Bamber CH 2 Britain Slides

5TH EDITION
INTERNATIONAL
& COMPARATIVE
EMPLOYMENT RELATIONS Edited by Greg J Bamber,
Globalisation and change Russell D Lansbury and Nick Wailes
CHAPTER 2
Employment Relations in Britain
Mick Marchington, Jeremy Waddington and Andrew Timming
Allen & Unwin, 2011. These slides are support material for International and Comparative Employment Relations 5th edition. Lecturers using the
book as a set text may freely use these slides in class, and may distribute them to students in their course only. These slides may not be posted on
any university library sites, electronic learning platforms or other channels accessible to other courses, the university at large or the general public.
International & Comparative Edited by Greg J Bamber,
Employment Relations 5th edition Russell D Lansbury & Nick Wailes
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
Chapter 2:
2 Britain
Copyright Allen & Unwin, 2011
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
Chapter 2:
3 Britain
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)
Chapter 2:
4 Britain
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
Chapter 2:
5 Britain
The voluntarist system

Voluntarism arose out of trade union immunity
legislation such as the Trade Disputes Act 1906
Principal features of voluntarism included:
1) non-legally binding collective agreements
2) voluntary union recognition by employers
3) low level of formalisation of industrial relations
structures
4) voluntary framework of state-provided dispute resolution
facilities (no power of the State to arbitrate)
This voluntarist system was supported by employers
and unions
Chapter 2:
6 Britain
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
Chapter 2:
7 Britain
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
Chapter 2:
8 Britain
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
Chapter 2:
9 Britain
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
Chapter 2:
10 Britain
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 Governments 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
Chapter 2:
11 Britain
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
Chapter 2:
12 Britain
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:
1) 1948-1968: Membership grew from 9.3 million to 10.2
million; union density moved between c.42% and 50%
during this time
2) 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%
3) 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%
Chapter 2:
13 Britain
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
Chapter 2:
14 Britain
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
Chapter 2:
15 Britain
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!
Chapter 2:
16 Britain
Trade Union Congress (TUC)

The TUC was established in 1868 and is Britains 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
Chapter 2:
17 Britain
The Union Movement

and 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
Chapter 2:
18 Britain
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
Chapter 2:
19 Britain
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)
Chapter 2:
20 Britain
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
Chapter 2:
21 Britain
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
Chapter 2:
22 Britain
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
Chapter 2:
23 Britain
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
Chapter 2:
24 Britain
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
Chapter 2:
25 Britain
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 EECs 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
Chapter 2:
26 Britain
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
Chapter 2:
27 Britain
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
Chapter 2:
28 Britain
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
Allen & Unwin, 2011. These slides are support material for International and Comparative Employment Relations 5th edition. Lecturers using the
book as a set text may freely use these slides in class, and may distribute them to students in their course only. These slides may not be posted on
any university library sites, electronic learning platforms or other channels accessible to other courses, the university at large or the general public.

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5TH EDITION

Context of British industrial relations

The role of the state

The voluntarist system

Broad shifts in state economic policy

Broad shifts in state public-sector policy

The 1997-2010 New Labour Government

History of early British unionism

British unionism since WWII

How can we explain the fall in

Contemporary British unionism

Trade Union Congress (TUC)

The Union Movement

Employers associations in Britain

Human resource (HR) management in Britain

History of collective bargaining in Britain

Changing collective bargaining

Employee involvement and participation (EIP)

European Union (EU) membership

Consequences of European Union membership

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