of representing them and with which they feel no basis of affiliation.

However, it could be argued that, given the labour process of organisations that adopted single-union deals (single-status working, flexibility, fewer separate job titles), the scope for a differentiated approach to bargaining is significantly narrowed. A further constraint upon the bargaining process in single-union firms is the association between singleunion deals, no-strike deals and pendulum arbitration.

  • A no-strike clause, once accepted by a trade union on behalf of the membership, effectively deprives union negotiators of the threat of strike action should bargaining break down and, moreover, denies employees the option of withdrawing their labour unilaterally.
  • No-strike clauses are usually (but not always) accompanied by pendulum arbitration facilities where a third party will arbitrate on behalf of the two principals should they fail to reach agreement. Where both sides are aware that an arbitrator will adopt one side or the other’s position and this will represent a cost to the other party, they are more likely to bargain in good faith, making every effort to settle (Singh, 1986; Milner, 1993). The limited use of this practice in Britain makes it difficult to assess the impact upon the bargaining process.
  • Single-table bargaining offers employers similar benefits to single-union deals while maintaining a multi-union site.

Bargaining takes place between unions to establish a negotiation proposal, which is then articulated by one bargaining unit which negotiates on behalf of all employees. A number of companies within the private manufacturing and service sector have adopted a single bargaining table, although the process is not common.

Marginson and Sisson (1990) suggested that such bargaining will become more widespread as the impact of European Union directives and legislation regarding information sharing, communication and collective bargaining encourage management to review bargaining processes. Recent evidence from Cully et al. (1999) indicates that this is indeed the case.

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