Significant Changes in Employee Relations in the UK - Essay Example

? One of the changes that occurred between the years 1980 and 1998 was the character of the workplace itself. Between these years, service industriesincreasingly dominated manufacturing, small firms increased, foreign ownership or firms increased, and the workplace population got younger (Millward et al., 2000, p. 49). Meanwhile, the workplaces got less segregated by gender and ethnicity, and the hiring of ethnic minorities increased, as only 33% of firms had an ethnic minority working for them in 1980, a number which rose to 60% by 1998 (Millward et al., 2000, p. 43). One of the other changes that have occurred since 1980 is the growth of non-standard employment, which includes short fixed-term contract, temporary employment, freelance work, outwork, homework and part-time work (Millward et al., 2000, p. 44). As far as part-time employment is concerned, 25% of firms had part-time workers in 1980, while 44% of the firms had part-time workers in 1998 (Millward et al., 2000, p. 44). The ever-increasing use of part-time workers has implications for unions, as part-timers are much less likely to be a part of a union, and workplaces that employ a substantial number of part-time workers are less likely to recognize trade unions (Millward et al., 2000, p. 45). With regards to workers with short fixed-term contracts, this number rose from 19% of all firms answering they had at least one employee with a short fixed-term contract in 1980 to 35% answering this question in 1998 (Millward et al., 2000, p. 46). With regards to temporary employment, the percentage increased from 20% of all firms answering in the affirmative whether they had at least one temporary worker in 1980 to 28% answering this same question in 1998 (Millward et al., 2000, p. 47). With regards to free-lance workers, the data is unclear as to whether this number has risen or fallen between the years 1980 and 1998 (Millward et al., 2000, p. 48). Employee relations have also undergone a big shift since 1980. One of the shifts is in regards to whom manages the employees – in 1980, employees were managed by a generalist; in 1998, the shift was towards management by a specialist in employee relations and line managers. In 1980, generalists accounted for 75% of all managers; in 1998, they accounted for only 46% (Millward et al., 2000, p. 52). One of the reasons for this shift is the increased prevalence of foreign firms, as they rely more upon employee relations specialists, such as human resource managers than domestic workplaces (Millward et al., 2000, p. 54). What the shift towards employing ER specialists for employee relations shows is that firms increasingly see employee relations as a position that requires a professional with formal credentials (Millward et al., 2000, p. 81). Another major change is that more women are managing employee relations – just 12% of employee relations positions were held by women in 1980, while 39% of employee relations positions were held by women in 1998 (Millward et al., 2000, p. 59). Another of the broad changes has concerned unionism. In particular, unionism has fallen considerably since 1980. In 1980, 73% of workplaces had one or more union members; that number fell to 54% in 1998 (Millward et al., 2000, p. 84). Moreover, the density of union members fell from 47% in 1980 to 36% in 1998, with the fall most steep in the private sector, with the public sector showing much less of a decline (Millward et al.., 2000, p. 103). With the decline in numbers came an attendant decline in clout, with collective bargaining coverage declining during the period between 1984-1998 (Millward et al., 2000, pp. 180-181). In 2004, around 34% of all employees were union members, and there were still roughly 36% of workplaces with a union, mainly in the public sector (Kersey et al., 2004). However, the decline of unions did not mean that employees lost their voice – there simply was a shift from union representatives being the voice of employees to the implementation of channels where employees can communicate directly with management, on management’s terms (Millward et al., 2000, p. 135). One of the fallout from the decline in unionism is that payment systems changed over the years as well. In 1980, the system of pay was mainly joint regulation (Millward et al., 2000, p. 220); in 1980, collective bargaining was the method of choice of pay determination for 65% of manufacturing establishments (Marchington & Parker, 1990, p. 28); by 1998, pay was unilaterally determined by employers and managers (Millward et al.,2000, p. 220). This continued into the 2004 survey, with 70% of employers setting their pay using this method in 2004 (Kersey et al., 2004). However, in 2004, in the public sector, 83% of firms used collective bargaining as a way to determine pay, compared to just 14% of private sector employees (Kersey, et al., 2004).As might be expected, due to the fact that the private sector saw the steepest decline in unionism during these years, the private sector saw the most marked shift in this direction, although the public sector experienced it as well (Millward et al., 2000, p. 220). Moreover, there was not a shift towards paying according to individual performance, profit-related pay did not spread from the early 1980s, and employee share ownership contracted in the 1990s (Millward et al., 2000, p. 222). Perhaps in response to ever declining clout and membership over the years, UK unionism underwent another change as they increasingly sought a wide range of social partnerships, beginning in the late 1990s. Part of the reason these partnerships were sought was because government started to put limits on collective bargaining and government had ever-widening disputes with trade unions, so the unions had to attempt partnerships as a way to increase their influence (Waddington, 2003, p. 346). These partnerships have occurred at the national level, in which unions involved themselves in the European Social Dialogue, helping to promote and negotiate such agreements on parental leave and part-time work; at the state level, where unions have become authoritative partners in economic and social management; at the economy and sectoral level, where unions have attempted to bring back collective bargaining with multiple employers and management organisations, with the goal of guaranteeing minimum employment standards; and at the company level, in which unions and management have partnered in an effort to promote co-operative relations within the individual firms (Heery, 2002, p. 21). These agreements typically involve a trade between what the workers want, which is security, development and involvement and what the corporation wants, which is worker commitment and flexibility (Heery, 2002, p. 23). Many of the partnerships that the unions have formed with individual corporations have been formed with mature industries who were in need of restructuring, which means that these industries were subjected to intense and new forms of competition. For instance, union partnership with management was concluded at Hyder, which is a part of the water industry, during a period of time that water was deregulated and privatized. Similarly, in the auto and truck industry, these agreements were forged while there were concerns about an over-supply in the international market, and, in Scotland, partnership agreements were forged in the spirits industry during a time of corporate restructuring (Heery, 2002, p. 22). This suggests that unions move to protect its own from economic risk and the attendant downsizing that often occurs during events like industry-wide deregulation and global over-supplying. This provides security for union members during uncertain times, while deliberately fostering insecurity within firms that are not unionized (Heery, 2002, p. 22). Agreements between employers and unions have the goal of harmonizing relations, by focusing upon shared interests and a commitment to mutuality (Heery, 2002, p. 23). These agreements may also focus upon agreements regarding long-term wage agreements which rely on “wage formulae which remove the need for periodic negotiations or reduce union-member involvement in the wage-setting process” (Heery, 2002, p. 23). Thus, these agreements reduce conflict between the two sides and make decision-making routine for the areas that are often conflict-ridden. Instead of the typical method of bargaining, which has traditionally been used by unions, the emphasis, with these agreements seek to promote consultation, as managers and workers come together for policy development and the resolution of difficulties regarding work and employment relations (Heery, 2002, p. 23). The agreements themselves represent another progressive change. These agreements have increasingly contained novel terms along with the tried and true. For instance, alongside such staples as guaranteeing more employee security and flexible working, these agreements also address concerns about training and development, including personal development that is immediately unrelated to job function (Heery, 2002, p. 22). Other terms include terms regarding employee communication and involvement; single status and equal treatment; and workplace dignity (Heery, 2002, p. 22). Other modernizations that were envisioned, with regards to union policy in and of itself, were an encouragement for women leadership and an extension of individual rights (Waddington, 2003, p. 338). These agreements, however, are not endorsed by many unions, who feel that these agreements accede too much to employers, which weaken their position. Therefore, many unions, including Blue Circle, United Distillers, and Scottish Power have rejected partnerships. Moreover, employers themselves reject partnerships, as the emphasis on short-term competitive advantage that is necessary for all organisations to flourish makes for a hostile environment for union-led partnership agreements (Heery, 2002, pp. 25-26). While these partnership agreements were a development that occurred in the late 1990s, the early 2000s saw more rancor between unions and the establishment, namely the Labour Party. The reason for this is because the Labour government, during its first term of office, had greater contact between the ministers of the government and the union representatives than had previous conservative governments. During this period of time, the Employment Relations Act 1999 was enacted, as was a reversal of the opt-out from the Social Protocol and a National Minimum Wage was also enacted. The Employment Relations Act 1999 stated that employers would be obliged to recognize unions that had a certain level of employee support (Oxenbridge, et al., 2003, p. 316). This was a boon to larger unions, however, it was thought that smaller unions would be weak and still forced to kowtow to the employer’s agenda (Oxenbridge et al., 2003, p. 317). These were all changes sought by unions, and the unions believed that they would continue to have an ear with the Labour Government after its re-election. However, many unions felt that this was not the case, and, indeed, Tony Blair referred to public-sector unionists as “wreckers,” and fire-fighters as “Scargillite” for their votes on taking industrial action (Waddington, 2003, p. 335). There were three issues that split the Labour Government and unions. The first issue was that the arguments for private finance initiatives (PFI) were not accepted by many unions, because the profits were not matched by service delivery, companies were making large additional profits through re-financing, PFI schemes were not objectively tested, and PFI were proven to only provide value for prisons and roads (Waddington, 2003, pp. 345-346). Second, private sector companies intervened with governmental policy, and this intervention was seen by unionists as deteriorating employment terms and conditions. Third, the reforms did not address, and possibly increased, labour intensification (Waddington, 2003, p. 346). Discussion and Conclusion It is clear that, from the trends, unionism has dropped steeply from 1980 to the most recent survey in 2004, and there is no reason to believe that this trend has not continued into current employment context. There are a number of reasons for this, chiefly that the public sector has a diminished role in UK employment and that there are more temporary, part-time and short-term contract workers than ever before. Since these are the types of employees who are not likely to engage in unionism, it follows that, as these types of employees gain more numbers in the workforce, unionism will drop. There are a number of scenarios that can be gleaned from the drop in unionism, and the drop in unionism cannot be underestimated in its importance. The first scenario is generally a positive one, and is one that is used by conservative governments globally. This perspective is that a drop in unionism means that the employer is more powerful, and has more leeway in setting wages and benefits. This, in turn, means that the businesses are presumably better able to be more profitable, as their employee costs are that much less. This would be a good thing, as the costs of goods will go down, and the quality might go up because the business is investing in products instead of people. For instance, the American car manufacturers complained that they were not able to compete with overseas car manufacturers due to their exorbitant labour costs that were forced upon them by Automakers Unions (Sherk, 2008). This is one way of looking at the changes. The other scenario recognizes that the employers have a symbiotic relationship with the workers in that the workers are consumers who will be buying the products of the employers and other firms. If these workers are struggling to make ends meet due to low wages and penurious benefits, then they naturally cannot buy the product of the employer. Therefore the employer is shooting himself in the foot, as he is able to produce more products yet nobody can afford to buy them. There is yet another fallout that must be considered, and that is that the decline in unionism might be one of the reasons for societal breakdown. The theory is that societal breakdown is the result of poverty, bad schools and low-paid and unstable employment. According to this theory, the same people who are now existing in poverty were the ones for whom labour unions helped the most (Ackers, 2002, p. 13). Whereas before an individual could get a high-paying without obtaining a degree, this same person in today’s job market cannot get a job that pays a living, decent wage. This leads to poverty and societal breakdown, and a “social apartheid,” where the well-to-do increasingly separate themselves from those who are in poverty by leaving areas where the impoverished live and pulling their children out of these schools (Ackers, 2002, p. 13). At any rate, there is no denying that matters have changed considerably since unions have started experiencing weakening influence. No longer can a person expect a high-paying job with decent benefits without obtaining a good education. The days of being able to make a middle-class wage if one is blue collar are clearly gone. This will have implications for the future, as there might be increasing evidence of social apartheid, with the richer getting richer, the poor getting poorer, and the middle-class becoming non-existent. In return, there will be less demand for goods, as people cannot afford them, which will end up hurting the employers in the long run. While this scenario seems dire it also seems realistic, as wages are increasingly getting smaller because the employer has complete control over pay, and the employer, ever interested in only the bottom line, will pay its workers as little as possible in order to stay competitive. This is a short-sighted solution and probably has contributed to the economic state that we currently are in. Sources Used Ackers, P. 2002. “Reframing Employment Relations: The Case for Neo- Pluralism.” Industrial Relations Journal, vol. 33, no. 1, pp. 2-19. Edwards, P. Industrial Relations: Theory and Practice. Oxford: Blackwell. Heery, E. 2002. “Partnership Versus Organising: Alternative Futures for British Trade Unionism.” Industrial Relations Journal, vol. 33, no. 1, 20-35. Kersley, B., Alpin, C., Forth, J., Bryson, A., Bewley, H., Dix, G. & Oxenbridge, S. “Inside the Workplace: First Findings from the 2004 Workplace Employment Relations Survey.” Available at: http://www.berr.gov.uk/files/file11423.pdf Marchington, M. & Parker, P. 1990. Changing Patterns of Employee Relations. London: Harvester Wheatsheaf. Oxenbridge, S., Brown, W., Deakin, S. & Pratten, C. 2003. “Initial Responses to the Statutory Recognition Provisions of the Employment Relations Act 1999.” British Journal of Industrial Relations, vol. 41, no. 2, pp. 315-334. Waddington, J. 2003. “Heightening Tension in Relations Between Trade Unions and the Labour Government in 2002.” British Journal of Industrial Relations, vol. 41, no. 2, pp. 335-358. Read More