Trade Union Density Has Undergone Significant Decline Since 1979 - Case Study Example

Trade Union Density Has Undergone Significant Decline Since 1979   Abstract Trade unions played crucial role in collective bargaining capacity on behalf o the employees and industrial relation in the United Kingdom till 1979. However, there was severe decline in trade union density since 1979 experienced in both the public and private sectors. Though several reasons contributed to the decline in trade union activity and number, the changes on British industrial relations since 1979 was considered to be the main cause. The government didn’t see the role of the trade unions as productive for the national interests are concerned. It strongly felt that the collective bargaining capacity of the trade unions has become a threat to regulate the industrial relations and the unions were taking the undue advantage of the immunity provided to them. Similarly, the employers were also of the opinion that the unilateral role played by the unions reduced the productivity of the firms and also hampered the flexibility of the top management in regulating the company activities. The decline in trade union density was also resulted by the corresponding economic developments and political developments. The emergence of new government i.e. the Conservative government resulted in enforcement of several acts like the Employment Act 1982 and the Employment Act 1989 which were more employee friendly and removed the immunities provided to the trade unions for conducting the strikes and picketing. The new government took serious note of the economic crisis in post 1979 period resulting in higher rates of unemployment and inflation. The public sector experienced decline in trade union since 1979 primarily due to the government change or political developments and the enforcement of new legislations controlling the pre-entry closed shops and removal of the immunity provided to the trade unions. Similarly, the private sector witnessed the decline due to the reduction in image of the trade unions in safeguarding the interests of the employees. Hence, the collective bargaining capacity and the economic crisis were the primary factors resulted in decline of the trade union density in private sector. The recent economic developments and globalization and liberalization reduced the relevance of the trade unions as far as the industrial relations are concerned. The individual employee to employer contracts have become frequent than the unionization. There is a prospect for the trade unions even in near by future if they protect the genuine interests of the employees with out affecting the smooth functioning of the organization. Introduction Trade unions are nothing but the unions registered under trade union act for facilitating the collective bargaining capacity on behalf of the employees in an organization (Charlwood, 2004a). They mainly work with the principle of making coordination between the employer and the employees and make the employer responsible for the provision of common minimum working facilities for the employees (Gospel and Wood, 2003). The trade unions enter in to agreement with the employers for safeguarding the minimum wages and other employment conditions (Gall, 2007). Initially, the trade unions were primarily responsible for the industrial relations in the United Kingdom and the trade union density was maximum during 1960s and 1970s. It was reported that the membership of British trade unions increased by 33% during 1972 to 1979.  However, there was a big turn around in its density which declined considerably since 1979.  What ever the extent of increase witnessed in 1960s and 1970s was declined significantly later.   There was a significant downfall in terms of trade union density in United Kingdom during the years In the years 1979-90 (Kelly and Bailey, 2007). It declined from 53% to 40% of all the employees as the number was reduced by more than three million members, (Beaumont and Harris 1995). To a considerable extent, this decline in trade union was due to the unfavorable treatment of management to the trade unions as they feared that the collective bargaining power of the unions would jeopardize the profit margin of the companies. The decline in trade union density resulted in changes in wage structure and distribution of the workers and it varied across age, education and occupation groups (Bell and Pitt, 1998). The changes in labor wage structure and distribution was more correlated with the extent of demand for the skilled workers in all the categories. Farnham and Giles (1995) analyzed union membership trends in the UK since 1979. They confirmed the sudden and considerable decline in trade union density since 1979 and this also led to surprisingly steady and sustained growth of employee membership of “non-affiliated” unions of professional workers and of staff associations, during the 1980s and early 1990s. There was a clear contrast between falling membership among highly unionate traditional unions and lowly unionate, non-political employee organizations. They also Classified the public sector professional associations and private sector staff associations and evaluated the nature and principles of the new moderate unionism in relation to managerial employment strategies. Main causes for the decline in trade union density in public and private sectors The role of the government was enormous in trade union decline during 1979 to 2000. In 1980’s when the United Kingdom was ruled by the Conservative Government, the trade union activities were highly regulated and mostly they were negatively influenced. The main reason for this approach of the government was to enhance the labor productivity. The government strongly believed that the trade unions were causing unnecessary nuisance for their own benefits and several times, they were instrumental in organizing strikes in public places causing severe inconvenience to the people. At the same time, the changes in socio-economic structure of the British society also reduced the demand for more number of workers and the unions always unilaterally favored the employee rights but not the country administration. The decline in the demand for the manufactured commodities also resulted in higher inflation and unemployment and the relevance of the trade unions was not significant and they ceased to act as strong pressure group. Due to these unfavorable treatment measures by the government, the trade unions made some attempts like innovative organizing approaches to revive the density, but couldn’t succeed well (Fosh, 1993).               In the early 1980’s the rise in unemployment and decline in trade union density occurred simultaneously and they were dependent on each other. The maximum number of employees were regulated by the trade unions during those times as the union control was strongest and the employee too believed that the enrolment as member of the union would fetch them better bargaining capacity with the employer.  However, the unemployment problem was only one of the factors that influenced the decline in trade union density. This was proved right in1983, when the rate of employment was going up, but the proportionate hike in trade union density was not witnesses, rather it further declined. The major reason for this decline was attributed to the weak organizational structure of the unions and their poor linkages with the government. The persistence of high levels of unemployment and drastic changes in the composition of the labor force also compelled the government to discourage the involvement of trade unions in the public sector. There was also a feeling that the work culture in the public and private organizations get severely affected by the over interference of the trade unions. In case of private organizations including software industry, the impact of economic crisis led to higher rate of inflation and reduced efficiency of the organization which in turn was highly responsible for the decline in trade union density (Diamond and Freeman, 2002). The Conservative government was also with a view that the unfavorable labor costs were resulted by the attitude of the trade unions. In other words, the productivity of the organizations would be low with the higher interference of trade unions and hence they took serious note of the same and implemented negative measures for reducing the trade union density. It was also alleged that the trade unions were responsible for reduction in employment.  It was also felt that workers who are went out of the trade unions tried to get their jobs in the non-union sector or private sector resulting in higher pressure and lower wages and low labor costs (Charlwood, 2002).  The unacceptable characteristics of trade union was also responsible for the reduction in membership.  It was also strongly opined that the unions were encouraging the activities like strikes that affected the production of the organizations which caused severe jolt to the economy of the United Kingdom. This resulted in the realization of the members that the union took care of its own interests rather than fighting or representing for their common cause. This also changed the soft nature of the government towards the unions, it felt necessary to marginalize the capacity of the trade unions to deploy sanctions.  Hence, the union lost the confidence of its members and encouragement of the government simultaneously and these two factors are correlated with each other (Fernie and Metcalf, 2005). The government sent signals to the unions that only those unions which have their leaders accountable to their members only would be considered as productive as far as the national economic interest is concerned. Several trade unions couldn’t maintain the leadership that was accountable to its members, rather they prioritized their own interests by taking unilateral decisions resulting in trade union membership in public sector and private sector in United Kingdom.   Keeping the above points in consideration, the Conservative government initiated action from all corners putting pressure on the trade unions to regularize their activities. Most importantly, the legislation was instrumental in decline of the trade union density. The deunionization of trade unions was the major target of the legislations enforced after 1979 in England. The legislations like the Employment Act 1980 and the Employment Act 1982 stated about the primary and collective responsibilities of the trade unions and they were forced to pay fines as civil liability if rules were violated. This made several trade unions to think twice before formally registering themselves for the union enrolment in both public and private sectors. As the unilateral decision making nature of the trade unions questioned the democratic view of the employees, the government cam forward with the Trade Union Act 1984 which stressed and emphasized on the compulsory use of ballots in union decision-making.  The trade unions which couldn’t implement this were removed from the list of the registered trade unions. The Conservative government was also critical about the accountability of the trade unions to their members. In the events of their health problems and other problems arising out of service matters, the trade unions should support the cause of the employees of the organization who enrolled as trade union members. In other words, the trade unions should make a clear representation about the welfare measures to be initiated by the organization. Several trade unions couldn’t implement this and hence the Employment Act 1988 was initiated by the government to safeguard the rights of individual members against their trade unions.  In this way, the trade union density was declined considerably. It was also opined by the government that the involvement of few trade unions to bargain with several organizations resulted in poor monitoring of their members’ needs and hence the Employment Act 1989 was enforced to discourage the multi-plant bargaining of the trade unions.  It also regulated the activities of the trade unions by controlling the unofficial strikes and by putting a ban on all pre-entry closed shops.  These pre- entry closed shops were major instruments used by the trade unions to enhance their membership, according to which the union membership was a necessary condition for retaining a job. The trade unions were convenient in increasing their number of members by using the concept of pre-entry closed shops in 1960s ad 1970s, however, the Employment Act 1988 put a break to this by initiating an action to enforce a closed shop as illegal in nature. Similarly, the trade unions also used picketing as another major instrument for enhancing the membership in the name of publicizing the view of the trade unions outside their work place, and there were several immunities earlier for protecting the unions against the government action. The legislations in 1980s also regulated the exercise of picketing which also resulted in reducing the immunity provided to the trade unions and hence caused the decline of the trade union density. The legislations also favored the decentralization of rule making which negatively affected the trade union density. The other important factors that led to decline in the trade union density in the United Kingdom since 1979 were the transformation of sovereign employer ideology and the demise of government as model employer. Impact of recent economic crisis on trade union density and potential for increasing membership in future The recent global economic crisis affected all the nations including United Kingdom (Fairbrother, 1996). It had a significant impact on trade union density as the employers have not been in a position to provide more number of jobs and they require rational economic measures to produce goods at a reasonable costs and they would prefer to enter in to individual contract with employees rather than with trade unions resulting in reduction of their density. However, its impact on public sector in terms of trade union density has been less compared to the private sector. There is an enormous potential to enhance the trade union density from the present level as significant number of people still regard unions as better bargainers on behalf of employees and they protect the interests of the workers in their work place and provide immunity to them in circumstances of exploitation by the organizations or employers (Certification Officer, 2007). Balndon et al (2006) reported the impact of unionization in over 650 firms in the private sector in the UK. It was revealed that after 1997 there has been a relatively large increase in union recognition. The emergence of new government in the form of Labour Party and enforcement of 1999 legislation favored the trade union density and hence there is good potential for revival of trade union movement and density in future. Conclusion Overall, it can be concluded that the decline in the trade union density was mainly caused by the changes on British industrial relations since 1979. The collective bargaining capacity of the trade unions was viewed as a threat to regulate the industrial relations and the unions were taking the undue advantage of the immunity provided to them. At the same time, the employers were also critical about the unilateral role played by the unions. It was further fuelled by the economic crisis in post 1979 period resulting in higher rates of unemployment and inflation. The change in the government in the United Kingdom also resulted in initiation and enforcement of new legislations that aimed at regulating the activities of the trade unions and providing the benefits to the employees and safeguarding the work environment for the employers keeping the national economy in mind (Gall, 2004). The public sector witnessed decline in trade union since 1979 mainly due to the government change or political developments and the enforcement of new legislations controlling the pre-entry closed shops and removal of the immunity provided to the trade unions. In case of the private sector, the decline was mainly due to the reduction in image of the trade unions in safeguarding the interests of the employees and collective bargaining capacity and the economic crisis were the primary factors resulted in decline of the trade union density. The recent economic crisis affected the trade union density but the intensity was not as high as in 1979 (Gall, 2005). This is because the trade union membership declined significantly during 1979 to 2005 (DTI, 2007). 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Kelly, J & Bailey, R 2007, ‘British trade union membership, density and decline in the 1980s: a research note’, Industrial Relations Journal, 20 (1) : 54-61. Read More