Industrial Relations in the Future

Trends and Possibilities in Britain over the Next Decade

Michael Poole, William Brown, Jill Rubery, Keith Sisson, Roger Tarling, Frank Wilkinson

• Publisher: Routledge
• Year: 2021
• ISBN:
  9781000543759
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Negocios en general

First published in 1984, Industrial Relations in the Future highlights probable developments in Britain's system of industrial relations into the 1990s. It also provides a basis for further and detailed analysis and debate of issues central to the nation's future. Written by distinguished scholars in their respective fields, the three main sections give reviews from three contrasting traditions- mainstream industrial relations, industrial sociology and management, and labour economics. These accounts are highly complementary in the ways in which, in each and every case, issues of collective bargaining, managerial strategy and union response, and the behaviour of governments are all set against a broad backcloth of economic, political, and social changes. The authors see the ultimate outcome as depending greatly on the policies and types of action of organised labour, managements and governments, and possibly of wider social movements as well. This book will be an essential read for scholars and researchers of labour economics, industrial sociology, economics, and public policy.

Part 1

Current trends and future possibilities

William Brown and Keith Sisson

Cautions and contexts

‘Dreams and predictions’, observed Francis Bacon four centuries ago, ‘ought to serve but for winter talk by the fireside.’ If this essay is to be of use it should start on a note of humility. Had it been written in 1962 it would have underestimated the rise of the shop steward and would have neglected totally the massive increase in government intervention in collective bargaining in the following decade. In 1972, when industrial action in the non-mining public sector was still a novelty, no forecast could have envisaged a decade in which unemployment was to increase fivefold and during which inflation was to remain in double figures. A reader in the 1990s may consider that the merits of this study lie less in its cautious attempts at extrapolation than in the doubts it casts on some of the more seductive predictions occasioned by the particular circumstances of the early to mid-1980s.

Our central purpose is not prediction. It is to stimulate thought about future developments in British industrial relations through a discussion of current trends and of the likelihood of their continuing. In the sections that follow we shall consider the pattern of change in the private sector, in the public sector, and in trade union organisation, and shall conclude with a discussion of changes in conflict and control. But, especially in Britain, the conduct of industrial relations cannot be divorced from the wider realms of politics and the economy; they all interact. It is thus necessary to start with a discussion of the range of possible political and economic contexts. This is only of value if we also discuss the extent to which it is possible to associate changes in industrial relations behaviour with changes in these contexts.

It should be stressed that there is no ‘model’ that can be used for prediction in the normal sense. First, there is no simple direction of causation; while bargaining behaviour may be influenced by the level of unemployment, the government’s efforts at control over that level will also be influenced by its beliefs about bargaining behaviour. Second, relatively few of the variables that might be considered relevant can be expressed in numbers and, as Marshall observed, ‘the application of exact mathematical methods to those which can is nearly always a waste of time, while in the large majority of cases it is positively misleading.’ Third, even where, as in the case of strike incidence and trade union membership, quantitative models have been used to good explanatory effect, they would be of poor predictive value, being subject to intermittent structural shifts for reasons outside the models and having been developed for very different levels of inflation and unemployment from those to which we are now accustomed. Fourth, in industrial relations, more than in most economic behaviour, past responses to a given phenomenon are a poor guide to future responses. An activity so essentially concerned with collective decision-making and institutional development involves learning and adaptation behaviour that place it beyond the reach of normal time-series modelling methods.

Our focus is the relatively narrow one of collective relations between employers and employees. The fact that there are complementary analyses of sociological and economic aspects of future developments in the field of employment causes the scope of this essay to be somewhat narrower than if it were to stand on its own. It will, for example, barely touch upon changes in the composition of the labour force, questions of pay structure, or broader aspects of participation. The nature of the commission calls for a broad-brush approach rather than a survey of research literature and, accordingly, we have limited our citing of other work.

The political context

The importance of the political context to the conduct of collective bargaining has increased with the steady increase in government intervention over the past twenty years. It is unlikely to diminish so long as industrial unrest, especially in the public sector, remains a political issue, and so long as industrial and counter-inflationary policies remain important parts of the governmental function. Leaving for later consideration the role of the government as an employer, we consider first industrial relations legislation.

Governments have moved from generally avoiding legislative intervention in collective bargaining in the 1950s, through a largely non-partisan phase of legislation on matters such as training and redundancy in the 1960s, to substantial and controversial intervention in the 1970s and early 1980s. The tendency for legislation to be increasingly partisan towards the interests of either employers or trade unions, and the associated tendency for governments to repeal their predecessors’ labour laws and institutions, demands predictive caution. But, whether or not these cycles moderate, it is difficult to see either Labour or Conservative governments (or, on the basis of recent statements, the SDP-Liberal Alliance) leaving collective bargaining alone.

Two broad areas are likely to remain on the political agenda. The first is the question of trade unions’ immunities from civil actions in industrial disputes. The form of legal moves to extend or limit these (possibly in conjunction with attempts to alter the legal status of collective agreements) remains uncertain. At least as uncertain would be trade union responses and judicial interpretation. This would remain so even if the system of immunities were replaced by positive rights. The problem of the boundary between what is lawful and what is unlawful would remain the controversial issue. Second, questions of trade union security and, in particular, the legal regulation of the closed shop and related practices, are likely to remain contentious. The impact of fresh individual rights is likely to be heavily influenced by the extent to which, in any particular situation, managers and unions seek to preserve their existing collective bargaining arrangements.

What might be the consequences of an increasingly unsupportive governmental attitude towards collective bargaining? First it seems safe to say that practices will not undergo substantial change throughout the very large tracts of employment where collective bargaining is an integral part of the management process. Throughout the public sector and much of, for example, engineering and chemicals, managements can be expected to go to considerable lengths to prevent legislative innovation disrupting established bargaining arrangements. But where collective bargaining is non-existent or shallowly rooted, as in much of the tertiary sector and small, subcontracting manufacturing establishments, it can be expected to retreat. Specific items of legislation, such as those providing opportunities to challenge closed shops, would probably play a lesser part in weakening collective bargaining than the more diffuse symbolic impact of the withdrawal of explicit government support.

The second observation suggested by past experience is that legislative intervention in collective bargaining, whether designed to extend or to inhibit it, modifies its conduct in important and unintended ways. There is strong evidence that a major cause of the substantial increase in the professionalism of industrial relations management over the 1970s -the managers concerned would say the single major cause -was the increase in labour legislation over the period. This stimulated the development of single-employer bargaining (at the expense of industry-wide agreements) and often increased the centralisation of control over industrial relations matters in multi-plant companies. Future legislation that might involve financial penalties for either employers or unions, or that might jeopardise bargaining relationships, will tend to have the same effect.

Incomes policies have been among the most important forms of government intervention in collective bargaining. No government since the Second World War has left office without first feeling obliged reluctantly to embark on some form of incomes policy. Some have lost office because of the consequences. With inflation now apparently endemic in the world economy, and with Britain’s decentralised bargaining system proving particularly potent in amplifying it, there is every reason to suppose that, if levels of unemployment are to be brought down, incomes policies will be a recurrent issue.

What can be said about the form they might take? We shall return to the possibilities of a long-term policy based upon greater co-ordination of collective bargaining after considering the roles of the CBI and TUC. Short-term policies have been so diverse in content over the past fifteen years that it is hard to speculate on future endeavours. Dangers of political embarrassment are reduced if penalties for noncompliance are directed at employers rather than trade unions; in this respect the current interest in tax-based incomes policies continues an approach that has previously used price controls and government contracts as sanctions. Chances of success also tend to be greater if the TUC can be persuaded at least to acquiesce. Because of this, governmental efforts to introduce incomes policies tend to be associated with a rise in the relative status of the TUC and, to a lesser extent, the CBI. But, even when the policies are successful, this does not imply a withering of the institutions of bargaining at lower levels. Recent years have seen unprecedented peacetime use of incomes policies coincide with an unprecedented consolidation of single-employer and workplace bargaining. Unless the policy takes the form of simple indexation it is likely to leave productivity and much else still to be bargained over at the workplace.

A different form of long-term incomes policy is that of statutory intervention to combat low pay. Equal pay legislation achieved some notable gains for women in the first half of the 1970s, but since 1976 these have barely been maintained. Further progress is unlikely unless the intervention is sufficiently penetrating to reduce discrimination in recruitment, promotion, training, and work organisation. On this, as on other questions of labour law, it is difficult to envisage EEC initiatives having anything other than a minor demonstrative impact for the foreseeable future.

On the problem of low pay for both sexes, the bi-partisan policy of gradually dismantling the wages council system since the 1960s has been called into question. Despite the opportunity since 1975 to establish statutory joint industrial councils with enforcement powers, collective bargaining has generally not developed as a suitable substitute to wages council regulation, inadequate though that may have been. While some influential political voices speak of further abolition as a means of generating jobs, others argue that the employment effects would be minimal and, supported by the Advisory, Conciliation and Arbitration Service, press the case for new or revived wages councils. The likely outcome of the debate is unclear.

However hot and cold governments may blow on the practice of collective bargaining they are unlikely to undermine ACAS. But, while the advisory work of this body continues to expand, and its individual conciliation services remain in consistent and high demand, the number of calls on it for collective conciliation has tended to decline in recent years. Although in part this reflects a general decline in the level of disputes, it does not lead us to expect conciliation and arbitration to play a substantially increased role in British industrial relations in the next decade.

The economic context

Even professional economic forecasters would make their excuses when asked to talk about so far as a decade ahead. To some extent we can do no more than indicate the great range of uncertainty that possible future economic circumstances present for the conduct of industrial relations. Uncertainty,for example, about the size of reserves of petroleum, and about its world price, is so great that the associated range of possible sterling exchange rates could imply anything from a major recovery of our export industries through to their faster demise. Similarly, in a world of floating exchange rates it requires a reckless degree of optimism to imagine domestic price inflation falling below 5 per cent per annum; on the other hand a memory dating back only to 1975 will suggest that unfettered bargaining could quickly take it over 25 per cent.

In one respect, however, there is substantial agreement among the forecasters. Most models predict the level of unemployment to be as high as at the moment at least until 1985. The prospect of labour-replacing technological innovation and the possibility of continuing cuts in public service employment make it unlikely that there will be a substantial decline in the number out of work in subsequent years. We thus face the prospect of a prolonged period with unemployment levels which are exceptionally high by comparison with the preceding forty years. Since a high level of demand for labour is generally accepted as having been one of the most important influences underlying the development of post-war British industrial relations, this major transformation is clearly of great importance for the present discussion. What can be said about the impact of sustained high unemployment upon industrial relations?

Little systematic research is available to inform us on the impact of high unemployment levels upon either individual or collective behaviour. Social psychologists and sociologists have studied characteristics of the unemployed and what happens to those made redundant, but this does not tell us much about those still in work. Since, however, an important consequence of rising unemployment is that a rising proportion of those in employment have past experience of being unemployed (fewer than a third of registered unemployed have been continuously registered for more than a year), one relevant question is how that experience influences subsequent attitudes at work. Does, for example, the experience raise political consciousness or increase individualistic apathy? A recent American study suggests that the experience of unemployment has little impact upon either social ideology or political behaviour for those affected (Schlozman and Verba, 1979). Other complex and almost unresearched areas are those of employees’ responses to increased risk of job loss, to reduced chances of moving to other jobs, and to reduced opportunity to fulfil their work potential. There is evidence that people in work have unrealistically optimistic beliefs about the nature of unemployment and their likelihood of gaining fresh employment; this misperception may help explain the continued and paradoxical drawing power of voluntary redundancy schemes.

Evidence on collective behaviour under high unemployment is even more scanty. A key question to which we shall return is whether and under what circumstances the increased risk of job loss makes employees more defensive and restrictive in their working practices or, on the contrary, more ‘realistic’ and flexible. Another is whether the slackening in demand for labour causes trade unions to seek to raise the level of bargaining and find protection in larger coalitions.

One exploratory device which we shall use is reference back to experience in the 1930s when unemployment was comparably high. At its peak, in 1932, 17 per cent of the working population (measured on a basis comparable with the present) was out of work (Feinstein, 1972). In 1982 the figure is arguably misleadingly low at the official figure of about 12 per cent because of the large number of women who have withdrawn from the unemployment register and because of the extent of special employment measures. In so far as it is possible to compare like with like over half a century, the severity of the recessions is sufficiently similar to make comparisons - with due caution - worthwhile. Certainly nothing has happened to the labour market since the war to prepare us for the upheaval to collective bargaining that may now be underway.

The private sector

Organisation

Seventy per cent of the employed labour force is in the private sector. A declining 40 per cent of these private sector employees is in manufacturing industry. It will help a consideration of developments in industrial relations to outline some of the major changes in organisation that have occurred. Some data are available only for manufacturing.

There have been substantial changes in the size of organisations. A number of aspects of industrial relations behaviour are highly sensitive to size, especially to establishment size but also the size of the wider enterprise of which it is a part (Marginson, 1982). The median size of establishment in manufacturing, having increased from 230 employees in 1930 to 480 in 1968, is now probably slowly declining. Even so, in 1978 two-fifths of employees in manufacturing worked in establishments with 1000 or more employees (Census of Production, 1978).

At least until recently the size of overall enterprise continued to grow, but at a slower pace than in the late 1950s and 1960s. Enterprises with 10,000 or more employees accounted for a quarter of manufacturing employment in 1958 but for more than a third in 1978. Over the twenty years the number of these massive enterprises increased from 74 to 83 and their average number of establishments from 30 to 40. The loss of one in five jobs in manufacturing since 1979, however, and the substantial redundancies announced by many major firms in recent years suggest that organisational size may no longer be on the increase.

The nature of ownership and control within these companies has also changed. Instead of ownership being in the hands of founding families or of a mass of private shareholders, it is increasingly a relatively small number of institutions - notably insurance companies and pension funds - that dominate. Between 1957 and 1975 the proportion of shares owned by institutional investors rose from 30 per cent to 50 per cent. It is a proportion that is likely to continue to grow and it has been authoritatively argued that this form of ownership tends to encourage further industrial concentration (Prais, 1976).

Foreign ownership has also increased. Although the rate of this is difficult to judge, in 1979, 23 per cent of the 4,000 largest private companies in Britain were owned by overseas interests (Size Report, 1979). They employed just over a million people in their British establishments. In manufacturing a little under one in five jobs are in foreign-owned firms, the great majority of these being American. Foreign owners have tended to be a catalytic force in British industrial relations,sometimes managing without collective bargaining altogether and often setting the pace in the move from multiemployer to company agreements (Brown, 1981).

Finally, there have been substantial changes in the internal organisation of these large companies. Twenty-five years ago the typical pattern was either one of highly centralised control of all functions, or one of a holding company where the separate divisions had a high degree of autonomy. Since then there has been a general move towards multi-divisional organisation in which head office maintains close control over strategic matters while allowing divisions substantial functional independence. One study of 120 large companies suggests that the proportion of them organised on multi-divisional lines rose from 42 per cent to 68 per cent between 1965 and 1971 (Steer and Cable, 1978). An important consequence of this development for collective bargaining is that, while industrial relations matters are usually dealt with at or below the level of the division, they are dependent upon strategic decisions which are made at the level of the whole company.

Bargaining structure

In 1980, according to the DE/PSI/SSRC Workplace Industrial Relations Survey, three-quarters of private ...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Original Title Page
• Original Copyright
• Table of Contents
• Tables and figures
• Preface
• Introduction
• Part 1 Current trends and future possibilities
• Part 2 A framework for analysis and an appraisal of main developments
• Part 3 Industrial relations issues in the 1980s: an economic analysis
• Bibliography
• Author index
• Subject index