Partnership and Modernisation in Employment Relations This volume brings together a comprehensive assessment of the partnership approach to employment relations. Partnership represents an attempt to shift the culture of employment relations away from zero-sum and adversarial relationships. Within the British context, it has formed a critical part of the Labour government’s new employment policy and forms a key underpinning of its modernisation of employment relations. It has also been seen as central to the debate around trade union renewal and revitalisation. Partnership and Modernisation in Employment Relations addresses three broad and related sets of questions. First, do partnership-style employment relations contribute to high performance management and economic improvement? Second, what are the consequences of partnership for trade union policy and practice and the institutional relations forged with employers? Third, is there a political and regulatory basis for new cooperative employment relations? Drawing from the work of leading researchers in the area, the contributions present conceptually grounded studies that explore the key dimensions of partnership in terms of the economic, organisational, social and political imperatives for the modernisation of employment relations. Many of the chapters in this collection were first presented at the Conference ‘Assessing Partnership’, held at Pinsent, Curtis Biddle in May 2001. We thank Pinsent, Curtis Biddle for their support. Mark Stuart is a Senior Lecturer at Leeds University Business School. He has published widely in the areas of HRM and employment relations, and has had his research funded by the European Union, the ESRC, the Department for Trade and Industry and numerous trade union bodies. Miguel Martínez Lucio is Professor of Industrial Relations and Human Resource Management at the University of Bradford School of Management. He has researched and published widely on the subject of employment relations. His work has focused on issues of changing workplace relations and the emergence of new forms of employment regulations.
Routledge research in employment relations Series editors: Rick Delbridge and Edmund Heery Cardiff Business School
Aspects of the employment relationship are central to numerous courses at both undergraduate and postgraduate level. Drawing from insights from industrial relations, human resource management and industrial sociology, this series provides an alternative source of research-based materials and texts, reviewing key developments in employment research. Books published in this series are works of high academic merit, drawn from a wide range of academic studies in the social sciences. 1 Social Partnership at Work Carola M.Frege 2 Human Resource Management in the Hotel Industry Kim Hoque 3 Redefining Public Sector Unionism UNISON and the future of trade unions Edited by Mike Terry 4 Employee Ownership, Participation and Governance A study of ESOPs in the UK Andrew Pendleton 5 Human Resource Management in Developing Countries Pawan S.Budhwar and Yaw A.Debrah 6 Gender, Diversity and Trade Unions International perspectives Edited by Fiona Colgan and Sue Ledwith 7 Inside the Factory of the Future Work, power and authority in microelectronics Alan Macinlay and Phil Taylor 8 New Unions, New Workplaces A study of union resilience in the restructured workplace
Andy Danford, Mike Richardson and Martin Upchurch 9 Partnership and Modernisation in Employment Relations Edited by Mark Stuart and Miguel Martínez Lucio 10 Partnership at Work William K.Roche and John F.Geary 11 European Works Councils Pessimism of the intellect, optimism of the will? Edited by Ian Fitzgerald and John Stirling 12 Employment Relations in Non-Union Firms Tony Dundon and Derek Rollinson 13 Management, Labour Process and Software Development Reality bytes Edited by Rowena Barrett Also available from Routledge: Rethinking Industrial Relations Mobilisation, collectivism and long waves John Kelly Employee Relations in the Public Services Themes and issues Edited by Susan Corby and Geoff White The Insecure Workforce Edited by Edmund Heery and John Salmon Public Service Employment Relations in Europe Transformation, modernisation or inertia? Edited by Stephen Bach, Lorenzo Bordogna, Giuseppe Della Rocca and David Winchester Reward Management A critical text Edited by Geoff White and Janet Druker Working for McDonald’s in Europe The unequal struggle? Tony Royle
Job Insecurity and Work Intensification Edited by Brendan Burchell, David Ladipo and Frank Wilkinson Union Organizing Campaigning for trade union recognition Edited by Gregor Gall Employment Relations in the Hospitality and Tourism Industries Rosemary Lucas
Partnership and Modernisation in Employment Relations Edited by Mark Stuart and Miguel Martínez Lucio
LONDON AND NEW YORK
First published 2005 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN Simultaneously published in the USA and Canada by Routledge 270 Madison Ave, New York, NY 10016 Routledge is an imprint of the Taylor & Francis Group This edition published in the Taylor & Francis e-Library, 2005. “ To purchase your own copy of this or any of Taylor & Francis or Routledge’s collection of thousands of eBooks please go to http://www.ebookstore.tandf.co.uk/.” © 2005 Mark Stuart and Miguel Martínez Lucio for editorial material and selection; authors their own contribution All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data A catalog record for this book has been requested ISBN 0-203-69438-4 Master e-book ISBN
ISBN 0-203-35237-8 (Adobe e-Reader Format) ISBN 0-415-30431-8 (Print Edition)
Contents List of illustrations
x
List of contributors
xiii
1 Partnership and modernisation in employment relations: an introduction MARK STUART AND MIGUEL MARTÍNEZ LUCIO 2 Partnership and voice, with or without trade unions: changing UK management approaches to organisational participation PETER ACKERS, MICK MARCHINGTON, ADRIAN WILKINSON AND TONY DUNDON 3 Assessing partnership approaches to lifelong learning: ‘a new and modern role for trade unions’? HELEN RAINBIRD 4 Working corporations: corporate governance and innovation in labourmanagement partnerships in Britain SIMON DEAKIN, RICHARD HOBBS, SUZANNE J.KONZELMANN AND FRANK WILKINSON 5 Developing partnership relationships: a case of leveraging power SARAH OXENBRIDGE AND WILLIAM BROWN 6 Trade union representatives’ attitudes and experiences of the principles and practices of partnership MARK STUART AND MIGUEL MARTÍNEZ LUCIO 7 Management and union motives in the negotiation of partnership: a case study of process and outcome at an engineering company DAVID WRAY 8 The promotion and prospects of partnership at Inland Revenue: employer and union hand in hand? DAVID BEALE 9 Breaking with, and breaking, ‘partnership’: the case of the postal workers and Royal Mail in Britain GREGOR GALL 10 Seeking partnership for the contingent workforce EDMUND HEERY, HAZEL CONLEY, RICK DELBRIDGE AND PAUL STEWART 11 Social partnership agreements in Britain JOHN KELLY
1
20
40
55
73 88
105
120
135
150
164
12 Employees’ experiences of workplace partnership in the private and public sector MIKE RICHARDSON, PAUL STEWART, ANDY DANFORD, STEPHANIE TAILBY AND MARTIN UPCHURCH 13 Workplace partnership and the search for dual commitment WILLIAM K.ROCHE AND JOHN F.GEARY 14 Whose (social) partnership? RICHARD HYMAN 15 Where next for partnership? MARK STUART AND MIGUEL MARTINEZ LUCIO Index
184
198 221 234
240
Illustrations Figures
2.1
Management strategy, union character and the dynamics of partnership
13.1 Scatterplot of union and organizational commitment
36 207
Tables
1.1 Principles guiding the mutual gains organisation
4
1.2 A framework for assessing partnership
10
2.1 Forms of employee involvement and participation (1992)
24
2.2 Voice mechanisms at the 1992 sub-sample of organisations in 2001
26
2.3 Types of workplace partnership
31
4.1 Case study characteristics: the structure of ownership, product markets and the regulatory environment
612
4.2 Case study characteristics: enterprise-specific factors and nature 623 of partnership 6.1
MSF representatives’ attitudes to the principles of partnership
6.2 Levels of union involvement
945 96
6.3
Mechanisms used by management to communicate with MSF members
97
6.4
Changes in flexible working practices and working conditions
99
6.5
Who stands to gain most and risks most from partnership?
100
A6.1
Sectoral breakdown of response
102
8.1
PCS members’ opinions of how successful Inland Revenue had been in improving communication with employees, creating sympathy for ‘business needs’ and making use of workers’ expertise
127
9.1
Strike activity in RM
137
Partnership and matched non-partnership firms
1701
11.2
Manual employment changes in partnership and nonpartnership companies
1723-4
11.3
Annual average profit margins (gross profit as % of turnover) in partnership and non-partnership companies
1745-6
11.4
Trade union density in partnership and non-partnership banks and retail stores 1998–2001
177
12.1
Employees’ experiences of work intensification at JetCo by 1899 occupational class
12.2
Employees’ experiences of work intensification at CityCo by occupational class and the Local Taxation and Payroll departments
190
12.3
JetCo’s employees’ views on job security by occupational class
194
12.4
CityCo’s employees’ views on job security by occupational 1945
11.1
class and Local Taxation and Payroll departments
5
13.1
Workforce survey: population and sample distributions by job category and airport
2056
13.2
Categories of commitment to the union and the company
208
13.3
Cluster analysis of union and organizational commitment scales
209
13.4
Latent class cluster models fitted to union and company commitment scales
210
13.5
Partnership-related influences on organizational 212commitment, union commitment, industrial relations climate 13 and perceived union effectiveness
A13.1 A13.2 A13.3
Organizational commitment scale
21516
Union commitment scale
21617
Scales of involvement in constructive participation
21718
Contributors Ackers, Peter, Reader, Loughborough University Business School, University of Loughborough. Beale, David, Lecturer, Manchester School of Management, UMIST. Brown, William, Montague Burton Professor of Industrial Relations, Department of Applied Economics, University of Cambridge. Conley, Hazel, Senior Lecturer, Bristol Business School, University of the West of England. Danford, Andy, Reader, Employment Studies Research Unit, Bristol Business School, University of the West of England. Deakin, Simon, Robert Monks Professor of Corporate Governance, Centre for Business Research and Judge Institute of Management, University of Cambridge. Delbridge, Rick, Professor of Organisational Analysis, Cardiff Business School, University of Cardiff. Dundon, Tony, Lecturer, National University of Ireland at Galway. Gall, Gregor, Professor of Industrial Relations, Department of Management and Organisation, University of Stirling. Geary, John, F., Associate Professor, The Michael Smurfit Graduate School of Business, University College Dublin. Heery, Edmund, Professor of Human Resource Management, Cardiff Business School, University of Cardiff. Hobbs, Richard, Research Assistant, Centre for Business Research and Judge Institute of Management, University of Cambridge. Hyman, Richard, Professor of Industrial Relations, Department of Industrial Relations, London School of Economics. Kelly, John, Professor of Industrial Relations, School of Management and Organisational Psychology, Birbeck College, University of London. Konzelmann, Suzanne, J., Reader, School of Management and Organisational Psychology, Birbeck College, University of London. Marchington, Mick, Professor of Human Resource Management, Manchester School of Management, UMIST. Martínez Lucio, Miguel, Professor of Industrial Relations and Human Resource Management, University of Bradford School of Management, University of Bradford. Oxenbridge, Sarah, Senior Research Officer, Advisory, Conciliation and Arbitration Service. Rainbird, Helen, Professor of Industrial Relations, University College Northampton. Richardson, Mike, Research Fellow, Bristol Business School, University of the West of England. Roche, William K., Professor of Industrial Relations, The Michael Smurfit Graduate School of Business, University College Dublin. Stewart, Paul, Professor, Bristol Business School, University of the West of England.
Stuart, Mark, Senior Lecturer, Leeds University Business School, University of Leeds. Tailby, Stephanie, Principal Lecturer, Bristol Business School, University of the West of England. Upchurch, Martin, Reader, Bristol Business School, University of the West of England. Wilkinson, Adrian, Professor of Human Management, Loughborough University Business School, University of Loughborough. Wilkinson, Frank, Senior Research Fellow, Centre for Business Research and Judge Institute of Management, University of Cambridge. Wray, David, Senior Lecturer, Sociology Department University of Northumbria at Newcastle.
1 Partnership and modernisation in employment relations An introduction Mark Stuart and Miguel Martínez Lucio This collection represents the most comprehensive assessment to-date of the partnership approach to employment relations. The partnership approach has gained increasing currency amongst policy makers in recent years and has come under increasing academic scrutiny. Its appeal, in part at least, rests on a series of basic propositions. First, that an emphasis on co-operative relations, around production as opposed to distributional issues (Huzzard and Nilsson 2002), between management and employees (and their representative organisations), is the most effective route to meeting changing business imperatives and attaining performance gains. Second, that such co-operative processes facilitate mutual trust and, most significantly of all, mutual gains (gains for all stakeholders involved). Partnership thus represents an attempt to shift the culture of employment relations away from zero-sum and adversarial relationships. Within the British context, it has formed a critical part of the Labour government’s new employment policy and forms a key plank of its modernisation of employment relations. It has also been seen as central to the debate around trade union renewal and revitalisation. In practical terms, partnership is, in some of the more high-profile cases, typically characterised in terms of a ‘social pact’ or explicit agreement, whereby the reciprocal rights and responsibilities of employers, employees and trade unions are delineated. This could include, for example, a commitment from an employer to employment security in return for guarantees of employee flexibility, or an expectation that employee responsibility for self-development is supported by an employer commitment to training provision. The inclusion of such ‘trade-offs’ in a number of high profile partnership agreements, such as those at Welsh Water, Blue Circle and Legal and General, has received significant publicity and generated wide ranging debate (Coupar and Stevens 1998; Thomas and Wallis 1998; Haynes and Allen 2001). The crux of the debate hinges on whether the perceived benefits (mutual gains) of partnership are actually realisable. For not only have advocates of partnership suggested it is good for business and employees: it has also been claimed that, for a beleaguered trade union movement, it represents an opportunity for increased social and economic influence, and ‘institutional centrality’, after almost two decades in the political wilderness (Ackers and Payne 1998; Terry 2003:469). Despite such claims, as Kelly (2001) notes, there have been few rigorous and objective empirical analyses of partnership conducted to-date. It is at this level that this collection, which draws from the work of leading researchers in the area, makes a key contribution.
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The book seeks to address three broad and related sets of questions. First, do partnership-style employment relations contribute to high performance management and economic improvement? If so: how? And, are the gains of partnership mutually distributed? At this level, we are primarily concerned with the actual outcomes of partnership. Second, what are the consequences of partnership for trade union policy and practice and the institutional relations forged with employers? Does partnership represent a new form of bargaining or is it a more extensive form of consultation? Where does the new attempt at co-operation via partnership sit with more traditional conflict strategies? How do we distinguish between a ‘genuine’ partnership-based arrangement and a ‘counterfeit’ one? At this level, our concern is with understanding the process of building partnership and the nature of labour-management cooperation.1 Finally, the book explores a number of questions relating to the regulatory and political dimension of partnership and the preconditions most likely to facilitate and underpin it. What are the preconditions and factors that give rise to trust and real relations of reciprocity within the workplace and the firm, and which lead to genuine mutual gains for all involved? Do such factors exist and what role does the regulatory environment play? Is there a political and regulatory basis for new co-operative employment relations? Who are, and should be, the partners that underpin this process, i.e. the state, employers, managers, unions, or employees? And, how does the British experience of partnership-led co-operation sit in comparative terms? This introductory chapter is split into four sections. We begin by setting out the definitional parameters of partnership, and introduce readers to the key academic interventions from Britain and the USA. The chapter will then focus on the debate between ‘advocates and critics’ of partnership. Subsequently, the British context of partnership will be considered, in terms of: the enunciated policies of the government; the discourses and guidelines of national bodies and peak organisations; and the historical context of labour-management co-operation. Building on this, the final section will consider the implications of the British environment for partnership, and will outline three key imperatives by which we can understand the current interest in partnership: first, the economic and organisational imperative to increase efficiency through the management’s involvement of trade unions and employees; second, the social imperative for partnership that emerges from trade unions in their attempt to enhance the voice of workers within the firm; and third, the political interest in designing new forms of economic governance that are co-operative and based on reciprocal interests and behaviour from management and unions. Through this discussion we shall draw upon, and highlight, the contributions to this book.
What is partnership? Whilst the definitional status of partnership is a matter of some debate, with some arguing it is a vague, ambiguous concept, formally there is an astonishing amount of interest in the concept (Ackers and Payne 1998; Bacon and Storey 2000; Guest and Peccei 2001; Haynes and Allen 2001; IPA 2001; Martínez Lucio and Stuart 2004). Whatever the point of view, it is generally accepted that in rhetorical terms, partnership is related to an approach to employment relations based on a belief—whether well founded
Partnership and modernisation in employment relations
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or not—that there are employers that find it both ethically responsible and economically effective to cooperate with trade unions (and employees) on strategic matters of organisational change. And, that there are also strategic opportunities for trade unions in engaging with such matters of organisational change. Within the UK context, the emergence of interest in partnership was summarised in the wake of the Labour Party’s electoral victory in 1997 by Ackers and Payne (1998). Given the on-going difficulties management faced in responding to the imperatives of change, and the likely impact of a potentially more labour friendly political environment, Ackers and Payne argued that management could not proceed to progress change without bringing unions on board in terms of decision-making. Partnership thus afforded the union movement a clear opportunity for increased social and economic influence after almost two decades in the political wilderness. The key tenet of their analysis was that the concept of partnership is not hermetically sealed. Rather, it can form the basis for union engagement and capture, and thus can be used to deepen their institutional role at various levels of the employment relation and the state. In effect, unions can ‘play back the rhetoric of employee involvement and become active agents in the workplace and wider society’ (Ackers and Payne 1998:527). As they went on to explain: Hitherto, many unions have watched from the sidelines, with undisguised cynicism, concentrating instead on protecting basic wages and conditions… Social partnership presents itself as such a strategy, partly because it is a moveable feast susceptible to redefinitions in a more radical direction… The strategy is…to ‘play back’ management rhetoric about employee participation, and to retain the high ground as proponents of worker rights. (Ackers and Payne 1998:546) This echoes Regini’s (1995) point, that the new politics of partnership between capital and labour within Europe is less ideological and more pragmatic an approach that will find trade unions favour in the longer term, as they become involved in strategic issues such as training and quality management (see also Streeck 1992). Thus partnership, both politically and practically, represents a convergence of interests and a desire for cooperation. Yet, like many processes of convergence that emerge from divergent positions and interests it is open to ambivalence, and political reinterpretation and uses (Martínez Lucio and Stuart 2004). Despite this, the interest in partnership has proceeded regardless. An influential literature on the benefits of labour-management cooperation has also emerged from the USA, most notably Kochan and Osterman’s work on the ‘mutual gains organisation’, which represented an attempt to define the meaning of partnership and how it may operate in practice. For some time, the more progressive constituents of American academics have argued that the development of a highly committed and strategically involved workforce, along with their representatives in the form of trade unions, are central to any improvements in US competitiveness. The collective involvement of workers is not necessarily related on a zero-sum basis with increases in economic and corporate competitiveness. Rather, the two may be mutually enhancing. This draws from a more long-standing engagement on the potentially positive contribution of trade unions to economic competitiveness (Siegel and Weinberg 1982; Katz et al. 1983; Beer et al.
Partnership and Modernisation in Employment Relations
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1984; Voos 1987; Nolan 1989). The mutual gains model of Kochan and Osterman emerges out of this strategic choice and labour economics literature of the 1980s which, broadly speaking, argued that, regardless of the problematic economic context, managers and unions could strategically develop alternatives and responses at various levels of the organisation (Beer et al. 1984; Cooke 1990). Against this backdrop, Kochan and Osterman’s intervention represented one of the most explicit attempts to assert that stakeholders within organisations could act in a cooperative manner and find mutual benefits in the response to heightened market competition. Kochan and Osterman (1994:46) prefer the term ‘mutual gains’ to alternative analyses of ‘high performance’, ‘best practice’ or ‘high commitment’ firms ‘because it conveys a key message: achieving and sustaining competitive advantage from human resources require the strong support of multiple stakeholders in an organisation’. The literature on ‘mutual gains’ argues that there are a range of ‘excellent’ firms in the USA that have achieved this status due to their collaboration with unions and their identification of negotiation strategies based on ‘win-win’ situations. However, and this is a central concern for many observers (as we discuss later), for partnership strategies to work the broader voice of labour has to be extended and institutionalised. As Table 1.1 indicates, the mutual gains enterprise is premised on a series of guiding principles that are arranged at three organisational levels.
Table 1.1 Principles guiding the mutual gains organisation Strategic level Supportive business strategies Top management commitment Effective voice for human resources in strategy making and governance Functional (human resource policy) level Staffing based on employment stabilisation Investment in training and development Contingent compensation that reinforces co-operation, participation and contribution Workplace level Higher standards of employee selection Broad task design and teamwork Employee involvement in problem solving Climate of co-operation and trust Source: Kochan and Osterman (1994:46).
This three-tiered model does two things. First, it quite clearly states how employee involvement can be inscribed within different levels of organisational activity in such a way that it can enhance the social needs of labour and the economic demands of
Partnership and modernisation in employment relations
5
management. This is one of the few explicit enunciations of what a partnership company should do. Second, it does something more basic. The model sends a message as to how labour can be inscribed collectively and individually within the process of organisational change. By respecting and guaranteeing the rights and roles of organised labour— sustainable with supportive public policy according to Kochan and Osterman— employers and managers have much to gain in negotiating and involving for change. In this respect there is something distinctively unique in the manner in which partnership locates the new role of organised labour, which sets it apart from the macro level, and politically driven understandings of labour involvement. Some would prefer to use microlevel corporatism as a term to describe such developments, especially as the state plays a uniquely different, supportive role when compared with the direct economic role it played in the past (Alonso 1994; Martínez Lucio and Stuart 2002). But partnership in the current context means more than symbolic overtures to consultation and union involvement in areas such as job redesign. Rubinstein and Kochan’s (2001) recent study of the Saturn plant in the USA, for example, illustrates the extent to which unions can guide management and influence them on matters ranging from the introduction and actual operation of teamworking right through to the raising of investment funds. Whilst there are alternative voices that would question such positive views in terms of their representativeness in the North American context (Rinehart et al. 1997), the American experience is an important point of reference within the UK context.2 According to Cooke (1990), three vital aspects are required for these new forms of cooperation to function. First, partnership processes have to establish clear procedures for resolving serious problems and crises: that is, there have to be clear modes of engagement between management and unions that are capable of dealing with negative as well as positive developments within the workplace and the firm. Second, the organisational behaviour of management and unions has to be clearly negotiated and understood, so that trust can be engendered:3 in effect, openness about difficult behaviour and the possible undermining of trust between the key players is essential. Finally, there is a need for a clear delineation of labour’s role in decision-making, the value it can add to an organisation, and the manner in which gains are to be shared. Hence defining partnership is not just an exercise in outlining processes; it is also about understanding the rules of engagement.
Advocates and critics Much of the debate on partnership has been located in terms of an evaluation of the specific manifestations of partnership. This has been driven by an interest in the establishment of key partnership agreements that formally allow for a greater union involvement in decision-making. Hence the central point of debate has tended to focus on whether partnership ‘diminishes trade union representative capacity (critics) or enhances it (advocates)’ (Terry and Smith 2003:2) 2). In this context, leading academic advocates of partnership (such as Ackers and Payne 1998) have been joined by an array of policy makers and practitioners. The Involvement and Participation Association (IPA), for example, has developed a series of ‘principles’, and associated practices, which delineate ‘high partnership’ organisations from ‘low partnership’ organisations (see Guest and
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Peccei 1998:6; 2001). The principles—which are discussed in detail later—include commitment to business success and the sharing of success, employment security, employee voice, training and development and flexibility. The implication, for Guest and Peccei (1998:6), is that, ‘successful partnership’ requires ‘a set of reciprocal commitments and obligations between the organisation and the people working in it’ and that this ‘principle of mutuality…provides coherence to employee relations within the business’. These principles and commitments appear to have influenced the institutional configuration of key partnership agreements and initiatives, such as those at the retailer Tesco, the financial services firm Legal and General, and the utilities company Transco. These agreements, it is argued, have allowed trade unions to extend their remit of influence and to participate, to varying degrees, within management’s decision-making processes (see Haynes and Allen 2001; Samuel 2003). Others have questioned the coherence of the ‘partnership model’ and its ability to reshape the terrain of management-union relations, noting that trade unions face significant difficulties and political risks in adopting the partnership approach (Kelly 1996; Claydon 1998; Taylor and Ramsay 1998; Danford et al. 2002). Kelly (2001 and this collection), for example, has argued that when comparing and contrasting partnership and non-partnership firms (something that assumes we can identify partnership) the former do not appear to exhibit significant differences in terms of employment and profitability (see Badigannavar and Kelly 2003). Taylor and Ramsey (1998) have further argued that partnership-based arrangements may draw trade unions into a management strategy of enhancing surveillance and work intensification. For example, in the process of engaging with partnership, trade unions may end up legitimating workplace change programmes that trade off employment security with greater work intensification, with a concomitant impact on membership commitment. Danford et al. (2002) and Richardson et al. (this collection) develop a series of arguments that point to some of the broader effects of this. First, the emphasis on partnership as a strategy may lead unions to downgrade their development of membership-led and resistance strategies. Partnership may also lead to an undermining of workplace activism, which can in turn lead to a long term weakening of union structures (see Geary and Roche 2003 for a discussion of the ‘displaced activist’ thesis). Second, as Richardson et al.’s chapter shows, levels of work intensification may actually increase even in supposed partnership-based workplaces. It is clear, then, that there are a range of advocates and critics, although the balance of opinion to-date has tended to err more towards a critical position. We would argue, however, that there is a need to supplement such lines of enquiry with an understanding of why partnership can be unstable in weak regulatory contexts, such as the UK’s, regardless of the perceived positive or negative outcomes in social and political terms. Partnership is not just about outcomes, or its potential for trade unions (Martínez Lucio and Stuart 2002:256–7; McBride and Stirling 2002). Partnership is a development that represents the emergence of a new approach to employment relations that attempts to reconfigure the form and content of management-union relations, as well as the role of the individual within the workplace—in other words it raises broader questions about the regulation of employment relations. It is a development that frames the manner in which ‘risks’, as well as ‘gains’ and ‘losses’ are managed and understood within employment relations, both collectively and individually (Martínez Lucio and Stuart 2003). Partnership also addresses the role of the state as an actor within the
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processes and practices of management-union relations, establishing new roles within collective and individual employment relations. Partnership must therefore be viewed as a more complex political development and an attempt to reconfigure the form of employment relations and not just its outcomes. Before we can proceed to discuss the significance of these critical considerations we first need to outline the salient points regarding the character of partnership and its regulation within the current UK context. We then turn our attention to the ways in which the book’s contributions critically engage with the issue of partnership.
Regulating and securing partnership: history, policy and benchmarking It is important to understand the regulatory context of partnership and the political and institutional developments that have been introduced to propagate it and secure relevant outcomes (Stuart and Martínez Lucio 2000, 2002; Martínez Lucio and Stuart 2002, 2004; Terry and Smith 2003). Thus, in the UK context there have been rhetorical and practical interventions around partnership as a new form of employment relations. This section will discuss the historical context of partnership, the contemporary and distinctive role of the state and the input of key peak organisations and national bodies and the principles and benchmarks that they have advanced. Sensitivity to these contextual factors is a vital pre-requisite to any dynamic evaluation of partnership. History The origins and motives of partnership approaches are longstanding. There are quite discreet nuances in the way in which different stakeholders attempt to shape the meaning and practice of partnership in any one context. In historical terms, we need to consider how partnership differs from previous attempts at industrial relations change (Whitston 2001). There is nothing new in the desire to see joint working and greater collaboration as central to the aspirations of industrial relations actors (Martínez Lucio and Stuart 2002). The concern with the poor state of industrial relations and the prospect of international shifts in labour politics during the First World War (1914–18) brought the Whitley Commission, with its recommendations of greater labour involvement and negotiation at sectoral level which would frame developments in union involvement at lower levels (Winchester 1983). This eventually became enacted within the public sector after the Second World War. The deterioration of industrial relations in terms of unofficial industrial action, the lack of management coordination within industrial relations, and the impact of tight labour markets brought the Royal Donovan Commission’s recommendation for a greater ‘formalisation’ of industrial relations in terms of management-union bargaining relations in the 1960s; and the Bullock Report’s recommendation for the development of worker directors and a greater corporate role for trade unions in the 1970s (Clegg 1979). It can be argued that just as with the case of employee involvement and participation more generally, there is a series of cycles where interest in partnership of one form or another is followed by periods of disinterest (see Ramsay 1977). Varying levels of
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industrial conflict, labour market shortages, and the political context of organised labour, along with other factors, may drive these cycles. For Ramsay (1977), employer interest, and that of the state, in co-operating with labour coincided historically with periods of labour strength (see also Panitch 1981). Yet, as Ackers et al. discuss in their chapter, the contemporary engagement with partnership is dependent on a broader range of factors, although it would be fair to say that the involvement of labour (although not necessarily via organised labour) for business and efficiency purposes is a paramount determinant. In addition, the current role of the state and regulation is of an indirect and supportive nature (perhaps even ‘hands off’ at times), which makes for a highly variable experience of worker involvement. Policy and principles: the move to benchmarking Tony Blair’s Labour government since 1997 has sought to advance its agenda of employment relations modernisation through micro-level exhortation and via the wider role of the state as employer. At the micro-level, its partnership agenda has been supported by the Department of Trade and Industry’s (DTI) Partnership Fund, which has invited project proposals (funded to a maximum of £50,000) from employers and unions aimed at modernising and improving employment practices and joint working, on matters such as involvement, bullying and the quality of working life (see Terry and Smith 2003). In terms of the state as an employer, a range of partnership initiatives and models have been advanced with regard to how employment relations in the public sector should be conducted. The objective has not just been the restatement of the philosophy of the state as a ‘good employer’ after almost two decades (1979–97) of Conservative governments and their anti-union rhetoric. Many of these policies are concerned with new forms of individually oriented human resource management practices and workplace strategies, and not simply union-oriented ones (Stuart and Martínez Lucio 2000). As far as the government is concerned, ‘there will be no return to old centralised command and control systems of the 1970s’ (Department of Health 1998:5). The partnership discourse attempts, therefore, to locate new management—union relations within the context of a broader set of interests such as those of the individual and, in particular, those of the employer and the customer. In this context the state acts not as a third party and major guarantor of partnership, but a facilitator of network and learning processes relevant to it (Rainbird, this collection). Partnership represents an attempt to coax social actors into new forms of behaviour without directly intervening into the substance of employment relations (Taylor 1998). This state policy of partnership depends on key institutions within civil society overseeing and providing rules and knowledge resources for the development of partnership. Hence, government policy has been supported by parallel behaviour amongst certain non-state institutions. The Involvement and Participation Association (IPA, as Kelly notes in his chapter) has played a particularly important role, moving well beyond its historic association with concerns of employee involvement to become a major advocate of matters partnership-related. An independent body, the IPA has sought to disseminate partnership best practice, provide guidance and advice and has established an underpinning set of partnership principles and practices. As Chapter 6 by Stuart and Martínez Lucio explains, these principles allow us to delineate not just the meaning of
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partnership but the subtle supports required for its development. To this end, the principles distinguish between the expected commitments to (the success of the enterprise; building trust and greater employee involvement; recognising the legitimate role of the partners) and building blocks of (recognition of the employees’ need for employment security and the company’s need to maximise flexibility; sharing success within the company; informing and consulting staff at the workplace and at company level; representation of the interests of employees) partnership (IPA 1997:2). The IPA has also been influential in policy circles, particularly with regard to the DTI Partnership Fund. This represents the nexus of a new type of policy making and implementation process. This process attempts to create a broad network of knowledge sharing and learning, and includes para-state bodies such as the Advisory, Conciliation and Arbitration Service (ACAS) with its guidelines for ‘working together’, along with interest groups such as The Industrial Society (Knell 1999)4 that have also entered, what could be called, the market for partnership (Martínez Lucio and Stuart 2002). This political dimension of partnership should not be underestimated. The Trade Union Congress (TUC) has also has developed its own interest in partnership, as a way of renewing and extending the role of organised labour within the workplace and moving beyond the traditions and legacies of adversarial industrial relations. The TUC has developed six partnership principles (TUC 2001:2): • Shared commitment to the success of the enterprise • Recognition of legitimate interests • Commitment to employment security • Focus on the quality of working life • Openness • Adding value. These are presented as the vital preconditions required for the establishment of a new accord between unions and employers. Once again, there is an emphasis on recognising the need for a common understanding of market imperatives, but the principles also identify the centrality of voice mechanisms, job security and investments in the quality of employees’ working conditions to sustainable and effective partnerships. The principles represent in other words an attempt to marry efficiency issues with social ones—a leitmotif of current partnership practices and interests. The TUC has utilised these principles to gain a legitimate stake in the ‘market’ for partnership and, to this end, has set-up a Partnership Institute (PI). The PI sells itself as a labour-friendly consultancy and training body for those employers and unions endeavouring to construct partnership practices. Naturally, the PI is active within the network of actors and discourses that have emerged in and around the state with regards to the ‘modernisation’ of employment relations. We have seen, then, the emergence of a broad constituency of interest groups and propagators of partnership that are driven by establishing voluntary guidelines and institutional supports. The modernisation of employment relations is driven by a new language and network of actors that facilitate the state’s indirect approach, although the presence of key employer and management groups such as the Confederation of British Industry, which represents most employers, and in particular the Institute of Directors (which represents company directors in the United Kingdom) and the Chartered Institute
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of Personnel and Development (who in the main represent management and professionals involved in personnel issues), is not so common.5 This absence of a transparent direction and active political support from such employer bodies shows how the politics of partnership have been driven by flexible alliances between the state, organised labour’s peak bodies, and supportive interest groups. It also raises concerns as to the ambivalence of organised employer interest.
The motives and dimensions of partnership Having discussed the regulatory and historical context, we now turn our attention to the forces shaping the nature of partnership and its specific characteristics and tensions. As noted above, the critics of partnership, whilst prevalent, have not always underpinned their discussion of partnership with sensitivity to the distinct, and at times contradictory, forces that have driven its development. Accordingly, this section aims to evaluate the distinct, and at times divergent, imperatives and forces that have underpinned the partnership agenda (Martínez Lucio and Stuart 2004), in terms of: economic/organisational factors, trade union engagement factors and the regulatory and governance dimension. The value of such a three-fold approach is that it not only allows us to detect the underlying structural factors promoting co-operation, it also allows us to appreciate that actors may approach the issue of partnership through different readings and that they may frame their responses to it in different ways. Hence, emergent tensions may be due to the fact that there is still a different
Table 1.2 A framework for assessing partnership Actors
Imperatives for change
Questions—outcomes
Management
Economic and organisational factors: efficiency, performance and employee involvement
Does it pay and for whom? Mutual gains?
Trade unionism and partnership
Union survival, renewal and institutional position. Establish trust and extending voice
Does it make a difference to the role of unions and their relations with management and employers?
The State: regulation, governance and partnership
Dismantling adversarial industrial relations Modernisation of public sector
Is there a political and regulatory basis for new co-operative industrial relations?
emphasis placed on distinct principles or operational levels of partnership by social partners. Questions regarding the outcomes of partnership need to be sensitive to these distinct imperatives (Martínez Lucio and Stuart 2004), which will in turn lead to different approaches and questions regarding the outcomes of partnership. Table 1.2 outlines the way the book draws together the diverse contributions and critiques of partnership within this framework.
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Economic and organisational motives for involvement: does it pay and far whom? In terms of economic and organisational imperatives it is often suggested that frontline companies and successful organisations derive much of their success from the manner in which they include stakeholders within decision-making processes (Kochan and Osterman 1994). Economic success is purported to be the outcome of investing in human resources and the development of knowledge (see Deakin et al., this collection). The increasing belief that successful economies and firms are constituted through a complex set of networks where different stakeholders share resources and develop collaborative strategies has taken hold in key areas of management education and theory (Miles and Snow 1986; see Deakin et al., this collection). These approaches in academic and political terms are based on a broader mapping of what we understand to be the economic, as they include a broader array of internal and external actors and stakeholders. This development does not necessarily lead to trade union inclusion as other corporate and client stakeholders may be the basis of such networks (see Deakin et al. and Ackers et al. in this collection). In organisational terms, the broad economic drive around stakeholding is imprinted within a micro-level imperative for partnership. At this level, partnership with trade unions and/or employees coalesces around three key concerns: the importance of involvement and what Leadbetter (2003) calls somewhat loosely ‘authorship’, whereby employees are viewed as virtual owners of their effort and creativity; the need to seek legitimacy for management change; and the need to constantly renew strategies for people management. The importance of employee involvement to continuous corporate and product improvement is outlined in the chapter by Ackers et al. Their longitudinal analysis documents a shift away from the more individualist experiments in involvement during the 1980s towards a greater concern with representative and integrated structures of involvement in the mid- to late 1990s. However, these representative forms are not to be conflated with the traditionally perceived forms of collective representation (of the 1970s), based solely on trade unionism. Inscribing employees within the workplace as authors is also seen as imperative to their motivation, commitment and performance (Leadbetter 2003). In partnership terms, as Roche and Geary (this collection) explain, this leads to the fundamental issue of how involvement and participation within decisionmaking translate into demonstrable changes in (dual) commitment and whether ‘partnership can deliver mutual gains’. We shall return to this point below. Second, trade unions can involve themselves in the internal marketing of change to their members, the process of selection and retraining that may come with restructuring, and the overall monitoring of fairness and consistency that is vital in broad projects of change. As Oxenbridge and Brown’s contribution explains, this is often utilised by management to help legitimate the process of organisational change. There is therefore an economic and organisational utility in involving trade unions within the decision-making remits of the firm. However, third, such involvement may not only be about legitimating processes of change but contributing to and ensuring their ongoing renewal. As a large body of research has shown, the systematic implementation of high performance human resource management (HRM) practices has proved problematic (Cully et al. 1999; Richardson et al., this collection). The verdict on the ‘new’ cultural language of management, along with the development of what Storey (1994) labelled the new ‘levers’
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of management (e.g. teamworking, appraisal and individual payment systems), is therefore somewhat uncertain. In this respect, it could be argued that there is now a desire to renew and legitimate this ‘tired’ project of HRM and organisational change using the format of representative dialogue and negotiation instead (Martínez Lucio and Stuart 2004; Ackers et al., this collection). These economic and organisational imperatives place involvement strategies centre stage on the partnership agenda, to the extent that this will contribute to the economic benefit of the firm and mutual gains more broadly. The question of mutual gains is at the very heart of the partnership debate, and is something that is examined specifically by the contributions from Kelly, Richardson et al. and Roche and Geary (and implicitly by other contributions). These contributions show that the potential gains from partnership are often far from obvious. Kelly’s analysis suggests, as noted above, that partnership firms often perform no better than their non-partnership counterparts; and indeed the outcomes for trade unions may be deleterious. Employee gains may also be lacking; with the study by Richardson et al. revealing increased levels of work intensification, stress and job insecurity in so-called partnership environments. These findings are informative, yet at the same time raise deep challenges for trade unions (see Chapter 6) because trade unions may have no option but to engage with partnership. As the chapters by Beale and Gall illustrate, even where there has been the potential for ‘alternative’ union strategies based around highly politicised struggles against labour-management co-operation, this has not deterred the drive by employers to pursue involvement-based routes to advance organisational change. Furthermore, Ackers et al. suggest that there may not be any alternative choice for unions, since outcomes may be even worse institutionally and economically were unions not to buy into the process of partnership. Trade unionism and partnership: does it make a difference to the role of unions and their relations with management and employers? Trade union interest in partnership, however, is not solely driven by an assessment of economic gains and losses. In this context, partnership is perceived to represent an opportunity for trade unions to advance their historic concern to ensure that the rights of workers in terms of the working environment, such as issues of health and safety, and the extension of learning and training in work and non-work related matters, are enacted and enhanced by employers. Partnership emerges from a general desire to extend the political and social position of workers at work by having them enter into a new relation with management, one based on a legitimate and independent voice (not managerially driven involvement), that allows risks to be shared and common approaches to challenges to be developed (i.e. trade unions aim to ensure reciprocity and mutual gains). Trade unions do not, therefore, see the adoption of the economic and organisational logics discussed above as being engaged with in isolation. They are part of a new operationalising of historic trade union concerns. However, this operationalisation is premised on the social obligations of the firm and the fundamental shift in the view of labour from being ‘economic resource’, ‘external political mediator’, and ‘mode of regulation’ to ‘partner’ capable of acting as a voice for both worker and corporate issues. Hence the extension of voice mechanisms at the strategic, functional and workplace level is a vital pre-requisite for the success of partnership as far as trade unions are concerned (see Deakin et al. for a
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view of how corporate governance must involve broader stakeholders). This may be an outcome of some new quid pro quo based on each side accepting the other’s concerns or a shift in identity within employers as far as the social dimension is concerned, but the elevation of worker voice and status is integral to the origins of interest in partnership for trade unions. The contributions by Wray, Gall, Beale, Heery and Oxenbridge and Brown all discuss the processes by which employee voice can be enhanced and enacted at the workplace level and the implications of this for trade union position, strategy and identity. They demonstrate how the centrality of voice tends to vary within different forms of partnership arrangements and agreements, and identify the possible limits of partnership as a strategy for union renewal. Kelly suggests that the recent introduction of formal legislative provisions in the UK for Statutory Trade Union Recognition may be important here, because they may facilitate partnership agreements based around a ‘more even balance of power’. Yet, as Wray’s qualitative case study reveals, it is not possible to read off the potential outcomes of partnership from the signature of a recognition agreement. Posing a distinction between ‘genuine’ and ‘counterfeit’ partnership, Wray’s analysis shows how managers were able to opportunistically exploit a claim for trade union recognition and take advantage of internal trade union politics and priorities. Recognising that an officer-led claim was prioritising the act of recognition in itself, management was able to sign, largely unchallenged, a partnership-based recognition agreement on its own terms. For Wray, this act of recognition resulted in a ‘counterfeit’ partnership, as it did not result in enhanced representation or voice for employees. The importance of internal union politics is more specifically addressed in the chapters by Gall and Beale. Their analyses show how the advancement of the partnership agenda by the leadership and full time officers of a union can lead to ruptures within the broader membership and activist constituency. These ruptures can result in political shifts within trade unions and the usurping of more co-operative leadership by more militant trade unionists. Heery’s contribution is not so pessimistic about the costs of engaging with partnership and attempts to chart ‘a middle ground between the arguments of advocates and critics’. He argues that whilst critics are right to point to the limitations of partnership, partnership is in great part dependent on how trade unions envelop such strategies with independent bargaining power and broader power resources. Much may depend on how issues of voice and union representation are tied to broader union political and bargaining practices. In this context, Oxenbridge and Brown argue that it is analytically useful to distinguish between formal partnership agreements and more informal partnership arrangements. Their findings show that the benefits for unions are greater, and collective bargaining is more likely to be nurtured, where partnership working is typically informal. This tends to occur in environments where traditional bargaining relations are well established, trade union membership is high and workplace representatives active. This contrasts with those companies that choose to use formal partnership agreements to condition and constrain the role of trade unions in terms of their sphere of influence within employment relations. This was found to be more likely where workplace trade unionism is weak. Oxenbridge and Brown consider this to be a contributing factor to the nature of partnership outcomes. Thus engagement on a broader level between managers and unions is contingent on the character of employment relations processes and the manner by which joint regulation is developed.
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Regulation, governance and partnership: is there a political basis for new co-operative employment relations? Finally, there are political imperatives for partnership that go beyond the enhancing of the voice and roles of social actors within employment relations. The main political driver has been the resurrection of Dharendorf’s (1959) desire to wither the cold front of class conflict. Whilst corporatist ventures in many European countries attempted this historically at the national political level, via macro-economic tri-partite structures (Lehmbruch 1984; Berger and Compston 2002), current forms of partnership tend to establish the firm as the arena around which class differences should mutate into common economic and social concerns. At the political level, then, there is a strong ‘ideological’ dimension to partnership (see McBride and Stirling 2002). The need to find broader bargaining agendas, a greater recognition of the centrality of productivity and efficiency, and the location of union-management collaboration at the strategic, functional and workplace levels is, as noted above, nothing new. Politically, it links social democratic concerns from the Wilson governments of the 1960s and 1970s with the post-1997 Blair government (Martínez Lucio and Stuart 2002). The difference in contemporary terms is the way such developments are understood and shaped by a greater reference to business process and entrepreneurial cultures (Crouch 2001). Thus, as Finlayson (2003:97) notes, This is a cornerstone of Blairite political theory. With this move modernisation and the third way retain a communal aspect, and take over the ‘one nation’ mantle from the Tory Party. It allows the introduction of a strong rhetoric about duty, rights and responsibilities which, at least for its sympathisers… It enables them to argue that… maintaining a ‘strong’ and ‘dynamic’ economy need not be at odds with the goals of equality and social justice. The economy can only thrive because all the people in the country work together and modernise so that economy and society are united as one. The current political imperative draws more explicitly on the unitarist approach to industrial relations with its emphasis on common goals and interests within the firm, albeit that these common goals are attained through a pluralistic process of negotiation and mutual acceptance of difference. In this respect, some commentators are quite right to say that partnership is nothing new, as it was a very common element in the language of the Whitley, Donovan and Bullock Commissions. In terms of its promotion of partnership, however, the role played by the state is more that of a supportive mechanism and less as a direct actor. The consequences of this facilitative approach and the broader UK regulatory context for partnership are examined by Rainbird and Deakin et al. Rainbird’s contribution considers the potential for trade unions to develop partnerships around lifelong learning, an issue considered by many to be particularly applicable for the development of co-operative relations and new union strategies. Her analysis reveals that a strong rhetorical support from the Labour government for the discourse of partnership has not been matched by formal regulatory support. Operating within a voluntary context, with limited obligations on employers, trade union-led partnerships for lifelong learning were found to be far from widespread
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and generally piecemeal in nature. In essence, the regulatory context provides little ground for the establishment of the ‘dual agency’ required for building meaningful partnership relations. The impact of the regulatory environment on partnership is also considered by Deakin et al., in terms of the governance structures of British capital. Their contribution argues that the emphasis on shareholder value and the corresponding gaps in representative and democratic corporate governance threaten the sustainability of mature forms of labour-management co-operation and partnership. In this context, regulation within the firm (be it accounting regulations or provisions for employee representation, voice and involvement) is considered important because it can ‘lengthen time horizons’, prompting employers to develop the long-term investment strategies considered so essential for the maintenance of trust-based partnership approaches (by, for example, developing investment strategies on training and development). At the present time such investment strategies are highly contingent on the vicissitudes of ‘external market and regulatory conditions’. Yet, both Rainbird and Deakin et al. identify some potential seeds of change within the regulatory context. Deakin et al. suggest that recent high profile reviews of corporate governance in the UK may have paved the way for the development of new longer-term investment funds. Whilst Rainbird notes the increasing influence that European Union provision, through legal rights for individuals, are likely to have on British employment relations. The European dimension has been referenced by many commentators, who often see strong conceptual similarities between the partnership concept and the ‘new’ European social model (Ackers and Payne 1998; Sisson 1999). Sisson (1999:460), for example, whilst identifying the potential limits of advancing an approach based on partnership in the UK (due to the paucity of forms of employee representation compared with the rest of Europe) nonetheless asserts that, ‘the “new” European social or “partnership” model has a great deal in its favour’, since ‘it combines the best of the “HRM” and the pluralist collective bargaining models…while at the same time minimising many of their weaknesses’. How the UK experience of partnership compares with that in continental Europe forms the basis of Hyman’s contribution. Hyman notes that the obsessive labelling of a continental model of partnership (counterposed to the British experience) is often far from straightforward, and that many of the concerns of British critics of partnership run parallel with similar debates in other European countries. Most significantly, the emphasis on strengthening the voice of workers may often isolate this feature of regulation from other more socially and economically oriented ones.
Conclusion It is important therefore not to overstate the underlying aims of partnership-based approaches to employment relations, and instead recognise purpose in relation to the broader socio-economic context, organisational environment and organisational strategies. This helps to explain competing takes on the issue and different concerns with partnership. That said, it is fair to say that there is an Anglo-Saxon and managerialist model emerging that is capturing the imagination of key policy makers within and beyond the United Kingdom. This is apparent with regard to the ‘new’ European social model outlined in the European Commission’s Green Paper Partnership for a New
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Organisation of Work, with its call for collaboration around the modernisation of work and its emphasis on flexibility, employability and lifelong learning (Sisson 1999; Greenwood and Stuart 2002). This language of partnership contrasts in some aspects with the traditional regulatory and legislative approach to employment relations present in many continental European countries. The contributions in this collection subject this perceived policy ‘orthodoxy’ (Sisson 1999) to rigorous conceptual and empirical scrutiny. They reveal a series of concerns with regards to the challenge of building more co-operative relations between management and trade unions and establishing high-trust relations at work. There is also concern with the very different meanings and approaches to partnership that are emerging in economic, organisational, social and political terms. The evidence presented in this book raises deep questions around motive, the absence of effective preconditions such as the regulatory support for worker voice mechanisms in the Anglo-Saxon context, and the costs and distributions of risks related with establishing joint working relations. We are seeing competing understandings of partnership and different trajectories, questioning whether there is a uniform or common experience. A state of ambivalence in discussing partnership within this context has therefore become very common. Genuine concern with improving the conduct and context of employment relations is often set against the lack of investment in trust relations and long-term strategic and structural support for social actors and partners. In this respect, the book is not just an extensive commentary on the state of partnership, but a reflection at the start of the twenty-first century of the ongoing project of modernising UK employment relations. The book’s brief conclusion will draw attention to the key findings of the volume and the future research required to understand further the challenge of partnership. It will draw attention to the need to recast the discussion in terms of the nature and prospects of cooperation at work.
Notes 1 The framework of our questions is broadly similar to that of McBride and Stirling (2002). 2 See Martínez Lucio and Stuart (2004) for a detailed engagement with Ackers and Payne and Kochan and Osterman. 3 See Dietz (2004) for a detailed conceptual consideration of trust in relation to partnership. 4 Which has now been relabelled the Work Foundation. 5 This is not to suggest that such parties have not engaged with partnership, or even sought to establish definitions, just that they are far more limited and managerial in nature (see IPD 1997; IPA 2001).
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Kelly, J. (1996) ‘Union militancy and social partnership’, in Ackers, P., Smith, C. and Smith, P. (eds) The New Workplace and Trade Unionism. London: Routledge, 77–109. Kelly, J. (2001) ‘Social partnership agreements in Britain: union revitalisation or employer counter mobilisation’, in Martínez Lucio, M. and Stuart, M. (eds) Assessing Partnership: The Prospects for and Challenges of ‘Modernisation’. Leeds: Leeds University Business School, 79–86. Knell, J. (1999) Partnership at Work, Employment Relations Research Series No. 7. London: Department of Trade and Industry. Kochan, T.A. and Osterman, P. (1994) The Mutual Gains Enterprise: Forging a Winning Partnership Among Labour, Management and Government. Boston: Harvard University Press. Leadbetter, C. (2003) Up the Down Escalator: Why Global Pessimists are Wrong. London: Viking Penguin. Lehmbruch, G. (1984) ‘Concertation and the structure of corporatist networks’, in Goldthorpe, J.E. (ed.) Order and Conflict in Contemporary Capitalism. Oxford: Oxford University Press. Martínez Lucio, M. and Stuart, M. (2002) ‘Assessing partnership: the prospects for and challenges of modernisation’, Employee Relations, 24(3):252–261. Martínez Lucio, M. and Stuart, M. (2003) ‘Regulating risk’—the politics, risks and the dynamics of social partnership’: “shotgun weddings and marriages of convenience”’, presented at the 21st International Labour Process Conference, University of West of England, 14–16 April. Martínez Lucio, M. and Stuart, M. (2004) ‘Swimming against the tide: social partnership, mutual gains and the revival of ‘tired’ HRM’, International Journal of Human Resource Management, 15(2):404–418. McBride, J. and Stirling, J. (2002) ‘Partnership and process in the maritime construction industry’, Employee Relations, 24(3):290–304. Miles, R.E. and Snow, C.C. (1986) ‘Organisations: new concepts for new forms’, California Management Review, 28 Spring: 62–73. Nolan, P. (1989) ‘Walking on water? Performance and industrial relations under Thatcher’, Industrial Relations Journal, 20(2):81–92. Panitch, L. (1981) ‘Trade unions and the capitalist state’’, New Left Review, 125:21–44. Ramsay, H. (1977) ‘Cycles of control’, Sociology, 11(3):481–506. Regini, M. (1995) Uncertain Boundaries. Cambridge: Cambridge University Press. Rinehart, J., Huxley, C. and Robertson, D. (1997) Just another Car Factory: Lean Production and its Discontents. Ithaca: Cornell University Press. Rubinstein, S.A. and Kochan, T.A. (2001) Learning from Saturn: Possibilities for Corporate Governance and Employee Relations. Ithaca, NY: ILR Press. Samuel, P. (2003) ‘Partnership working and the cultivated activist’, presented at the 53rd British Universities Industrial Relations Association Annual Conference, University of Leeds, Leeds, 3–5 July. Siegel, I.H. and Weinberg, E. (1982) Labor-Management Cooperation: The American Experience. Kalamazoo, MI: W.E.Upjohn Institute. Sisson, K. (1999) ‘The “new” European social model: the end of the search for an orthodoxy or another false dawn?’, Employee Relations, 21 (4/5):445–462. Storey, J. (1994) Developments in the Management of Human Resources. Oxford: Blackwell. Streeck, W. (1992) ‘Training and the new industrial relations: a strategic role for unions?’, in Regini, M. (ed.) The Future of Labour Movements. London: Sage. Stuart, M. and Martínez Lucio, M. (2000) ‘Renewing the model employer: changing employment relations and partnership in the health and private sectors’, Journal of Management in Medicine, 14(5/6):310–325. Stuart, M. and Martínez Lucio, M. (2002) ‘Social partnership and the mutual gains organisation: Remaking involvement and trust at the British workplace’, Economic and Industrial Democracy, 23(2):177–200. Taylor, P. and Ramsay, H. (1998) ‘Unions, partnership and HRM: sleeping with the enemy?’, International Journal of Employment Studies, 6(2):115–143.
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Taylor, R. (1998) ‘Workplace revolution’, Financial Times, 18 June. Terry, M. (2003) ‘Can “partnership” reverse the decline of British trade unions?’, Work, Employment and Society, 17(3):459–472. Terry, M. and Smith, J. (2003) Evaluation of the Partnership at Work Fund, Employment Relations Research Series No. 17. Department of Trade and Industry. Thomas, C. and Wallis, B. (1998) ‘Dwr Cymru/Welsh water: a case study in partnership’, in Sparrow, P. and Marchington, M. (eds) Human Resource Management: The New Agenda. London: Financial Times Pitman Publishing. TUC Partnership Institute (2001) Partners for Progress: Winning at Work. London: TUC. Voos, P.B. (1987) ‘The influence of cooperative programs on union-management relations programs’, Industrial and Labor Relations Review, 40(2):195–208. Whitston, C. (2001) ‘The chimera of social partnership’, in Martínez Lucio, M. and Stuart, M. (eds) Assessing Partnership: The Prospects for and Challenges of ‘Modernisation’. Leeds: Leeds University Business School, 147–152. Winchester, D. (1983) ‘Industrial relations in the public sector’, in Bain, G.S. (ed.) Industrial Relations in Britain. Oxford: Blackwell.
2 Partnership and voice, with or without trade unions Changing UK management approaches to organisational participation Peter Ackers, Mick Marchington, Adrian Wilkinson and Tony Dundon
Introduction Industrial relations theory has tended to assume that trade unions are central to management’s field of vision when it comes to organisational participation, as with much else (see Ackers and Wilkinson 2003). Either participation schemes are designed to weaken and marginalise unions or their aim is to make unions ‘see sense’ and behave more responsibly (Ramsay 1977). Our earlier research showed that new concerns about quality, customer care and employee commitment motivated 1980s and 1990s management Employee Involvement (EI) initiatives, supplanting the traditional emphasis on industrial relations conflict resolution (Marchington et al. 1992). Social Partnership has been widely interpreted as heralding a return of trade unions to the centre of UK organisational life. However, our recent research suggests that, while there has been a revival of management interest in representative EI since 1997, ‘partnership’ will not translate into an automatic union revival. Indeed, employers may develop effective (in their eyes) non-union forms of partnership, where unions are either too weak or too adversarial to deliver employee consent. From the perspective of UK managers, the prospects for unions in the workplace will depend on their willingness and ability to contribute towards partnership between employers and employees. And rarely will unions be the exclusive channel for achieving this.
The changing face of UK organisational participation Worker participation in its various guises has been a constant theme in UK industrial relations. Different historical periods have witnessed new forms of participation, sometimes in place of old, sometimes alongside those already existing. The wider political and economic climate has played a key influence in shaping particular institutional types. Our research for the Employment Department over a decade ago was an attempt to track these developments through the 1980s into the 1990s (Marchington et al. 1992). Here we present some new findings from return visits in 2001 to seven of the 25 organisations studied in 1989–91, to bring the story up-todate.1 The past decade has seen quite major changes in the political and legal environment of British employment.
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To put this in simple terms, if the 1980s saw Britain moving at some speed towards a US neo-liberal model of employment relations, the early years of the twenty-first century have seen some reorientation towards a more European social market model, underpinned by legally enforced notions of employee rights (see Marchington 1998; Ewing 2003). This chapter compares and contrasts the forms of employee voice being promoted by current employers with what they were doing a decade ago. The 1992 research pointed to the existence of waves of EI activity within companies, partly driven by internal dynamics, partly by changing national policies and popular management fashions. While the focus of that EI research was slightly different to this ‘voice’ project (Marchington et al. 2001), it still constitutes a useful benchmark for illuminating current management practice. Our 2001 research was part of a larger study of management attitudes and choices regarding ‘employee voice’ at 18 organisations, and is therefore naturally limited in what it can say about the changing state of employee opinion.2 With hindsight, we can discern three quite different periods of management policy towards worker participation since the Second World War. In the first period, roughly from 1945 to 1979 (but beginning during the war) interest centred on notions of power sharing in industry, or industrial democracy centred on trade unions. The main aim was to reduce industrial relations conflict by involving unions in management decisionmaking (Brannen 1983). From 1979 to 1997, during a second period defined by dramatic political change, the decline of the trade union movement removed such issues from the agenda. Many commentators thought managers would lose interest in participation altogether (see Ackers et al. 1992). However, over the last twenty years, business interest in the area has never been higher. But this interest took a novel form, borrowed from America and Japan, namely employee involvement (EI). The associated new initiatives were management sponsored and, not surprisingly, concerned with business goals, notably employee motivation and commitment to organisational objectives (Marchington and Wilkinson 2000). Thus most EI has been limited to information sharing or localised problem solving, without granting workers much say over high-level decision-making (Wilkinson 2001). A resulting ‘representation gap’ (Towers 1997) was reinforced by the decline of collective bargaining and consultation committees. The current period of social partnership, since 1997, has seen some revival of earlier concerns with employee representation and rights at works, mainly drawn from European social policy and employment regulation. With the landslide re-election of New Labour in 2001 it is now appropriate to identify this as a distinctive period of some solidity, with its own specific dynamics.
Towards social partnership? If EI looks set to stay, there are signs that, under New Labour, it has been joined by some revival of representative participation. For the public policy context of employee participation has changed markedly since 1997. A new language of social partnership (a concept rarely used in the 1980s) has accompanied the end of Conservative rule, more active government regulation of the labour market (the National Minimum Wage, Statutory Trade Union Recognition, EU Working Time Directive etc.), and a closer engagement with European social policy, including the European Works Council (EWC)
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initiatives (see Ackers and Payne 1998; Tailby and Winchester 2000).3 The EU concept of social dialogue centres on partnership between employers and employees, through representative bodies, notably trades unions and works councils. It also advocates participation as an extension of employee citizenship rights and not just business expedience (see Martin 2003). The Information and Consultation Directive is the latest important development (Sisson 2002). Some British companies are responding directly to this new public policy framework. Others, such as Blue Circle and Tesco have struck voluntary partnership deals with trade unions. British Airways, following the 1997 industrial dispute, issued a statement on the principles of partnership. Still more, like the non-union Marks and Spencer, have had to accept EWCs. By and large these agreements balance the EI agenda with a greater emphasis on employment security and employee representation, through consultative committees and trade unions. The price for the latter is to eschew adversarial bargaining and reactive conflict for consultation and proactive co-operation, following the trade union style of Scandinavia and Germany. Most significantly, social partnership may offer a new vision of the place of trade unions in participation arrangements (though there are non-union versions, as we shall see). In reality, the relationship between EI and trade unions was never straightforward. A variety of outcomes are possible, ranging from compatibility or indeed synergy, through to tension and competition between management and union representatives to secure influence. Alternatively, the relationship may be relatively unaffected, with EI and trade unions operating in quite separate zones. It has been common to suggest that EI marginalises unions, threatening their traditional role of defending and advancing worker rights. Thus, for Beale (1994:120), EI represents: [a] significant challenge to the traditional influence of trade unions in the workplace. Employee involvement programmes provide an alternative source of information, ideas and interpretation of workplace experiences, an alternative to that provided by the union. Employee involvement programmes actively promote a new culture in competition with the traditional explanations and culture communicated by the union. However, management attempts to by-pass unions by involving employees directly have met limited success in terms of enhanced worker commitment, creating ‘dualistic’ union and non-union structures in many large ‘mainstream’ organisations (Storey and Sisson 1993). On the other hand, where unions stand outside the EI initiative, their indifference or hostility may be a major reason for its failure. Social partnership theory suggests that union involvement can make EI work better, for both management and employees. The critical policy question concerns whether employers, unions and employees are really interested in partnership, and whether this can succeed to the mutual benefit of all (see Johnstone et al. 2004). Radicals claim that consultation (short of workers’ control) ‘incorporates’ and enfeebles trade unions, while direct EI by-passes them and undermines collectivism (see Ramsay 1977). The corollary of this zero-sum analysis is that effective trade unions weaken and discard management-led channels of EI. In our previous work, we have challenged, as oversimplistic, this notion of a necessary link between waves of EI and forms of union-centred partnership (Ackers et al. 1992; Ackers and Payne 2000). Clearly, there is a potentially problematic relationship between ‘representative’ and
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‘direct’ forms of participation. Both the British Trade Union Congress (TUC) and the Involvement and Participation Association (IPA) have promoted a more positive-sum relationship between trade unions and management; one which transcends ‘arms-length adversarialism’ and connects representative and direct forms of participation. A practical manifestation of this is the TUC’s positive attitude to European Works Councils (EWCs), notwithstanding their potentially non-union character (see Monks 1998). Our research, below, suggests that management’s current rethinking of EI does not have trade unions (or industrial relations issues) at its centre—except where union strategies have engineered them into management’s definition of the problem. A decade ago, our ‘Escalator of Participation’ followed Pateman (1970) in charting a progressive, step-by-step advance of participation from information giving and communications to co-determination (see Marchington et al. 1992). Recent work by Wood and Fenton O’Creevy (1999), suggests that multinationals, which relied only on direct EI, involved their employees less than those prepared to also consult or negotiate. While the union was the channel for only a limited number of issues, the overall level of involvement was still higher on average in unionised operations. This may be because unions put managers under pressure to inform and consult via other channels or because management involve staff in other channels in order to counter or bypass the union. A third possibility is that a management favourably inclined towards unions is more likely to be well disposed to other forms of EI as well. In any case, employees enjoyed more genuine participation when trade unions were present. On the other hand, Guest and Conway (2001) have identified the ‘paradox’ that such unionised workers are often more dissatisfied; a finding that will hardly encourage managers to embrace union-centred participation. For, as we shall see, the place of trade unions in emerging workplace partnerships is far from assured. Notwithstanding Hilmer and Donaldson’s (1996:198–9) plea for ‘corporate uniqueness’, there is also evidence that strong participation thrives in certain national cultures and regulatory regimes. And questions remain about whether the short-term, cost-minimisation culture of British business and HRM is inimical to effective participation; in contrast to other continental economies (see Cressey et al. 1985; and also Deakin et al., this volume). With these thoughts in mind, we now turn to the fruits of our recent research.
The dynamics of EI: ten years after The 1992 EI study covered 25 company cases, broadly stratified by company size, age, region and union presence (Marchington et al. 1992). It found a wide range of management EI activity in most organisations and, with other research, identified the emergence of dual union/non-union channels of employee participation. We identified four main types of EI: downward communications, upward problem-solving, financial participation and representative participation (Table 2.1). Of these, only financial participation was not germane to this new study of employee voice. For, while financial participation may become a subject of ‘employee voice’, especially where worker stakes are significant, it is not of itself a form of employee voice. To aid this longitudinal analysis, a subgroup of seven organisations was drawn directly from the 1992 study. This
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allowed for a direct assessment of organisational change over time, which forms the core of this chapter. However, the other cases in the background also enable some indirect assessment of how the management approach to employee voice has changed over the past decade. Changes in business environments and new patterns of diversity Once more, in this new study, we have found great unevenness in company approaches to participation, depending on size, sector, the presence or attitude of trade unions, company employment traditions and so on. And these have developed unevenly over time. Growing organisational size, complexity and spatial spread often lie behind a rethinking of the 1992 EI recipe. Housing Association, a suburban,
Table 2.1 Forms of employee involvement and participation (1992) Organi Dow sation Nward /tech commun nique ication
Upward problem solving
Finan cial EI
Repre Sentative partic ipation
New Empl Brie Sugge Att Qua Cust Profit Unit- JCC Collec spaper oyee fing stion itude lity omer share wide works tive report sy sche su circle care/ sche bonus cou ba stem me rvey TQM me ncils rga ining Housing Asso ciation Leisu reco Mid bank Retail Bank Scot chem Sout hern Shoe Wea veco Source: Marchington et al. (1992).
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estate-based body has extended its operations into a relatively distant new town and moved into various care-based activities, changing both the character and spatial distribution of staff. The care staff drew the organisation into the National Minimum Wage and the Working Time Directive and raised new problems of communicating with staff at a distance and on shifts. Moreover, staff living away from the traditional estate no longer doubled as tenants with a special relationship to the housing association. Beyond this, sheer growth in size, from 120 to over 300 employees, required more structures. In contrast, Southern Shoe has downsized radically in the UK, in terms of manufacturing workforce numbers and regional spread. The result was that its comprehensive 1980s participation apparatus (see Table 2.1) became far too elaborate in company eyes for current purposes, leading to a downgrading of the personnel function (formerly a key corporate board position) and to a much more ad hoc approach to employee voice in the factories. At the same time, the globalisation of the business and the growing weight of its retail arm, favoured developments like the EWC (and the company council), which drew together all the functional and geographical dimensions of the business. As a result of these variations at the level of the firm, two hitherto similar manufacturing firms, Southern Shoe and Weaveco, had thus moved in diametrically opposite directions: the latter towards strong, functional, manufacturing centred forms of voice linked to UKbased teamworking; the former towards weaker, global and company-wide systems (see Table 2.2). Whereas the micro-economic environment is necessarily highly individual, the macroeconomic, political and legal environments might be expected to be a more common influence. The election of New Labour in 1997 and greater involvement in EU social policy has seen the emergence of a more active regulatory framework. Once more, however, the impact on company choices regarding participation has been highly uneven. Some of the ‘minimum standards’, like the National Minimum Wage and the Working Time Directive, have had little or no implications for large, unionised organisations, such as Retail Bank, Midbank, Scotchem, Southern Shoe or Weaveco. They have had a significant impact, though, on both Leisureco and Housing Association, as individual policies and as generalised regulatory pressure for professional personnel management where it had barely existed in the past. Thus Leisureco reported a major rise in labour costs from minimum wage levels and new holiday entitlements. More important for employee participation, the rising level of employment regulation was one factor in the professionalisation of the personnel function, as both Leisureco and Housing Association acquired all-round personnel departments headed by a CIPD accredited HRM specialist. Since 1996, the Housing Association Personnel Manager, supported by the Deputy Director, had expanded the personnel function from one ‘record keeper’ to ‘a more professional service’: It’s just grown, the more we do the more we need to do, the more we are expected to do…the expectations have grown…it’s partly the employment legislation that was coming in thick and fast, there was a lot more complexity to running a place like Housing Association.
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Table 2.2 Voice mechanisms at the 1992 subsample of organisations in 2001 Organi sation
Upward problem-solving
Representative participation
Elect Two-way Sug Atti Project Joint Partne European Coll ronic commu gestion tude teams consu rship works ective media nications sche surveys ltation scheme council barga mes ining Housing Asso ciation Leisu reco Midbank Retail Bank Scotchem Southern Shoe Weaveco
Likewise a personnel and senior manager combination at Leisureco had built a more active personnel function to support a stronger range of participation mechanisms centred on a new consultation system. In 1992, operational imperatives and the weakness of personnel had meant that consultation was considered impractical. As the HRM manager commented: I think [personnel] probably had quite a high priority without the legislation, but I do think it’s important that you’ve got at least one individual that’s keeping abreast of all the employment legislation and that can interpret into the English language obviously for people on the park and make sure we are adhering to the legislation. Another, more across-the-board set of new influences, was the rise of charter benchmarks such as Investors in People (most firms) and the CBI’s manufacturing excellence standard (Weaveco). These required evidence of effective employee participation mechanisms and, in their new methodology, tested their efficacy with ordinary employees. Finally, the government has also encouraged voluntary partnership at work with a discernible impact at several companies. The result was an interesting tangle of shaping factors—product and labour market pressures, sudden business crises (Southern Shoe and Weaveco), statutory minimum standards and employee rights, voluntary benchmarking, government conceptions of best practice, management consultants, and
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proactive personnel managers aided by senior management sponsors—with the precise context varying from firm to firm. The declining prominence of certain approaches to employee participation Notwithstanding such complexity, there were some common trends. One was the decline, dismantling or recasting of the 1992 vintage of EI techniques. A clear trend is the replacement of stick-on techniques, such as quality circles, by more all-embracing participation or change management schemes. A good example of this is Weaveco, which has abandoned its entire 1992 range of EI techniques—joint consultation, suggestions scheme, quality circles, company magazine, financial report and annual employee briefing—in favour of a system of self-managed teams, linked in turn to both management briefing and employee problem-solving. The HRM manager had himself pioneered the 1980s EI techniques. As he put it: ‘they’ve gone, but we’ve moved on. I think it’s fair to say we’ve improved most areas.’ Quality Circles had become ‘clicky [sic] and elitist’ and ‘lived its life’: if you wanted to say, do you have a quality circle meeting today? I would say, yes, we do but they are called department improvement teams (DITs)… We would say to the quality circles in your area it appears to be you have a problem with X housekeeping, would you tackle it please, and they did. Today the department improvement teams decide what they want to do in our area, and it’s gone up market. They look now, the improvement teams, at if there is a quality problem in the company, before that would be a management problem. Whereas the old problem-solving schemes had a reward element and often attracted ‘absolute trivia’, the DITs ‘seek to improve their department for their own benefit and for the company but not for reward’. In a very different setting, Retail Bank had ‘dropped’ quality circles because ‘feedback was coming back in other ways’ such as the intranet and ‘Let’s talk’ discussion panels. New electronic mediums have complemented older paper channels, particularly in white-collar organisations, like Retail Bank, where employees have constant access to computers. Whereas employees were once asked to ‘send in’ questions to the company magazine they now sometimes have the Chief Executive’s email or phone number. Among the sub-sample, however, paper-based techniques remained important, especially for manual and operational employees outside the office, such as tradesmen at the Housing Association, and rides and retail staff at Leisureco. During a period of economic rationalisation, Weaveco abandoned the longstanding company magazine, though there are now weekly bulletins in various production areas. Leisureco includes a weekly bulletin in employee pay packets. More generally ‘one-way’ downward communications—both paper and oral—appear to have declined in salience if not quantity, in favour of two-way communications. As a consequence, downward communication and upward problem solving are increasingly fused. Retail Bank described the transition from an ‘oil refinery’ model of communication, where you made the pipes as wide as possible and the current, more
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targeted ‘air traffic control’ model. Whereas ‘the feedback process was almost nonexistent’ five years ago, they now use attitude surveys and focus groups ‘to check the temperature’. we…put in these forms of audit to be able to find out whether the message is getting through, how did they get the message, did they believe it. Even so, this audit told them: ‘we’re communicating too much and the messages aren’t getting through’. Midbank described a similar approach: We’ve sort of embedded a culture of wanting people to or managers to communicate with our staff. They just sort of naturally have team meetings and their own internal kind of newsletters and things like that. The Weaveco Production Director drew a general conclusion: [It] probably started by preaching to our employees, then we started talking to them but then the next thing is to start listening, and I think the listening is more through the DITs where they get involved in solving problems. Finally, there are signs that management is less inclined to regard trade unions as a legitimate or even inevitable channel for employee participation, even where membership and workplace had been traditionally strong, except in those cases where the union was actively contributing to partnership. Five of our 1992 sub-sample had collective bargaining, all with quite strong union traditions. Perhaps the most interesting case was Weaveco, which had suffered manufacturing competitive pressures, causing a loss in the early 1990s. The company had globalised some manufacturing to satellite plants in Portugal, India and the US, while modernising its main high-tech UK weaving base, and using overseas production as a lever for change within the core British factories. This ‘crisis’ prompted a Business Process Re-engineering (BPR) programme that stripped out everything that did not add value to the company, such as supervisors, traditional craft weavers and the 1980s EI channels. Self-managed teams were linked to new group payment systems (in place of piecework) and new levels of labour flexibility. Shopfloor union membership remains as high as 80 per cent, but the union appears to have been institutionally marginalised (union representatives and employees may have a different view). The company has withdrawn from industry negotiations (and departmental piecework bargaining) to pursue site negotiations. As the Production Director explained: we didn’t want it to be all union on the other side, we wanted some employee representatives that were non-union as well…we were looking to reduce the influence of the union if it seemed to be a negative influence and try to develop a more positive attitude. Initially the change was more cosmetic than real, with the non-union representatives as ‘spectators’, but then the firm introduced monthly progress reviews with a partnership
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emphasis on understanding the wider business context of employment relations and moving away from adversarial distributive bargaining. This was formalised as monthly site improvement teams (SIT), linked to departmental improvement teams (DITs), focused on ‘projects to do with productivity, quality and service’. The prelude had been to excise the ageing core of traditional weavers, by making them redundant and moving their looms to Portugal. According to the Production Director, [this] very influential group were perceived to be not quite in tune with modern manufacturing thinking, they were very traditional craft. They’d resisted multi-loom weaving, and multi-loom weaving was a way of trying to get our costs down… But there had been that resistance and there was bad taste of it. The 1992 dualistic system of union-centred and direct EI methods was scrapped. Everything else was done through the shop steward so that managers would meet shop steward, shop steward would then roll it down. We never dream of that now, if we want to change a department then we would call the whole department together and sit with all of them or we would identify the opinion formers and have those in, and the briefings that we are doing. It’s crazy when you think back that we used to not talk to our employees, only through a [union rep]. Self-managed teams may draw together problem-solving and communications in a way that excludes trade unions. Thus the HRM manager described a movement ‘away from negotiation and communication through the trade union to direct communication’. It is important to note that the company was not hostile to unions per se. They reported good relations with the GMB and the AEEU elsewhere in the business. But the main production union was regarded as old-fashioned, negative, obstructive and adversarial and thus excluded from the rhetoric of positive voice. Hence management withdrew check-off, when the union’s threshold for strike action was reduced. This case illustrates that even in a deeply entrenched union environment where union representation was always regarded as natural for manual workers, contemporary UK management is highly concerned about the character of union voice, and may be prepared to look beyond it altogether. New approaches to participation and more prominent EI techniques In addition to electronic communication (intranets, email), several techniques or approaches stand out as either new or much more prominent than in 1992, including two addressed to the individual employee. Attitude surveys were found in seven organisations from the overall sample of 18 organisations. In 1992 none of our sub-sample had attitude surveys, whereas Midbank, Scotchem and Weaveco all do today. As discussed above, this suggests that managers are making more strenuous efforts at monitoring employee responses to policy. In many cases, these surveys are conducted by credibly objective external bodies and fed back to employees and union representatives. Appraisal,
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according to managers, had become a significant individual channel for employee voice—an unexpected finding. Employers as far apart as the Housing Association and the manufacturer, Weaveco, volunteered appraisal as a mechanism for employee voice in the same breath as more predictable collective channels such as trade unions and consultation committees. In Southern Shoe, by contrast, the introduction of appraisal was mooted as a subject for pre-emptive partnership discussions with the staff union. It remains to be seen whether employees also perceive and value appraisal as an opportunity for the expression of employee voice. In the changed UK political and legal environment, collective, representative forms of participation seem to have gained a new lease of life. In 1992 consultation was in the doldrums, with the notable exception of company councils at some Japanese companies. This time, we encountered seven clear cases of espoused partnership within the larger sample; all involving some form of consultation, though not all of these were entirely new. These Partnership Agreements exhibited three key characteristics: a new emphasis on consultative structures, involvement of the trade union or other employee representatives in an early pre-emptive stage of management decision-making, and attempts to bridge the divisions between direct EI and representative systems. Partnership is a loose word for many shades of employment relationship. One useful distinction (echoing the old ‘closed shop’ language) is between de jure partnership, where a specific partnership agreement has been agreed, probably fairly recently, and de facto partnership, where the union-management relationship has, and may have had for some time, the characteristics outlined above, though this is not formally called partnership. Although the term ‘partnership’ is often confined to unionised businesses (according to TUC criteria), we are concerned not to exclude the possibility that collective relationships reasonably defined as partnership might occur in non-union organisations or in the absence of union engagement (as envisaged by New Labour and the Involvement and Participation Association). Nearly all the recent literature on partnership—for example, the papers presented at the conference, Assessing Partnership: the prospects and challenges of ‘modernisation’, at the University of Leeds, May 2001 (Martínez Lucio and Stuart 2001)—assumes that partnership centres on management-union relations. While we are sympathetic to this viewpoint, it does make an a priori assumption that genuine participation can only exist with a workplace trade union. And it seems sociologically unproductive to rule-out non-union consultative forms, whether voluntary or state regulated (e.g. EWCs), before examining the evidence. As Badigannavar and Kelly (2003:2) argue, Pluralist and Marxist Industrial Relations theory is suspicious of non-union participation, due to its underlying understanding of the asymmetry of ‘power and interests in the employment relationship’. But theory needs to be ‘tested’ empirically, and Badigannavar and Kelly do this by comparing the efficacy of partnership, through employee eyes, at a ‘best practice’ non-union retail company against a broader sample of unionised and non-unionised retail sector firms. In this way, the attitudes and experiences of ordinary employees are central to deciding how successful a system of partnership or participation is (see also Richardson et al. and Wray, this volume). Ironically, this is one of the criteria that UK managers are looking for with unions: do they provide effective voice? Of course, managers’ criteria for both ‘effective’ voice and ‘effective’ trade unions may be very different from those of employees. With these caveats, we feel it is
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useful to distinguish between three main types, which we will then illustrate from the research (Table 2.3). In the case of Scotchem (strong union, de facto), a powerful, independent union had been drawn into management decision-making as a means of ensuring shopfloor awareness of and openness to change. In the Managing Director’s words: ‘Some of the shop stewards are very good at trying to pull these things together in a cohesive way and identifying what the main issue is’. In this way, the union complements and clarifies the second channel of direct communications, overcoming the dualism of the 1980s. Collective partnership includes: monthly meetings between management and individual unions, regular meetings between the Managing Director and the three senior shop stewards on the long-term business outlook, and the Communications Group of 40 key communicators including the three senior stewards and their deputies. Finally, there is the Employee Relations Workshop (ERW), an ‘intensive dialogue’ between management and the union—including non-union members. This builds on the Way Ahead programme, reported in 1992. That was damaged by industrial relations problems in the late 1990s and, in response, senior management ‘delegated
Table 2.3 Types of workplace partnership Type
Orientation to union
Example
Strong-union partnership
Incorporation
Scotchem (de facto) Midbank (de jure)
Weak-union partnership
Sponsorship
Southern Shoe (de facto) Retail Bank (de jure)
Non-union partnership
By-passing
Weaveco
Substitution
Housing Association
authority’ to the ERW. So while the union remains central to this partnership, management insists that ‘the outcome should be good for the unions and their members but also for all employees’. At Scotchem the union would be able to survive in the short-term—though not necessarily thrive in the long-term—without partnership. For Retail Bank (weak union, de jure), by contrast, partnership entails management sponsoring the staff association—as in the better known Tesco/USDAW case—such that the union becomes highly dependent on management for its future strength. Here, as at Midbank (strong union, de jure), the relationship was conceived as a ‘partnership between employees and Retail Bank’ as part of a broader network of stakeholders, including customers. The two banks first signed formal partnership agreements with a staff association or union in 1997 and 1998, in response to ‘the government’s sense of promoting employer trade union partnership’ (Retail Bank), and the influence of the TUC and ‘Tony Blair wanting partnership’ (Midbank). For Retail Bank, the main difference from the old ‘slightly traditional and slightly formal’ relationship was the involvement of the staff association ‘in problems and solutions to problems at an earlier stage’. For instance, the business situation was ‘debated in a more relaxed form’ over four months before actual pay negotiations,
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allowing these to be settled more easily. At Midbank, where union membership was over 70 per cent, management had ‘effectively involved the union and got the participation of their members right at the very outset’ and constantly reported back to them. Nevertheless, there was also a new parallel staff council, comprising non-union representatives, which the union had refused to sit on. Once again, management was prepared to keep their HRM options open, should needs be: ‘If we get down to a situation where, over time, union representation falls lower then you’ve still got another mode to actually have an advisory group’. Likewise, Retail Bank justified partnership by the quality of feedback received from the staff association, but added ‘we’d rather work with [them] than any other union’. With staff association membership at around 30 per cent, this might prove a ‘risk’: Our overall strategy is to promote a strong, or as strong as possible trade union in the staff association and have as strong as possible partnership with them…[if] a not particularly strong union diminishes in membership and strength such that they become a very weak form of voice and that we have to re-establish another formal mechanism. If union-centred partnership should fail as an effective and constructive participation mechanism, both Retail Bank and Midbank envision the sort of consultative partnership model found at Housing Association (non-union, substitution). Here there is also a staff association, but no one even pretends it is a union and the efficacy of partnership does not rest upon its support. This not-for-profit organisation has had ‘a very strong joint consultancy committee’ as the centrepiece of employee voice for more than 20 years: ‘It’s been a mechanism of representation that stood the test of time but it doesn’t appear to have been greatly used by employees as making their voice heard’. The Deputy Director felt this was because ‘staff by-and-large think they are getting a reasonably good deal’. The JCC’s ‘terms of reference are so wide’ as to include wages and conditions, ‘anything’, and it is associated with a consultative and open management style whereby most changes are floated with employees before they are implemented. The main development has been to buttress the individual dimensions of partnership through a ‘high performance culture’ of more effective briefings, team meetings and appraisal, supported by a more professional personnel function. The Weaveco (non-union, by passing) model of partnership provides an instance of where management was now actively constructing a collective voice strategy that is no longer dependent on the union. In this respect, though the union retains majority shopfloor support, some might suspect that a ‘Trojan Horse’ pattern of non-union partnership is emerging. For example, Weaveco has replaced its traditional quarterly, union-centred JWC by monthly site and departmental meetings. As the HRM manager stressed: [Negotiation] of course, isn’t in the brief of the improvement teams. And I’m confident that the information we were imparting there (the old JWC) did not get back to the departments. I think we have a better communication channel, which is probably the biggest improvement we’ve made.
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EWCs were not part of the employment relations scene in 1992, whereas there were four in our larger 2001 sample. The Southern Shoe EWC illustrates how the dynamics of partnership change with employment context, management policy and external regulation. In 1992, Southern Shoe already had close relations with its manufacturing union, a company council and factory joint consultation. A Personnel Director oversaw this workplace partnership before its time: we’ve always consulted with the unions, always. But I think at times the consultation would take place right at the end of the process. Whereas now it happens very much at the beginning and involvement throughout. Even so, the Personnel Manager added, ‘I deal a lot with trade unions but in truth no-one in the centre deals with trade unions at all here’. The reason is that the UK manufacturing union now represents a small and shrinking constituency within the global, retail-led company. As a result, the ‘discipline’ of the former grand participation design has gone in the UK factories: ‘we don’t have regular meetings and the pressure isn’t there’. Operational demands dominate and it is ‘now more about making shoes at a good price, at a good quality and getting them out’. As the old logic of collective employee voice has gone, a new participation framework is emerging. The Company Assembly has changed from a large annual set-piece event, with all the Directors facing the UK workforce representatives, to a series of small group consultations. The Southern Shoe EWC has emerged as a new forum that brings together the European elements of the much more diverse global workforce (British, German, Irish, Portuguese), mixing union and non-union representatives. In the first instance, the EWC was mainly about ‘compliance’ because of the effort and expense. However, Southern Shoe introduced theirs two years before it became compulsory and invited the Slovakians to join before they belonged to the EU. Management is now trying to use it as an effective ‘PR-type exercise’ and has employed a consultant to this end: ‘We are trying to make people appreciate that they are part of a large business, an international business’. At the same time, they are ‘still trying to find our way’: ‘What we are trying to do is identify what is the role of the European Works Council, what scope they have to make things happen’. One possibility (maybe concern) is that when the German subsidiary joins, with their fluent English-speaking representatives and strong works council traditions, the EWC will become a much more powerful consultative body. In this respect, as at Weaveco and Scotchem, new patterns of partnership may evolve from the old.
The new participation amalgam Since, in this latest research, we spoke only to management, it would not be appropriate to make definitive statements about the changing employee perceptions of organisational participation. We noticed, for example, that managers tended to accentuate the positive, brushing over grievance as an issue for voice and only mentioning trade unions where they occupied what they saw as a ‘constructive’ role in partnership agreements. The notion of unions as a purely independent voice for their members, owing nothing to
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management, did not bear much consideration. In reality, ordinary employees may be much more critical of company participation arrangements than it appears here; while trade unions and collective bargaining in some organisations may still represent the crucial, submerged element of the participation iceberg. This said, employers and managers are central policy agents in the construction of organisational participation, so their opinions cannot be ignored. Moreover, managers themselves are not organisational ciphers and their views and experiences suggest a number of research themes about the medium-term future of workplace employee participation in the UK, which we can draw together for a more speculative model of the likely future place of trade unions in the British participation mix. The new UK policy environment has begun to reshape employee participation The 1980s and early 1990s literature on HRM and EI (see Storey 1992) was unduly shaped by the neo-liberal climate in the UK and US, with its assumption that the state would remain largely absent from employment relations. Labour and EU policy since 1997 has introduced a new policy framework (see Ewing 2003), which is having some impact, both direct and indirect on company approaches to ‘voice’. However, this impact is complex, belying simplistic dichotomies between state regulation and employer choice. It represents neither a smooth continuation of 1980s EI, nor a lurch back to the 1970s status quo ante. Instead, elements of a new amalgam are emerging, with its own distinctive dynamics—notwithstanding continuing diversity in management approaches. Minimum standards regulation may stimulate the HRM role in partidpation? For employers with a hitherto weak personnel function, increased employment regulation has changed the environment of employee voice, strengthening the role of the personnel function and thus the scope for participation. More generally, regulation does remove some choices, but creates a new institutional base line of employee rights and a changed normative framework, within which management can continue to exercise choice and creativity. Even management initiatives that appear enterprise-based are often shaped by ‘best practice’ benchmarking. Rarely are voice mechanisms genuine DIY, entirely custom-made for the company. There is a more confident, possibly more coherent management approach to organisational participation In general, the current British management approach to voice appears less faddish and fragmented than in 1992. Attempts have been made to consolidate and integrate voice mechanisms. EI has been normalised and entrenched in everyday management practice. A new generation of managers is more accustomed to managing EI and briefing employees face-to-face. In some cases, a new generation of union activists has reduced the adversarial character of shopfloor culture, and taken the heat out of direct voice mechanisms.
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Unions are still declining as a voice channel UK unions may continue to decline as a voice channel acceptable to management, except where they form explicit partnership agreements. There are moves away from the 1980 dualism, of parallel union and EI channels, either by drawing the union into closer partnership or by marginalising it, even in strongly unionised companies. This does not always reflect an outright hostility to trade unions per se, as the partnership successes show. Rather, management object to certain specific union characteristics and attitudes, which they regard as inimical to organisational success. Many companies seek partnership with or without unions Partnership does dilute the central role of the union, as an exclusive channel for employee voice, in the few cases where this is still intact. But non-partnership, as a union strategy, threatens complete marginalisation. ‘Partnership’ with employees is going ahead with or without trade unions. On the other hand, several unions have initiated new partnership arrangements.
Conclusion—partnership with or without trade unions Taken together, these developments suggest that the current policy environment holds better prospects for UK organisational participation, partly as a product of greater employment regulation and partly because management has learned from the limitations of 1980s EI. As yet, British management has not absorbed properly the European language of employment rights, following the long period of amnesia that was the 1980s and 1990s. Equally, the notion that an arms-length adversarial culture on the ‘shopfloor’, composed of authoritarian foremen and obstructive ‘shop stewards’, forms an obstacle to contemporary partnership, appears less and less credible (see Marchington et al. 2001). Certain types of ‘employees’ are almost indistinguishable from managers, and are thus more confident in putting forward their individual viewpoints. The old manufacturing heartlands of strong trade unions and conflictual industrial relations have been largely replaced by service sector organisations with very different employment traditions. Even where the old citadels of labour still stand, a new generation of managers and union representatives are striking a very different relationship. As Figure 2.1 suggests this latest phase in the history of UK organisational participation offers new opportunities but also stark choices for UK trade unions. To invert Fox’s (1974) ‘Patterns of Management—Employee’ relations, this new period of social regulation and management initiative suggests a very different equilibrium model (though without employee responses the model cannot be complete). In employment relations terms, we are living on another planet, with its own relatively stable climate and natural laws. On the right side, non-union consultative employment relations are no longer a deviant, immature or unstable form, but one of two relatively stable partnership poles. These structures may be quite capable, in their own way, of meeting the challenge of EU regulation and raised employee expectations. On the left side, the successor to the 1970s ‘sophisticated modern’ corporation, drained of its stronger adversarial elements, is the union-centred partnership, again a relatively stable form, given the requisite skills and
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goodwill from managers and trade unions. On the top, as a highly unstable pattern, is the contemporary version of Fox’s ‘continuous challenge’ model, though in management terms, the criterion has shifted from ‘those who are not against us are with us’ to ‘those who are not with us are against us’. Gone is the old pluralist tolerance of ‘us and them’ or arms-length adversarialism, channelled and institutionalised by the trade union. If the union is going to retain a central role, management expects much more in terms of engagement with business goals. But this is more than just an employer prejudice; it is part of the economic climate of the employment planet we now live on. In other words, for the future, both management and government, and indirectly customers, are highly intolerant of union behaviour that does not ‘add value to the organisation’. But unions do not only have to fear employer hostility, there is also the related question of employee apathy and union efficacy. Another unstable form is the weak union. Here management may try to sponsor the union to bolster partnership, but if
Figure 2.1 Management strategy, union character and the dynamics of partnership. employee support ebbs way, substitution by non-union consultative structures is an alternative available strategy. Managers/employers are but one party in the shaping of employment relations, and their attitudes and behaviour are being influenced by political and economic changes linked to the expectations of employees, who have their own shifting perspective on trade unions (see Deakin et al. 2002; Martínez Lucio and Stuart 2002; Oxenbridge and Brown 2002). Our speculative model needs to be ‘tested’ against employee experiences of partnership in both union and non-union organisations. This said managers appear here as a powerful and proactive force in the reshaping of organisational participation. All this does not preclude trade union mobilisation altogether, of the kind led by militant bodies, such as the French CGT, which fight employers from the outside (see Kelly 1998). But as the recent fire-fighters’ dispute illustrates, this stance is fraught with danger (both for the union involved and the wider trade union movement), once the union is isolated from
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public support and exposed to the full power of the employer and/or the state. Therefore, it seems unlikely that a successful, day-to-day trade union strategy can be devised on this basis. Partnership offers unions the opportunity to win a broader social legitimacy (Ackers and Payne 1998). In certain circumstances, such as BMW’s disposal of Rover, a coalition of trade unions, employees, customers and government can paint the employer into a corner as the negative factor. More generally, unions will have to manage skilfully the tensions between conflict and consensus in the employment relationship, and minimise the harm that these tensions cause to the business organisation. Central to this will be their ability to make organisational participation work. In short, it may be ‘partnership or perish’, and even then it will not be easy for unions.
Notes 1 This research was funded by the British Chartered Institute of Personnel Development (CIPD), the professional body for HRM managers. An earlier, rather different version of the introductory section, without the data, appeared in the professional employment briefing, Croner’s Employee Relations Review (Ackers and Wilkinson 2000), while the main body is a longer, expanded treatment of Chapter 7 of the full CIPD report (Marchington et al. 2001; see Dundon et al. 2004). 2 The research was conducted in April and May of 2001. At each organisation, we interviewed the HRM manager and usually one other senior manager, as well as collecting documentary material. The semi-structured interviews were typically about an hour long and were taped. In many of the organisations, including the seven discussed here (which forms a longitudinal sub-sample see Marchington et al. 2001, pp. 11–12 for the full study), we have enjoyed a much longer and deeper research relationship, which we draw on here for background information and as a benchmark for current changes in management attitudes and practices. Our previous research has involved interviews with union representatives and employee questionnaires, and, once more, this provided useful knowledge when interpreting this purely management sample. 3 Many continental Europeans perceive Tony Blair as an Anglo-American style neo-liberal, particularly where their levels of employment protection are already well above EU minimum standards and may even seem threatened by them. The view from the British workplace is very different, after almost twenty years of Thatcherism, union exclusion and de-regulation. The clarion call of the British CBI is ‘red tape’, a synonym for Labour and EU employment regulation. It is arguable, that in the employment sphere, New Labour’s ‘third way’ does offer new solutions to the tension between labour flexibility and social protection (see Ackers 2002).
References Ackers, P. (2002) ‘Reframing employment relations: the case for neo-pluralism’, Industrial Relations Journal, 33(1):2–19. Ackers, P. and Payne, J. (1998) ‘British trade unions and social partnership: rhetoric, reality and strategy’, International Journal of Human Resource Management, 9 (3):529–550. Ackers, P. and Payne, J. (2000) ‘“Through a Glass Darkly”: deciphering the colliery consultation minutes of the nationalised British coal industry, 1947–1974’, Labour History Review, 65(1):59–89.
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Ackers, P. and Wilkinson, A. (2000) ‘From employee involvement to social partnership: changing British management approaches to employee participation’, Croner’s Employee Relations, 14:3–10. Ackers, P. and Wilkinson, A. (2003) (eds) Understanding Work and Employment: Industrial Relations in Transition. Oxford: Oxford University Press. Ackers, P., Marchington, M., Wilkinson, A. and Goodman, J. (1992) ‘The use of cycles? Explaining employee involvement’, Industrial Relations Journal, 23(4): 268–283. Badigannavar, V. and Kelly, J. (2003) ‘Labour-management partnership in the non-union sector’, Paper for the 21st International Labour Process Conference, University of West of England, Bristol, 14–16 April. Beale, D. (1994) Driven by Nissan? A Critical Guide to New Management Initiatives. London: Lawrence and Wishart. Brannen, P. (1983) Authority and Participation in Industry. London: Batsford. Cressey, P., Eldridge, J. and MacInnes, J. (1985) Just Managing: Authority and Democracy in Industry. Milton Keynes: Open University Press. Deakin, S., Hobbs, R., Konzelmann, S.J. and Wilkinson, F. (2002) ‘Partnership, ownership and control: the impact of corporate government on employment relations’, Employee Relations, 24(3):335–353. Dundon, T., Wilkinson, A., Marchington, M. and Ackers, P. (2004) ‘The meanings and purpose of employee voice’, International Journal of Human Resource Management, 15(6):1149–1170. Ewing, K. (2003) ‘Labour law and industrial relations’, in Ackers, P. and Wilkinson, A. (eds) Understanding Work and Employment: Industrial Relations in Transition. Oxford: Oxford University Press, 138–160. Fox, A. (1974) Beyond Contract: Work, Power and Trust Relations. London: Faber. Guest, D. and Conway, N. (2001) ‘Exploring the paradox of unionised worker dissatisfaction’, BUIRA Conference, Warwick, July. Hilmer, F.G. and Donaldson, L. (1996) Management Redeemed: Debunking the Facts that Undermine our Corporations. New York: Free Press. Johnstone, S., Wilkinson, A. and Ackers, P. (2004) ‘Partnership paradoxes: a case study of an energy company’, Employee Relations, 26(4):353–376. Kelly, J. (1998) Rethinking Industrial Relations: Mobilisation, Collectivism and Long Waves. London: Routledge. Marchington, M. (1998) ‘Partnership in context: towards a European model?’, in Sparrow, P. and Marchington, M. (eds) Human Resource Management: The New Agenda. London: Pitman, 208– 225. Marchington, M. and Wilkinson, A. (2000) ‘Direct participation’, in Bach, S. and Sisson, K. (eds) Personnel Management: a Comprehensive Guide to Theory and Practice, 3rd edn. Oxford: Blackwell, 340–364. Marchington, M., Goodman, J., Wilkinson, A. and Ackers, P. (1992) New Developments in Employee Involvement, Employment Department Research Series No. 2, HMSO: London. Marchington, M., Wilkinson, A., Ackers, P. and Dundon, T. (2001) Management Choice and Employee Voice, CIPD Report, September. Martin, R. (2003) ‘Politics and industrial relations’, in Ackers, P. and Wilkinson, A. (eds) Understanding Work and Employment: Industrial Relations in Transition. Oxford: Oxford University Press, 161–175. Martínez Lucio, M. and Stuart, M. (eds) (2001) Assessing Partnership: the Prospects for and Challenges of ‘Modernisation’. Centre for Industrial Relations and Human Resource Management, Leeds University Business School: Leeds. Martínez Lucio, M. and Stuart, M. (eds) (2002) ‘Assessing partnership: the prospects and challenges of “modernisation”’, Employee Relations Special Edition, 24(3):243–360. Monks, J. (1998) ‘Trade unions, enterprise and the future’, in Sparrow, P. and Marchington, M. (eds) Human Resource Management: The New Agenda. London: Pitman.
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Oxenbridge, S. and Brown, W. (2002) ‘The two faces of partnership and cooperative employer/trade union relationships’, Employee Relations, 24(3):262–277. Pateman, C. (1970) Participation. Cambridge: Cambridge University Press. Ramsay, H. (1977) ‘Cycles of control; workers participation in sociological and historical context’, Sociology, 11(3):481–506. Sisson, K. (2002) ‘The Information and Consultation Directive: unnecessary “regulation” or an opportunity to promote “partnership”?’, Warwick Papers in Industrial Relations, No. 67, Industrial Relations Research Unit (IRRU), Warwick University, Coventry. Storey, J. (1992) Developments in the Management of Human Resources: An Analytical Review. Oxford: Blackwell. Storey, J. and Sisson, K. (1993) Managing Human Resources and Industrial Relations. Milton Keynes: Open University Press. Tailby, S. and Winchester, D. (2000) ‘Management and trade unions: towards social partnership’, in Bach, S. and Sisson, K. (eds) Personnel Management, 3rd edn. Oxford: Blackwell. Towers, B. (1997) The Representation Gap: Change and Reform in the British and American Workplace. Oxford: Oxford University Press. Wilkinson, A. (2001) ‘Empowerment’, in Poole, M. and Warner, M. (eds) International Encyclopaedia of Business and Management Handbook of Human Resource Management. London: ITB Press. Wood, S. and Fenton O’Creevy, M. (1999) ‘Channel hopping’, People Management, 25 November, 42–45.
3 Assessing partnership approaches to lif elong learning ‘A new and modern role for trade unions’? Helen Rainbird
Introduction During the Conservative government (1979–97) trade unions were systematically excluded from authoritative decision-making in the sphere of training, development and labour market policy. Since Labour came to power in 1997, the government has identified lifelong learning as providing ‘a new and modern role for trade unions’ (DfEE 1998). Although the policy discourse has identified trade unions as social partners in the life-long learning agenda, as yet there has been little formalisation of this role in the workplace or elsewhere. Initially, the government adopted a facilitative role, providing funding for trade union innovation through the DfEE/DfES’s Union Learning Fund.1 Effectively, this gave a boost to a number of developments which were already taking place in trade union practice in the workplace and allowed for experimentation and consolidation of models of working. Largely on the basis of this successful experience, from 2003, the government introduced a statutory entitlement for trade union learning representatives to have time-off to carry out their duties. Although they do not have rights to information and consultation on their employers’ training plan and individual employees do not have an entitlement to paid educational leave, this marked a significant step forward. A number of future developments, some originating from the European Union and others from within the UK, suggest that a broader statutory framework may be under consideration. In this voluntarist context, trade unions relied on a strategy of raising training and development primarily through collective bargaining. It has long been recognised that ‘as long as access to training is not a statutory entitlement, employees depend to a large extent on their trade unions to secure this right for them as part of their contract of employment’ (Manufacturing, Science and Finance 1988:20). During the 1990s, trade unions developed a range of strategies to put training and development on the bargaining agenda. The approach adopted sought to establish employee entitlements through negotiation and joint work with the employer, whilst campaigning for statutory entitlements, for example, through the Campaign for Paid Educational Leave. Vocational training is a classic arena for the development of corporatist arrangements, whereby responsibility for policy-making is devolved by the state to the interest groups of capital and labour. The German apprenticeship system is an example of this kind of involvement of the ‘social partners’ in the development and implementation of training
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policy. This has led to the view that training can be a consensual issue for capital and labour, although this is far removed from the British context, where trade unions are not incorporated into the institutions of vocational training in this way (Rainbird 1990). Some optimistic accounts of the future of work, such as Piore and Sabel’s (1984) formulation of ‘flexible specialisation’, emphasise the contribution of training to skill formation and to more consensual industrial relations. In Britain, not only are workplace institutions supporting training absent, but also the institutions and employee rights supporting more participative management styles which are supposed to underpin these new production paradigms (IRRU 1997). Despite the absence of workplace institutions capable of supporting skill-based modernisation strategies, the idea that training, environmental issues and equal opportunities can contribute to a new bargaining agenda on which management and unions can co-operate has been influential in the trade union movement (Industrial Relations Review and Report 1991). The idea that training and development can produce ‘win-win’ gains for managers and employees alike is based on a number of high profile developments, such as the Ford Motor Company’s employee development scheme (EDAP) and a number of collective agreements in which training and development figure. However, Stuart (1996) argues that this debate has often tended to overstate the consensual nature of skill formation. Many trade union initiatives on training and development were a response to the harsh industrial relations climate of the 1980s and 1990s, as part of a shift towards servicing members as opposed to building local activism, which was the model of the 1970s (Heery and Kelly 1994; Heery 1996). These initiatives were conceived as services to members, providing skills which would contribute to members’ employability. They were often targeted at groups of workers who received little employer-provided training. The changing external environment has meant that these forms of training provision have often formed the basis of partnership approaches with employers. Although different unions are developing a range of practices and representational roles, partnerships on training and development are often single purpose partnerships, with separate structures from collective bargaining. They are frequently initiated by the union representatives and negotiators and, in this respect, have dynamics which are distinctive to those of general purpose partnership agreements (Munro and Rainbird 2000b). General purpose partnerships are usually initiated by the employer and may by-pass union structures (Knell 1999; Mullis 2000). Training may also feature in these general purpose partnerships, but this is not the subject of this chapter. The focus is on union-initiated partnerships on training, which may encompass a range of employee development activities. Unlike the training concerns of craft unions which focus on apprenticeship, these developments are often aimed at groups of workers whose needs have been neglected in the past. The relationship between training as it arises in collective bargaining and through structures outside it is a complex one, and is essential for understanding the dynamics of partnerships on lifelong learning.2 The analytical approach adopted in this chapter stresses that partnership approaches to lifelong learning are most effective where trade unions take the initiative and retain their ability to mobilise independently of the employer in support of members’ interests. It explores developments in the Bargaining for Skills (now TUC Learning Services) projects, the projects supported by the Union Learning Fund and the UNISON/employer
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partnerships. It draws on longstanding research which has examined trade unions and training policy and ongoing work for UNISON.3 The chapter is divided into five sections. The first concerns the relationship between strategies of conflict and partnership approaches. The second examines the extent to which the policy environment supports the partnership agenda. The third concerns whether the adoption of partnership approaches facilitates workers’ access to training for employability and lifelong learning. The fourth explores the ways in which trade unions have responded to the politics of partnership on lifelong learning. The conclusion assesses the extent to which partnerships on lifelong learning provide ‘a new and modern role for trade unions’ or draw on established practices and approaches to dealing with the employer.
Strategies of conflict in the context of partnership As argued above, partnerships with the employer on training and development are qualitatively different from general purpose partnerships, where unions make concessions to the employer. The emerging model is one in which partnerships on training and development and the committee structures (if they are formalised to this extent) which relate to them are kept separate in procedure and substance from the structures of collective bargaining (see Sutherland and Rainbird 2000). Where partnership arrangements are single purpose and separate from collective bargaining they do not prevent unions from engaging in conflict with the employer in relation to other aspects of the employment relationship. Even so, trade unions need to ensure that they are leading the development and gain genuine benefits for members in the form of learning opportunities. Otherwise partnerships may be perceived by members as the ‘cuddly stuff’ (Cutter 2000) or as ‘getting into bed with the employer’. Not only are partnership approaches to lifelong learning extremely rare but where they do emerge it is often in response to a crisis. These crises may be due to product market conditions, threatened take-overs or redundancies (Rainbird et al. 2003). Under these circumstances, members will feel vulnerable and there are risks involved for trade unions in working in a more co-operative way with employers. If members believe that elected representatives are not representing their interests to the employer, but are representing the employer’s interests, these initiatives will fail. Trade union representatives working in partnerships have repeatedly emphasised the need to be seen as being independent from the employer, and this is also the case where they are drawn into more extensive joint project work with their employer (Rainbird et al. 2003). This confirms Streeck’s (1994) point that trade unions need to retain their ability to mobilise independently if they are to cooperate with the employer on training and development. This involves recognising that although they can work together in this arena their interests are not identical. This is not to say that training does not emerge as an issue in collective bargaining where it can be the subject of conflict. In collective bargaining it is more likely to emerge in the context of negotiations which have direct consequences for payment structures, for example, on flexibility, multiskilling or competence-based pay. Here, training is likely to be central to the organisation’s business strategy: it is primarily aimed at meeting business need and is based on employer rather than union initiative. In this context it is
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also more likely to be seen as a potential bargaining counter in a wider distributive conflict, rather than a more consensual arena of joint work. Where partnership arrangements on training and development have been established with an employer, this does not mean than conflict does not emerge in relation to pay and conditions or in relation to the delivery of training. Even in the relatively restricted and consensual sphere of life-long learning, a common experience has been the continued need for shop stewards to negotiate with middle managers to ensure workers have time off to attend courses (Shaw 1999; Cutter 2000; York Consulting 2001; Rainbird et al. 2002).
To what extent does the policy environment support the partnership agenda? Prior to the election of the Labour government in 1997, there had been initiatives within individual unions on developing the lifelong learning agenda as a service to members as well as through partnership approaches. Examples are the Ford EDAP scheme, the Electrical, Engineering, Telecommunications and Plumbing Union’s (EETPU) provision of IT and technical training, the UNISON/employer partnerships on the ‘Return to Learn’ programme and the TEC/TUC Bargaining for Skills projects. These represent the major types of partnership arrangement. These are (1) a jointly managed employee development scheme; (2) updating training provided as a service to members or through partnerships with employers; (3) an adult education programme initially provided for members but later through partnerships with employers; and (4) trade union advocacy of the adoption of the Investors in People award and/or NVQs/SVQs (supporting the government’s and the employer’s business agenda for training), alongside a learning centre or employee development programme (training for employees’ needs). The distinction between employer and employee need will be explored in more detail below in considering the extent to which partnership approaches can facilitate employability and lifelong learning. Lifelong learning as a concept was in existence prior to the change of government, but received fresh impetus from the setting up of the National Advisory Committee on Continuing Education and Lifelong Learning (Fryer 1997). It was reinforced by the publication of the green paper The Learning Age’ (DfEE 1998), the Kennedy report on widening participation (1997) and the Moser report on adult basic skills (1998). The green paper argued that: Learning is a natural issue for partnership in the workplace between employers, employees and their trade unions. Businesses with their desire for improved competitiveness, and employees concerned with job security and future prospects, have a shared interest in learning. This joint activity, focusing on practical issues such as time off for learning, employer support for individual learning accounts, and training plans for staff, signals a new and modern role for trade unions. (DfEE 1998:35) To this end, it argued:
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The Learning Age will not just be about the ‘top’ of organisations spreading the message. It will be as much about encouraging demand for learning from the bottom up. For example, the TUC’s Bargaining for Skills initiative...is leading the way in helping trade union representatives negotiate with employers about improving training. (DfEE 1998:35) It is significant that trade unions’ role in encouraging demand from the bottom up is emphasised rather than an approach based on workers’ rights or obligations on the employer to invest in training or to provide information on it to employee representatives. The DfEE/DfES’s Union Learning Fund (ULF) has allowed trade unions to build on extant initiatives, both in relation to the provision of training as a service to members, for new roles within unions (for example, learning representatives) and partnerships with employers and providers on training and development. Some ULF projects have also built on other government initiatives on lifelong learning, for example the University for Industry and Individual Learning Accounts (for evaluations, see Shaw 1999; Cutter 2000; York Consulting 2001). The Department of Trade and Industry (DTI) also has a Partnership Fund to which joint bids can be made, though relatively few of these projects have focused specifically on training. What are the elements which make up the policy environment for partnership approaches towards lifelong learning? The main delivery mechanism relies on a facilitative approach which has provided seed corn funding for innovation, but relies on voluntary effort for dissemination and consolidation. There is less evidence of support for embedding social partnership in formalised institutional structures in the workplace. Despite the trade union movement’s longstanding demand for workplace training committees, there are no statutory entitlements to this where trade unions are recognised for the purpose of collective bargaining on a voluntary basis (the vast majority of workplaces where trade unions are recognised). The 1999 Employment Relations Act makes provisions for unions to be consulted on the employer’s training policy on a sixmonthly basis, but these apply only to the minority of workplaces recognised under the new statutory procedures. The DTI anticipated that this model might be adopted on a voluntary basis in other workplaces, though research evidence suggests that employers have been reluctant to concede this (Rainbird et al. 2003). Although Labour has been reluctant to adopt a statutory approach, there is some evidence that this may now be under consideration. At the time of writing (2002) the only statutory entitlement to paid educational leave in the UK is for 16 and 17 year olds in employment, introduced in 1999 by the Further and Higher Education Act. An early evaluation by the Social Exclusion Unit (1999) suggested few young people had taken up this entitlement and in 2001 Malcolm Wicks, the then Minister for Life-long Learning, admitted that the government had no statistics on the take-up of this entitlement (response to parliamentary question). The main mechanism of enforcement is for the young person to take her/his employer to an employment tribunal—an unlikely option for a young and inexperienced recruit to the workforce. There are no provisions for the employer and trade unions to co-operate to ensure that this entitlement is taken up in practice. There are no requirements on employers to allocate a proportion of their payroll to training although there are statutory requirements for training in areas such as health and
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safety, food hygiene and for workers’ competence to be assessed to NVQ standards in residential care. Despite the emphasis in policy documents on the need for individuals to take responsibility for their own lifelong learning and employability (see Coffield 1997; Keep 1997) trade unions are not seen as having a formal role in representing employee voice in training and development. On the contrary, their role appears to be primarily one of stimulating demand and providing expertise—for example, David Blunkett referred to them as ‘foot soldiers’ for raising skills and ‘workplace experts on skills issues’ (Guardian, 28 August 2000). To what extent might this change in the second and (potentially a third term) of Labour government? In May 2001, the government issued a consultative paper on its proposals to put union workplace learning representatives on statutory basis on the model of health and safety representatives. This was enacted in 2002. Although this will be a union role it is seen as separate from collective bargaining and learning representatives will operate ‘outside the collective bargaining framework’ (DfEE 2001:2). The proposals do not assign rights to bargain over training or learning and there is no requirement for employers to consult with learning representatives. The emphasis is on the ways in which this role can support the employers’ training strategy. It states ‘in practice most employers will wish to ensure that the unions’ activities support and complement their own workforce development strategies’ (2001:2). Significantly, it states that ‘the development of a new role for trade unions in promoting learning at work has had a significant impact on increasing motivation and enthusiasm for learning among employees and employers’ (my emphasis, DfEE 2001:1). The Employment Bill 2002 provides rights to time-off for union learning representatives to carry out a range of activities in relation to their members. These involve analysing learning or training needs; providing information and advice on training; arranging training or learning; promoting the value of training or learning; and consulting with the employer on carrying out these duties. Reports produced by the Performance and Innovation Unit (PIU) (2001) and the Treasury (2002) have suggested that the government has recognised the need to tackle basic skills problems and to boost the supply of intermediate level skills in the economy. Alongside this is the suggestion that it is prepared to contemplate statutory intervention. The PIU report is significant in recognising that it is not just the supply of skills that needs to be addressed by government, but also employer demand: in other words it recognises the self-reinforcing nature of a ‘low skill equilibrium’ (see Finegold and Soskice 1988). The Treasury report recognises disparities in access to training at work, and how the pattern of training reinforces rather than remedies the past failings of the education system. It also identifies that workers with low levels of formal qualification are less likely to receive training in general, transferable skills than their more highly qualified colleagues (2002:11). Although the Treasury report makes its case in terms of the relationship of workforce skills to productivity growth, it also argues that improving the skills of low skilled adults can reduce social exclusion. In order to correct these market failures, it identifies that government needs to have an approach to supporting and providing for training needs, ‘so that the incentives, rights and responsibilities are provided for everyone involved’ (2002:15). It goes on to argue that what is needed is an approach which encourages firms and individuals to train, through targeted incentives from government ‘which also requires them to recognise and
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meet their roles and responsibilities’ (2002:20). The report indicates the government’s willingness to consider using the tax system and other mechanisms to encourage increased training and, significantly, introduced a series of pilot schemes to support paid educational leave for workers’ training in basic skills or level 2 qualifications (2002:21). The six pilot schemes, which are run by local Learning and Skills Councils offer free basic skills and level 2 courses for employees, either 35 or 70 hours of paid educational leave, replacement staff costs to employers (with compensation varying by size of firm), and advice and guidance to individual employees and employers (2002:3). Whilst the report unambiguously rejects statutory intervention in the form of training levies (although it does not preclude voluntary ones) the model of incentives, entitlements and responsibilities that is being tested is that of paid educational leave, though this is restricted to workers with low levels of formal qualification. There is other evidence to support this interpretation of potential future shifts in policy, based on developments in the NHS, where the government is effectively the employer. In 2000 the NHS Plan recognised the need to provide training and development for staff whose needs had often been neglected in the past. Staff without professional qualifications are guaranteed access to an NVQ qualification at level 2 or 3, or to resources for personal development available under the NHS Learning Accounts Scheme from 2001. The trade unions have been playing an active role in setting up partnership arrangements with managers at local level, and have received funding through the NHS Learning Accounts scheme to support the development of organisational capacity of the staff side. The ‘Working Together—Learning Together’ proposals (Department of Health 2001) talk of creating a ‘skills escalator’ whereby staff joining the NHS at relatively low levels can progress through training and development. Finally, developments at the level of the European Union may potentially influence the role of trade unionists in workplace learning, through the transposition of the Information and Consultation Directive. This provides for employee representatives to be informed or consulted on ‘the situation, structure and probable development of employment’ and ‘any anticipatory measures envisaged, particularly where there is a threat to employment’ (Hall et al. 2002:1). Its implementation will be staggered between March 2005 and March 2008. It is possible that training would be an item for consultation and information.
The contribution of partnership approaches to employability and lifelong learning Survey evidence suggests that training and development opportunities are unevenly distributed across the workforce and that workers in large workplaces, in unionised workplaces and in the public sector have greatest access to training and development. The analysis of large datasets has pointed to a positive correlation between measures of union presence and access to training and development (Green et al. 1996; Arulampalam and Booth 1998). There appears to be an indirect affect of trade union presence in the workplace on access to training, since the survey data do not explore the extent to which unions have a conscious strategy towards training and development. In contrast, a survey conducted for MSF by Heyes and Stuart (1998:462–5) showed that where a trade union
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actively participates in training decisions, members are even more likely to receive training than where it is not actively involved. They are also more likely to perceive that there is a more equal distribution of access to training activities and to feel encouraged by their union and their employer to train. The Workplace Employee Relations Survey (WERS) data allow the extent to which trade union representatives are involved in training decisions to be explored. The source book notes that employers rarely discuss training with employee representatives: in 43 per cent of cases there was no provision of information on training, let alone consultation or negotiation (Cully et al. 1999:104–5). In order to assess the extent to which workplaces have adopted a systematic approach to training in this respect, we developed a measure which combined four elements.4 These were: (1) at least 60 per cent of the workforce received two or more days’ off-the-job training in the previous year; (2) the presence of training in organisational processes; (3) a strategic plan which included employee development; and (4) the involvement of employee representatives. Although 28 per cent of establishments met the first criterion, when all four were combined only 3 per cent of workplaces demonstrated these characteristics. These workplaces were concentrated in public administration, education and the utilities and not the private sector, where more advanced forms of Human Resource Management might have been anticipated. This suggests that the relatively sheltered nature of the public sector has contributed to the conditions in which partnership approaches might develop. Nevertheless, there is a case for arguing that the way in which the questions on training were framed in the WERS survey may have resulted in an underestimation of the extent of trade union involvement in training. Few managers claim to negotiate on training with employee representatives, though case study evidence suggests that the coverage of collective agreements is more extensive than the survey data show. For example, many thousands of workers in local government are covered by the Single Status Agreement which has a number of significant clauses on training and equal opportunities. It is also common for agreements on flexibility and competence-based pay to make reference to training and development, although this is not the primary purpose of the agreement. However, as Stuart’s (2001) analysis of the National Training Agreement in the print industry shows, even relatively well-organised unions may lack the capacity to ensure adherence to the agreement in the workplace. Finally, it is worth noting that the language of negotiation may not capture adequately the more co-operative arrangements which tend to characterise training and development, their dependence on key individuals on the management and the union side, and their limited institutionalisation (Rainbird et al. 2003). The distinction between training and development for employer and employee need is essential to the understanding of partnerships on life-long learning and the extent to which they can facilitate employability and lifelong learning. Essentially training for employer need is based on a unitarist perspective, whereby training investment which benefits the organisation is perceived by managers as being of value to the employee too. Employees may benefit from this investment in the sense that improved business performance may increase job satisfaction and employment security. Nevertheless, the training provided may be narrowly related to the needs of the job and will not contribute to their employability in the wider labour market. In this respect, the resolution of the
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conflict of interest over training is in favour of the employer, with indirect benefits to the employee. In contrast, training for employee need is based on the recognition that employees’ interests are not the same as those of the organisation. Training for employee need provides employees with broader development opportunities which gives them skills and knowledge that are not directly related to their current jobs. It contributes to their wider employability, both within the organisation and potentially in the external labour market as well. In this respect, the conflict of interest between the employer and the employee has a more extended resolution. There are direct benefits to the employee, though the employer may also benefit from employees’ interest in further learning, ability to apply the knowledge to future job requirements, increased self-confidence and improved communication skills (see Rainbird et al. 2003). Whereas increased access to training for employer need may be an effect of the employers’ market strategy and indirect effect of the presence of trade unions in the workplace, employees’ access to training for employability is related to the presence of conscious trade union strategies towards training. Many of the developments in union provision of training as a service to members in the 1980s and 1990s were aimed towards skills which were not being provided by employers in the workplace. For the National Union of Public Employees (now UNISON), for example, the provision of the Return to Learn programme, an adult education programme providing a second chance of education and credits for access into further and higher education, was initially seen as a service for low paid members. It contributed to their self-confidence and ability to change jobs. More importantly, its continued funding was justified internally on the basis of its contribution to students’ increased involvement in the union. This acquired added significance when the merger to form UNISON took place, in the context of encouraging new forms of activism and ensuring the representation of low paid women workers in the new structures (Munro and Rainbird 2000a). The initial rationale for unions to engage in training as a service to members was to provide training for employability which, at the same time, contributed to their interest in being members and activists. Trade unionists have recognised the potential of lifelong learning not just as an individual service to members but also as an organising issue (Munro and Rainbird 2000b). Partnerships with employers on lifelong learning have emerged out of this concern to provide training for employability for members. For example, the early UNISON/employer partnerships were not planned as part of a deliberate strategy, but emerged on a pragmatic basis, where managers and trainers with a vision for the training and development of low paid workers were prepared to work with the union around a common objective. In this respect, the Return to Learn programme represented a high quality adult education programme which commanded the confidence of employees because of its association with the union (Munro et al. 1997). In the same way, a proportion of the learning provision funded through the Union Learning Fund has focused on IT skills, general and basic skills education (Cutter 2000; York Consulting 2001). In some instances, these union initiatives have reached groups of workers who are difficult to reach, such as freelancers. In other cases, they have resulted in the development of workplace structures for learning at site level (USDAW 2002) or in bringing together workers in small firms on a sub-regional level as in the GPMU’s initiative in the print industry (Payne 2000).
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The Bargaining for Skills projects, originally supported by the Training and Enterprise Councils and the TUC, are perhaps a special case and need separate discussion here. These were originally set up to help deliver the government’s own targets on NVQ attainment and the achievement of the Investors in People award. The model adopted was one whereby union representatives acted as advocates for the adoption of these measures in their workplaces and were able to draw down external resources and sources of expertise. Often the employer provided access to an open learning centre on site as part of the deal. In this instance, the NVQs and the IIP award were seen as being ‘for the employer’, whereas the learning centre was seen as ‘for the employees’.
The response of trade unions to the politics of partnership Unlike general purpose partnership arrangements which have often been developed at the initiative of the employer (Knell 1999), partnerships on training and development have nearly always been initiated by trade unions. As outlined above, they provide access to training and development for sections of the workforce who receive little or no access to employer provision. All the models identified above provide opportunities for learning which facilitate employability and lifelong learning. The response of trade unions to the politics of partnership on lifelong learning therefore concerns two major areas. These are how to pursue partnerships on lifelong learning within the constraints of what is primarily a voluntarist system and to develop organisational capacity in this arena. The facilitative approach adopted by the Labour government is based on providing seed corn funding for innovation, for example, through the ULF. This has played an important role both in supporting developments which were already taking place in some trade unions and in encouraging them in others. However, there are problems in relying on an approach which is essentially short-term and project based, rather than long-term and developmental. For trade unions it poses the question of continuity in projects and project workers. Time must be spent on developing project bids, and recruiting and managing staff to work on the projects. The short time-scale of many projects means that staff expertise can be lost and the objective of securing funding may override considerations of developing a more strategic approach to organisational development. The ULF projects have undoubtedly led to organisational innovations, such as the recognition of new roles in union rule books, and have raised the profile of life-long learning as an organising issue. Nevertheless, these innovations have often been led by national and regional officers and have yet to be embedded in branch structures and practices. Undoubtedly, these developments would be strengthened by a statutory framework. The main problem has been that where the Labour government has adopted a statutory approach, entitlements have been so weak as to be virtually inoperable. Two examples were mentioned above. One of these is the 1999 Employment Relations Act, which only entitles trade unions to receive information from their employer about the company training plan in the minority of workplaces where trade unions are recognised under statutory procedures. The entitlement of 16 and 17 year olds to paid educational leave is a second example of this weak model of statutory entitlement, which reflects the absence of workplace institutions capable of ensuring that the entitlement is taken up in practice.
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The development of the statutory rights for trade union learning representatives in the 2002 Employment Relations Act is a welcome development and may allow trade unionists to consolidate their role in building workplace partnerships. Although this role was perceived as being one of stimulating demand from the bottom up, there is no corresponding requirement on the employer to provide resources or information on training. Trade unions can make some progress on lifelong learning on their own, but for this to develop into partnership with employers requires dual agency. In other words, it requires ‘enthusiastic local actors’ (Munro et al. 1997) on both the union and the management side to sustain it (see Heyes 1993). Where key actors on the management or union side move on, it may be difficult to sustain partnership work (Rainbird et al. 2003). The fragility of partnerships based on a voluntarist approach lies in their dependence on key individuals and the absence of formal workplace institutions. The consequence of this is that long-term relationships that are essential to building up expertise on both sides are rarely present. In the absence of incentives (or sanctions) on the employer to work with the union learning representatives, there will be limitations to trade unions’ capacity to develop partnerships with employers on lifelong learning. Where partnerships have developed with employers on training and development over a number of years, there is evidence of relationships of trust developing between trade union representatives, on the one hand, and managers and trainers, on the other (Rainbird et al. 2002). This may improve channels of communication more generally and provide the basis for developing partnership approaches in other aspects of the employment relationship.
Conclusion The evidence to date suggests that partnerships on training and development are not widespread, although trade union interest and capacity to work with employers on them is growing. For many trade unions the life-long learning agenda is potentially an agenda for organisational renewal. As an individual service to members, it can be seen as a recruitment and retention tool. It can also be seen as a mechanism for developing new roles for representatives and activists. Although the Labour government (1997–present) has provided rhetorical support for the development of partnership approaches to lifelong learning, the main mechanism adopted has been facilitative rather than statutory. The Union Learning Fund has provided resources for trade union innovation and experimentation and has resulted in the provisions in the 2002 Employment Relations Act which put the union learning representative role on a statutory basis. This may provide a basis for consolidating the union role in relation to lifelong learning in the workplace. But without incentives or obligations on the employer it seems unlikely to provide the dual agency which is essential to building partnerships on training and development. So far, the question of resources for training and the employers’ provision of information on the organisation’s training plan have not been addressed. At best, a piecemeal approach is being adopted: the union role is seen as contributing to creating employee demand, on the one hand, and encouragement to the employer on the other. It could be argued that the government has much stronger mechanisms at its disposal for achieving both these objectives: employee
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entitlement to paid educational leave, and statutory requirements on employers to invest in training and to consult and inform workplace representatives on their training plan. Equally, there are stronger mechanisms, such as workplace training committees, for embedding approaches to social partnership in the workplace. The idea that employees’ interests in relation to training and development at work should be represented is singularly absent from the debate. This leads us to the question of whether partnerships on learning are providing ‘a new and modern role’ for trade unions. The answer appears to be both ‘yes’ and ‘no’. Although many of the recent developments in trade unions have been in response to a perceived need to modernise their approach to membership services and members’ perceived concerns, in other words to the ‘new bargaining agenda’ (see Storey et al. 1993), there are also continuities with past practices. Indeed, David Blunkett in his introduction to ‘The Learning Age’ specifically refers to the role of friendly societies and self-improvement in contributing to the quality of working peoples’ lives (DfEE 1998). In other words, there are echoes of a traditional, rather than modern role, for trade unions here. Insofar as trade unions continue to rely on their ability to negotiate with the employer on training and development within a voluntary framework to secure benefits for their members, there are continuities with their traditional bargaining role. Alternatively, if trade unions’ role in lifelong learning is perceived as simply stimulating employee demand as David Blunkett suggested in his reference to them as ‘foot soldiers’ and ‘workplace experts on skills’, this is certainly a new role. This perspective suggests that partnerships with employers are not a major objective because the crucial element of dual agency is missing. In emphasising lifelong learning as a service provided to members, it merely consolidates a role that trade unions have been developing over the last two decades. Their role is therefore as providers and commissioners of lifelong learning. If this is the case, trade unions will need to identify more ambitious objectives in the development of expertise and to see educational institutions rather than employers as their partners. Finally, to what extent does this ‘new and modern role’ for trade unions reflect broader shifts in the nature of the industrial relations system? Largely under the influence of the European Union, Britain is beginning to shift from employee rights established through free collective bargaining to individual rights established in law, although much of this has been on a piecemeal basis (Hall et al. 2002). In the arena of training and development, one of the striking features is that where statutory rights have been awarded, they have been of an extremely weak nature. They have not been supported by corresponding obligations on the employer or more substantial workplace institutions capable of supporting training for both employer and employee need. Although the pilots of paid educational leave and the transposition of the European directive on consultation and information may signal that a more robust statutory framework is under consideration, the evidence to date on statutory intervention on training suggests the government’s preference is for weak rather than strong forms of entitlement. Insofar as these entitlements are tokenistic, it could be argued that there is little scope for trade unionists to develop ‘a new and modern role’ and that partnerships on lifelong learning will be restricted to what can be achieved under traditional voluntarist methods.
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Notes 1 The Department for Education and Employment, subsequently, the Department for Education and Skills, introduced the Union Learning Fund in 1998. 2 For a discussion on how training can emerge as an issue in the workplace through the structures of collective bargaining and outside it see Rainbird et al. (2002a). 3 The research for UNISON began in 1996 and has focused on the examination of partnerships with employers and the development of a new role within the union, that of the ‘lifelong learning advisor’. These are former Return to Learn students, who act as advocates and enthusiasts of learning in the workplace. Research has also been conducted on training and development in the public sector under the ESRC’s Future of Work and the Teaching and Learning Research Programmes (project refs: L212 25 2017 and L139 25 1005) with the active support and engagement of UNISON. More recently, an evaluation has been conducted for UNISON on multi-employer partnerships on Return to Learn and related programmes (see Rainbird et al. 2002b). This paper also draws on research conducted for the DTI on employee voice and its influence over training provision (see Rainbird et al. 2003) and a short paper for the TUC on the role of learning representatives (Rainbird 2002). 4 This section draws on the secondary analysis of the WERS data conducted by Paul Edwards on the DTI research project on employee voice and its influence over training and employability (see Rainbird et al. 2003).
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Heyes, J. (1993) ‘Training provision and workplace institutions: an investigation’, Industrial Relations Journal, 24(4):296–307. Heyes, J. and Stuart, M. (1998) ‘Bargaining for skills: trade unions and training in the workplace’, British Journal of Industrial Relations, 36(3):459–467. Industrial Relations Review and Report (1991) New Bargaining Agenda for Unions, No. 479, January. IRRU (1997) Comments on the European Commission’s Green Paper ‘Partnership for a New Organisation of Work’, mimeo, Coventry, Industrial Relations Research Unit, University of Warwick. Keep, E. (1997) ‘‘“There’s no such thing as society…” some problems with an individual approach to creating a Learning Society’, Journal of Education Policy, 12 (6):457–471. Kennedy, H. (1997) Learning Works. Widening Participation in Further Education. Coventry, FEFC. Knell, J. (1999) Partnership at Work, Employment Relations Research Series, Department of Trade and Industry. Manufacturing, Science and Finance (1988) ‘Training for the future. Can Britain compete?’, May, London, MSF. Moser, C. (1998) Improving Literacy and Numeracy. The Report of the Working Group Chaired by Sir Claus Moser. Sudbury, DfEE. Mullis, C. (2000) Does union-employer partnership contribute to employees’ training and development opportunities? A comparison of general purpose and single purpose agreements. Unpublished M.A.dissertation, University of Warwick. Munro, A. and Rainbird, H. (2000a) ‘UNISON’s approach to lifelong learning’, in Terry, M. (ed.) Redefining Public Sector Unionism. UNISON and the Future of Trade Unions. London, Routledge. Munro, A. and Rainbird, H. (2000b) ‘The new unionism and the new bargaining agenda: UNISON/employer partnerships on workplace learning in Great Britain’, British Journal of Industrial Relations, 38(2):223–240. Munro, A., Rainbird, H. and Holly, L. (1997) Partners in Workplace Learning: A Report on the Unison/Employer Learning and Development Programme. London: UNISON. Payne, J. (2000) REACH. Regional Accord for Change. A Sub-regional Partnership in the Printing, Publishing and Packaging Industry. Wessex GPMU. Performance and Innovation Unit (2001) In Demand. Adult Skills in the 21st Century. London, The Cabinet Office. Piore, M. and Sabel, C. (1984) The Second Industrial Divide; Possibilities for Prosperity. New York, Basic Books. Rainbird, H. (1990) Training Matters: Union Perspectives on Industrial Restructuring and Training. Oxford: Blackwell. Rainbird, H. (2002) Trade unions, lifelong learning and workforce development: issues to be addressed. http://www.tuc.org.uk/. Rainbird, H., Munro, A. and Holly, L. (2002) Learning Partnerships in Health and Social Care: an Evaluation of Partnership Initiatives in Health and Social Care. London, UNISON. Rainbird, H., Sutherland, J., Edwards, P.K., Holly, L. and Munro, A. (2003) Employee Voice and its Influence over Training Provision: Analysis of Case Studies and WERS 98. Employment Relations Research Series no. 21, London: Department of Trade and Industry. www.dti.gov.uk/er/emov/ Shaw, N. (1999) An Early Evaluation of the Union Learning Fund. Research Report RR113, Department for Education and Employment. Social Exclusion Unit (1999) Bridging the Gap: New Opportunities for 16–18 Year Olds not in Education, Employment or Training. London, the Stationery Office.
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4 Working corporations Corporate governance and innovation in labourmanagement partnerships in Britain Simon Deakin, Richard Hobbs, Suzanne J.Konzelmann and Frank Wilkinson
Introduction The emergence of innovative forms of labour-management partnerships was one of the more striking and unexpected features of British employment relations in the second half of the 1990s. The intensification of competition in product markets which flowed from globalisation and privatisation led many companies to re-examine their structures and processes with a view to improving performance. Although downsizing was one consequence of this, many enterprises began actively to engage with employees and their representatives on issues of work organisation, training and job security. The process received a fresh impetus with the election in 1997 of a Labour government committed to ‘partnership at work’, but was already underway in numerous organisations prior to that point. The challenge of sustaining these new forms of partnership has gone on to become a major focus of union-management relations at the enterprise level and has engendered intense policy debate. This chapter locates the recent resurgence of labour-management partnerships in Britain in the context of the wider system of corporate governance. Specifically, we address the following question: how far does the institutional and policy priority given to shareholder value in the British system impose a ‘corporate governance constraint’ on the emergence of mature forms of cooperation between labour and management? On the basis of case studies of organisations operating in a range of sectoral and regulatory environments, we find that the structure of corporate ownership and control is one factor, but not necessarily the decisive factor, in the emergence and maintenance of labourmanagement partnerships. We show that successful partnerships tend to be found in sectors where both sides can make credible commitments to cooperate over the medium to long term. This depends in part on the dynamics of particular relationships, but is also heavily influenced by the policy and regulatory framework within which enterprise-level relations are situated. More precisely, the key significance of corporate governance and related forms of regulation is to set the time period over which cooperative strategies can be played out between the different stakeholders. Certain rules and practices within corporate governance shorten time horizons by enabling shareholders to use the threat of exit to extract rents from the enterprise. Opportunistic takeover bids may provide the occasion for this, as do falls in stock market value which put companies at risk of takeover.
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However, other elements in the regulatory framework can lengthen time horizons. This is the effect, for example, of product market regulations which encourage competition on the basis of quality rather than price. Within corporate governance, practices and strategies can be adopted which encourage shareholders to take a long-term view of their investments. Taking a high-value added approach to training and investment in human capital can be part of a managerial strategy to build shareholder loyalty. Conversely, some institutional shareholders may consciously set out to provide a stable investment environment within which management is provided the space and opportunity to develop creative responses to external pressures. This configuration of circumstances is compatible with enduring labour-management partnerships. Where, however, these external and internal conditions are absent, partnership arrangements are highly vulnerable to a breakdown of trust between the parties. The argument is developed as follows. Section 2 below outlines the current policy framework relating to corporate governance and partnership at work in Britain, with the focus on ‘shareholder value’ as a reference point for corporate performance. Section 3 examines the case study evidence, illustrating the varied experience of companies with different ownership forms and operating in different regulatory environments. Section 4 considers the implications of the findings for the future sustainability of labourmanagement partnerships in Britain.
Corporate governance and partnership at work: the policy framework The economic benefits of labour-management partnerships are, in principle, well understood. Partnership allows for the full exploitation of technical complementarities in production, it facilitates the sharing of knowledge, and, above all, it fuels the organisational learning processes by which new information and knowledge are created and diffused, and by which new products, processes and organisational forms are developed (Wilkinson 2000). The hallmark of partnership, from this point of view, is that the parties give open-ended commitments to cooperate, in the expectation that they will share in the resulting economic surplus. This necessarily entails an extended time horizon. It also involves an acknowledgement on both sides of their mutual exposure to risk. In this sense, to qualify as an ‘influential stakeholder group’ within an enterprise, employees ‘must bear significant residual risks, contribute valued resources, and have sufficient power to affect organizational outcomes’ (Kochan and Rubinstein 2000:370). In other words, employees must not only put valued resources at risk, in the sense of incurring costs if the enterprise fails or their relationship with it terminates; management must in return accept that employees should be able to exercise a degree of power in the context of corporate decision making. At the very least, this implies that they should be meaningfully informed and consulted when decisions over the shape and structure of the enterprise are made. The current labour relations policy of the UK government formally endorses labourmanagement cooperation or ‘partnership’ as a basis for improving economic performance. It has been suggested that the government’s approach is focused on ‘the achievement of a particular role orientation on the part of employees so that they are
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flexible, expansive in their perceptions and willing contributors to innovation’. According to this point of view, [p]artnership is a matter of employers having the right to ask employees to develop themselves in order to accept fresh responsibilities whilst they themselves must take responsibility for providing the context in which this can happen. (Wood 2000:130) In this formulation of partnership, the strong emphasis is on the need for workers to make open-ended commitments to their employer’s business interests and objectives, and to mould themselves to its needs. Workers provide additional and improved resources for the firm’s managers to manage more effectively. The position was summed up by Tony Blair, the Prime Minister, when he laid out the Labour government’s primary industrial relations objectives in the White Paper, Fairness at Work in 1998. These objectives required ‘nothing less than to change the culture of relations in and at work’. The new culture was to be ‘one of voluntary understanding and cooperation because it has been recognised that the prosperity of each (employer and employee) is bound up in the prosperity of all’ (DTI 1998:1); and he emphasised that ‘partnership works best when it is about real goals—part of a strategy for instance for doubling business. Or bringing employee relations in line with market re-positioning. Or ending the often-meaningless ritual of annual wage squabbling’ (Blair 1999). A variety of techniques is currently available for enhancing employee participation at enterprise level. The traditional method by which this has been achieved in Britain is collective bargaining. Under legislation passed in 1999, employment law requires employers to enter into negotiations with trade unions over collective bargaining under certain limited circumstances, and, with this encouragement, trade union recognition agreements at enterprise level are on the increase again after nearly two decades of decline (Oxenbridge et al. 2001). At the same time, other forms of employee participation are being promoted by legal means, including employee share ownership and employee information and consultation procedures outside the framework of collective bargaining (see Ackers et al., this volume). However, it is unclear how far any of these methods go towards meeting the need to give employees an effective say in organisational decisions in return for putting their own economic interests at risk in the enterprise. Although employers have a legal duty to consult recognised trade unions over the effects of large-scale redundancies and business transfers, the legal scope of collective bargaining in the UK does not extend to the substance of corporate strategy and planning (Deakin and Morris 2001: ch. 9). Share ownership schemes generally offer financial incentives without conferring voice or control rights on employees (Michie and Oughton 2002). While procedures for information and consultation are increasingly common at enterprise level (particularly in the form of so-called non-statutory works councils: Terry 1999), they generally lack the features which make similar systems of employee representation effective in continental Europe, namely a firm legal and institutional underpinning and active involvement on the part of independent trade unions (McCarthy 2000).
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The perception that employees are being called on to make unconditional commitments to the enterprise without being given a meaningful say in its operation is reinforced when we consider the impact of corporate governance norms and procedures. Corporate governance theory holds that differences in ownership structure have implications for incentives and, in the final analysis, for corporate performance. A large proportion of UK productive capacity, in relative terms, is held in the form of publiclylisted companies (stock market capitalisation is significantly greater than GDP). Since the 1980s, as a result of privatisations, many essential services and utilities which were once provided by government are now sourced through the listed company sector. The predominant type of ownership in UK listed companies, as in the US, may be described as dispersed-share ownership. In the UK (and to a lesser degree in the US), the principal shareholders are institutions—insurance companies and pension funds—which act on behalf of their policy-holders and beneficiaries, respectively. Typically, the share structure of a UK listed company will consist of several blocks (of between 5 and 10 per cent) that are controlled by fund managers on behalf of a number of clients. By contrast, the dominant block-holding model, in which one shareholder holds a majority or nearmajority stake, is rare in UK listed companies. Methods for securing dominant blocks through cross-shareholdings by large companies in one another (which are common in France), and by bank-led governance of the kind that operates (in various different ways) in Germany and Japan (see Berglöf 1997; Franks and Mayer 1998) are the exception in the UK With dispersed share ownership of the kind observed in Britain and the US, shareholders benefit from the possibility of low-cost exit. The resulting liquidity in capital markets enables them to take advantage of alternative investment opportunities. The disadvantage is that other stakeholders, such as employees, suppliers and customers contributing firm-specific inputs, knowing that the shareholders may switch their investments at short notice, may be dissuaded from making long-term investments of their own in the firm (Franks and Mayer 1998:728). From this point of view, the ability of management to mediate between the different corporate constituencies, in such a way as to ensure the continued cooperation of each group, becomes an essential issue. In this context, it is arguable that the UK’s corporate governance system strongly incentivises company boards and senior managers to prioritise the short term interests of shareholders. The market for corporate control, which operates through the mechanism of the hostile takeover bid, is particularly important here. During a hostile takeover bid, the boards of target companies are required by the rules of the City Code on Takeovers and Mergers to assume a neutral stance and offer disinterested advice to shareholders on the financial merits of the bid (see Deakin and Slinger 1997). Although the City Code requires bidders to state their intentions with regard to the future treatment of employees, this results in little more than the insertion of a standard-form legal ‘boilerplate’ in offer documents. There is no obligation on the part of either the target board or the board of the bidder to consult employee representatives during a bid; this only occurs after a bid has gone through when large-scale redundancies are announced. There is even some doubt as to how far either board may go in providing information to employee representatives without contravening the provisions of the Code and the listing rules on the disclosure of price-sensitive information. These rules, together with the doctrine of ‘pre-emption’ (which makes it impractical for most listed companies to issue non-voting stock as a way
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of beating off a take-over bid), create particular incentives for boards to prioritise shortterm shareholder interests over other interests during a bid. Despite the legal principle that makes it compulsory for boards to take into account the interests of employees when exercising fiduciary duties, employees have no standing to challenge a particular decision or commercial transaction on the grounds that there has been a breach of duty by the board. Nor do employees have any standing before the City Panel on Takeovers and Mergers. By international standards, there is a high level of hostile takeover activity in the UK Even so, the numbers of hostile bids in a given year will be in the tens rather than the hundreds, whereas the number of listed companies runs into the thousands. More significant, in the UK, is the long shadow cast over corporate governance by the Code and by the listing rules. No listed company is immune from the possibility of a hostile bid. To varying degrees, companies can insulate themselves against short-term fluctuations in their share price relative to the market by cultivating a culture of long-term investment. But this is not an option open to all; and there is a question as to whether it is continuously available for any. In practice, the takeover mechanism has been the principal catalyst for corporate restructuring during the last decade and a half, with virtually no sector escaping its influence. Hostile bids (or the threat of them) are almost invariably the trigger for job losses and plant closures (Deakin et al. 2003). If managers, through the combined effect of convention and law, are required to prioritise shareholder value over other interests when decisions regarding corporate structure are made, it is possible that they will be correspondingly less able to make ‘credible commitments’ to respect the long-term interests of other stakeholders, in particular, employees. Where this is so, employees for whom no meaningful guarantee of economic security is given will have little incentive to engage in the sharing of information and reciprocal learning which are key to competitive success. The prevailing system of corporate governance would then represent a major constraint on the possibilities for effective partnership in UK employment relations. On the other hand, it is possible to envisage a scenario in which corporate boards act to promote ‘enlightened shareholder value’ (see Company Law Review 1999, 2000, 2001). Here, management takes a strategic decision to build long term shareholder value by winning the confidence of a range of stakeholder groups whose inputs into the company’s success are vital. In turn, it is necessary to make a case to shareholders that they should regard their investments as held for the long term. If this scenario is played out, it becomes possible to identify scope for a partnership approach, even within a corporate governance system, such as the UK’s, which broadly accepts the ‘shareholder primacy norm’. A key point in the stakeholder debate of the 1990s was the claim that fairness of treatment, job satisfaction, high quality of work environment and, particularly, income and job security are important factors in generating investments in firm-specific capital by employees (Blair 1995; Slinger and Deakin 2000). A growing body of work in the theory and practice of human resource management points to a link between effective HRM and improved corporate performance (see Guest 2001, for an overview). However, it is also clear that the possibility of these gains will not necessarily induce management to adopt a pro-stakeholder stance. A low-commitment, low-cost alternative may be to pursue increased market share through a strategy of cost reduction, involving minimal
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commitments of job security and a marginal role for employee voice. The product market has been identified as a factor shaping this aspect of corporate strategy; cost-reduction approaches are thought to be more likely in sectors where product or services are relatively undifferentiated and managers perceive little scope for competing on quality (Schuler and Jackson 1987). By contrast to this focus on the product market, the impact of corporate governance mechanisms on corporate strategy in general and on human resource management in particular has until recently been neglected. One of the very few studies to make the link explicit is Kochan and Rubinstein’s study of Saturn, the US vehicle manufacturer which was set up as an experiment in partnership between General Motors (GM) and the United Auto Workers (UAW) union (Kochan and Rubinstein 2000; Rubinstein and Kochan 2001). One of the messages of the Saturn experiment is that there is a still unresolved tension between the priority granted to shareholder interests by the US corporate governance system, and efforts to build labour-management partnerships which will endure over time. At the same time, there are distinctive features to the Saturn case, in particular the ambivalence of the wider GM management and UAW leadership towards the idea of partnership that may make it a special case. In the final analysis, the question of the possible existence and effects of a ‘corporate governance constraint’ on labourmanagement partnerships in systems such as Britain and the United States can only be resolved empirically. With that point in mind, we turn to our case studies.
Governance and restructuring: opportunities for partnership? The case studies The sample consists of seven companies which have been examined on a longitudinal basis since the mid-1990s (see, more generally, Deakin et al. 2002, on which this section draws). These are all companies which claim to follow a partnership model in relations with employee representatives. At the same time they have all been actively engaged in the market for corporate control, resulting in periodic restructurings following mergers and takeovers. Successive waves of interviews have been conducted with senior managers and trade union officials in order to track, over time, changing perceptions regarding partnership. The sample was constructed with the aim of seeing how contrasting patterns of ownership (dispersed share ownership; concentrated ownership; UK control; overseas control) and different forms of market regulation (ranging from relatively unregulated product markets exposed to intense international competition, to utilities markets which are subject to intensive price and quality regulation) affected the emergence and stabilisation of partnership relations. Tables 4.1 and 4.2 summarise the key characteristics of the case study firms (fictitious names for which have been provided) and the outcomes of
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Table 4.1 Case study characteristics: the structure of ownership, product markets and the regulatory environment Clean well
Fix well
Sector
Specia lised contract cleaning and facilities mainte nance
Owner Ship (degree of disper sion, stock exchange listings)
Regu Lation (stake holder represen tation, industry regula tions)
Product markets (product type,
Hea rwell
Warm well
See well
Tenswell
Electrical Multicontra utility: cting Water and gas
Tele commu nications
Multiutility: electri city, gas, water
Multiutility: electricity and gas
Manufac turer: heavy industry
Concen trated: European parent
Concen trated: UK manage ment buyout Stock Not exchanges: listed conti nental Europe
Concen trated: Euro pean parent
Dispe rsed: UK parent
Dispersed: UK parent
Dispe rsed: US parent
Employee interests influence PFI
Customer Customer interests interests dominate dominate
Customer interests dominate
Customer interests dominate
Regula tions: price, quality service, financing, compe tition, environ ment
Regula tions: price, quality service, financing, compe tition, environ ment
Regula tions: price, quality service, financing, compe tition, environ ment
Regula tions: quality in NHS, health and safety
Regula tions: predom inantly health and safety
Flo well
Disper sed: Merger between UK and Euro Stock Stock Stock Stock parent exchange: exchanges: exchanges: exchanges: Stock contin London London NY excha ental and NY and NY nges: Europe London, NY and conti nental Europe
Regula tions: price, quality service, financing, compe tition, environ ment
Regula tions minimal: environ ment, health and safety
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degree and nature of compe tition, supply relations) Services and products: specia lised and techno Generally logically very sophist limited icated compe Compe tition, titive although energy retail Mainly market high open to quality compe tition
General cleaning: price compe titive
Elect Multirical contra utility cting services services
Multiutility services
Multiutility services
Mass produced, manufac tured goods
Specia lised services: compe tition on the basis of quality and given price. Fewer, larger compe titors; reputa tion impor tant; longterm contracts in PFI
Operates across different markets
Generally very limited compe tition, although energy retail market open to compe tition
Generally very limited compe tition, although energy retail market open to compe tition
Intense compe tition on basis of price and satisfactory quality
Mainly medium size contracts
market: price and quality
Long-term relations
Volatile and difficult market conditions Short-term relations
Table 4.2 Case study characteristics: enterprisespecific factors and nature of partnership Clean well
Fix well
Fl owell
Enter Multi-site prise Multistructure country
Multi-site UK
Multi-plant MultiMultiplant country Multicountry
Multi-plant MultiUK and US plant Multicountry
Union strength (density, effective represe
Density: 50% New leadership at local
Density: 50% (up from 40% two years ago)
Density: 45% overall, 66% of staff
Density: 35% overall, 60% in NHS
Hearwell Warmwell Seewell
Density: 60% overall, 99% in networks
Density: over 80% in generating and
Tenswell Multi-plant Multicountry Density: 80% overall, 100% blue collar
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ntation)
sector Effective represe ntation of membership
level said to be less partnership orientated
Weak represen tation at local level
Effective represen tation of member ship
covered by collective agreements Effective represen tation of membership
networks, less than 10% in trading Internal divisions among Seewell unions
Internal divisions Redund ancies eroding UK membership base
Nature of partner ship
Proactive and mature Voluntary Particularly mature and deep in NHS sector Joint consultation and dialogue HR policy supports business objectives and partnership Union involve ment in working through challenges Reco gnition of mutual interests
Proactive and mature Unions seen by manage ment as an effective check and balance against commercial pressures HR policy supports business objectives and partnership
Very little; disinte grating Union only recognised as a result of legislation Works council with union and independent represe ntatives Culture of insecurity
Proactive (with some reactive elements) and mature Voluntary Mature, especially in traditional lines Joint consul tation and dialogue HR policy supports business objectives and partnership Union involve ment in working through challenges Reco gnition of mutual interests
Proactive (with some reactive elements) and mature Divisional and local joint bodies to develop awareness of business plan and objectives HR policy supports business objectives and partnership Union involve ment in working through challenges Recogn ition of mutual interests
Reactive and weak Much infor mation and consul tation in some parts of business but individua lisation in other parts Union not involved at all in strategy Union used to manage down sizing Issues owned by manage ment
Very little; disinte grating Insuff icient sharing of infor mation and consult ation, especially re redund ancies and plant closures Union has no confidence in business strategy
their efforts to promote partnership. We distinguish between partnerships which, on the one hand, are ‘proactive’ and ‘mature’, and those on the other which are ‘reactive’ and ‘weak’ or ‘disintegrating’. These characterisations are based on the parties’ own reported perceptions of the partnership arrangements in which they were involved. Proactive partnerships are those in which the union’s role is broadly conceived in terms of the promotion of a high-trust culture based on functional flexibility, with management, in turn, providing the conditions for employees to make the necessary investments in human
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capital. In reactive partnerships, by comparison, the union’s role tends to be confined to dealing with the immediate consequences of restructuring in terms of large-scale redundancies, while management makes a minimal commitment to employment security. Similarly, mature or enduring partnerships are those which survive moments of crisis caused by external pressures and in which both sides are willing to make relation-specific investments which are put at risk if the company faces the prospect of competitive failure. By contrast, weak or disintegrating partnerships are those in which the parties are more concerned with taking steps to minimise their exposure in the event of corporate failure than engaging in a strategy of aiming for mutual gains from cooperation. As a result, external shocks tend to lead to the breakdown of partnership. Does ownership matter? Dispersed versus concentrated, AngloAmerican versus European share ownership The case studies offer some evidence that dispersed share ownership may not easily be compatible with sustainable partnership. One of the case study companies, Tenswell, is a heavy-industry manufacturer producing for highly competitive, international markets. In 1998, its chairman said: ‘[o]ur business is about profits and shareholder value. If it’s jobs before shareholder interests, the answer is no…it simply prolongs the agony.’ In 1999, the company merged with a continental European competitor. The new company had its shares listed on the London and New York stock exchanges. Within a few months, as deteriorating trading conditions led to a fall in profits, the company’s senior executive managers resigned and the former chairman took over as chief executive with a stated aim of restoring shareholder value. In February 2001, the company announced a major restructuring programme with the loss of 6,000 jobs. There was no prior consultation with employee representatives. On the day of the restructuring announcement, the company’s share price increased by 11 per cent. Trade union officials were critical of US institutional investors who, it was felt, had placed pressure on the company to take a short-term view of shareholder value, and who were distant from the implications for workers and communities of large-scale closures. Despite a long tradition and active recent history of close management-union cooperation within the UK company the unions perceived the radical downsizing as a breach of trust, revealing the partnership to be merely ‘reactive’ and perhaps even non-existent. This case can be characterised as an example of shareholder rent-seeking at the direct expense of non-shareholder constituencies (see Deakin et al. 2003). However, a contrasting case is that of Cleanwell UK, a wholly owned subsidiary of a continental European company (Cleanwell International). Prior to 2000, approximately half of voting shares were controlled by five main holdings, two of these being continental European public sector pension funds and one a continental European bank. Cleanwell International shares were primarily listed on a continental European stock exchange, with a secondary listing on the London Stock Exchange. The recognised union at Cleanwell UK felt that the continental European model was an ‘important influence’ on the company’s approach to HR strategy and union relations. Under this model, the corporate group’s focus was on the creation of shareholder value; and its business objective was to double turnover, operating profit and earnings per share by 2005. However, the group was made an explicit commitment to growing the business over the
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longer-term. According to its 2000 Annual Report, Cleanwell International ‘believes that management, employees and shareholders share common long-term interests’. In 2000, Cleanwell International’s chief executive said, ‘we do not believe in “management by quarter”, with big dividends, fragmentation of the business with a view to short term profit’. The company was not paying a dividend to shareholders, preferring to fund further investment. According to Cleanwell UK’s Finance Director, the pressure from shareholders and bankers was to demonstrate ‘credibility of management’, by delivering what management had promised. In 2000, Cleanwell International’s corporate governance environment changed significantly as Cleanwell increased its issued share capital by 5.1 per cent to fund acquisitions, and merged the voting and capital shares into a single class. As a result, its shareholder base became much more dispersed, with only one pension scheme holding more than 5 per cent of the share capital. The geographical distribution of shares also shifted: 30 per cent of investors were now based in continental Europe, while 56 per cent were based in either the UK or US. Despite this change in share ownership, there was still strong evidence of Cleanwell’s commitment to partnership with its employees. In 2000, the Group launched a new human resource strategy as ‘a core element’ of the Group’s business strategy, and set up a corporate HR function ‘to strengthen its employee development efforts’. According to the UK Finance Director, changing share ownership was not a negative factor for partnership because ‘new investors know what they are buying into’. Yet other cases suggest that mature, ‘proactive’ partnership can be developed and maintained within the UK corporate governance environment. This is indicated by the experience of two utility companies, Warmwell and Hearwell. Warmwell’s personnel director told us: we have excellent relations with our trade unions. We sit at the table with them at the national and the local level. We…recognise the value of a legitimate role for the trade unions. Why fight? Why go back to the seventies? If there is a problem, we share the problem and the solution. At Hearwell, too, the union described a mature partnership, explaining that evidence could be found in the fact that over a two-year period, the company and union had negotiated a complete overhaul of the system of grading structures, pay and conditions. In the opinion of the union official we interviewed, the result was a win-win situation: the company achieved greater flexibility and employees achieved better pay and a reduced working week. Hearwell’s personnel director commented in 1999: ‘I hesitate to call it a partnership, although to some extent that’s what it has become’. Yet both companies have highly dispersed share ownership and continually stress the importance of delivering value to shareholders. In recent years, both companies have also pursued strategies designed to pay high dividends relative to earnings. According to Hearwell’s director of strategy, shareholders are the company’s ‘most important’ stakeholder group. Nevertheless, both companies emphasise long-term shareholder value and devote considerable effort to managing shareholder expectations. Warmwell’s 1999 Annual Report talks of a ‘long-term strategy of concentrating on…shareholder value’ (emphasis added). Warmwell’s personnel director told us that:
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we spend a lot of time trying to educate the stock market on what we’re about...the institutions are seeing us in a better light… All of our strategies are about building businesses. We believe that you can’t do that in the short term… In every pound that we use to acquire or to grow organically, we’re looking for a long term return. In 1999, Hearwell told us that: we have a different shareholder base to our competitors. We have a lot of pension funds and so on who are interested in long-running, continuing cash flows rather than sparky value appreciation and decline… I think the other thing is that we are quite explicit that we are a medium term stock’ (emphasis added). Recently, however, Hearwell’s share price has fallen as debts mounted following a series of acquisitions and certain investments failed to produce expected returns. The response of Hearwell’s union was significant in that it took care to avoid making the argument that the UK model of corporate governance had a negative effect on partnership. It did, however, say that the need to satisfy the financial markets could distract management from developing more long-term strategies because as share prices fall, management tends to make ‘knee jerk reactions’ and attack costs, so as to demonstrate to financial analysts that some action is being taken. The union also said that it would refuse to join in public criticism of the company. Rather, it was urging management to be less defensive in managing financial analysts and more aggressive in publicising the company’s underlying achievements. Partnership and the market for corporate control The operation of the market for corporate control is generally thought to be hostile to employee interests, particularly job security. Hostile bids nearly always lead to asset disposals and redundancies, either before or after the bid goes through (Deakin et al. 2003). However, our case studies demonstrate that a complex relationship may operate between partnership in employment relations and the takeover process. In the case of Warmwell, a key acquisition of another UK utility which took place in the mid-1990s was facilitated by its human resource management strategy. The takeover battle was bitterly fought. Warmwell’s initial offer was almost 40 per cent over the then market price. The rationale of its bid was that the target was currently a ‘high cost, high tariff’ utility, which could be run more effectively in future thanks to Warmwell’s superior ‘expertise in best practice and cost control programmes’. The target responded in a manner typical of companies faced with an unwelcome bid, by attempting to demonstrate to its shareholders that it could return sufficient value to them in the short term to retain their loyalty. In effect, this is an effort to counter the bidder’s offer of short-term gain (in the form of the premium over the pre-bid market price of the target’s shares) with one of its own. Here, it took the form of a promise to return cash to the shareholders, which would be generated in large part by a redundancy exercise aimed at cutting costs. Thus halfway through the bid process, the target announced that it would be cutting 17 per cent
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of its workforce in the then financial year, a figure equivalent to over 500 jobs, 200 or so more than had previously been expected. In the event it went even further, dismissing nearly 1,000 workers while the bid was in progress, including 500 in one day. However, this did not prevent the vast majority of its shareholders accepting the offer tabled by Warmwell, which duly took control. Warmwell’s HRM strategy was the key to its bid: [we] use our trade unions…to talk with the local unions and say ‘we know you don’t like the idea of being taken over. We don’t like the idea of you being taken over. But if you’re going to be taken over, it’s better that it’s these guys because they know what they’re going to do and they’ll treat you firmly but very fairly’. Hence, the hostile takeover was used to import the partnership philosophy into an organisation that was previously opposed to the concept. After Warmwell completed its acquisition, it reintroduced union recognition arrangements that the previous management had removed following privatisation, and then engaged on a major programme of investment in retraining. In this case, a hostile takeover led to a union-unfriendly employer being replaced by one which was considerably more receptive to union involvement. Whether Warmwell would have made redundancies on the same scale as the target, had they not been made prior to the bid going through, is unclear. However, the case suggests that, contrary to the received view, hostile takeovers may select for stakeholder-orientated firms. This particular aspect of the UK corporate governance system may therefore work in favour of, and not against, a partnership agenda. However, the vital point is that for partnership to emerge, corporate governance rules must work in conjunction with regulation to create a favourable market environment. Regulation can serve as a complement to corporate governance through its influence on the relative position of stakeholder groups within the hierarchy of interests. The role of regulation in lengthening time horizons Health and safety regulations, for example, can support the relative position of employees in the hierarchy of stakeholders. This is evident in the case of Fixwell, an electrical contracting firm operating in an industry where health and safety legislation is strong and there are significant reputational and legal liability costs associated with failure to comply with statutory norms. According to Fixwell’s personnel director, customers are prepared to pay a premium because ‘the cost of getting health and safety wrong is higher than the premium they pay to Fixwell for getting it right’. He welcomed more stringent health and safety regulation as a way of ‘levelling up’ the playing field. A further example of regulations which buttress the relative position of employees concerns the Private Finance Initiative (PFI), a procedure by which private capital is made available for long-scale public infrastructure projects. With the objective of ensuring a high quality standard of service, PFI regulations in the National Health Service sector require evaluation of the employment-relations records of firms who bid for contracts; they also entitle trade unions to interview and submit a report on short-listed bidders. According to the guidelines, the underlying logic is that companies with poor
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labour relations and inadequate investment in staff often deliver a poor standard of service. We found strong evidence of the supportive role of PFI regulation in the NHS in the case of Clean-well UK, which has been particularly successful in this area. Cleanwell UK held ten contracts with an annual turnover of over £30 million. As a result of the relative success of Cleanwell UK’s partnership approach in this environment, more and more firms in the NHS PFI market were building partnership into their relations with employees. It is important to note that employers’ support for the terms of PFI regulations in the NHS had an influence on the content of regulation. According to Clean-well UK’s union, ‘if the NHS contractor employers had opposed the idea of trade unions being on selection panels…it might not have gone through’. Utility regulation provides another example. Although it gives precedence to customers and the community interest in the environment, rather than to employees, by regulating quality standards it can underpin a partnership approach. The imposition of guaranteed customer service standards by the regulators serves as a significant support mechanism for partnership because it means that while there are pressures to cut costs, there is a limit to how far these can be permitted to undermine standards of customer service. Hearwell’s trade union told us that high guaranteed standards of customer service provide an effective bargaining tool in negotiations over cost cutting: [t]he vulnerable area is customer relationships and if those are disrupted, then there are various means through the regulator and other bodies that they will be brought to account. So that’s advantageous to us. Utility regulation can also extend time horizons by tempering the expectations of capital providers and extending operating parameters. By allowing for capital providers ‘a return that is sufficient, but no more than sufficient’ (in the words of a union interviewee), these regulations facilitate a longer-term view that is conducive to partnership. Regulators make assessments for costs of debt, costs of equity and dividend yields in their price determinations. They also set operating parameters for periods of up to five years. At the same time, regulators’ assessments of returns on capital are indicative and not prescriptive; regulators determine the level of prices but leave it to companies to manage their level of profits. As a result, this form of regulation still provides only a very weak support mechanism for partnership in itself; it is open to companies operating under this regime to decide whether or not to opt for a proactive approach to partnership. The stress on customer service in utility regulation is particularly important in encouraging active partnership in conjunction with the operation of the takeover mechanism. Warmwell’s bid for another UK utility company, considered above, was assisted by the publication by the regulator of information relating to levels of customer service and organisational costs in companies which had recently been privatised. On this basis, Warmwell was able to benchmark its own performance against industry standards and identify a suitable target for acquisition. As an interviewee put it to us: The skills that we built through benchmarking were just the same ones that we needed to evaluate potential acquisitions… We looked at [the target] and said we know what it can do: its costs per customer, per kilometre of line, its fault rates and so on were all in the public domain
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from the regulatory process. We knew the international benchmarking levels possible from looking at…other leading companies. We could say—if that company was under our control, this is what it would be worth to us. We then looked at what we would have to pay for it. Thus the information generated by regulatory process was used by the company to exploit what it considered to be its comparative advantage in being better able than the takeover target to meet high standards of service. In Tenswell, by contrast, over 80 per cent of the workforce was engaged in the production of a product where markets were highly volatile and price sensitive and there was substantial global over-supply. Regulation had been aimed at increasing the intensity of national competition through the removal of barriers to trade, and the market was more or less unregulated in terms of price and quality standards. It was these conditions which imposed on the company the short time horizon under which its management felt it had little choice but to ‘return’ value to shareholders by way of plant closures. The response of the investment community One important feature that distinguishes corporate ownership in the UK from the US is the relatively high level of institutional investor ownership of shares in the UK. As of early 1999, about 70 per cent of listed UK equities were held by institutional investors (see Stapledon 1999). There is evidence not only that the influence of institutional investor activism on corporate governance practices is growing, but that it is incentivising managers to pursue competitive strategies in a more stakeholder-friendly way with the aim of promoting long-term shareholder value. The regulatory framework again has a role to play. One of the key corporate governance reports of the 1990s, the Turnbull report, emphasised internal audit as a means of managing corporate risks (ICAEW 1999). This view was based on the premise that corporate compliance with a variety of external regulatory controls and liability regimes was ultimately linked to the maintenance of shareholder value. In similar vein, a key part of the agenda for law reform laid out by the DTI’s Company Law Review which was completed in 2002 was the generation of reporting and accounting processes which would enable investors to make an informed decision on the capacity of companies to deal effectively with stakeholder issues. The Company Law Review’s recommendation for greater disclosure by companies of information relating to issues of social and environmental responsibility, through the proposed operating and financial review (Company Law Review 2000:180–93; 2001:49– 54), aimed to enable shareholders and other stakeholders to make better informed judgements on non-financial aspects of corporate performance. In turn, investors were being encouraged in a variety of ways to place greater weight on voice and less on exit in their relations with companies. Legislation passed in 1999 and coming into force in 2001 that required pension funds to treat their right to vote on company resolutions as a fiduciary asset, and thus to publicise and in some circumstances justify their voting record,1 was a part of this process, as were related recommendations of the Myners (2001) report on institutional investment. In these different ways, corporate governance policy at the end of the 1990s was running strongly in the direction of an effort to equate the shareholder interest with that of society as a whole.
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Traditionally, UK institutional investors have not engaged actively with the companies whose shares they held. The normal pattern has been for investors to sell up as the principal response to poor managerial performance (with periodic hostile takeover bids providing opportunities to reap the occasional substantial premium over the regular market price) and to intervene selectively at ‘crisis points’ when, for example, a company needs to go to the market to raise fresh capital, or where informal dealings take place with management ‘behind the scenes’ (Black and Coffee 1994). The leading example of a new-style activist fund which engages more proactively with companies is Hermes Investment Management Ltd. Hermes is currently one of the largest pension fund managers in Britain, controlling on behalf of its clients approximately 1.2 per cent of all the shares on the FTSE All Share Index. It is one of the few large pension fund managers that is not owned by a bank or large financial institution; rather, it is owned by, and is the principal fund manager for, the UK’s largest pension scheme, that of British Telecommunications plc. It also manages pension scheme portfolios for the Post Office and a number of other major corporate and public employers. This independence is said to allow Hermes to avoid a range of potential conflicts of interest which affect investment funds which are part of wider banking groups. Hermes is the first major investment institution in the world to have established an activist investment fund, Hermes’ UK Focus Fund. This fund invests in companies that are poorly performing but fundamentally sound with the aim of improving performance and delivering long-term shareholder value through better management and corporate governance. In this process, a team of specialist professionals liaise closely with fund managers to monitor company direction and performance. Whereas, as we have seen, institutional investors typically do not become involved in the direction of the companies in which they invest, Hermes’ fundamental belief is that companies with concerned and involved shareholders are more likely to achieve superior long-term returns than those without. As a result, Hermes actively involves itself in working together with managers and directors in all companies in which it invests to ensure that long-term shareholder interests are prioritised. In its Statement of UK Corporate Governance and Voting Policy 2001, Hermes supports a framework for corporate governance in which directors of public companies and shareholders as owners can together work to maximise long-term shareholder value. In this context, although Hermes itself uses the language of enlightened or long-term shareholder value, its conviction that ‘a company run in the long-term interests of its shareholders will need to manage effectively relationships with its employees, suppliers and customers’ is compatible with the attempts of some of our case study organisations to appeal to longterm investors. While it remains to be seen how far the Hermes example is followed in the future, it arguably represents a new stage in the evolution of shareholder ownership and in relations between corporate management and institutional shareholders.
Conclusions Overall, the case studies suggest that corporate governance structures play an important role in shaping partnership, but only in conjunction with regulatory factors. Regulation of product and service quality, of the kind observed in most utility sectors and in certain
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others, favours the emergence of stable partnerships. This is because, in these markets, profitability is linked to the ability of companies to maintain a high and consistent quality of service for end users. As a result, companies are better able to convince shareholders to take the view that they will reap significant returns over the long term from a stakeholder approach. In the absence of these stabilising factors, however, goodwill between labour and management is not enough to sustain a partnership approach when it conflicts with shareholder interests. Then, the pressure to meet shareholder value over the short term tends to prevail. By focusing the attention of managers on maintaining shareholder value, the current corporate governance system in Britain threatens to destabilise labour-management partnerships which would otherwise be sustainable. The ability of managers to persuade investors to accept an ‘enlightened shareholder approach’ depends to a large degree on external market and regulatory conditions. Even in sectors where conditions are favourable to partnership, sudden changes in the market and regulatory environment may induce managers to resort to downsizing in order to restore what is understood to be ‘investor confidence’. Thus labour-management partnerships, while a significant development, are also highly vulnerable to external shocks which can see a return to managerial strategies based on labour shedding. Nevertheless, new forms of investment practice are emerging which involve innovative attempts to factor stakeholder issues into the assessment of corporate performance. Where long-term partnership strategies are value-creating, they will be in the interests of shareholders as well as other stakeholders. Coordination by investment institutions to foster a long-term time horizon on the part of corporate management may yet prove to be the most effective mechanism for sustaining partnership at work.
Note 1 The Occupational Pension Schemes (Investment and Assignment, Forfeiture, Bankruptcy, etc.) Amendment Regulations, SI 1999/1849, reg. 2(4), amending SI 1996/3127.
References Berglöf, E. (1997) ‘A note on the typology of financial systems’, in Hopt, K. and Wymeersch, E. (eds) Comparative Corporate Governance: Essays and Materials. Berlin: Walter de Gruyter. Black, B. and Coffee, C. (1994) ‘Hail Britannia? Institutional investor behavior under limited regulation’, Michigan Law Review, 92:1997–2087. Blair, M. (1995) Ownership and Control: Rethinking Corporate Governance for the Twenty-First Century. Washington, DC: Brookings Institution. Blair, T. (1999) Speech to TUC Partnership Conference, May. Company Law Review Steering Committee (1999) Modern Company Law for a Competitive Economy: The Strategic Framework. London: DTI. Company Law Review Steering Committee (2000) Modern Company Law for a Competitive Economy: Developing the Framework. London: DTI. Company Law Review Steering Committee (2001) Modern Company Law for a Competitive Economy: Final Report Volume 1. London: DTI. Deakin, S. and Morris, G. (2001) Labour Law, 3rd edn. London: Butterworths.
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Deakin, S. and Slinger, G. (1997) ‘Hostile takeovers, corporate law and the theory of the firm’, Journal of Law and Society, 24:124–150. Deakin, S., Hobbs, R., Konzelmann, S. and Wilkinson, F. (2002) ‘Partnership, ownership and control: the impact of corporate governance on employment relations’, Employee Relations, 24:335–352. Deakin, S., Hobbs, R., Nash, D. and Slinger, G. (2003) ‘Implicit contracts, takeovers and corporate governance: in the shadow of the City Code’, in Campbell, D., Collins, H. and Wightman, J. (eds) Implicit Dimensions of Contract (Oxford: Hart). DTI (1998) Fairness at Work, Cmnd. 3968. London: TSO. Franks, J. and Mayer, C. (1998) ‘Ownership and control in Europe’, in Newman, P. (ed.) The New Palgrave Dictionary of Economics and the Law, Vol. II. London: Macmillan. Guest, D. (2001) ‘Human resource management: when research confronts theory’, International Journal of Human Resource Management, 12:1092–1106. ICAEW (1999) Internal Control. Guidance for Directors on the Combined Code. London: Institute for Chartered Accountants in England and Wales. Kochan, T. and Rubinstein, S. (2000) ‘Towards a stakeholder theory of the firm: the Saturn partnership’, Organisation Science, 11:367–386. McCarthy, W. (2000) ‘Representative consultations with specified employees—or the future of rung two’, in Collins, H., Davies, P. and Rideout R. (eds) Legal Regulation of Employment Relations. Deventer: Kluwer. Michie, J. and Oughton, C. (2002) ‘Employee participation and ownership rights’, Journal of Corporate Law Studies, 2:139–154. Myners, P. (2001) Institutional Investment in the United Kingdom: A Review. London: HM Treasury. Oxenbridge, S., Brown, W., Deakin, S. and Pratten, C. (2001) ‘Collective representation and the impact of law: initial responses to the Employment Relations Act 1999’, Centre for Business Research Working Paper No. 206, University of Cambridge. Rubinstein, S. and Kochan, T. (2001) Learning from Saturn. Ithaca, NY: Cornell UP. Schuler, R. and Jackson, S. (1987) ‘Linking competitive strategies with human resource management practices’, Academy of Management Executive, 1:207–219. Slinger, G. and Deakin, S. (2000) ‘Company law: an instrument for inclusion—regulating stakeholder relations in takeover situations’, in Stewart, A. and Askonas, P. (eds) Social Inclusion: Possibilities and Tensions. London: Macmillan. Stapledon, G. (1999) ‘Analysis and data of share ownership and control in the UK’, paper prepared for DTI Company Law Review, available at http://www.dti.gov.uk/. Terry, M. (1999) ‘Systems of collective employee representation in non-union firms in the UK’, Industrial Relations Journal, 30:16–30. Wilkinson, F. (2000) ‘Cooperation, the organization of work, and competitiveness’, in Clarke, L., de Gijsel, P. and Janssen, J. (eds) The Dynamics of Wage Relations in the New Europe. Deventer: Kluwer. Wood, S. (2000) ‘From voluntarism to partnership: a Third Way overview of the public policy debate in British industrial relations’, in Collins, H., Davies, P. and Rideout R. (eds) Legal Regulation of Employment Relations. Deventer: Kluwer.
5 Developing partnership relationships A case of leveraging power1 Sarah Oxenbridge and William Brown
Introduction There has been much talk of partnership in practitioner, policy and academic circles in recent years. Workplace partnership has been encouraged by both Government funding and ACAS guidance (ACAS 2001). Analysis of this development has tended to concentrate on whether partnership agreements offer a means for trade union renewal, or whether they threaten to undermine trade union independence in the workplace. In this chapter we eschew this polarised debate by analysing a variety of partnership relationships developing between employers and trade unions and the implications for each of the actors party to them. The contrasting views in the current debate can be set out simply. On the one hand there is the view that considers partnership to be a lifeline for beleaguered trade unions. For example, Ackers and Payne believe that partnership ‘provides an opportunity for British unions to return from political and economic exile’ (1998:546). In contrast to this position, Martínez Lucio and Stuart (2000) and Kelly (1998) warn that partnership agreements may serve to undermine workplace unionism and weaken the union movement as a whole. These writers, and others, point to evidence demonstrating that partnership may result in concession-bargaining, a narrowing of the bargaining agenda, and the introduction of new (often non-union) consultative committees that displace or weaken collective bargaining (Marks et al. 1998; Bacon and Storey 2000; Martínez Lucio and Stuart 2000). Most studies are agreed in linking partnership with organisational change initiatives (Marks et al. 1998; Bacon and Storey 2000; Martínez Lucio and Stuart 2000). And in many partnership companies, change programmes involve the adoption of Employee Involvement (EI) or high commitment Human Resource Management (HRM) practices. This has caused some commentators to claim that partnership is simply HRM or EI in another guise. Indeed, the two concepts seem analogous when considering Legge’s (1995:283) description of ‘soft’ HRM’s assumption of mutuality of the reciprocal interests between employer and employee in their survival against the competition. Moreover, writing about the Amalgamated Engineering and Electrical Union (AEEU), Legge (1995:277–8) notes that its stance on partnership with management is perfectly compatible with ‘soft’ HRM policies such as those developed on foreign owned greenfield sites. Taylor and Ramsay (1998:117) also believe that similarities between HRM and partnership are evident in terms of the core goals of ‘attainment of competitive advantage, and in prioritising employee involvement and communication techniques to
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engender commitment’, as well as ‘the common underlying philosophy of shared objectives and interests between employers and employees’. Ackers and Payne hold that a key reason for the growing business interest in partnership is that management attempts to bypass unions by involving employees directly have met limited success. ‘As a result’, they write, ‘some employers now court union support to make EI work’ (1998:531). Martínez Lucio and Stuart also argue that, because a new high trust, involvement driven HR system has not emerged, unions are now becoming involved in implementing similar flexible working methods such as teamworking and problem-solving groups. Of interest, however, is research by Guest and Peccei (2001) and Marks et al. (1998) that shows that the success of partnership arrangements, and of workplace reform efforts within partnership organisations, derives from the use of a broad range of HR practices. The growth in partnership agreements has also been accompanied by a growth in studies evaluating whether partnership delivers mutual, or uneven, benefits to employers, unions and employees. Most research of this type concludes that the benefits flow mainly to management (Kelly 2001). Guest and Peccei (2001:231), in a study of 54 partnership companies concluded that ‘…mutuality may be somewhat unbalanced… In many cases management would appear to be gaining more from the practice of partnership’. And Martínez Lucio and Stuart (2000:21) also suggest that ‘the balance of evidence to date seems to be tipped more in favour of a continuation of shrewd bargaining, rather than a genuine partnership at work’. Unsurprisingly, however, publications produced by the Trades Union Congress (TUC) and the Involvement and Participation Association (IPA) highlight the many benefits of partnership flowing to all stakeholders. The TUC (2002) for example cites enhanced productivity and profitability, lower turnover and absenteeism, and more secure and fulfilling jobs as positive outcomes of partnerships. These published studies of partnership focus on formalised partnership agreements. The subject matter of this chapter differs from them in that it examines a range of cooperative union-employer relationships. Some do involve formalised agreements, while some are essentially partnership agreements under different names. Others are less formal and are described by employers as ‘partnership relationships’. Our study is based on data collected during 1999 and 2000 as part of the Cambridge ESRC ‘Future of Collectivism’ research project. It draws on interviews with senior HR and personnel staff in 11 companies which, when interviewed, had formal partnership agreements, informal partnership relationships, or were planning to negotiate formal partnership agreements in the near future. These 11 cases emerged from the project’s 60 case studies, which had been selected to shed light on changing responses to trade union recognition in anticipation of the 1999 Employment Relations Act. Our cases thus come from a non-random, but carefully structured sample. Data from interviews with 31 senior leaders and full-time officials from ten trade unions and the TUC are used to supplement these case study data. Four of these interviews with union officials discussed partnership arrangements in three of the service sector case study firms examined. The remainder of the interviews with officials did not focus on the specific features of arrangements, but covered their experience of changing employment relationships, including partnerships, more generally. The 11 case studies spanned a range of industry sectors. They included two outsourcing companies which had negotiated national-level agreements with trade unions
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after winning public sector contracts; a temporary employment agency; the service divisions of two retail electrical and office equipment supply firms; a financial services company; three printing companies; and two machinery manufacturing firms. Four of these cases had what managers described as informal partnership relationships with trade unions, and another four had formal written agreements of varying titles. Four (including one of these) anticipated that partnership agreements would be finalised in the near future.2 The diversity of partnership relationships evident in our case study firms, from formal partnership agreements to informal partnership relationships, can be characterised by a ‘continuum’ of union involvement in the workplace. At one end were informal partnership relationships evident in production sector firms, where union power derived from strong unionisation and active workplace representation. At the other was the highly contained trade union activity of the service sector firms in which managers had developed formal agreements. In the case study organisations we examined, unions had greater rights when they had informal relationships backed up with high levels of workforce unionisation. We shall explore these different models of partnership in four parts. The first explores the factors underlying the formation of partnership arrangements and assesses employer motives for seeking partnership relations. The second section reports management and trade union officials’ views on the benefits and drawbacks of cooperative relationships. The third focuses on the strategies used by managers to shape partnership arrangements and constrain union involvement. Fourth, we describe features of the two types or faces of partnership arrangements evident in the case study firms. The chapter concludes with a discussion of whether the two faces or types of partnership relationships are likely to become established in the longer term, or whether they are temporary, transitional and isolated.
Antecedents and motives The development of cooperative union/employer relationships in the majority of the firms studied was associated with several critical circumstances. First, a long-standing relationship between the parties was a factor in seven of the 11 firms studied and was most common among production sector firms, although managers from temporary employment and outsourcing companies described having worked with unions towards partnership over a period of many years. Union officials also agreed that partnerships tend to emerge from ‘mature’ employer—trade union relationships. A second factor common to most firms studied was the appointment of new senior, HR or personnel management, or, in some establishments, new owners, who were disposed towards partnership. In most cases, these new managers had worked in unionised industries in the past and had extensive experience in dealing with unions. The appointment of new HR staff usually coincided with a ‘culture shift’ which in most cases occurred in response to competitive crises in which organisational survival was threatened, redundancies were necessary, and workforce morale had collapsed. In four firms, new managers were hired specifically to turn companies around during or after the crisis period by introducing new work systems. However, in four additional firms, senior
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managers had adopted a new partnership ‘philosophy’ which had not emerged out of crisis circumstances, and in these firms new managers were brought in to institutionalise this new mode of working. A third, related factor, was new or existing managers’ belief that union involvement was vital in the implementation of organisational change programmes. These three sets of antecedent variables—organisational crisis, a change of management, and managers seeking union involvement in organisational change—coincided in four of the 11 firms studied. These four printing and machinery manufacturing firms had long-standing relationships with trade unions—some good, some adversarial—and all had encountered competitive or financial difficulties at various times during the 1980s and 1990s. Managers stated variously that the management style within these firms became more consultative, and that management worked hard at building trust and ‘getting union officials to understand the business’. As a manager from a printing company explained: If you look back at the early ’90s, Thatcher was killing the unions off basically. I think there was a bit of a change in the union themselves, there was personality changes here, there was the need to change because computerisation was starting to explode. We had to do something because otherwise survival might not have been on the cards. In the two machinery manufacturing firms, managers described how a change of senior management resulted in the organisational climate changing from one of adversarial relations to one of trust, or partnership. In one case this shift was necessary for company survival as the early 1990s recession hit hard and new competitors began to dominate the market. The company came close to closing and had a change of Board, CEO and financial director, who ‘turned it around’. In the other, most of the company’s sites were closed down in the early 1990s, with the exception of the case study site. However, employee morale remained low in this factory, with mistrust of management high due to repeated changes of management and successive phases of short-time working. The company was put up for sale and bought out by the management team, who once again initiated a change of culture on the site and developed a closer relationship with trade unions. Similarly, managers in another four mainly service sector firms had developed or were planning to develop partnership arrangements because they perceived that union involvement in organisational change, usually stemming from mergers or restructuring of operations, was beneficial and necessary. An HR manager in one of these firms, for example, had recently re-recognised one union in order to prevent another more confrontational union from seeking recognition under the ERA. The company had derecognised the latter union after a work-to-rule and threatened strike action, but the union had retained members in the company. This manager was extremely candid about her proposed strategy of making changes through a third party, the newly re-recognised union. She explained her rationale for seeking a partnership relationship: …we felt with all the changes that had happened, and with the history (the company) has of treating some of its employees not particularly well, (…) that if we said that we were not going to have any sort of union
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representation, that would actually promote it, and we would end up with the wrong union. And my view was, especially with the Fairness legislation coming in, that we were better going with a union that we could agree on a partnership deal with and work with, rather than being forced into an agreement that we didn’t want. And also with all the changes that we knew were going to happen (…) one of the things that has to be looked at is harmonisation. If you’re going to go through something like that, it’s much better if we could do it with an outside body. (…) That was one of the reasons we wanted to have an external union, because we didn’t think people would trust the company. Because of all the changes there had been and the changes there would be, we wanted to do it through somebody else. Of the 11 cases studied, this was the only company in which the Employment Relations Act (ERA) 1999 had acted as the impetus for the formation of a partnership relationship, albeit in conjunction with other factors. However, interviews with union officials indicated that it was acting as a stimulus for partnership in the broader economy, and had provided them with the incentive to approach greater numbers of employers for partnership agreements. A fourth set of factors was evident in one printing firm in which the personnel manager, when asked if the company had a partnership relationship with the union, thought about it and replied, ‘I suppose it could be’. A co-operative union/employer relationship resulted from a tradition of strong shopfloor unionisation and organisation (in the form of an active chapel system), union negotiation of pay and conditions, and a long and mostly amicable working relationship between union representatives and the personnel manager (a former Father of the Chapel). The relationship had not been developed as a result of aforementioned factors, such as the need to gain union assistance in organisational change. In fact the only major change to the way work had been organised in this firm in the last five years had been the introduction of a night shift, which the union chapel had resisted, and which had taken managers 13 months to negotiate. Despite this, the personnel manager believed that on the whole, the union facilitated rather than restricted change within the firm. In the main, the service sector companies studied had entered into or were planning to negotiate formal agreements with unions as a consequence of expansion into new markets. This involved the absorption of unionised groups into private sector companies as a result of outsourcing in the public sector, mergers and acquisitions, or expansion of the temporary workforce in unionised sectors. In the large outsourcing companies, HR managers with experience of dealing with unions were specifically recruited into roles that involved dealing with trade unions ‘inherited’ on winning contracts. Managers in these organisations perceived that union/employer relationships were a fact of life if the company wanted to enter new markets, win contracts, and build market share. In contrast, the production sector firms had long-standing, sometimes adversarial relationships with unions, but in most cases these had become partnership relationships as a result of some sort of critical incident, usually financial crisis stemming from competitive difficulties. However, one antecedent factor common to firms in both sectors
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was management’s willingness to involve trade unions in implementing far-reaching, often difficult, organisational changes.
Net benefits to the parties Unsurprisingly, therefore, most managers said that a leading benefit of cooperative relationships was that of union assistance in managing organi-sational change. They specified consultation, redundancy, and redeployment processes, and, to a lesser degree, the role of union officials in selling or legitimising change programmes. In service sector companies unions were involved in harmonising disparate terms and conditions resulting from successive mergers, acquisitions or tendering processes. More generally, they facilitated the implementation of flexible working arrangements such as multi-tasking and team-working structures, and changes to shift and payment systems, including the introduction of individualised payment schemes. There was also a general view that union involvement in communication, pay-setting and consultation processes more broadly led to greater effectiveness and less management effort, as the union acted as a channel for representation of many employees. However, while employers agreed almost unanimously that their ‘partners’ assisted them in implementing change, there was some evidence of unions also restricting or ‘slowing’ change. They gave examples of trade unions resisting, and provoking opposition to, management attempts to: restructure working hours, enhance flexibility, change working practices, and shift from collective bargaining to performance-related pay systems. In production sector firms, unions had helped managers to recruit skilled employees, establish ‘pools’ of temporary workers, and develop training and health and safety programmes and procedures. And in the case of two outsourcing and temporary employment companies, unions also recommended or ‘promoted’ these companies to employers when they were bidding for contracts, and thus assisted them in increasing their market share. Indeed, managers from the outsourcing and temporary labour supply companies stated that, when bidding for new contracts in unionised sectors, they positioned themselves as ‘union-friendly’ employers on the basis of their relationships with these unions. This approach, it might be assumed, was particularly advantageous when tendering for contracts in Labour-dominated local authorities, or where trade union officials were involved in panels which vetted bids for contracts. A senior official in a trade union with which one of these companies had a relationship acknowledged, however, that the company had instigated the relationship purely for instrumental reasons, stating: It’s not that a lot of these organisations are necessarily union-friendly, but the only way they get in the door of a lot of companies is if they can say they’ve got an arrangement and the backing of a union. We’ve always got on very well with (the company) but you have to recognise that there’s reasons for the relationships. All our trade union interviewees were unanimously in favour of partnership or informal partnership-type arrangements, both of which were common among the surveyed unions.
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However, some officials placed a caveat on their approval for partnerships, stating that they only supported robust partnerships, from which both parties benefited. They held strong views about what did and did not constitute partnership. Several referred to ‘real’, ‘genuine’ and ‘true’ partnerships, while another described features of ‘false’ partnerships (see also Wray, this volume). Some felt that the interests of both parties—the union and employers—were fundamentally different, and thus conflict may emerge. Quotes from officials encapsulate these views (emphasis added): (…) we only want to go for real agreements. And our perspective is that most of the time, you don’t get real agreements unless the employer knows that you’re prepared to have a row with them somewhere down the line. And that’s how you get the best partnership, we argue, the real workable genuine partnership (…) the employer needs to be aware that you’re not going away. If you don’t get an agreement you’re going to be there anyway, and there’s other ways we can deal with representation, fortunately. Any company that wants to work with us on the partnership front, we’re prepared to work with them, no problem about that at all. What we don’t like is this false partnership, and there’s two sides to that. There’s employers who say ‘We want partnership, providing it’s everything from our point of view’ (…), who want partnership when it suits. (…) But when they want to close down a factory at a week’s notice, there’s no consultation. Secondly, there’s the most insidious type; trade unions who reach an agreement with an employer that provides for partnership (…) but have got no members. (…) Where a company wishes to change, and has got real problems (…) then we’ll work with them, providing it cuts both ways. (…) genuine partnership is where there’s genuine consultation between both sides, where both sides’ views are respected and listened to, and where we reach joint solutions. Indeed, among officials there was a general lack of clarity surrounding partnership and what it constituted. Some felt that partnership may involve the use of confrontational tactics on the part of unions, while others explicitly ruled out the use of such strategies. Unsurprisingly, views on partnership varied within unions, with internal debates highlighting differences of opinion. Officials said that some long-standing members were opposed to or ‘nervous’ about partnership, or, that in terms of their workplace union representatives, ‘some love it, others hated it’. Like their management counterparts, union officials described how they worked with employers to implement management of change programmes, including involvement in managing redundancy processes. They believed that the main benefits for unions of formal partnership agreements centred around employers encouraging workers to join the union, as well as better pay and conditions for workers, which also provided an incentive for workers to join. It might be expected that unions would benefit from an ability to extend recruitment and recognition into traditionally difficult to organise areas of the private sector, for example outsourcing, temporary labour supply and retail. This was true
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to a degree in certain firms in this study, as unions were permitted to recruit within sites or sectors covered by existing recognition agreements. However, they were often not allowed access to these sites or divisions of companies which did not have recognition coverage. This resulted in a situation where small ‘islands’ of unionisation existed within largely non-union service sector companies, with union officials unable to broaden their membership reach. But while they had only limited opportunities to extend membership into new areas within existing partnership firms, officials were sometimes able to use these agreements as a means of striking up new deals with other employers. There was general agreement among trade union officials that partnership agreements could and did flounder when companies were faced with severe competitive pressures. Guaranteed job security was often the first component of many agreements to be renegotiated—or sacrificed—in such instances, and unions found themselves playing a key role in managing redundancies. However, officials agreed that the downsizing process was made easier, with better outcomes for employees, with union involvement. This was because the parties discussed options to try and stave off redundancies, or because employers discussed redundancies with union officials well in advance of making public statements, giving them the opportunity to work through redeployment or job-sharing processes ahead of time.
Strategies of control To assess how substantial these partnership arrangements were in terms of traditional collective bargaining rights, we analysed the scope of union recognition rights, the extent of union involvement in consultation and communication structures, and employer strategies for restricting union power in the relationship. In general, union rights were greater in those companies that had informal partnership relationships than they were in those companies which had formalised partnership agreements with unions.3 The depth and breadth of trade union recognition rights were greatest in the printing and manufacturing firms where employers and unions had informal relationships. Outsourcing and temporary employment sector employers transferred recognition agreements which varied in depth and breadth, and which in most cases involved union negotiation for only a minority of employees. The remainder of firms, all in the service sector, had developed or were intending to develop partnership agreements which accorded fewer union rights or reduced union strength. Employers in the latter two groups had adopted several common strategies which enabled them to reduce union power. Two of these firms had specifically negotiated, or were planning to negotiate, partnership agreements in order to restrict union involvement in employment relations matters. Others used strategies to manage unions once an agreement or relationship had been established. These strategies included: • Negotiating new agreements, or changes to existing agreements, which explicitly limited union rights and activity in the workplace. • Refusing to deal with ‘difficult’ trade union officials, and dealing only with officials perceived to be compliant. • Taking steps to reduce union control over communication and consultative structures and increase management control of both.
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Six of our 11 case study employers adopted one or more of these strategies. They had written, formal agreements, or in the case of two firms, anticipated that agreements would be negotiated in the near future. They shared a number of characteristics. All were large, service-sector employers with employees, establishments or contracts spread throughout the UK. Managers from most of these firms met exclusively or mainly with national union officers. Most had relationships or agreements with multiple unions. The use of each of the practices listed above by these firms will be examined in the following sections. Strategies aimed at limiting union rights and curbing union power Employers used two main methods to restrict union involvement in employment relations activities which involved designing arrangements that subtly limited or downgraded the status of the union ‘partner’, or explicitly curbed union power. The first approach was obvious in the two outsourcing firms, where managers were reluctant to call their agreements ‘partnership’ agreements, and used other labels which denoted considerably less union power in the relationship, including ‘strategic relationships’ and ‘memoranda of understanding’. A manager in an outsourcing firm, when asked about the company’s partnership agreement, replied ‘It’s the use of the word “agreement” that worries us. We have “Memoranda of Understanding”.’ Interestingly, officials from two different unions that had each signed the memoranda with this company both described it as a nationallevel recognition agreement, while company management did not. Both officials admitted that their unions were in a relatively powerless position vis-à-vis the company, because the limited scope of this agreement/memoranda gave local managers considerable discretion over terms and conditions. One stated that the memoranda ‘wasn’t worth the paper it’s written on’. This was because local managers often ignored those conditions in the memoranda which were meant to be included in local recognition and procedures agreements (and which pertained to union recognition, rights of representation, training and facilities for union representatives, and procedures for avoiding and resolving disputes). Moreover, the union had little ability to enforce compliance with these conditions due to weak union organisation within the company. An official from the second union stated that his union had tried, but been unable to engage in national bargaining with the company, as managers ‘want everything to be dealt with on a contract-by-contract basis’. He added that officials had ‘gone along with (this), because we haven’t really got any option’. Thus, despite officials’ acknowledgement of the limited nature of the arrangement, their unions were prepared to live with such agreements, contrary to the position of those cited earlier who were only prepared to tolerate ‘genuine’ partnership. Managers in outsourcing firms employed other strategies for enhancing management control over trade unions. In one firm, they were attempting to replace collective negotiation of pay with performance-related pay, and increase management discretion over other terms and conditions. In a second company, managers adopted a strategy of refusing to use disciplinary procedures that involved successive levels of panel tribunals. Instead, they endeavoured to formulate procedures with unions which involved local union representatives dealing directly with company management, in order to resolve disputes quickly, ‘in-house’.
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Two other companies had negotiated or were negotiating agreements primarily to gain union assistance in implementing and legitimising large-scale organisational reform programmes. In both cases, managers aimed to develop agreements which clearly and concisely spelt out union rights. This reduced unions’ ability to resist change and to undertake certain activities that they had previously been able to. The first of these companies had an agreement which was probably the most detailed and formal of all the agreements or relationships in this study. Yet it was also one of the most limiting, in terms of union rights. Unions were not involved in any aspect of pay-setting and the agreement enabled managers to reduce and more stringently monitor time off for trade union activities. In the second firm, managers were planning to negotiate a partnership agreement that would no longer allow the union to exercise a right to veto changes proposed by management. An interviewee from this company stated that this new agreement would enable managers to ‘inform and consult, rather than power-share’. Bypassing and choosing union representatives Another aspect of management control over relationships centred on managers’ ability to pick and choose which trade union officials they dealt with. Managers in three firms that had encountered resistance from trade union representatives had developed strategies to deal with such obstacles. These included bypassing and refusing to deal with union officials or workplace representatives who presented a problem (usually local or regionallevel officers), and instead working with other more compliant officials (usually ‘handpicked’ national-level officials or stewards). Managers from two of these firms stated that their relationships with national officials were more positive than those with stewards and local officials, as the latter tended to resist change or generate negative publicity about the company. A manager from one outsourcing company experienced problems with local union officials who used tactics such as leaking news stories to local newspapers that cast the company in a negative light. He stated that national union officials admitted that they tried to control these local officials, but could not. In a second outsourcing company, managers preferred to deal with national officials because they took a ‘commonsense approach’ in comparison to ‘parochial’ local officials. Where they encountered obstructive regional officials, managers bypassed them with help from the national union leadership. Management control over communication Firms were divided into those where managers dominated the communication process, and those in which unions played a significant role, but where union communications ran alongside an ever-increasing number of management communication devices such as team-briefings, all-workforce meetings, management presentations, and newsletters. In most of these firms, managers sought to replace union-member communication with management-employee communication. If we examine service sector employers first, in three companies, communication with the workforce was conducted entirely through and by managers without union involvement. In the two outsourcing firms, unions dominated communication structures where there were unionised contracts. Only one (the finance company) had a
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communications structure which might be considered to be dominated by the union, where information was disseminated through many layers of paid full-time and part-time union representatives. The findings relating to the production sector firms were of interest. While two of the five firms had communication systems dominated by shop stewards (which ran alongside management-controlled communication devices such as those described above), three companies or establishments had taken active steps to reduce union involvement in communications in recent years. These were firms in which unions had broad and deep recognition rights. In two of the three, managers had decided, while transforming the company culture from one of confrontation to partnership in the early 1990s, that communication with the workforce should be controlled by management, and that employees’ loyalties should be shifted from the union and towards the company. A manager from the first of these (a printing company) explained how although stewards served as an effective vehicle for imparting information, management had nonetheless shifted the focus of communications from the union to individual employees in order to enhance their commitment to the company. Similarly, a manager from a second printing firm stated, ‘We don’t rely on the unions to disseminate information, we do it ourselves. We like the management slant on it’ In the third (machinery manufacturing) firm, a shift had taken place from managers consulting shop stewards before making changes, to all employees contributing to change processes through teamwork structures. Managers did not rely on stewards to disseminate information, and instead cascaded information down through the workforce.
The two faces of partnership A marked contrast between the partnership companies is thus revealed by our case studies. They can be divided into two broad groups. For one, partnership is characterised by the nurturing of collective bargaining; for the other it is characterised by the containment of collective bargaining. The first, ‘nurturing’ group of cases comprised small or medium-sized production sector employers which had developed informal partnership relationships, rather than formal agreements. These firms sometimes followed national agreements, but also negotiated pay and conditions with stewards, and managers met almost exclusively, and regularly, with workplace representatives. The nature of the relationship in these firms was typically informal, with a high level of unionisation and active workplace representatives. Despite the potential for disputes, which occasionally occurred, relationships were highly cooperative and had resulted from the continuation of a tradition of employer-union relations, combined with ‘critical incident’ factors, mainly threats to company survival. The second ‘containing’ group of cases were service sector employers that had negotiated, or were planning, formal agreements which accorded minimal or reduced rights to unions. These agreements often emerged as employers realised that union involvement was an inevitable consequence of company acquisitions and mergers or tendering for contracts in unionised sectors. Some developed, or were planning, tightly constrained agreements intended to gain union assistance in implementing change while
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limiting wider union influence and increasing management discretion. Common management strategies included refusal to deal with confrontational union representatives, and choosing other officials perceived as more cooperative. This produced an industrial relations (IR) environment whereby confrontation was largely defused or suppressed, in contrast to the production sector firms where outbreaks of conflict and disputes occasionally occurred. These service sector employers were incrementally moulding their union relationships and agreements to better fit their HR strategies. Indeed, many of the strategies designed to reduce union involvement and enhance employee commitment resemble those described by Storey (1992) and Legge (1995). Legge (1995:281) describes how ‘soft’ and ‘hard’ HRM methods may serve to undermine unions through cooptation, marginalisation, and in some cases, derecognition. As in Legge’s analysis and Storey’s study of the introduction of HR practices, managers in some of our case study firms actively marginalised unions and bypassed union channels in pursuit of an HRM paradigm. However, as in Storey’s study, we found that manufacturing case study companies which had ‘predominantly a legacy of well-organised workforces’ also ‘tended to adopt a “realistic” view which entailed a fairly prominent place for trade unions for some time to come’ (Storey 1992:260). And while Legge (1995:233) argues that the team leader structures evident in some manufacturing companies provide a means of marginalising stewards, data from our cases indicate that stewards in firms where teamworking was introduced often retained their power by engaging in informal, frequent contact with managers. Most of the service sector firms studied were similar to the group of employers identified by Bacon and Storey (2000) who actively sought to reduce union power and presence and then maintained limited relationships with the resulting ‘empty shell’ unions. Managers in our service sector firms were incrementally eroding union rights. Because of the increasing management discretion in the relationship, and the changing nature of union involvement, employers perceived relationships with unions to be improving. Change in union officials—in terms of both their composition and attitude— was also cited as a key factor leading to and promoting partnership by managers in printing and outsourcing firms. Thus, the emerging trend towards partnership may be a function of change within unions, with the recruitment of new, pro-partnership officials. Certainly, union officials indicated a high level of approval for ‘genuine’ partnership. But it may also be a function of employer strategies aimed at picking those officials they feel comfortable with, often assisted to this end by the ‘chosen’ union partner. Alternatively, it may be that unions are becoming increasingly acquiescent in the face of management attempts to undermine agreements because they view an agreement of any description as a vehicle for expansion into hitherto non-union sectors. However, it was not only among the group of large service sector employers that managers actively diluted union power in the workplace. Managers in production sector firms also made efforts to reduce unionemployee communication and enhance management-controlled communication, and to reduce the number of unions they dealt with. Formalised partnership agreements appear to be more restrictive than loose, unwritten relationships built up as a consequence of years of custom and practice. However, a characteristic key to both types of arrangement was that of informal relations between union representatives and managers. Managers in four firms—two printing firms and
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another two from large service sector firms—all stated that their relationships with trade union representatives had changed and become more ‘open’ with regard to both the style of negotiation and consultation conducted, and management’s willingness to discuss issues and share information with officials, stewards, or, the workforce. In case study firms with ‘containing’ agreements, managers engaged in informal contact with national trade union officials, while those with ‘nurturing’ relationships also referred to informal, frequent dealings with stewards. However, it seemed that for managers, the quality of informal relations rested on the extent to which they were able to choose which union representatives they dealt with. And where managers dealt solely with stewards—in the case of some production firms where managers actively pursued a somewhat isolationist strategy—there is a danger that they might become co-opted by management and lose their independence. A manager in one such firm outlined the pressures on stewards: I believe some of the shop stewards probably have more problems with some of their own lay members than they do with the company. Because there are still some of the traditionalists out there saying (to stewards) ‘What the hell are you doing, letting them get away with this?’ Q) So the stewards are quite pragmatic? A) Yes very much so. And I think they’re prepared to sell things these days.
Conclusion How does this study contribute to our understanding of the nature of partnership arrangements in Britain today? First, our findings confirm many of those in previous studies. Our managers sought agreements with unions for many of the same reasons as those in other studies: as a result of financial problems; or, to gain assistance in winning and transferring public sector contracts, managing change, implementing quality-based methods, or harmonising terms and conditions. As in other studies, we also found evidence of use of EI and HR methods within partnership, particularly teamworking, individualised payment systems, and dual communication structures. In many firms, a change of HR or senior management was a precursor to organisational change, reflecting British managers’ traditional ‘pragmatic’ approach towards workplace industrial relations. Our study differs from others in identifying two distinct types of partnership arrangement. This raises questions relating to the potential for partnership in the long term. If we look first at the type of arrangements emerging within ‘nurturing’ organisations, it might be asked whether the fact that the strongest partnership relationships were born out of negative, crisis-driven circumstances will lead to instability in the long-term. Did managers opt for partnership relations because they had no other choice? Or is it simply that they were more likely to be disposed towards partnership in the first place because of their long-standing relationships with trade unions?
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Such relationships were characterised by the reply given by a personnel manager of 20 years in a company with a long-standing recognition agreement, when asked if he had a formal (written) recognition agreement. After explaining that he had looked for an agreement to no avail, he stated ‘I thought I had one, but no. But you don’t need a formal recognition agreement, do you? It’s back to the relationships between the two parties.’ And when asked to describe his working relationship with shop stewards, he answered: ‘Partnership, very informal, amicable, although at times there will be some pretty good arguments as well’. He gave a practical example of how the relationship worked: Let’s say we’ve just introduced a new 10–colour printing press. The union guy here will go away and get from the branch what he thinks is the appropriate rate; I’ll do my own; we’ll sit down and we might be about £15 apart. And you’ll argue the toss and I think we ended up paying an additional £5. It’s just like talking to you across the table—it’s not formal—to the point where we concluded a lot of the introduction of this machine. Indeed, most of the ‘nurturing’ firms had pre-existing, strong recognition arrangements, but had ‘re-branded’ their relationships as ‘partnership’ after working through hardships together. As a manager from a firm (which was not profiled in this paper as one of the 11 cases) remarked: I’m aware of these partnership agreements but I’m not totally convinced that really they’re any different to what have always been good management-union relationships. They’re just another word for, in my opinion, what probably should have worked in the first place. Does this mean, therefore, that partnership is simply a new label for what in the past might have been termed ‘good industrial relations’? Much depends on one’s definition of ‘good’ industrial relations. Certainly, the relationships in these firms delivered a greater number of mutual benefits to the parties concerned than those in the service sector organisations. Such cooperative relationships did not, however, prevent managers from seeking greater control over communication structures, and trying to shift worker loyalty away from the union. If the future of nurturing relationships is shaky, that of containing agreements is perhaps shakier. So far as the longevity of ‘containing’ agreements is concerned, the question arises whether the unions party to them will remain satisfied with relatively restrictive deals. For them the prospect of expansion into new non-union areas of the service sector remains slight. The depth of feeling among trade union officials that only ‘genuine’ agreements should be tolerated—and the criticisms of those officials party to the highly constrained agreement described earlier—highlight the precarious origins, and perhaps tenuous future of, ‘containing’ agreements. Many such agreements are products of employer opportunism in that they have enabled private sector firms to win public sector contracts. If there were a change of government, companies may no longer need to be ‘union friendly’ to bid for contracts. This may mean that partnership is only a temporary phenomenon in these newly privatised sectors. Because management
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opportunism appears to be a key factor driving partnership arrangements, they will become an established feature only if employers continue to see some advantage in them. Where there were ‘containing’ agreements, the main beneficiaries appeared to be employers and their durability will depend upon employer perceptions of the unionisation threat.
Notes 1 This is a revised version of Oxenbridge, S. and Brown, W. (2002) ‘The two faces of partnership? An assessment of partnership and co-operative employer/trade union relationships’, Employee Relations, 24(3):262–276. This research was funded by the ESRC research grant, L212252030. 2 When re-interviewed in late 2001 and early 2002, several of those firms planning to negotiate or finalise formal agreements had not yet done so. This was because they had decided to retain their original (draft) agreement, or because negotiations towards the agreement were still progressing. 3 See Oxenbridge and Brown (2002:267–269) for a detailed analysis of recognition rights and consultative structures in the 11 case study organisations.
References ACAS (2001) Annual Report 2000–2001. London: ACAS. Ackers, P. and Payne, J. (1998) ‘British trade unions and social partnership: rhetoric, reality and strategy’, International Journal of Human Resource Management, (9)3:529–550. Bacon, N. and Storey, J. (2000) ‘New employee relations strategies in Britain: towards individualism or partnership?’, British Journal of Industrial Relations, 38(3):407–427. Guest, D. and Peccei, R. (2001) ‘Partnership at work: mutuality and the balance of advantage’, British Journal of Industrial Relations, 39(2):207–236. Kelly, J. (1998) Rethinking Industrial Relations: Mobilization, Collectivism and Long Waves. London: Routledge. Kelly, J. (2001). Social partnership agreements in Britain: union revitalisation or employer countermobilisation? Paper delivered to the ‘Assessing Partnership: the Prospects for and Challenges of “Modernisation”’ Conference, Leeds University Business School, 24–25 May 2001. Legge, K. (1995) Human Resource Management: Rhetorics and Realities. Basingstoke: Macmillan. Marks, A., Findlay, P., Hine, J., McKinlay, A. and Thompson, P. (1998) ‘The politics of partnership? Innovation in employment relations in the Scottish spirits industry’, British Journal of Industrial Relations, 36(2):209–226. Martínez Lucio, M. and Stuart, M. (2000) Swimming Against The Tide: Social Partnership, Mutual Gains and the Revival of ‘Tired’ HRM. Working paper 00/03. The Centre of Industrial Relations and Human Resource Management, Leeds University. Oxenbridge, S. and Brown, W. (2002) ‘The two faces of partnership? An assessment of partnership and co-operative employer/trade union relationships’, Employee Relations, 24(3):262–276. Storey, J. (1992) Developments in the Management of Human Resources: An Analytical Review. Oxford: Blackwell. Taylor, P. and Ramsay, H. (1998) ‘Unions, partnership and HRM: sleeping with the enemy?’, International Journal of Employment Studies, 6(2):115–143. TUC (2002) Partnership Works. London: Trades Union Congress.
6 Trade union representatives’ attitudes and experiences of the principles and practices of partnership Mark Stuart and Miguel Martínez Lucio
Introduction That opinion on partnership is divided is the natural point of departure for any examination of partnership-based approaches to employment relations. As most of the chapters in this collection note, following Roche and Geary (2002), there are ‘advocates’ and ‘critics’. Whilst the partnership agenda raises questions around new management strategies and the potential for mutual gains (see Kochan and Osterman 1994), much of the British debate has focused on the implications for trade unions in engaging with the partnership agenda. Thus, for Ackers and Payne (1998), partnership affords the union movement a clear opportunity for increased social and economic influence after almost two decades in the political wilderness. Critics disagree, pointing to the potential dangers and risks for trade unions in engaging with partnership (Kelly 1998; Taylor and Ramsay 1998; Danford et al. 2002). Yet despite this caution, trade unions have continued to engage with the partnership agenda, through the signature of partnership agreements, via project-based support under the Department of Trade and Industry’s Partnership Fund (see Martínez Lucio and Stuart 2002) and, perhaps most significantly under the auspices of the Trade Union Congress (TUC), which has laid down a series of principles for partnership working.1 Such principles are considered to be central to underpinning the effective development of partnership-based approaches, in so far as ‘genuine’ partnerships (see Wray, this volume) are based on the establishment of reciprocity, trust and mutual gains. This chapter explores the meaning and relevance of such principles to contemporary employment relations and examines their significance for the development of partnership at the workplace. Its key aim is to assess the relevance of such principles to the experiences and attitudes of workplace trade unionists to changing employment relations. To support our analysis we draw from a large-scale survey of workplace representatives of the Manufacturing, Science and Finance trade union (MSF). We note that, whilst there was evidence of a cautiously positive attitude to the overall processes of partnership, there was a high degree of concern over the content and outcomes of partnership (see also Martínez Lucio and Stuart 2004a). Much of this concern is related to the risks trade unionists perceive to be exposed to when entering into the partnership process. This more subtle and ambiguous approach amongst trade unionists to questions of partnership is
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rarely acknowledged within the discussion. The chapter aims to provide an insight into the complex trade-offs and organisational concerns held by workplace trade unionists.
The development of partnership: politics, preconditions and principles The politics of partnership It is possible to identify a number of factors that have driven the interest in partnership since the early 1990s, even if the term itself is widely regarded as ‘imprecise’ (see Heery et al., this volume). The first has been the changing regulatory environment in the area of employment (through new national provisions and the influence of Europe), most notably in the extension of individual employee rights (Smith and Morton 2001). This has meant that employers have been faced with the prospect of having to involve unions and workers’ representatives in their decisionmaking processes. Broader concerns over corporate governance and social issues at the workplace, in terms of work-life balance and employeeled flexibility, have also had an impact. Second, an obsession with workplace renewal and change has led to an increasing interest amongst management and employer circles in the role trade unions can play within the management of labour. This finds resonance within the partnership agenda in terms of the role trade unions can play in facilitating and, more importantly, legitimising organisational change (see Oxenbridge and Brown, this volume; also Martínez Lucio and Stuart 2004b). Finally, the partnership approach has been embraced and advocated by various union elites, who have seen the possibility for a new role for organised labour in the regulation and managing of work. Set against these forces, partnership is seen to represent an opportunity for linking organisational effectiveness with social considerations through the establishment of a new voice for labour within the corridors of corporate and workplace life (Ackers and Payne 1998). It is difficult to trace, however, a clear line in terms of the development of, and interest in, partnership. In many ways it is a complex and over-determined phenomenon, with unions and management engaging with the concept for quite different reasons and in relation to distinct elements of employment relations (Martínez Lucio and Stuart 2004b). These competing logics within partnership mean that it is subject to various interventions and uses (Brown 2000). And it is against this backdrop that the increasing interest in establishing principles, meanings and approaches to partnership should be set—as part of a political process to its ‘regulation’ and management. Concerns, risks and preconditions The need for some form of regulation for partnership becomes more manifest when considering the concerns of critics. To the extent that partnership working presupposes trade unions working in a more ‘consensual’ way with management a range of pertinent issues present themselves, in terms of: the impact on worker representation of such a new-found proximity to management interest and processes; and the extent to which partnership depoliticises and incorporates trade unions (Kelly 1996, 1998; Marks et al. 1998; Taylor and Ramsay 1998; Danford et al. 2002). Given the fact that trade union
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engagement with management is hardly a new problematic, much turns on the manner of this engagement and the degree of autonomy, independence and power that trade unions may potentially relinquish through the adoption of a partnership-driven agenda. In other words, working in partnership may pose certain risks for trade unions. The extent of these risks may be exacerbated within the British context by the specific historical character and form of employment relations (Martínez Lucio and Stuart 2003). An emphasis on voluntarism has meant that trade unions have had to operate within an environment of limited institutional supports and legal rights and, given the erosion of ‘the institutions of sectoral bargaining’, an emphasis on workplace activity and concerns (Terry 2003:460). Given these concerns, it is important to recognise that even leading proponents of partnership have argued that a set of preconditions are required for effective implementation. Kochan and Osterman (1994:46), for example, argue that for partnership relations to be effective, voice mechanisms should be incorporated at the strategic, functional and workplace levels (see introductory chapter). Mere shifts in management rhetoric, and a minimal involvement of trade unionists within the political processes of the firm, will not lead to effective outcomes in terms of mutual gains. Such preconditions suggest sensitivity to the issue of risk and the reality that trade unions have more to lose than employers if the ‘game’ of partnership is not handled evenly (Higgins 1996). At a theoretical level, Higgins (1996:479) argues that partnership relations at the workplace are contingent on the principles of ‘mutual trust’ and ‘efficacy’. On this basis, the principles of ‘mutual trust’ suggests it is unfair for one party to incur risks and costs if other parties are not prepared to accept similar sacrifices; whilst the ‘efficacy principle’ suggests that it is unfair for one party to incur risks and costs if it would only benefit those unwilling to behave in a similar manner. In the absence of such assurances, parties are more likely to engage in ‘shrewd’ rather than (more risky) co-operative bargaining arrangements. The establishment of mutual trust at the workplace will thus be influenced by clear displays of reciprocity and a balanced set of outcomes. It is against this need to ensure ‘mutual trust’ and ‘efficacy’ that commentators such as Kochan (1985) have consistently argued that partnership strategies necessitate that the voice of labour be extended and institutionalised, and that there should be a political and cultural commitment to the influence of organised labour. These dimensions are seen as vital preconditions for partnership to develop as a socially and economically ‘beneficial’ strategy, a position that is often underplayed in the more optimistic and prescriptive pronouncements on partnership. It is these preconditions that are the vital starting point to any discussion on partnership and they underpin the recent attempts by leading organisations involved in employment relations to condition and influence its development in the face of the diverse realities and experiences that inevitably emerge. Building the principles of partnership: in search of the ‘key ingredients’ Our discussion suggests therefore a range of concerns regarding the viability, endurance and costs (especially for labour) of partnership. Against this background, a number of national bodies have attempted to provide employment relations actors with a set of criteria for establishing ‘good’ partnership practices. As the Involvement and Participation Association (IPA) (2001) documents, definitions and models of partnership
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have been articulated by bodies as diverse as the Labour government, the European Commission, the Chartered Institute of Personnel and Development, ACAS, the TUC and various individual trade unions, and the IPA itself. In most cases, ‘a model is presented for managing an organisation’s employee relations with a bundle of specific HR practices’ (IPA 2001:1). The most widely referenced ‘principles’ have been those provided by the IPA and the TUC. Both bodies are concerned with setting a clearly delineated set of criteria against which partnership can be operationalised, assessed and benchmarked, so as to avoid the practice of partnership becoming synonymous with minimalist organisational agendas and fanciful rhetoric. In this sense it becomes possible to distinguish objectively, in Wray’s terms (this volume), between the ‘genuine’ and the ‘counterfeit’, and to allow an identifiable criteria for establishing the parameters of the new engagements between unions and management. The principles themselves tend to be a mix of aspiration, prescription and practice. Thus, in the IPA’s case, they are divided between ‘three commitments to which all partners should subscribe’ (commitment to business success, building trust and employee involvement and a recognition of each partner’s ‘legitimate role’) and four building blocks of partnership (a trade-off between organisational flexibility and employee security, sharing the success of the organisation with all employees, information and consultation and ‘representation of the interests of employee’) (IPA 1997:2). The principles stress the mutual responsibilities of all parties. Thus as a recent IPA report notes, ‘…successful partnership operates with a set of reciprocal commitments and obligations between the organisation and the people working in it which underpins the way the company is run. The stronger this approach the more positive the outcomes’ (Guest and Peccei 1998:6). This notion of reciprocity is central to the development of partnership as it emphasises the need for a complex contract between actors in dealing with the changing form and content of employment relations. For the purposes of this chapter, however, we focus upon the TUC’s six principles of partnership. These are broadly similar to the IPA’s principles and, again, can be understood as the necessary building blocks and preconditions for the successful development of partnership at the workplace (see Brown 2000). The principles are presented in the TUC’s Partners for Progress (1999:13) document as follows: Principle 1:
Commitment to the success of the organisation.
Principle 2:
Recognising legitimate interests: considered the ‘underpinning’ of true as opposed to sham partnerships and the ‘guarantor’ of sustainability.
Principle 3:
Commitment to employment security: encompassing internal security (no compulsory redundancies) and external employability (transferable skills and qualifications).
Principle 4:
A focus on the quality of working life: emphasis on personal development and considered the ‘acid test’ that partnership delivers.
Principle 5:
Transparency: emphasis on involvement, participation and information disclosure at an early state.
Principle 6:
Adding value: making the most effective use of human resources.
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Again, the principles are comprised of a set of essential commitments and required practices, even if the TUC does not distinguish them as such. Thus, the context of partnership is premised on detecting and establishing firm foundations for the renewal and extension of labour participation within employment relations on issues such as communications, involvement, the quality of working life and business objectives. This reflects a concern with the legacies of British industrial relations and the weakness of its institutional processes and managerial traditions (Martínez Lucio and Stuart 2002). Essentially, the interest in partnership appears to be underpinned by the belief that a series of ‘good practice’ benchmarks may facilitate a renewal in ‘good industrial relations’ (Purcell 1981), and the avoidance of a further decline in institutional industrial relations. This is an intriguing development, for such principles represent an explicit recognition of the low trust nature of British workplace relations and the limited institutional supports, regulations and rules that exacerbate this. Set within a weak regulatory context such principles are meant to act as an explicit set of rules to govern workplace engagement. The issue for consideration here is what these ‘rules’ actually mean in the context of the lived experiences and attitudes of trade unionists in the workplace. How such ‘principles’ resonate with workplace representatives is therefore the focus of our empirical analysis in the remainder of the chapter.
Methodology The principles of partnership elaborated by the TUC form the backdrop and basic ground rules for British trade unions’ engagement with partnership. Little is known, however, about the utility and relevance of these principles for trade union activity at the workplace—the level where the majority of partnership approaches and agreements will be developed and concluded. The chapter examines these concerns through the findings of a postal questionnaire of MSF workplace representatives. In broad terms, the survey aimed to provide extensive data on the changing nature and forms of employment relations across the union’s key sectors. It sought to investigate the key changes to employment relations practices and the attitudes and experiences of MSF representatives to the principles and practices of social partnership. The distribution of questionnaires was not restricted, therefore, to those organisations with partnership agreements. The union was chosen because at the time of the study it was one of the UK’s largest trade unions, with 425,000 members.2 Whilst it mainly represented skilled and professional workers (typically technical and scientific), it covered a wide range of industries and services in the public and private sectors and had a reputation for developing innovative trade union strategies (for example, around training and development and organising). Its workplace representatives provided, therefore, an excellent data source for exploring the development of partnership-type approaches. The questionnaire was distributed to the most senior MSF representative at each workplace across eight key industrial sectors: airlines, aerospace, chemicals, education, finance, health, manufacturing and the voluntary sector (see Appendix 6.1).3 Two thousand and eighty four questionnaires were distributed during April and May 2000, with non-respondents followed up in July. In total 317 useable returns were elicited,
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giving an overall response rate of 15 per cent (for more detail see Stuart and Martínez Lucio 2002).
The principles and practices of partnership As noted, the TUC’s principles of partnership cover not just broad statements of commitment but also the practical dimensions that must be delivered for partnership to thrive. In terms of the latter, much emphasis is put on the implementation of involvement and participation practices and investment by employers in employee development and the quality of working life. Accordingly, our empirical analysis covers not just the ideological dimensions of partnership but also the key ‘pillars of partnership’ in terms of involvement, training and changing working practices (Martínez Lucio and Stuart 2001). The principles of partnership The TUC’s six principles presuppose certain attitudinal perspectives from both trade unionists and employers, presented in terms of reciprocal responsibilities. The survey sought to explore MSF representatives’ attitudes towards mutual reciprocity by unpacking the six broad TUC principles into 16 specific items. Items were identified through a review of the TUC’s publications on partnership, specifically in terms of the philosophies, characteristics and enabling conditions supposed to underpin the six principles (TUC 1996, 1999). MSF representatives were asked to respond on a five point Likert scale from strongly agree (1) to strongly disagree (5). The responses, presented in Table 6.1, find that the balance between general levels of agreement and disagreement was evenly distributed across the 16 variables. Positive responses were most forthcoming on the ideological and processual aspects of partnership (McBride and Stirling 2002). Thus, there was broad agreement that employment relations were most effective when ‘based on a shared understanding of the business goals of the organisation’ (84 per cent) and, in some aspects, nonadversarialism. More specifically, 57 per cent of respondents reported that ‘employee commitment is dependent upon non-adversarial industrial relations’ and 46 per cent were of the view that training and development, key practices of the ‘new’ industrial relations (Stuart 1996), were non-conflictual issues between management and unions. There was also a more positive balance amongst respondents to the core partnership trade-off between workforce flexibility and employment security. Forty per cent of respondents agreed that ‘employment security should be dependent upon the development of greater flexibility’ compared with just 24 per cent of respondents that disagreed. A significant majority of respondents (66 per cent) also accepted that partnership working would mean that information disclosure with members would have to be managed differently, most notably in terms of recognising that being informed about key business indicators at an early stage would be subject to confidentiality clauses. It should not be inferred from this, however, that respondents were totally captured by the ideological dimensions of partnership. There was a higher level of disagreement (45 per cent) than agreement (29 per cent) that ‘the future role of the union…should be dependent upon its success in contributing to performance improvements’. We would also expect the recognition of
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legitimate differences of interest to be important to our trade union sample. There seemed to be some basis for this, with 57 per cent of
Table 6.1 MSF representatives’ attitudes to the principles of partnership (valid percentage) Stron Agree Neu Dis Stron gly tral agree gly agree dis agree
Mean score
Effective industrial relations are based on a shared understanding of the business goals of the organisation
39
45
9
4
3
1.86
The business goals of this organisation are clearly explained to the union and its members
12
34
26
18
11
2.82
Management has become more willing to share, and develop jointly, the future business goals of this organisation
5
29
25
23
18
3.21
Management recognises that at certain times there might be legitimate differences in the interests of the employer and employee
9
48
20
17
7
2.64
There is a high degree of mutual trust between management and unions at this organisation
5
14
25
30
26
3.57
Employment security should be dependent upon the development of greater flexibility
6
34
37
15
9
2.88
Management has become more committed to employment security
5
18
35
26
16
3.30
Measures to improve the employability of staff have become an increasing priority
2
23
34
26
15
3.30
There has been an increased investment by the organisation in the quality of members’ working lives
1 10 29 39 22 3.69
Training and development are regarded as non-conflictual issues between unions and management at this organisation
6 40 28 20
Opportunities for non-vocational training exist at this workplace
4 24 20 30 23 3.43
Management shares information, and discusses openly, the future plans of the business
4 29 21 24 23 3.33
7 2.82
Unions have the opportunity to express their members’ views on key business issues
10 45 16 16 14 2.80
Unions may have to accept conditions of confidentiality on certain issues and manage their membership communications in new ways
18 48 21
8
5 2.33
Trade union representatives’ attitudes
Employee commitment is dependent upon non-adversarial industrial relations The future role of the union at this organisation should be dependent upon its success in contributing to performance improvements
95
16 41 24 15
4 2.50
6 23 27 29 16 3.26
respondents reporting that ‘management (at their organisation) recognises that at certain times there might be legitimate differences in the interests of the employer and employee’, with just under a quarter (24 per cent) indicating that this was not the case. The ‘acid test’ of partnership for trade unionists lies not in its ideological dimension but in terms of its content and outcomes. There were some positive findings in terms of communication and participation, but these were explicitly related to the dissemination of information around business goals. Thus, 56 per cent of respondents reported that the business goals of the organisation were clearly explained to members and 55 per cent believed that the union had ‘the opportunity to express their members’ views on key business issues’. Yet there was some indication that this level of participation was limited. Respondents were more likely to disagree (41 per cent) than agree (34 per cent) that management had ‘become more willing to share, and develop jointly, the future business goals of this organisation’; and disagreed even more pronouncedly that ‘management shares information, and discusses openly, the future plans of the business’. The support for partnership was least visible, however, with regard to working conditions and investment in human capital. Certainly there was little to suggest that either employment security or employability had become an increasing priority for employers. Respondents were more likely to disagree (41 per cent) than agree (25 per cent) that ‘measures to improve the employability of staff had become an increasing priority’, and opportunities for non-vocational training appeared to be limited to just over a quarter of cases (28 per cent). According to respondents, management had committed itself to employment security in just 23 per cent of cases. Likewise, there was little optimism amongst respondents in terms of improvements in the quality of members’ working lives, with just 11 per cent agreeing that management had increased its efforts in this area. Partnership working is typically understood to revolve around the issue of mutuality, with trust-based relations underpinning mutual gains. Our findings suggest that it is the content of partnership (outcomes), as opposed to its form and perceived politics, that is most likely to generate trust. Thus, even though there was broad agreement amongst our respondents to the ideological dimension of partnership, few believed (19 per cent) that a high degree of mutual trust existed between management and unions at their place of work. Involvement and communication It is often argued that successful organisations are known for the way they communicate to, and involve, employees in decision-making processes. The philosophy of partnership draws from this interest in employee involvement (see IPA 1997). This is clear from the TUC’s principles of partnership, with its emphasis on transparency:
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If partnership is to be meaningful then it must be based upon a real sharing of hard, unvarnished information, and an openness to discussing plans and thoughts about the future when they are at the ‘glint in the eye’ stage… Unions must ensure that all participants feel that their views are represented while keeping the structure of dialogue co-ordinated and effective. (TUC 1999:13) The questionnaire investigated the extent of MSF involvement and participation across a range of key workplace issues. Involvement was defined in terms of negotiation, consultation and information, and respondents were asked to give preference to the highest level of involvement in relation to the issues outlined in Table 6.2. Union involvement was most entrenched in terms of pay and conditions, and least prevalent with regard to business investment decisions: 65 per cent of respondents reported that pay and working conditions were the subject of negotiation, whilst just over half of respondents (56 per cent) reported no involvement whatsoever over business investment decisions. This is a particularly notable finding given the emphasis in the partnership literature on a shared commitment to business success and the need to disseminate information about future business plans at an early stage. Health and safety issues recorded the second highest level of negotiation, and were the issues least subject to noninvolvement. For many, partnership working is more conducive around production and developmental issues than distributional concerns (see Huzzard and Nilsson 2002). For example, it is often argued that training and
Table 6.2 Levels of union involvement (valid percentage) Negotiate
Consult
Inform
Not involve
Meana
Pay and working conditions
65
13
11
12
1.69
Health and safety
32
45
13
10
2.01
Equal opportunities
23
36
21
21
2.40
Levels of training investment
5
22
38
36
3.04
Training opportunities
7
29
34
29
2.86
Performance appraisal
17
33
21
29
2.62
Staff and manpower planning
7
21
34
39
3.04
Business investment decisions
1
11
32
56
3.43
26
25
18
31
2.54
Family friendly policies
Note a The higher the mean the lower the level of involvement (where 1=negotiate and 4=not involve).
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development related issues could act as the basis of a ‘new bargaining agenda’ (Mathews 1993). The consensual nature of training and development is perceived to provide fertile ground for increased union involvement at the workplace; which, in turn, will allow access to broader business investment decisions. This is because if trade unions are to bargain over skills they will require deeper contextual information on staff and business planning. The findings offer little support for this assertion. Negotiation over levels of training investment (5 per cent), training opportunities (7 per cent) and staff and manpower planning (7 per cent) was found to be negligible. In the case of staff and manpower planning, 39 per cent of respondents reported no involvement at all, whilst involvement over training investment and opportunities were most likely to take the form of basic receipt of information. The development of ‘new agenda’ items was, however, found to be more positive in the areas of equal opportunities and family friendly policies. Nearly six out of ten respondents reported that negotiation (23 per cent) or consultation (36 per cent) took place on equal opportunities, whilst in the area of family friendly policies negotiation took place in 26 per cent of cases and consultation in 25 per cent of cases. The issue of involvement was also considered in terms of the mechanisms used by management to communicate with MSF members. Findings presented in Table 6.3 organise the communication mechanisms into upward, downward and collective forms of involvement. The general pre-ponderance of downward forms of communication over upward and collective mechanisms is clearly in line with other recent commentaries (Marchington and Wilkinson 2000; Sisson and Storey 2000). The four most frequently
Table 6.3 Mechanisms used by management to communicate with MSF members (valid percentage) Communication mechanism
%
Team meetings (D)
84
Notice board (D)
85
Newsletters (D)
77
Video communications (D)
25
Suggestions schemes (U)
44
Staff attitude surveys (U)
49
Quality circles (U)
22
Performance appraisal (U and D)
79
Works consultation committee (C)
53
Regular factory meetings (C)
33
European works council (C)
19
Note C=collective communication, D=downward communication, U=upward communication.
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reported communication mechanisms were: notice boards (85 per cent), team meetings (84 per cent), performance appraisal (79 per cent) and newsletters (77 per cent). Of these, only performance appraisal can be considered to be an upward form of communication based on active employee involvement. Other forms of upward communication and problem solving were less common. Staff attitude surveys were reported by nearly half our respondents (49 per cent) and suggestion schemes by 44 per cent. As Marchington and Wilkinson (2000:347) note, initiatives such as suggestion schemes ‘are a relatively marginal form of employee involvement’; and are clearly individually focused. Collective forms of information disclosure and communication were generally less common than individual forms. The most common form of collective communication was via a works consultation committee (53 per cent) with factory meetings less commonly referenced (33 per cent). Just 19 per cent of MSF representatives reported the existence of a European Works Councils (EWC); although it is important to recognise that this would not have been applicable to all of the sectors covered by the survey. Where EWCs were identified, the majority of respondents (66 per cent) reported that they had no effect on production and employment issues. In summary, the data reveal an extensive presence of involvement and communication mechanisms. Yet, communication mechanisms tend to take a predominantly ‘direct’ form, whilst as far as issues of engagement are concerned the bargaining agenda is relatively free of ‘new’ employment relations issues. At a crude level, this is suggestive of a series of ‘involvement gaps’ (Towers 1997). Changing working practices and working conditions The reciprocal nature of partnership is often characterised in terms of a quid pro quo between flexibility and security. Employees are expected to be open to flexible working practices, whilst employers are expected to respond to this through measures that enhance the security of their employees. Improvements in the quality of the working environment are also regarded as central to both the process and outcome of partnership strategies. Yet, is a managerial commitment to improving the working environment and the nature of work apparent? How do MSF representatives view workplace change and their working environment? The survey sought to address these concerns by uncovering the extent to which developments at work are supportive of a greater level of trust and mutual interest between managers and workers. The study explored some of these concerns by asking respondents how their conditions of work and their degree of flexibility had changed over the previous three years. The findings presented in Table 6.4 are measured across a three-point scale from increased, through no change to decreased. Our respondents reported a significant increase in flexible working. Only a very small minority reported that the degree and extent of flexible working had decreased at their place of work. This was most likely to be reported with regard to the proportion employed on temporary contracts, which had declined in 16 per cent of cases, although even here nearly half
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Table 6.4 Changes in flexible working practices and working conditions Increased
No change
Decreased
Flexible practices The extent of multi-skilling
57
40
3
The extent of multi-tasking
76
21
2
The proportion of temporary contracts
47
38
16
The proportion of part-time contracts
43
48
9
The number of hours worked
40
51
9
Intensity of work
89
9
3
Access to training and development
36
47
18
Information about change at work
30
58
12
3
38
59
Working conditions
Security of employment
our respondents (47 per cent) recorded increases in such contractual arrangements. Far more common, were significant increases in the extent of flexible working, suggesting that the emphasis on flexibility at the British workplace has now become a central concern. The most pervasive example of flexibility was multi-tasking (taken to denote an increase in the number of tasks conducted at the same level of skill), which was reported to have increased by just over three-quarters of respondents (76 per cent). The extent of multi-skilling (referring to an addition of formally recognised skills) was also found to have increased for 57 per cent of respondents. An increase in the proportion of part-time contracts and the number of hours worked was reported to have increased by 43 per cent and 40 per cent of respondents, respectively. In both cases, the majority of respondents reported that there had been no change. The findings on changing working conditions over the three previous years indicate that the increases in flexible working were not supported by general improvements in working conditions. For the majority of respondents, information about change at work (58 per cent), discretion over the conduct of work (74 per cent) and access to training and development opportunities (47 per cent) had broadly stayed the same. The most notable findings, however, were around the intensity of work and the perceived degree of employment security. By far the most common experience of workplace change was an increase in the intensity of work, reported by approximately nine out of every ten respondents. This intensity in working conditions was not, though, matched by increased job security, with nearly six out of ten respondents indicating that in their view employment security had decreased in recent years. The survey findings suggest, then, that the fundamental reciprocity perceived to be so central to the development of trustbased partnership arrangements has not yet materialised. An increased extent of flexible working has not been compensated by perceived improvements in employment security.
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The potential gains and risks of partnership The findings on the principles of and supports for partnership appear to be mixed. Thus, whilst MSF representatives support some of the broader aspirational and ideological elements of partnership, there is a recognition that the actual support mechanisms and preconditions for the development of partnership have yet to emerge. This raises strategic questions about the potential risks for trade unionists in engaging with partnership. Table 6.5 presents MSF representatives’ views on the possible gains and risks associated with the partnership approach. Approximately seven out of ten representatives reported that both management and trade unions stand to gain from the development of social partnership. This seems to suggest that fertile ground exists for the development of a more cooperative and strategic employment relations agenda. Nonetheless, a significant minority of respondents (26 per cent) regarded management as the most likely beneficiaries of partnership-type arrangements.4 More significantly, nearly half of all respondents (48 per cent) suggested that trade unions are likely to incur the greatest risks in moving towards a partnership approach. Just 26 per cent reported that neither management nor union stood to incur any risk. Very few respondents indeed (8 per cent) perceived partnership as a risky proposition for management. It is useful at this point to refer back to Higgins’ (1996) conceptualisation of ‘mutual trust’ and ‘efficacy’. The former suggests it is unfair for one party to incur risks and costs if the other parties are not prepared to accept similar sacrifices; whilst the latter suggests it is unfair for one party to incur risks and costs if it would only benefit those unwilling to behave in a similar management. Our findings clearly associate the risks of partnership as being greater for trade unions than management and this, coupled with the unbalanced trade-off between flexibility and security (including workforce development and better quality of life), reveals that the basis for building mutual trust is far from robust. At a strategic level, this suggests that trade unions should treat (co-operative) partnership approaches with considerable caution.
Conclusions Our analysis shows that the terrain of partnership is far from clear. At one level, we can infer a cautiously positive attitude amongst trade unionists to
Table 6.5 Who stands to gain most and risks most from partnership? (percentage) Management Who has the most to gain? Who incurs the greatest risk?
Trade union
Both
Neither
26
2
69
3
8
48
18
26
the challenge of finding a ‘new way of working’ with management. MSF representatives reported a general acceptance of the more ideological aspects of the TUC’s principles (i.e. principles 1, 2 and 6: commitment to the success of the organisation, recognising
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legitimate interests and adding value). Specifically, they agreed in working jointly towards the success of the organisation and that management in their workplaces accepted their right to differ at key moments. There is clear evidence that certain elements of the TUC agenda are being reflected within trade union positions within the workplace, and many trade union leaders have referenced such views when attempting to steer their organisations towards an acceptance of partnership strategies. Yet when the analysis is extended to practice, and the experiences of workplace trade unionists, a number of gaps start to appear. When considering the specifics of principles 3, 4 and 5 (employment security, focus on the quality of working life and transparency) there was a belief that the actual support mechanisms and preconditions for the development of partnership have yet to emerge. This became only too apparent when the analysis was extended to consider the key pillars of partnership in a little more depth. There was little evidence of an expanding involvement agenda and effective forms of transparency and involvement were not seen as being present at the workplace. The quality of working life was seen to be particularly poor and an intensification of work common. Similarly, whilst respondents were open to the general principle that employment security should be dependent on more flexible ways of working, this was not the perceived reality of employment relations: increases in flexibility were ongoing but there was no reciprocated commitment around employment security. This presents us with a complex set of challenges. It appears that the very form of industrial relations and its content has not shifted towards a partnership-based approach. First, any adoption of partnership would appear to be taking place in a context where institutional resources for trade unionists may not be enhanced—especially given the uneven tradition of voice mechanisms (Stuart and Martínez Lucio 2002). Second, the ‘minimal’ management commitment that is perceived means that any venture into partnership may be considered to be a ‘risky proposition’ from a trade union point of view—something that our MSF representatives were only too aware—as gains may not be easily visualised by their members. Third, the poor substance of working life (in terms of training, working environment, etc.) means that any trade-offs and gains may not actually be consistent over time. There appears to exist, therefore, a gap between the rhetoric of the ‘modern’ labour movement and the current experiences of workplace trade unionists—although in terms of sentiments this gap may not be so clear. Much of the literature on partnership, in our view, fails to comprehend these gaps and the way workplace trade unionists draw from their complex experiences and expectations when formulating views of institutional developments such as partnership. The current interest in establishing principles and benchmarks is in part a realisation of these very gaps. In other words, that partnership requires a complex effort in terms of its construction exactly because of the paucity of institutional guarantees and supports in a context where the experience of work is on the whole negative. Thus, organisations such as the TUC have developed the new politics of benchmarking, which we have outlined earlier. Partnership may therefore appear attractive, but even its keenest supporters are forced to acknowledge that, given the degree of instability in employee voice, collective rights, and unpromising developments in the quality of working life, the process needs very detailed ‘maps’, to guide trade unionists, and even managers, through the difficult exchanges and challenges facing them when constructing new ways of working together.
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Appendix 6.1: Sectoral breakdown of response Sector Aerospace
No. distributed
No. returned
Response %
Valid percentage
168
33
20
11
70
10
14
3
Chemicals
190
22
12
7
Education
156
29
19
9
Health
266
68
26
22
Finance
228
34
15
11
Manufacturing
706
71
10
23
Voluntary
300
42
14
14
15
100
Airlines
Missing Total
8 2,084
317
Notes 1 The TUC also established a Partnership Institute in 2001, to offer consultancy advice in the area of partnership (see TUC Partnership Institute 2001). 2 The MSF merged with the Amalgamated Electrical and Engineering Union in 2002 to form the new union Amicus, which has a membership of approximately one million. 3 It is common to utilise the attitudes and experiences of trade union representatives as proxies for their members, we recognise however that such views are not necessarily synonymous. 4 A finding that was even more pronounced in those organisations with formal partnership agreements (Martínez Lucio and Stuart 2001:21).
References Ackers, P. and Payne, J. (1998) ‘British trade unions and social partnership: rhetoric, reality and strategy’, International Journal of Human Resource Management, 9(3):529–549. Brown, W. (2000) ‘Putting partnership into practice in Britain’, British Journal of Industrial Relations, 38(2):299–316. Danford, A., Richardson, M. and Upchurch, M. (2002) ‘“New Unionism”, organising and partnership: a comparative analysis of union renewal strategies in the public sector’, Capital and Class, 76:1–27. Guest, D. and Peccei, R. (1998) The Partnership Company: Benchmarks for the Future, London: Involvement and Participation Association. Higgins, S.H. (1996) ‘Towards taming the labor-management frontier: a strategic marketing framework’, Journal of Business Ethics, 15:475–485. Huzzard, T. and Nilsson, T. (2002) ‘From boxing to dancing? Social partnership in the contemporary Swedish workplace’, presented at the 20th Annual International Labour Process Conference, University of Strathclyde, Glasgow, 2–4 April. Involvement and Participation Association (1997) Towards Industrial Partnership. London: IPA.
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Involvement and Participation Association (2001) ‘Definitions of Partnership’, http://www.Partnership-at-work.com/pardefs.html, accessed on 17/10/2001. Kelly, J. (1996) ‘Union militancy and social partnership’, in Ackers, P., Smith, C. and Smith, P. (eds) The New Workplace and Trade Unionism. London: Routledge, 77–109. Kelly, J. (1998) Rethinking Industrial Relations: Mobilisation, Collectivism and Long Waves. London: Routledge. Kochan, T.A. (1985) ‘Is a new industrial relations system emerging?’, in Kochan, T.A. (ed.) Challenges and Choices Facing American Labour. Cambridge: MIT Press, 339–345. Kochan, T.A. and Osterman, P. (1994) The Mutual Gains Enterprise: Forging a Winning Partnership among Labour, Management and Government. Boston: Harvard University Press. Marchington, M. and Wilkinson, A. (2000) ‘Direct participation’, in Bach, S. and Sisson, K. (eds) Personnel Management. Oxford: Blackwell, 340–364. Marks, A., Findlay, P., Hine, J., McKinlay, A. and Thompson, P. (1998) ‘The politics of partnership? Innovation in employment relations in the Scottish spirits industry’, British Journal of Industrial Relations, 36(2):209–226. Martínez Lucio, M. and Stuart, M. (2001) In Search of Partnership: Trade Union Experiences of Contemporary Employment Relations and the Management of Change. London: Manufacturing, Science and Finance Union. Martínez Lucio, M. and Stuart, M. (2002) ‘Assessing partnership: the prospects for, and challenges of, modernisation’, Employee Relations, 24(3):252–261. Martínez Lucio, M. and Stuart, M. (2003) ‘Regulating Risk: Politics, Risks and the Dynamics of Social Partnership.’ Paper presented to the 25th Annual International Labour Process Conference, University of West of England, Bristol, England, 12–14 April. Martínez Lucio, M. and Stuart, M. (2004a) ‘Partnership and the politics of trade union policy formation in the UK: the case of the Manufacturing, Science and Finance Union’, in Verma, A. and Kochan, T. (eds) Unions in the 21st Century: an International Perspective. Basingstoke: Palgrave. Martínez Lucio, M. and Stuart, M. (2004b) ‘Swimming against the tide: social partnership, mutual gains and the revival of “tired” HRM’, International Journal of Human Resource Management, 15(2):404–418. Mathews, J. (1993) ‘The industrial relations of skill formation’, International Journal of Human Resource Management, 4(3):591–609. McBride, J. and Stirling, J. (2002) ‘Partnership and process in the maritime construction industry’, Employee Relations, 24(3):290–304. Purcell, J. (1981) Good Industrial Relations: Theory and Practice. London: Macmillan. Roche, B. and Geary, J. (2002) ‘Advocates, critics and union involvement in workplace partnerships: Irish airports’, British Journal of Industrial Relations, 40(4): 659–688. Sisson, K. and Storey, J. (2000) The Realities of Human Resource Management: Managing the Employment Relationship. Buckingham: Open University Press. Smith, P. and Morton, G. (2001) ‘New Labour’s reform of Britain’s employment law: the devil is not only in the detail but in the values and policy too’, British Journal of Industrial Relations, 39(1):119–138. Stuart, M. (1996) ‘The industrial relations of training: a reconsideration of training arrangements’, Industrial Relations Journal, 27(3):253–266. Stuart, M. and Martínez Lucio, M. (2002) ‘Social partnership and the mutual gains organisation: remaking involvement and trust at the British workplace’, Economic and Industrial Democracy, 23(2):177–200. Taylor, P. and Ramsay, H. (1998) ‘Unions, partnership and HRM: sleeping with the enemy?’, International Journal of Employment Studies, 6(2):115–143. Terry, M. (2003) ‘Can “partnership” reverse the decline of British trade unions?’, Work, Employment and Society, 17(3):459–472.
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Towers, B. (1997) The Representation Gap: Change and Reform in the British and American Workplace. Oxford: Oxford University Press. Trade Union Congress (1996) Your Stake at Work: TUC Proposals for a Stakeholding Economy. Congress 1996. London: TUC. Trade Union Congress (1999) Partners for Progress: New Unionism in the Workplace. London: TUC. Trade Union Congress Partnership Institute (2001) Partners for Progress: Winning at Work. London: TUC.
7 Management and union motives in the negotiation of partnership A case study of process and outcome at an engineering company David Wray Even in a genuine partnership the union is a tool to help managers control their workforce (Trade Union Full Time Official)
Introduction While various definitions or ‘models’ of partnership have been offered (Marks et al. 1998; Guest and Peccei 1999; Danford et al. 2000; Grugulis et al. 2000) there has been a tendency to distil these down to a definition that identifies partnership as a system of organisational governance bringing ‘mutual gains’ to both sides of the employment relationship (Kochan and Osterman 1994). If this type of partnership exists then it represents no less than a redefinition of the social relations of labour, as social partnership will see organisational governance taking a non-adversarial pluralist, even neo-corporatist, style. Presumably, this is the type of partnership the trade union full time official (FTO) quoted at the beginning of the chapter describes as ‘genuine’. The use of the word ‘genuine’ is a commonly used defining term when talking to FTOs about partnership. It should be noted, however, that the use of the term ‘genuine’, in relation to partnership in the workplace, suggests that ‘counterfeit’ partnerships may also exist. The problem in distinguishing between the ‘genuine’ and the ‘counterfeit’, and central to an accurate definition of partnership, is that very little is known of partnership in practice (Guest and Peccei 1999). The true test must reside in how far the reality of partnership relates to the rhetoric; in how much of a Voice’ employees have in the governance of the organisations for which they work; in how far the new relationship provides ‘mutual gains’; and perhaps most importantly how, and for whose benefit, the structures of partnership are operationalised. What distinguishes the ‘genuine’ from the ‘counterfeit’ and why any party would willingly become involved in a ‘counterfeit’ partnership will depend upon the needs and ambitions the contributing parties bring to the negotiations setting the structure and form of the partnership. Marks et al. (1998:210) conclude that: The interaction between the employment relationship, the labour process and organisational governance is…a crucial factor conditioning the nature
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and effectiveness of strategies to create new discourse and practices of partnership. In other words, the final form and structure of any partnership agreement will be determined through negotiation, negotiation that will be influenced by the hoped for outcomes the contributing partners expect to achieve from the negotiation. Those negotiated outcomes will be contingent on circumstances both within the organisation, and externally on the general circumstances of labour and product markets at the time of negotiation. The key purpose of this chapter is to provide case study evidence of the process of negotiating a partnership agreement. The case study will examine the motivations behind both parties in their engagement with the concept of partnership, and identify the implications of the final agreement for employer, trade union and employees. The importance of this type of analysis in assessing the ‘genuineness’ of partnership has been recognised by McBride and Stirling (2002), who argue that any analysis of partnership must examine both the context of the agreement and the relationships surrounding the negotiations. Such an analysis allows us to conceptualise partnership in terms of ‘ideology, process and outcomes’. Central to any form of analysis must be the ‘voice’ of the workforce, as their decibel rating must be high before any partnership agreement can begin to be categorised as ‘genuine’. In other words, any gains made by a workforce must have first, been articulated by them, and second, be quantifiable, substantive and comparable to those of management. The case study evidence will show that while partnership is normatively understood as a bilateral relationship seeking mutual gains for all concerned, with a trade union articulating the ‘voice’ of the workforce, in reality the management and the trade union were individually working toward securing other agenda. The resultant agreement was simply the framework through which other imperatives were being promoted. For management, the negotiations were driven by the British government’s Employment Relations Act 1999 (ERA) and management’s intention was to negotiate, on its own terms and in its own interests, a recognition agreement with a trade union before one was imposed on the company by the legislation. For the trade union, the main imperative was securing recognition, primarily to increase membership. If the final agreement did provide a mutual gain situation, the gains were only made by management and the trade union as an organisation, with few gains and a very low decibel rating for the workforce. The partnership agreement, neither in form nor operation, can in any way be described as an attempt to create a genuine partnership at work. Operationally it is a partnership that affords the trade union recognition (and therefore increased membership), but leaves it marginalised and co-opted into the cause of management, and the workforce with little increase in influence over their lived experiences at work. The chapter begins by describing the methodology and background to the negotiations, and the situation within the firm prior to the approach from the trade union. It then outlines the form and process of negotiation, before examining the partnership in practice. It concludes with a discussion of the issues raised.
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Methodology The chapter draws on data collected as part of an ongoing research project in the case study organisation. Full access was granted to senior management, the workforce and the FTO throughout the case study, although not to the negotiations themselves. The research process involved interviews, both formal and informal, and included information gathered from general conversations with all parties—indeed, some of the most valuable insights into the negotiations came from such conversations, especially at critical points in the negotiations. The main actors in the case study from management were the Managing Director and the Human Resource Manager, assisted by an advisor from the Engineering Employers Federation (EEF). The main actor representing the workforce in the negotiations was a full time official from a trade union at the forefront in negotiating partnership agreements. Throughout, I was particularly concerned with tracking and detailing the micropolitical dimensions of the negotiations. It became obvious from the outset the actors involved had a particular agenda towards which they were working, agenda that influenced, and were subsequently influenced by, the agenda of others. While both sides began from clear positions regarding both process and outcome, as the negotiation developed positions and ambitions changed and developed organically throughout. It quickly became clear that a full assessment of the outcome would be impossible without a comprehensive understanding of the nuances shaping the process of negotiation.
Turnhay engineering: a case study Background to the negotiations Turnhay Engineering is a branch plant of a European based multinational corporation, situated in the north of England. Located within the ‘light engineering’ sector, it produces a specific finished product range for a small, specialised customer base. The specialised nature of the product means that the firm has few competitors, but with few customers, competition, especially on price, is fierce. During the last two decades the firm has experienced several changes of ownership and was acquired by the multi-national corporation in 1993. Following this, a new management team was brought in whose first step was the introduction of a redundancy programme that reduced the workforce from 230 down to 180. The product sector the firm trades in is also seasonal with demand fluctuating greatly, depending on the time of year. The months of January through until July are the slack period; and from August until late December the firm works to maximum capacity. The seasonal nature of product demand is at the heart of all antagonisms within the organisation and became the significant factor in determining the pace and progress of the partnership negotiations between management and the trade union. Management’s solution to the organisational problems caused by fluctuating product demand took the form of a system of ‘banked hours’ where all employees are re-paid 100
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hours of work over the year. At times of high demand management draw upon the hours ‘in the bank’ when a maximum of eight hours per week is ‘withdrawn’ from the balance of each employee before overtime rates are triggered. Employee’s finding themselves laid-off during the slack period have the choice of taking holidays or continuing to receive wages, thus increasing the balance in their ‘account’. The great hostility of the workforce to the ‘banked hours’ system, aggravated by a sudden and imposed change to shift patterns, proved to be the catalyst for calls for trade union representation in what had historically been a non-union firm. With no union involvement, what conflict there was over these issues was unregulated, unofficial and primarily covert, and was hampering attempts to introduce new working practices to all sections of the organisation (Wray 2001). Negotiating the partnership First contact from the trade union was made by a shop-floor representative on the firm’s Joint Consultation Committee (JCC) in May 1998. This is the high point of the firm’s slack period when conflict over the ‘banked hours’ system is at its height. The trade union, also approached by this individual, began a weekly recruitment campaign at the factory gates. It was at this point management representatives realised they would probably be confronted by an increasingly concerted effort on the part of the trade union to gain recognition. The decision over whether or not to formally meet with the union was heavily influenced by the proposed ERA legislation1 which, when implemented, would automatically enforce trade union recognition, if certain qualifying pre-conditions were met. At this point management took the decision to enter into negotiations with the trade union, should a formal approach be made. That approach was made in July 1998, and a management team, made up of the Managing Director and the Human Resource Manager, agreed to meet with the FTO offsite. This initial meeting was held off-site at the insistence of management to ensure that the FTO understood that the meeting was informal, with no commitment to enter into formal negotiations. As the Managing Director explained: We only met with the union because we realised that the proposed legislation would make it inevitable that we’d have to deal with a union sooner or later, and if this was the case we wanted to make sure it was on our terms. The individuals making up the management team, prior to their employment at Turnhay Engineering, had both worked in the automotive industry, and both admit to long experience in dealing with trade unions. While jointly expressing no particular hostility towards trade unions per se, they felt that ‘the unions aren’t for us at this moment in time’. At the first meeting, management was informed by the FTO that he was holding regular meetings with over 40 of the company’s employees, and was intending to represent three of them in claims for damages due to accidents at the firm. It was at this point that management realised the approach was serious, and that the call for recognition and representation would have to be addressed. A series of further meetings, again
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informal and off-site, were arranged by management in order to determine the true extent of workforce interest in the trade union. Central to the tactics of management were attempts to prolong negotiations, for two reasons: first, until it was clearer about the proposed legislation; and second, and more importantly, to get through the firm’s busy period before any serious negotiations were entered into. The management representatives felt that given the unrest among some of the workforce over the ‘banked hours’ system, the enforced shift changes, and proposed changes in working practices, formal negotiations would best be undertaken during the slack period, when any damaging industrial relations problems could be better contained. The climate and pace of the ensuing negotiations were dictated by the management’s determination not to enter into formal negotiations during the busy period. Subsequent, and still informal, meetings were restricted to discussions about the structure of possible formal negotiations, with management representatives dropping incorrect hints that they were involved in negotiations with another trade union. In an attempt to determine the extent of the interest in trade union membership within the workforce, management initiated a ballot of all shop-floor employees. The ballot was restricted to the shop-floor as any resultant trade union representation was to be restricted to the hourly paid shop-floor workforce. The ballot result showed that over 80 per cent would join a trade union if given the opportunity, results that were withheld from the workforce. The FTO responded to this failure to divulge the ballot result by informing management that he was aware of the extent of interest from the significant numbers that had joined without recognition being agreed. In acknowledgement of the interest in the trade union, and in an attempt to stall formal negotiations until the New Year, the Managing Director agreed to a joint shop-floor presentation from himself and the FTO. This presentation was held in mid-December 1998, at which the Managing Director announced that the firm intended to enter into formal negotiations with the trade union with the intention of granting recognition on the basis of a negotiated partnership agreement. For the formal negotiations Turnhay Engineering called on the services of the EEF to provide them with an advisor who would be party to all future negotiations, which would take place on EEF premises. Before formal negotiations began the FTO was able to secure the inclusion of two representatives from the shop-floor, who would sit in on the negotiations as observers. At the first of what became a long series of meetings, the FTO presented for consideration the trade union’s ‘model’ partnership document as the basis for future negotiations. The response by the management team was to ask for time to consider this document, with the intention of returning with any amendments they might have. Again, the tactics of the management team were to prolong the negotiation process: realising that the negotiations were taking place at the beginning of the slack period, and that such an agreement could normally be expected to be signed in a few months, management was determined to prolong negotiations in order to ensure no agreement before early 2000. The method chosen to prolong negotiations was the development of the firm’s own partnership document, with points deliberately built into it that they could ‘reluctantly’, and over time, negotiate away. As the EEF advisor explained:
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We were presented with a draft agreement and we took it away and almost totally rewrote it. We included issues that we could negotiate away over time, but he (the FTO) agreed to it without comment, which made us suspicious of his intentions. These suspicions, led the management team to further extend the negotiations, fearing that they would immediately be confronted by a conflictual situation, either in the form of a wage demand or over the system of ‘banked hours’ should the agreement be formalised. It was only following a’corridor conversation’ between the Managing Director and the FTO that it became apparent that the FTO was under pressure to secure an agreement as soon as possible. For the Managing Director: It became obvious that the FTO was being driven by the need to recruit. He admitted that he was under pressure to meet a quota of new members and it became difficult to stall the negotiations, to keep them going. If we had asked him to stand on his head he would have done. Still determined to stall the implementation until the New Year, and the start of the slack period, management would only sign if a six months’ ‘settling in’ period was agreed before full representation would be allowed. When the FTO accepted this proviso, the agreement was formally signed on the 16 July 1999. Representation in terms of discipline would come into play in September, with grievance procedures introduced in November and full collective bargaining not in place until 16 January 2000. Management had thus ensured that the workforce was to remain partially mute until the beginning of the firm’s slack period. The only requirement that the FTO insisted upon, and which the management team felt it had to concede to secure the ‘settling in’ period, was the ‘check-off. The FTO wanted this for the obvious reason of convenience, though management’s reluctance was not down to avoiding an extra administrative burden. As the Managing Director explained: I didn’t want the ‘check-off for a number of reasons. Firstly it hides the cost of membership and would be just part of ‘off-takes’. Having to pay in cash weekly or monthly would test the workers ongoing commitment to the union. A direct debit would introduce the cost of membership into the home, and the wife might ask why he is paying it, especially as it represents about 1 per cent of pay. Throughout the whole negotiation the ‘check-off’ was the only concession management had to make to get the agreement it required; an agreement that minimised the ability of the trade union to represent its members in any meaningful way. The aims of the Turnhay Engineering partnership agreement entitled ‘Working Together in Partnership’ were to: …secure our long-term future by working together as partners to continually improve business performance and to share in the success.
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The formal structures of this agreement, through which these aims were to be achieved, are paraphrased in Appendix 7.1, which outlines all the substantive areas included.2 The ‘partners’ view the agreement differently, and the following statements provide clear insights into the micro-political dimensions of the negotiations. Management representatives were happy with the agreement, and with the way it subsequently developed: We got a great deal. The FTO was only interested in membership, and the agreement ties them in, in such a way that they have very little room to manoeuvre. The agreement is so tight that the union can do nothing. In fact, if we agree to something with the union on work practices for example, then it is up to them to get the workforce to go along—not us. What we have is an agreement between ourselves and the union, and I don’t think the workforce are aware of that fact. (Managing Director) We have been asked for copies of the agreement by other firms in the area. If you look at the document you see it is a non-document. Since we entered into the agreement the union has done well. I think nearly all the hourly paid staff have joined, although some of the welders are in another union. (HR Manager) The FTO was also pleased with the way things progressed, although for different reasons: I am comfortable with the agreement. I think it was the best I could get under the circumstances. You have to understand the union is a business; we must have members to survive. We enter partnerships to ensure recognition and to gain members. Even in genuine partnerships the union is a tool to help management control the workforce. They use us all the time. When things are going well they keep us at arms length, but when things go wrong they bring us in to sort things out. (FTO) The workers appear to have different views, as the comments of one shop steward indicate: The union made an arse of the whole process. The agreement is weighted totally in favour of management. All the FTO was interested in was membership—at any price. The FTO has told me that if we have a serious problem just to walk out, then he will come up and tell us to get back in and he will sort things out.3 What fucking use is that? The wage negotiation was a test case for the union as far as some of the members were concerned. They failed and we are losing members. People are starting to ask what they get for their money, and I have to say not much. I was representing the people in my section before the union came in, and I
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don’t have much more say now. The FTO was not hard enough in the negotiations and the agreement leaves too much scope for management to interpret it to their advantage. For example ‘unsatisfactory attendance’ has resulted in one of the lads getting a verbal warning for not working on a Saturday morning for overtime, not normal working—overtime. They can warn you for not working overtime, but they can send you home when things are slack with no warning and you end up owing them time. Partnership in operation The first operational test of this agreement came immediately the partnership was signed, when the apparent management right of veto over the selection of shop-floor representatives was tested. When informed of the names of those willing to stand for election, the HR Manager contacted the FTO to make him aware that he thought two of the four candidates were unsuitable (see point 17 in Appendix 7.1). According to the Managing Director: We informed the FTO that two of those standing were not articulate enough to do the job, though we thought them too militant. We thought he would tell us to fuck off—that it had nothing to do with us, but he didn’t. He came and somehow persuaded them to stand down, which they did. Can you imagine what we would have said if they had objected to our rep from the EEF? The FTOs recollection of this incident is somewhat different: Four individuals put themselves forward to stand as shop stewards. I didn’t want two of them because I wanted people who’d be responsible and a credit to the union so I persuaded them to stand down. With these contrasting accounts of the same incident, we are left to decide for ourselves. It is interesting to note, however, that the two individuals everyone was unhappy about were active throughout the campaign for recognition, and were the individuals chosen by the FTO to sit as observers during the negotiations.4 Once the partnership agreement was fully implemented, and the (acceptable) shop stewards in place, the next operational test quickly followed. In December 2000, management announced a programme of redundancy requiring the loss of 32 jobs, 25 from the shop floor. To reach the target number (following the identification of volunteers) the shop stewards were required to become involved in the selection process, formulating the objective and subjective criteria to be used for selection. Once identified as a candidate for redundancy, each individual was given an ‘at risk’ interview, at which they were allowed to challenge their selection. This process was completed within a week, with only one successful challenge, with all the individuals concerned leaving the organisation at the end of January 2001. Far from protecting jobs, the partnership agreement had made the trade union complicit in the reduction of the workforce, rather than as a focus of resistance to redundancy.
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The next test came in the form of a wage negotiation in January 2001 (concurrent with the redundancy process). At the initial meeting with management, the shop stewards were asked to outline their claim, which included a ‘substantial’ rise in wages, a 35 hour week (from 40), two extra days’ holiday and other ancillary benefits. As one of the shop stewards commented: We wanted a substantial rise because we have only had 16 per cent over the 7 years since Turnhay took over. The response we got was that any rise would have to be self-financing, as would any reduction in hours. As the HR manager confirmed: We made no initial offer, simply stating that any rise would have to be self-financing. We wanted to make the early negotiations short and sharp to get the FTO involved as soon as possible. Following an early ‘failure to agree’ the FTO was brought in and, with his involvement, management made what it described as a ‘final offer’ of a self-financed 2 per cent rise (to be paid for through the introduction of a 10 per cent productivity increase across the year), a reduction in hours to 37.5, financed by taking away the paid aspect of the 30 minute daily lunch break and no extra holidays or other ancillary benefits. The loss of the paid lunch break would not be offset by increases in overtime payments following the reduction in the working week and an earlier entry into overtime, as the ‘time and a half rate was to be reduced to 1.41 per cent and the ‘double time’ rate reduced to 1.87 per cent to compensate. An initial ballot of the workforce turned down the offer, and with no further increase offered by management, the FTO requested a further ballot with the words ‘the offer is as far as the company and the union can go’ included. Both shop stewards resisted this, adding the words ‘at this time’. Following a second rejection, the Managing Director and the FTO made a joint statement to the workforce, and the offer was accepted following a third ballot. Both management and the trade union are sensitive to the level of membership in the union and are reluctant to provide figures, however in each of these ballots over 80 individuals voted. There is evidence that strongly suggests that the partnership agreement is being used by management to engage the trade union in ‘managing’ a dissatisfied and unhappy workforce. Both management and the FTO readily acknowledge that at any time the workforce become ‘recalcitrant in any way’ it is the trade union’s role, as defined in the agreement, to assist management in securing compliance. This has had serious consequences for both management and the trade union. The period between the 2001 and 2002 wage settlements has been described as anarchic by the HR manager as the trade union has experienced great difficulty in recruiting and maintaining shop stewards. Thus, according to the HR manager, ‘[T]he JCC has not met for months because the union can’t get or keep shop stewards’. This period has also been costly for the trade union, especially in terms of membership. The critical case incident for the union appears to have been a conflict over a change of shift pattern for one small section of the shop-floor workforce. The shift changes were imposed with one week’s notice, and the workers concerned (all of whom were members
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of the trade union) sought advice, not from the union, but from ACAS. On learning that they had not been given sufficient notice the workers concerned claimed compensation from management. As the HR manager explained: When I learned of this claim I informed the FTO and he told us to ignore it and that he would come out and sort it out, which he did. The result was a one-off payment of £85 to the workers concerned and an agreement that allows us to change shift patterns with 3 days’ notice anywhere in the organisation. The consequences for the trade union of this critical case, taken with other incidents, became clear during the 2002 wage negotiations when only 54 people voted in a ballot on the wage rise, for trade union members only, and held over five working days. This figure would suggest that a significant loss in membership had occurred (33 per cent), a fact acknowledged by a current shop steward: I’m not sure about how many members we have now but we have lost a lot. The FTO does his best but nothing changes, the wages are still shit, we still get fucked about, and a lot of them can’t see the point anymore. While partnership in the workplace is often seen as a bilateral agreement between a trade union(s) and management, this case study would suggest that partnership agreements should be recognised as trilateral relationships: a relationship between the employer, the trade union(s) and the workforce. The agenda behind the calls of the workforce for trade union recognition was simply a call for representation, due to the hated ‘banked hours’ system, and what the workforce saw as dictatorial management. Ultimately, the workforce were calling for something previously denied them—a ‘voice’—some mechanism through which they could articulate their concerns over issues affecting them in the workplace. They needed someone to speak meaningfully on their behalf, and to enjoy the protection of collective representation. At no time was there ever a call for a partnership agreement from the workforce, indeed the workforce continue to have little concept of what this means. The benefit the workforce has received from the agreement is an apparent right to representation, though how that ‘right’ is itself operationalised would appear limited. The proposed changes to working practices were implemented, the ‘banked hours’ system remains, and shift patterns have again been changed against the wishes of those affected. Ultimately, management has reinforced its primacy over organisational governance, and while the workforce has been given a ‘voice’, that voice has a very low decibel rating, and at times speaks with a management accent.
Discussion What can we make of this case study, and how does it inform the debate on partnership? As it stands, it is a partnership based upon single union recognition and a ‘no strike’ agreement. In terms of creating ‘a shared commitment to the business goals of the organisation’, commitment is to be identified and quantified through targeted
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productivity improvements. While ‘a commitment to labour flexibility’ is an ‘expectation’ in that ‘changes to working practices are to be part of normal ways of working’, the hated ‘banked hours’ system will be retained unchanged to meet the ‘seasonality of manufacturing requirements’, and compulsory overtime is enshrined in the agreement to meet short term fluctuations in demand for product. No mention whatsoever is made about job security. The agreement also falls short in the area of sharing financial success, indeed it is stated categorically that ‘additional payments to basic rates will not be considered’ for productivity efficiencies. The ‘sharing of information and a willingness to discuss business strategy’ is, in this case, defined by issues such as the ‘banked hours’ system being ‘continued’ and changes to working practices ‘expected’. Where consultation is agreed, it is to be through the JCC, with the union representatives outnumbered, and therefore their voice muted, as salaried staff will take the two non-union seats on this committee. The agreement also gives the company the right to communicate directly with any individual or group from the workforce, with union representation only ‘where it is felt necessary’—by management. The ‘recognition of legitimate differences’ is implicit in the agreement rather than stated explicitly, and the ability of the shop stewards to voice workforce sentiment and ambition is, as a consequence, severely limited. It is this inability on the part of the trade union to articulate the concerns of the workforce that Stuart and Martínez Lucio (2002:196) describe as, ‘a fundamental deficit in terms of the presence and effectiveness of voice mechanisms at work’ that ultimately defines this partnership as ‘counterfeit’. I would argue that the agreement represents no more than the framework for a ‘hard’ HRM strategy aimed at enforcing change to working practices, a point that has been recognised in other partnership agreements (Ackers and Payne 1998; Danford et al. 2000). The strategic nature of the document can be seen in two of the points outlined in the case study. First, management has secured a partial veto on the selection of shop floor representatives and second, has manoeuvred wage negotiations to a period when any breakdown in talks will fall at the beginning of the firm’s slack period. Thus management has weakened the union’s hand in any contested negotiations. Functionally, all the workforce has gained from this partnership is an old style collective bargaining agreement, but one which is severely limited in application The literature on partnership suggests that this case study should not be seen in isolation as in many instances, far from a situation of ‘mutual gains’, only marginal gains have been won for workers compared with significant gains for management. At Turnhay Engineering partnership does not represent a re-alignment of the labour process towards a more collaborative relationship between capital and labour, but a reaffirmation of a labour process based on exploitation and dependent upon control. Far from being a new beginning in management practice that provides workers a greater say in, and extended influence over, their lived experiences at work, this partnership should be seen as no more than a managerial strategy aimed at maintaining control over the labour process, a control seemingly threatened by the introduction of the Employment Relations Act 1999. A major plank of this strategy is the incorporation of the trade union into the processes and mechanisms of control, over both the labour process and the individuals involved in it. The evidence in no way suggests a system of organisational governance based upon non-adversarial pluralism, as in this case partnership can only be seen as a mechanism
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reinforcing the extant social relations of labour rather than as a mechanism re-shaping them. If we apply the definitional tests of partnership offered by McBride and Stirling (2002), then this partnership fails in all situations. Ideologically, both Turnhay Engineering and the trade union were acting from positions of organisational expediency, neither from a belief in, nor a commitment to, the concept of partnership in the workplace. Management was seeking to limit the possible impact of the trade union through its representation of the workforce, and the trade union was primarily interested in the financial gains increased membership would bring. In terms of process, the agreement primarily serves the interests of management with the trade union incorporated into the mechanisms of organisational governance. In practice, only lip service is paid to ideas of consultation; to the idea of the development of common goals and the achievement of mutual gains. If outcomes are examined, again management is the prime beneficiary as it was able, through the agreement, to achieve: an uncontested programme of redundancy; influence over the choice of shop-floor representatives; retention of the ‘banked hours’ system; acceptance of a wage rise based on productivity gains; a reduction in working hours based solely on the removal of a paid lunch break; and a reduction in overtime premiums. However, for the trade union, the situation may be more complicated than simple organisational expediency—of putting membership numbers before representation. It could be seen in utilitarian terms of achieving the best possible conditions of representation, where trade unions generally find themselves faced with the choice of either being incorporated into the management structures of organisational governance through partnership agreements or being left outside the factory gates with the workforce unrepresented. This would reflect the TUC’s organising strategy, as opposed to the more traditional servicing strategy of recruitment. If this is the case, then those supporting the ‘new unionism’ project should take notice of this case study. Simply gaining recognition for the union as an organisation, whilst leaving the membership unsupported, may be counterproductive as members will come to question what it is they want from a trade union, and what represents value for money. If a trade union organisation abandons its membership once an agreement has been signed, that membership may then abandon the trade union. The danger for both management and trade unions of leaving a workforce without a significant voice is, by the standard of this case study, anarchy in terms of industrial relations and a haemorrhaging of membership. The Employment Relations Act 1999, by giving trade unions the right of recognition if specific criteria are met, may allow unions to forgo this organising route and avoid forced entry into ‘counterfeit’ partnership agreements. The legislation may also allow trade unions, tied into such partnerships, to renegotiate more meaningful agreements, as the danger of de-recognition is reduced. In such circumstances it will be the workforce to whom trade unions will have to sell themselves, not management, with the consequence that the trade unions will have to be less accommodating to management and more responsive to the needs of their members. It may well be that the new legislation on recognition, and not partnership at work, proves to be the catalyst for change in an employment relationship that is, and will remain, inherently pluralist. In summary, the operational tests offered above would suggest that this partnership cannot, realistically, be described as ‘genuine’. We have a management, threatened by an
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enforced recognition of a trade union, determined to minimise the influence collectivism can bring by tying a union into an ultimately meaningless partnership agreement. We have a trade union equally determined to sign the agreement, primarily to increase membership. We can conclude that both parties were acting from a perceived sense of weakness, and approached the concept of partnership from a position that can only be described as cynical. Any genuine attempt by management to engage the collective workforce in meaningful consultation and negotiation could have brought an end to anarchy and covert resistance. Any genuine attempt to represent the workforce, and a resistance to incorporation into the implementation of management decisions, could have brought the union increased credibility within the workforce, growing influence over the organisational governance of Turnhay Engineering, and potentially a stability of membership they do not now enjoy. Perhaps the last word on partnership should be left to the FTO who suggests that the whole debate surrounding partnership at work is a chimera: Partnerships are agreements between the union and management, setting the rulebook for workers to follow…just collective bargaining agreements. The union gets new members, the members get professional representation and management get order from formalised collective bargaining structures. Partnership does not exist it’s just a new term for a single union, no strike deal.
Appendix 7.1: Turnay Engineering’s partnership agreement 1 All employees will be committed to improving the productivity of the Company by all possible means. Targets for productivity will be set throughout the year and communicated to all employees. 2 Continuous improvement will be a requirement for everyone. Changes to working practice are to be part of normal ways of working. Additional payments to basic rates will not be considered for activities resulting in, or arising from, continuous improvement initiatives or from productivity improvements. 3 Every employee will be expected to be flexible, subject to his or her availability to do the job, after training if necessary and subject to safe working practices. In exceptional cases employees will be required to work additional hours in instances when there is a threat to customer satisfaction. 4 The Flexible Working Policy (Banked Hours) has been established and will be continued in order to protect the earnings of hourly paid employees and balance hours worked and therefore labour costs to meet the seasonality of sales and subsequent manufacturing requirements. This will be reviewed annually by the JCC. 5 The teamworking concept is critical to enable the Company to achieve best in class automotive standards and core employees will be expected to work in teams. 6 Customer satisfaction must always be everyone’s first consideration. Procedures, techniques, measurement and process adherence are fundamental in achieving consistency in output of product.
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7 We will work together to provide the best possible working environment. 8
Constant open and honest communications between employees throughout the Company will be the normal way of working. The Company will ensure that employees are informed on a regular basis of matters that affect their employment and work area and that they are involved in ensuring that performance meets company objectives.
9
All employees will participate to the best of their ability in giving and receiving necessary training and development.
10 A fundamental principle of this Partnership Agreement is that all conflicts of interest will be resolved through conciliation and negotiation rather than any form of industrial action such as strikes or lock out. Should such conflict of interest arise, the agreed procedures will be put into practice and while in operation there will be no industrial action and co-operation will be maintained. 11 The aspect of recognition of the trade union is covered in the agreement document as follows, again paraphrased. 12 By this agreement we grant recognition to the Union to represent the Company in all hourly paid employee categories. 13 The Union recognises the right of the Company to plan, organise, manage and decide finally upon the operations of the Company. 14 The Company recognises that it is to its benefit for relevant employees to be represented by the Union and therefore recognises the sole right of the Union to represent the employees who are members of the Union, within categories up to the specified levels. 15 The Company will encourage relevant employees to become members of the Union and to actively participate in Union affairs. 16 The Union recognises the right of the Company to communicate with employees as individuals or groups at any time, extending an invitation to a Shop Steward or Full-Time Officer where it is felt necessary. 17 Two representatives will be elected, in accordance with the Union’s Rules, by secret ballot. These individuals will sit on the JCC. The Company will have the right to raise with the Union any objection to the appointment of any individual. 18 The Company and the Union recognises that the Joint Consultative Committee will be the major forum for relationships between the Company and the employees. The Company and the Union support the JCC as the prime forum for raising and resolving collective issues. 19 The JCC will consist of: 2 representatives of management; 2 accredited Union representatives; 2 representatives from non-Union members of the Company. 20 Negotiations of wages and main terms and conditions of employment will be conducted between the company and the Union Employee Representatives. Negotiations will usually be conducted at such a time as to allow settlement and implementation on January 1st each year.
Notes 1 The part of this legislation driving the management at Turnhay Engineering was concerned with the statutory requirement to recognise a trade union. If, following a ballot, a majority of
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all those voting, and at least 40 per cent of those who are entitled to vote, vote, then the trade union must be recognised for collective bargaining purposes. 2 Management representatives would not inform me of the points they had included to negotiate away. Readers are left to judge for themselves. 3 This presumably leaves anyone following this advice open to summary dismissal. 4 Both of these individuals have now left Turnhay Engineering. One left of his own volition shortly after the ballot to select the two shop stewards, expressing disgust at the whole process. The other was subsequently ‘selected’ for redundancy.
References Ackers, P. and Payne, J. (1998) ‘British trade unions and social partnership: rhetoric, reality and strategy’, International Journal of Human Resource Management, 9(3):529–550. Danford, A., Richardson, M. and Upchurch, M. (2000) ‘“New unionism”, organising and partnership: a comparative analysis of union renewal strategies in the public sector’, International Labour Process Conference, University of Strathclyde, April. Grugulis, I., Dundon, T. and Wilkinson, A. (2000) ‘Cultural control and the “culture manager”: employment practices in a consultancy’, Work, Employment and Society, 14(1):97–116. Guest, D.E. and Peccei, R (1999) ‘What is partnership and does it pay off?’ British Universities Industrial Relations Association Conference, De Montfort University, July. Kochan, T. and Osterman, P. (1994) The Mutual Gains Enterprise: Forging a Winning Partnership Among Labor, Management and Government. Cambridge Mass: Harvard Business School Press. Marks, A., Findlay, P., Hine, J. and Thompson, P. (1998) ‘The politics of partnership? Innovation in employment relations in the Scottish spirits industry’, British Journal of Industrial Relations, 36(2):206–226. McBride, J. and Stirling, J. (2002) ‘Partnership and process in the maritime construction industry’, Employee Relations, 24(3):290–304. Stuart, M. and Martínez Lucio, M. (2002) ‘Social partnership and the mutual gains organisation: remaking involvement and trust at the British workplace’, Economic and Industrial Democracy, 23(2):177–200. Wray, D. (2001) ‘The message is the medium: a case study in “cultural change”. University of Hertfordshire Business School. Working Paper Series, paper no. 34.
8 The promotion and prospects of partnership at Inland Revenue Employer and union hand in hand? David Beale
Introduction It has been argued that previous studies have often failed to locate the debate about partnership sufficiently within an historical, political and economic context, that they have given inadequate consideration to the workplace and the significance of internal union processes, and have sown confusion over the definition of partnership (e.g. Kelly 2001; Whitston 2001; McBride and Stirling 2002). This chapter aims to take these criticisms into account through a study of the historical development of partnership between union and employer at Inland Revenue. In doing so it considers the evolution of the union’s approach to industrial relations from its consensual traditions, through the Thatcher era, to the post-1997 period of Labour government. This perspective is particularly relevant to the public sector where, arguably, the approaches to industrial relations that were predominant in the 1945–70s period of postwar consensus embraced aspects of partnership. In addition, this study emphasises the significance of the balance of power between the parties; and it implies that the reality of partnership is much more likely to restrain and undermine the militancy of the union than that of the employer. This reality emerges because partnership commits the union substantially to the employer’s agenda through a combination of informal relationships and formal agreements—and thus limits the union’s ability to act independently. Partnership is understood here partly in terms of the TUC’s six principles of partnership (TUC 1999) and partly through Kelly’s perspective that contrasts partnership/moderation with militancy (Kelly 1996, 1998, 1999, 2001).1 Whilst recognising the basic political differences that underlie them, taken together these definitions provide a fairly broad though useful framework for an historical interpretation of the issues. This allows for partnership to be seen both as a general industrial relations approach and in terms of formal agreements between union and employer. Several factors make Inland Revenue an interesting case to consider. In spite of considerable cost and performance pressures within its Civil Service context, Inland Revenue has experienced a relatively limited degree of market exposure and has a particular and direct relationship with central government. Government policy has not led to organisational fragmentation quite to the extent that it has occurred elsewhere in the public sector. Inland Revenue has strong centralised traditions, and these are still important in spite of some partial movement away from this. In addition, the main trade
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union has supported a partnership approach in its relationship with the employer and central government, although this has been strongly contested by some sections within the union.2 This chapter first briefly describes the background of Inland Revenue, outlining its historical context and the role that partnership and related approaches have played. The next section looks at the factors that were conducive to partnership at Inland Revenue, the form it has taken and the significance of Inland Revenue’s new management initiatives to it. This is followed by an assessment of the obstacles to partnership, the predominant focus of partnership at a national level and the balance of power more generally. It is argued that the promotion of partnership in this organisation has been more a question of union choice than might otherwise be assumed, and this is related to entrenched conflict between the main political factions within the union. In terms of methodology, union representatives and union members alone have provided research data for this study.3 Whilst there are limitations to such an approach (Bacon and Blyton 1999:642)—with primary data from workplace managers being of interest—the methodology had several important strengths. Focusing on union representatives was beneficial to making sense of the union’s attitude to partnership; local union representatives, with their particular role in relation to adversarial trade unionism, have been seen as central to the study of conflict and cooperation (Kelly and Heery 1994; Bacon and Blyton 1999:642). The tendency has been to rely on single respondent studies utilising data from managers alone (Bacon and Blyton 1999:642), and the methodology here can be partly justified in terms of helping to redress the balance. Also, this study benefits from a combination of both qualitative and quantitative methods in relation to union representatives and members. The project looked at nine Inland Revenue offices, located in the north of England. There were 23 semi-structured interviews of union representatives, supplemented by semi-structured questionnaires and documentary evidence. Structured questionnaires were sent to all union members at the nine offices; 1,179 questionnaires were distributed to union members, with 629 responses (a response rate of 53 per cent). The data were collected in 1998–99.
Inland Revenue, its historical context and development The primary function of the Inland Revenue is to collect, administer and assess direct taxes, including income tax, corporation tax, capital gains tax, stamp duty and petroleum revenue tax (HMSO 1998:486, 507).4 With its close relationship with central government, Inland Revenue advises and is accountable to the Chancellor of the Exchequer. The tax collection, administration and assessment functions are organised under the umbrella of the Inland Revenue Board, and 22 executive offices, including ten at regional level, are responsible for day to day operational matters. In excess of 50,000 staff are employed by Inland Revenue, of whom approximately 40,000 work in regional network offices throughout the country (Inland Revenue 2001; Inland Revenue Manpower Policy Unit unpublished sources). These offices, as the basic units of the organisation, have direct responsibility for processing tax returns, enquiries
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and related administration, and the collection of taxes in a locality or for other specific groups of taxpayers (Fairbrother 1994:114). The Inland Revenue group of the Public and Commercial Services Union (PCS) organises all but management and senior technical grades. Union organisation underwent major changes in the 1990s, with two large-scale union mergers. First, the Inland Revenue Staff Federation (IRSF)—the principal union for Revenue workers—merged with the National Union of Civil and Public Servants to form the Public Services, Tax and Commerce Union (PTC); second, in 1998 PTC merged with the Civil and Public Servants Association (CPSA) to form PCS. Union membership amounted to 86 per cent of Inland Revenue staff (Fairbrother 1994:130), but membership amongst main grade staff within the regions may be in excess of this. Inland Revenue has industrial relations traditions rooted in the centralised and predominantly consensual history of Civil Service Whitleyism. The IRSF traditionally adopted the methods common to Civil Service clerical unions; that is, it placed argument and political lobbying, rather than the threat of industrial action, at the heart of its strategy for improving pay and conditions (Humphreys 1958; Parris 1973). Such an approach was recognised as a legitimate modus operandi by both Conservative and Labour governments for several decades. To a large extent this was a partnership by another name, albeit in the context of the public sector as ‘model employer’ (e.g. Colling 2001:600–2). Factors underpinning the consensual relationship included a mutual interest in the needs of Inland Revenue as an organisation of national importance, moderate union demands and significant concessions to management, the containment of conflict and discouragement of industrial action, a strong reliance on the employer, a pluralist approach within these limits and guaranteed job security. Whilst there was no formal partnership agreement between IRSF and Inland Revenue of the kind we know today, this consensual relationship did contain a significant number of the elements of partnership identified by both the TUC and Kelly (TUC 1999; Kelly 1996, 1998, 1999, 2001). From the late 1960s through to the 1990s, an extensive range of pressures and challenges to this consensual approach emerged. First, there were growing demands for radical reorganisation of the Civil Service in order to increase efficiency and responsiveness to government requirements (Fulton 1968; Fairbrother 1994:18–20). Second, government policy in the 1980s generated considerable cost-cutting and productivity pressures—imposing restraints on pay and staffing levels—and created greater managerial control (Marsh 1992:226–7; Horton 1996:93–4). Third, Civil Service strike action over pay in 1981 effectively ended IRSF’s traditional reputation as a staff association. Fourth, the impact of information technology, combined with the effects of new tax systems and new areas of work, was considerable in the 1980s and 1990s. Whilst computers had become the basic tool for Inland Revenue staff by the end of the 1980s (Fairbrother 1994:120–1, 125), information technology also increased the potential for performance measurement and the redesign of work tasks. It ensured a much greater standardisation of work, opened up the potential for deskilling and an increased division of labour, and provided the basis for large tax return processing offices and new Inland Revenue call centres. Whilst a relatively centralised organisation, Inland Revenue has been subject gradually to a degree of decentralisation and managerial devolution: encouraged first by the Financial Management Initiative of the mid-1980s (Fairbrother 1994:113–19), and later
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by the Next Steps programme. The latter aimed to reorganise the Civil Service on the basis of executive agencies, expose it to market forces and increase managerial autonomy (Efficiency Unit 1988; Corby 1993/94; 1998:194). Change also took the form of new management initiatives in relation to pay, labour flexibility and employee involvement. In the late 1980s, Inland Revenue introduced a staff appraisal scheme and subsequently linked this to pay, establishing an individual performance-related pay (IPRP) scheme known as Performance Management. IPRP proved to be a generally difficult area for Inland Revenue (Marsden and Richardson 1992, 1994; Marsden and French 1998a, 1998b), exacerbating long-standing tensions over pay. In the mid-1990s, Inland Revenue also proposed radical plans for greater flexibility of working time. Alongside these developments, Inland Revenue implemented an employee involvement programme that included Team Listening (a variation of team briefings), staff attitude surveys, an increased volume of bulletins and circulars to employees about Inland Revenue’s ‘business needs’, and total quality schemes. These initiatives therefore incorporated both downward and upward internal communication elements. However, in spite of the extent of these changes in recent decades, and the potential of many of them to generate conflict and promote more adversarial industrial relations, the consensual traditions proved to be particularly resilient. Several ‘stabilising’ factors contributed to this. First, successive administrations—including the Thatcher governments—were slow to decide how they would transform the essentially nineteenth century bureaucratic framework of the Civil Service (Hennessy 1990; Fairbrother 1994), and this was particularly so in the case of Inland Revenue, with its proximity to central government and related political sensitivities. Job losses were largely achieved through natural wastage, recruitment restrictions and voluntary arrangements, rather than compulsory redundancies. Operational requirements ruled out the possibility of widespread numerical labour flexibility; and there was no explicit attempt to abolish national bargaining. In addition, the union still clung strongly to its predominantly nonconfrontational traditions. The national leadership of the union evidently aimed to maintain the essential element of these traditions, even though political lobbying of central government, the union’s traditional alternative to industrial action, was no longer an available option in the Thatcher era. This scenario of an extensive and varied programme of change, counter-balanced by important stabilising factors (including the union leadership’s determination to avoid serious confrontation with the employer) laid the foundations for a more intense and explicit battle over the union’s support for partnership in Inland Revenue in the post-1997 period.
Partnership, its form and the factors conducive to it During the Thatcher years any overtures to government inevitably fell upon deaf ears, and in some sense the union at national level became an advocate of partnership in search of a partner. The national leadership of the union embraced the politics of new realism in the 1980s, which essentially entailed trade union and Labour Party rejection of confrontational approaches to industrial relations, and argued that unions had no
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alternative but to accept and operate within the new business-orientated, political and economic climate. In so doing, new realism helped lay the foundations for the widening interest in partnership that was to follow in the 1990s. First, within the context of Inland Revenue, this increasingly meant union concessions to the growing programme of change, pushed forward by the Thatcherite agenda. Second, with initially the prospect and later the reality of a Labour government, the union leadership’s advocacy of nonadversarial and partnership approaches to industrial relations was greatly encouraged, with both employer and central government now willing to act as partners. In response to the difficulties of the performance-related pay scheme, national negotiations commenced in 1999. The PCS Inland Revenue group executive committee recommended acceptance of the employer’s offer arising from these negotiations, though this was initially rejected by the union membership in a ballot in September 1999. A programme of limited industrial action began, but in January 2000 a revised offer, conditional to acceptance of a Modernisation Agreement for Inland Revenue, was recommended to and accepted by the membership. The Modernisation Agreement addressed principles of mutual respect for each party’s agenda, openness and trust in dealings between union and employer, a joint commitment to the success of Inland Revenue, improvements in job satisfaction, job security and skill levels, increased flexibility in working time arrangements and proposed more effective information technology support for staff; it did not replace pay negotiations or remove the right to strike (PCS 2001a, 2002a). Alongside the Modernisation Agreement, an agreement for the Civil Service as a whole—entitled Partnership Working in the Civil Service—was signed by PCS, Civil Service senior management and central government (PCS 2000a, 2000b, 2000c, 2002b). This was intended to provide a framework for agreements within particular agencies, departments and private sector employers. It outlined broad principles of mutual commitment to the success of the organisation, joint management of change, improving public service, greater employee involvement, joint efforts to avoid redundancies, improvements in information technology, training, workplace accommodation and work-life balance, and compliance with employment law (PCS 2000a, 2001b, 2002b; The Socialist 2000c). Both agreements were made up of wideranging and relatively vague sets of principles, open to various interpretations. The PCS Left Unity group, for example, argued that its aim was to tie the hands of the union and to worsen conditions. It means acceptance of the Government’s modernisation programme. There is nothing modern about reintroducing Victorian working conditions for many of our members: 24 hour, 7 day a week opening and provision of services; call centres with their high pressure working methods; increased electronic monitoring of your work. (Left Unity 2001) The Partnership Working and Modernisation Agreements largely formalised the broader non-confrontational and conciliatory approach of the national union leadership in the 1990s, and by expressing that approach through formal sets of principles, the agreements also attempted to tie the union to it for the foreseeable future. The agreements generally incorporate most of the TUC’s partnership principles (TUC 1999). However, the concept
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of partnership is arguably located more in the union’s broader industrial relations approach in the 1990s than in these agreements per se—that is, in terms of union support for the ‘joint management of change’, the extent of concessions to the employer in negotiations, the rejection of adversarial approaches and the discouragement or containment of strike action. This is a picture that conforms substantially to Kelly’s notion of partnership as moderation. It is also important to clarify the relationship between partnership and key new management initiatives. First, with regard to individual performance-related pay, this was not an element of the Modernisation Agreement, as the employer’s final pay offer (to settle the 1999 pay dispute) was conditional upon its acceptance. Neither the Modernisation nor the Partnership Working agreements explicitly endorse particular new management practices, but the agreements’ broad principles do imply union support for future developments particularly in the areas of employee involvement, labour flexibility and performance measurement. However, in the 1990s, the union leadership had already established effective joint union-employer implementation on a range of key new management practices, which promised to deliver substantial cost reductions, increased productivity, restructuring and reorganisation for the employer and central government. Partnership was very much located in this union negotiating strategy and relationship. A particular aspect of this was the attempted incremental implementation of new management practices through local pilot schemes that were frequently encouraged by the national union leadership, and which arguably conceded significant union workplace control. The union’s handling of the Alternative Working Patterns proposals was an example of this. Here was an issue that was ‘…Potentially divisive (for the union) unless you can get the broader issues across’ (local PCS union representative); and the union members surveyed confirmed this picture—21 per cent were against, 21 per cent in favour and 44 per cent recognised both good and bad aspects of the scheme. Such divisions made this an issue that was bound to be difficult for the union to control. Partnership also has an important link with employee involvement. Not only is improvement of internal communications generally recognised as a key partnership principle (and employee involvement schemes implicitly promoted), but also partnership issues are in effect addressed at the frontline in the workplace through team approaches that use workers’ expertise to tackle operational problems. Although neither employer nor union may have much of a strategic approach to linking the workplace implementation of employee involvement to national approaches and frameworks for partnership, there is nevertheless a significant relationship between them, and the former is, arguably, potentially an important ingredient in securing the credibility of a partnership ideology at a workplace level. The developing character and context of industrial relations at Inland Revenue—from its consensual traditions, through the Thatcher years, to the era of New Labour—can be seen in terms of a reconfiguration of the factors conducive to partnership. This raises the question of whether the recent form of partnership in Inland Revenue was no more than an extension of traditional senior management/union relations. Certainly the resilience of consensual industrial relations traditions—and not least the union leadership’s role in maintaining them—have been important in laying the foundations for the partnership approach of recent years, and there are strong links between the two. However, the
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current form of partnership does differ in some significant aspects from the traditional consensus. Employee involvement, labour flexibility, radical changes to working practices and a more rapid and extensive programme of organisational change are essentially new related elements, and the extent of concessions made by the union to the employer have been greater, arguably, in the 1980s and 1990s than they were in previous post-war years. Of course, the wider economic and political context changed fundamentally in the 1980s and 1990s, creating a major shift in the balance of power in favour of employers, and this context has been critical in producing some significant differences between the traditional consensual approach to industrial relations in Inland Revenue and the more recent form of unionendorsed partnership. It also suggests that the recent promotion of partnership might be interpreted partly as an attempt to establish a peace settlement following a major victory and advance for employers.
Obstacles to partnership: pay and the failings of employee involvement Two important sets of factors have acted to discourage the promotion of partnership in Inland Revenue in the more recent period, and these are related to pay and employee involvement. First, in the 1980s and 1990s pay—particularly individual performance-related pay— was a major source of discontent amongst Inland Revenue staff in the workplace. Typical comments of office union representatives about IPRP were that: ‘Favourites always get through… (It) causes ill feeling… (It is) very divisive… The majority (of staff) are certainly disapproving of the system’. Other office union representatives described it as: ‘… So unfair…so contrived… It’s not what it says it is… It’s made the pay system the most unfair in the country’. The strength of these feelings was confirmed by the data supplied by union members, who were overwhelmingly critical of the Performance Management scheme. Only 3 per cent were in favour of it (64 per cent were against and 26 per cent recognised both good and bad aspects); and one third were against it even if the appraisal element was divorced from pay. Widespread resentment was expressed in the workplaces studied not only about the scheme, but also towards the union at national level for having negotiated it; and the indications at the time of the fieldwork (1998–99) were that these tensions were increasing, with considerable potential for industrial action over this issue. Shortly after completion of the fieldwork, Inland Revenue attempted to defuse the situation by declaring its intention to negotiate an alternative to IPRP—but by the middle of 2002, there still appeared to be basic discontent about the payment system, with debate over the equally contentious team-based performance-related pay proposals. Therefore, there was growing rank and file pressure in the late 1990s (and beyond) upon the national leadership of the union, to abandon a conciliatory and partnership approach towards the employer in respect of the central issue of pay. Second, Inland Revenue’s employee involvement programme was essentially cosmetic, with serious and perhaps insurmountable obstacles to establishing it more securely within the workplace. Combined with the persistent and deep sense of grievance over pay, this was an important obstacle to the promotion of a partnership ideology in the workplace, with it playing a significant part in restricting partnership relationships to the
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national level. The research data indicated that, in response to Team Listening, staff attitude surveys and total quality project initiatives, office union representatives were determined and effective in defending both the union’s independence and the established role of the local negotiating machinery (i.e. the office Whitley committees). Whilst the responses of office union representatives and members to these initiatives were essentially compliant, they were also low key, cynical and lacking in commitment to management’s objectives. Union representatives frequently used Team Listening meetings to challenge management, demanding answers to their critical questions and quoting back to management statements and information acquired through the meetings. Regarding the large quantity of staff circulars and bulletins, one union representative commented that: ‘… You can walk round when it’s given out and the bins are full’ (i.e. with discarded circulars). With respect to staff attitude surveys, union representatives urged their members to ‘… Fill them in, be honest and watch out for loaded questions’. However, it was reported that the surveys had no real credibility in the eyes of employees; initially employees put quite a lot of effort into completing them but concluded that the surveys had little impact on management. ‘Nobody bar about six managers takes much notice of the results… I don’t think they know how to use them’ (union regional executive committee member). Similarly with total quality/continuous improvement projects, whilst the workforce widely complied with them, there was little evidence of staff commitment. ‘People look at areas (i.e. subjects for projects) for the sake of it and do a report’ (an office union representative). The Inland Revenue group union regional secretary described it as: ‘… Fairly cosmetic…(and management has) not put the resources into it…it’s more of an irritant’. When asked how successful Inland Revenue management had been in improving communication with employees, creating sympathy for ‘business needs’ and making use
Table 8.1 PCS members’ opinions of how successful Inland Revenue had been in improving communication with employees, creating sympathy for ‘business needs’ and making use of workers’ expertise (per cent) Improving communication
Sympathy for business needs’
Using workers’ expertise
Very successful
1.8
1.5
2.7
Quite successful
47.4
37.1
38.0
Quite unsuccessful
29.9
30.5
34.5
Very unsuccessful
15.8
13.1
17.9
5.1
17.9
6.9
Not sure Note N=629.
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of workers’ expertise to improve the way things were done in the workplace, nearly half of the union members who responded thought Inland Revenue had been quite or very unsuccessful (Table 8.1). Less than 3 per cent of union members thought that Inland Revenue had been very successful. These results do have to be treated with some caution, partly because a significant proportion also thought Inland Revenue had been ‘quite successful’, and partly because the questions were quite broadly phrased rather than referring specifically to particular employee involvement initiatives. Nevertheless, these results do lend support to the view that Inland Revenue had not completely succeeded to achieve the goals normally associated with employee involvement in the eyes of a large proportion of its staff, and very few of them indeed thought that Inland Revenue had been ‘very successful’.
Partnership at Inland Revenue: the national focus In addition to the limitations of employee involvement to help establish partnership in the workplace there are several other particular factors that have helped to locate partnership predominantly at a national level within Inland Revenue. Its national focus has probably been encouraged by the Revenue’s relatively distinct and politically sensitive role within the Civil Service, and its traditionally close and direct relationship with central government. In the 1980s and 1990s Inland Revenue avoided the worst effects of privatisation and fragmentation of the public sector, and, in spite of a significant degree of decentralised management, it is still essentially a national entity. In this context, and alongside the union leadership’s affinity to partnership and New Labour’s third way philosophy and related advocacy of it, partnership at Inland Revenue has emerged essentially in terms of a tripartite, national level relationship between central government, union leadership and employer. An important interpretation of this is that the broadly common political ground between the two ‘moderate’ factions of the PCS national leadership and New Labour in government is a central dimension in the attempt to contain and defeat the challenge to the moderate national union leadership from some of the regions, branches and workplaces, and particularly associated with Left Unity. The moderate PCS factions—the National Moderate Group and Membership First—would argue that their advocacy of partnership is not only a step forward for the union but one of political realism. Yet, as the following section indicates, the moderate national leadership of the union may have had more political choice in the situation than their ‘realism’ argument suggests.
The balance of power, union choice and political agency As well as the broader political and economic changes in the 1980s and 1990s, the organisational change discussed above enhanced the power of the employer and central government. In addition to these developments, there were also several union weaknesses from which Inland Revenue gained significant advantage such as the lack of a strong union identity, the moderate approach of the leadership, and the underdeveloped
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workplace traditions of the union. In short, if the employer could gain the support of the national union leadership over particular issues (which it often did) then matters were effectively resolved. The considerable political divisions, and the predominant influence of assertive moderate groups at the national level within the union, were generally reassuring to management, employer and central government. The union was neither united nor militant and this situation seems to have increased the extent to which industrial relations conflicts were played out within the union. However, these factors that favoured the management, employer and government were arguably outweighed by a wider range of more significant management weaknesses and union strengths.5 Key management weaknesses and union strengths included the following. The fluctuating political contingency that Inland Revenue senior management faced since the 1980s made the formulation and implementation of management strategy problematic.6 Whilst all governments had recognised the need for Civil Service reform since the 1960s, how the Conservatives might go about this was unclear until the late 1980s, and the specific approach to Inland Revenue uncertain until 1992. The problem of management strategy was exacerbated by the conservative and bureaucratic traditions of the organisation and the radical nature of the change proposed. Furthermore, in spite of some threats of partial privatisation, the union gained bargaining power from the monopoly status of Inland Revenue. As referred to above, job losses had been achieved through natural wastage, recruitment restrictions and voluntary arrangements, with the absence of compulsory redundancy preventing an important element of fear in the workplace. In terms of workplace organisation, the sensitive and technical nature of the work meant that casual labour was an unsuitable option for the employer, and the potential of other forms of numerical labour flexibility was limited by the operational demands within offices. There was one union for all but senior grades, high union density, no prospect of union derecognition and national bargaining was still essentially in place. There is a case to argue, therefore, that the PCS Inland Revenue group had not been forced into a corner by the employer or by government-led initiatives, unlike the experience of many unions. An examination of the balance of power in relation to Inland Revenue suggests that the union’s national leadership has had a considerably greater degree of choice in policy and strategic terms than suggested by new realist assumptions, of universally weakened trade unionism that has no alternative to moderation. This shifts the focus onto the political will and policy choice of the union at national level, as a critical factor in an analysis of the promotion and prospects of partnership in Inland Revenue. Although it would appear that Inland Revenue was keen to establish some form of partnership relationship with the union at national level, this may have been partly because of several areas of relative weakness in the employer’s bargaining position (combined with government caution), as well as in response to government ‘modernisation’ policy towards the Civil Service as a whole. Of course, the factors and processes specific to the Inland Revenue group of the union cannot be divorced from the wider processes and politics of PCS, and its national leadership’s determination to establish a partnership framework agreement for the Civil Service as a whole (in which it succeeded in 2000). The question of political agency raised by these points also emphasises the significance of the intense political conflicts that have taken place within the union, with
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partnership as an important ideological element of these internal battles. It is to the latter that the argument now turns.
Partnership and the challenge from the ‘broad left’ A conspicuous characteristic of some Civil Service unions has been the degree of political division within them. Whilst there has been significant evidence of this since the late 1970s in the union at Inland Revenue, its origins may be more deeply rooted historically (Parris 1973:191–201). In addition, internal political differences and tensions seem to have become more entrenched in recent years. The National Moderate Group and Membership First have their origins in CPSA and PTC respectively, with the latter essentially a Blairite faction (LabourNet UK 2000; http://www.cix.co.uk/ undated). The National Moderate Group—with its leading advocate, Barry Reamsbottom, the last general secretary of CPSA and subsequently a joint general secretary of PCS—has its origins in bitter attempts to crush the influence of Militant activists in the CPSA. Its position and approach are perhaps more akin to the fervent anti-communism that was a feature of British unions in the 1950s. Left Unity—the broad left faction and entitled the socialist group within PCS—has managed to bring together the main left-wing groups that existed within the respective unions prior to the establishment of PCS (Left Unity 2002a; http://www.cix.co.uk/ undated). A result of the CPSA/PTC merger (to form PCS) has been to intensify internal political conflicts. The strong centralised traditions of the union have emphasised the extent to which battles between ‘moderate/Blairite’ and ‘broad left’ factions have been played out in terms of conflicts between key national union officials and the national executive majority on the one hand, and many regional and local activists on the other. However, significant divisions between the National Moderate Group and Membership First emerged. With regard to Left Unity, its influence in the regions and branches has not been insignificant, and its representation at national level increased substantially between 1998 and 2002. The determination of Barry Reamsbottom (of the National Moderate Group) to remain in office as one of the union’s two general secretaries was successfully challenged; and in December 2000 Mark Serwotka, a Left Unity member (though with some tactical differences with it), was elected as general secretary (The Socialist 2000a, 2000b). In July 2002, in spite of a rearguard action by Reamsbottom to challenge Serwotka, the High Court confirmed the latter’s position as general secretary of the union (Labour Left Briefing 2002; Left Unity 2002c). Also in 2002 the union elected Left Unity members to the positions of national president and administrative vice president, and increased its representation to 12 seats on the national executive committee. However, there was also a shift in the vote from Membership First to the more strident National Moderate Group, with the latter commanding a majority on the executive committee (Left Unity 2002b). In 2003 the position changed dramatically. In a fundamental shift to the left in the union’s elections, the National Moderate Group was reduced to a rump of just four out of the 43 seats, with Membership First winning five, Left Unity 25 and the newly formed PCS Democrats nine (the latter had also formed an electoral alliance with Left Unity earlier in the year) (Left Unity 2003). In addition, the four deputy and vice president positions were won by the joint left slate, and the (Left Unity) national president was re-elected.
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Whilst the gains for Left Unity need to be treated with caution—not least because of the low proportion of members who usually vote and the introduction of annual elections in 2003–they mean that the partnership approach of the union at national level—as well as the way in which the union is run and the accountability of union officials and national executive committee members—faces the prospect of major change. The politics of the union has long been premised and organised around the issue of partnership, making its further development intriguing to say the least.
Conclusions Several factors have been cited in this chapter that have been conducive to the promotion of partnership at Inland Revenue. These include the historically persistent consensual approach to industrial relations of the union’s national leadership (or at least of its dominant element prior to the union’s 2002–03 elections). In some sense, this longestablished approach experienced a new lease of life with the advent of New Labour and its explicit advocacy of partnership, but it has also been underpinned by and related to Inland Revenue’s extensive programme of new management initiatives and employee involvement programme. However, the successful promotion of partnership at Inland Revenue has been challenged by very considerable resentment amongst the workforce with regard to pay (particularly performance-related pay), and by a failure to establish employee involvement schemes in the workplace in anything other than a superficial sense. Such ‘workplace obstacles’ and political dimensions to partnership, combined with the affinity of the ‘moderate’ sections of national leadership of the union to New Labour in government, have been important in locating and focusing partnership at a national rather than a local level. Nevertheless, on closer examination, the balance of power between the employer and the union would seem to be favourable to a serious and potentially effective challenge to partnership by PCS. This suggests the union’s promotion and support for partnership has been mainly a question of political will, and following on from this logically that there is a viable alternative to this approach. More recent political developments within the union that favour the influence of Left Unity— i.e. the election of a new PCS general secretary, national president and ‘broad left’ majority on the national executive—will now intensify internal union pressures to jettison consensual strategies and tip the scales away from partnership. However, the longer-term outcome of these internal union developments remains unclear. In these circumstances, therefore, it is feasible that partnership and its associated rhetoric may form key elements of a rearguard action, reorganisation and fight back by the ‘moderate’ wing of the union. A number of significant broader issues and questions in relation to the promotion of and prospects for partnership are raised by this analysis of Inland Revenue. One intention of this chapter has been to demonstrate some of the potential of a more contextualised approach to the debate about partnership, emphasising that the political, economic, industrial relations and operational context of partnership can only be effectively understood within an historical perspective. In addition, this historical approach needs to take into account not only the broader patterns and balance of power in British industrial relations, but also those in more specific sectional and organisational contexts. It clarifies the significance of union choice, political agency and their relationship with
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environmental factors in this analysis. As the case of Inland Revenue suggests, there may be significantly more choice available to the union regarding the issue of partnership than politically moderate and pro-partnership national union leaders are prepared to recognise. At the same time, the argument here is not intended to imply that the power relations in some other cases—unlike that of Inland Revenue—are such that the union may have no alternative but to embrace partnership, but rather that the nature and extent of opportunities for contesting it may vary.
Acknowledgements The research reported in this chapter was financed by Economic and Social Research Council small grant no. R000222662. Whilst the author alone is responsible for the views and analysis suggested here, thanks are also due to Professor John Goodman for his invaluable supervision of the research project.
Notes 1 Kelly equates partnership with moderation, and as the opposite of militancy. He understands union advocacy of partnership in terms of the general rejection of industrial action, moderate demands and significant concessions to management, strong reliance on employers, third parties and the law, a willingness to experiment with or support non-bargaining institutions and a union ideology of partnership. However, Kelly points out that this is not to suggest that such unions might conform to all of these dimensions, but that there will be variation between them, and that partnership/moderation and militancy are two ends of a continuum (Kelly 1996, 1998). 2 Indeed, the union’s long-established partnership policy may now be abandoned in light of a major victory for the ‘broad left’ in the 2003 elections for the union’s national executive. 3 This approach initially arose from the objectives of a larger project, of which this Inland Revenue study was a part. The larger project looked at union responses to new management initiatives in various public services. 4 The Valuation Office, which values land and buildings for tax purposes, is also located within the Inland Revenue but as a distinct executive agency. 5 This may echo the suggestion of countervailing pressures in the Civil Service to the trends and developments resulting from the Next Steps programme (Corby 1993/4:52, 65; 1998). 6 The notion of political contingency is borrowed from Batstone et al. (1984).
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Marsden, D.W. and Richardson, R. (1994) ‘Performance for pay? The effects of “merit pay” on motivation in a public service’, British Journal of Industrial Relations, 32(2):243–262. Marsh, D. (1992) The New Poli tics of British Trade Unionism. Basingstoke: Macmillan. Parris, H. (1973) Staff Relations in the Civil Service. London: Allen and Unwin. PCS (2000a) ‘PCS welcomes civil service partnership deal’ [online], PCS press release, http://www.pcs.org.uk/newsbrief/press/2000/release001%201.htm(accessed 19.4.01). PCS (2000b) ‘Whitehall union backs welfare reform’ [online], PCS press release, http://www.pcs.org.uk/newsbrief/press/2000/release0005.htm (accessed 4.9.02). PCS (2000c) ‘Newsbrief: NEC report January 2000’ [online], http://www.pcs.%20org.uk/newsbrief/nec/jan00.htm (accessed 4.9.02). PCS (2001a) ‘Partnership perspectives: Les Priestley, IR group president’ [online], PCS View archive of articles, http://www.pcs.org.uk/newsbrief/view/2001/%20june04a.htm(accessed 4.9.02). PCS (2001b) ‘Partnership perspectives: Stella Dennis, BA group president’ [online], PCS View archive of articles, http://www.pcs.org.uk/newsbrief/view/%202001/june04b.htm(accessed 4.9.02). PCS (2002a) ‘Security, choice and respect in the workplace’ [online], http://www.pcs.org.uk/revenue/security.htm (accessed 4.9.02). PCS (2002b) ‘PCS: bringing you a brighter future’ [online], a summary of the first annual report, http://www.pcs.org.uk/about/annual.htm (accessed 4.9.02). The Socialist (2000a) ‘PCS: Left force Reamsbottom nearer election’, 23.6.00. The Socialist (2000b) ‘Right routed in civil service election’, 15.12.00. The Socialist (2000c) ‘The partnership problem’, 4.2.02. TUC (1999) Partners for Progress. London: TUC. Whitston, C. (2001) ‘The chimera of social partnership’, presented at the conference, Assessing Partnership: the Prospects for and Challenges to Modernisation, Leeds University Business School, 24–25 May. http://www.cix.co.uk/ (undated) ‘Factions in PTC’ [online], http://www.cix.co.uk/%20~spuddy/factions.html(accessed 4.9.02).
9 Breaking with, and breaking, ‘partnership’ The case of the postal workers and the Royal Mail in Britain Gregor Gall
Introduction Before union-employer ‘partnership’ deals began to become vogue in Britain in the late 1990s, the letters arm of the Post Office, Royal Mail, instituted its own form of ‘partnership’ with the Union of Communication Workers (UCW) (subsequently the postal side of the Communication Workers Union: CWU), called ‘Strategic Involvement’ (SI) in 1992. Royal Mail (RM) employs around 140,000 workers, making this the largest single partnership agreement in Britain to date. SI was intended to be both a structured relationship through specific joint-meetings and a spirit of working within RM between union and management, operational at all levels within the newly decentralised organisation, but running alongside the framework of collective bargaining. It was welcomed by the UCW national leadership and constituted a counter-part to the newly devolved industrial relations structure of the New Industrial Relations Framework Agreement (NIRFA). The central thrust of SI was to open up RM’s business and organisational plans to the UCW/CWU at a much earlier stage than had previously been the case. That is, consultation would take place after the formulation of the first drafts of business plans, so that by the time of negotiation, union attitudes would be moderated and compromise engendered on the employer’s grounds, ensuring business success. RM hoped it would be able to ameliorate union opposition to its business plans, if not incorporate the union into them through winning its support, by divulging to it previously unseen information and offering the union an ‘input’ at the earliest possible stage of decision making. In essence, RM hoped to alter and influence the union’s behaviour and bargaining agenda. This strategy has foundered, however, and been split asunder by the very industrial conflict that SI was designed to avoid and control: RM has been by far the most strike-ridden company-cum-industry in Britain since the mid-1990s. Although not formally rescinded, SI is now a ‘dead letter’. The purposes of this chapter are threefold: first, to provide an overview of the process and forces by which SI evolved and met its fate; second, to provide an explanation for this outcome; and third, to examine whether there are salient issues which emerge from this industry for industrial relations (IR) and trade unions elsewhere. The chapter will thus explain why a partnership agreement was broken and why an increasing number of postal workers’ lay officials have made significant steps towards ‘breaking with’ partnership through breaking the SI partnership agreement. The data for this research are
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derived from a wider project investigating worker militancy and IR in RM in the 1990s (Gall 2003). The data are derived from nearly 80 interviews with lay officials and fulltime officers (FTOs) from the CWU postal side between 1995 and 2001, covering the important axes running through the union’s branches and personnel—that is, political (‘left’/ ‘right’), geographic (north/south) and generational (older/younger). The lay officials included unit representatives, area representatives, branch secretaries, divisional representatives and Postal Executive Committee (PEC) members, while the FTOs included the general secretary, deputy-general secretary (postal) and assistant general secretaries.
The origins of ‘strategic involvement’ SI emerged (as did NIRFA) as a considered employer response to the 1988 postal workers’ national unofficial strike and the growing levels of overwhelmingly unofficial industrial conflict (see Table 9.1). The 1988 walkout began as an official one-day strike over regional pay supplements but escalated as local management attempted to impose draconian terms for clearing the backlog to that strike. In some cities, unofficial strikes lasted for between two and three weeks, under the control of local lay officials. The provocation was widely seen as an attempt by the government to face down and turnover one of the remaining strong sections of the union movement and a workforce with a reputation for ‘militancy’. However, the union remained unbowed and the outcome was a partial victory for it, reinforcing postal workers’ industrial confidence. The national walkout was indicative of the growing antagonism within the industry and, in particular, the continuing development of self-assertive workplace union organisation and continuing pressures towards commercialisation resulting in attempts to increase work intensification and management control in the workplace. RM recognised from the strike that a change of tact was required on its part to deal with the postal workers, seeking to quell the conflict not only for traditional commercial and managerial reasons but also to pre-empt direct government intervention in its affairs. This did not mean that senior management was opposed to privatisation. Rather, it wished to maintain direct control of the business within the state sector at the same time as expanding it within a more commercial, and less government and trade union-regulated, environment. In the same period (1988–92), the Conservative government began its push towards privatisation of RM. Having engaged in the privatisation of many other industries, the Post Office (PO)/RM came within the government’s gaze. Quite apart from generating revenue for the Treasury for tax cuts, reducing the size of the state and expanding the operation of the ‘free market’, the government certainly wanted reform of RM’s IR as part of its political project to emasculate strong trade unionism. But it did not see the latter as end in itself. The government also needed to be mindful of a truculent workforce that constituted an obstacle to privatisation in terms of resisting the preparations for privatisation and privatisation itself, fearful of the likelihood of this dissuading potential investors. In short, both RM management and the government needed a ‘settled’ workforce. The pressures towards partnership were, thus, both managerial and political.
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With these in mind, the formulation, development, consultation and negotiations over SI (and NIRFA) took place between 1989 and 1991.
Table 9.1 Strike activity in RM Year
No. of strikes
Workers involved
Working days lost
No. of unofficial/ official strikes
1980–81
47
1,200
2,000
1981–82
40
5,000
3,900
1982–83
52
25,000
50,000
1983–84
62
7,500
10,200
1984–85
128
45,000
90,000
1985–86
104
37,000
74,000
1986–87
117
25,000
50,000
1987–88
193
36,000
64,000
1988–89
323
277,000
1,100,000
1989–90
109
15,000
30,000
1990–91
48
18,750
1991–92
12
12,500
1992–93
11
37,500
1993–94
34
17,500
1994–95
65
42,000
1995–96
88
63,000
1996–97
178
811,000
100/78
1997–98
337
50,000
161/176
1998–99
206
16,000
135/70
1999–2000
210
22,000
183/27
2000–01
355
63,000
337/18
Notes and sources: a Figures for 1980/81 to 1989/90 are from PO (in Martínez Lucio 1993:35). It is justifiably assumed the overwhelming majority of strikes here are from the letters (i.e. RM) rather than the counters or parcels sides. b Figures for days lost 1990/91 to 1995/96 from personal correspondence with Head of Industrial Relations (23 December 1999, 3 February 2000) and PO Annual Reports where available. c All figures for 1996/97 until 1999/2000 are from RM through News Statesman (11 September 2000). For the year 2000–01 figures from the Scotsman (30 March 2001) and Independent (12 April 2001).
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From the UCW, and in particular the national union leadership, SI met with quite an enthusiastic and supportive response, reflecting a combina-tion of not entirely compatible positions throughout the union. The most important were the following. First, the prospect of an end to what was seen as destructive and destabilising industrial conflict, which if not ended or controlled would, it was believed, precipitate further government action (privatisation and legislation). Second, the prospect of additional and valuable information to either block RM plans by ‘noising up’ the members at an earlier stage or to further develop the union’s bargaining agenda (internally and externally) and to aid the union in its negotiations. Third, that politically and ideologically SI was viewed as fitting with the ‘modern’ and ‘progressive’ direction in which IR should move (see GMB/UCW 1991). Finally, SI provided sustenance to those on the right of the union who believed the best modus operandi for advancing members’ terms and conditions of employment was through mutual gains via cooperation with management in increasing productivity and profit. The left in the union, centred on the Broad Left, was a weak force further weakened at this time, despite the fillip of the 1988 strike, by the fallout of the political crises of communism. It was thus unable to make its oppositional position felt. It was also split through disagreement on SI: some believed that SI was not so pernicious, would not impact on day-to-day IR and could be used to the union’s advantage, while others argued the reverse. SI was intended to reduce rather than eliminate the scope for disputes and industrial action while the business underwent reorganisation and reorientation towards further commercialisation, marketisation and possible privatisation. By explaining that both the company and the workforce have common interests in protecting and advancing the business and, thus, securing jobs under a harsher regime, RM’s belief was that this would blunt the edge of discontent and combativity. In essence, the argument to be put was ‘we’re all in this together—we sink or swim by common endeavour’. Specifically, it was intended to pre-empt disagreements by involving senior union personnel in consultation about business decisions and planning prior to negotiation on issues so that the items did not appear to be sprung on the union, causing confrontation. This process was intended to take place at the national, divisional and office levels, drawing in the whole array of union FTOs and lay officials into a series of consultative meetings. The more senior FTOs and lay officials were intended to relay information and messages downwards to alert workplace officials to the prospect of changes and initiatives. The objectives of creating industrial harmony and genuine cooperation were not to the fore. RM hoped that ‘forewarned’ was ‘forearmed’ in that the union’s bargaining agenda could be influenced (in effect, moderated) and that early involvement would make the union feel responsibility for the decisions it was party to. The consequence of the latter, it was hoped, would be that the decisions leading to changes in the workplace would be better understood and have legitimacy. NIRFA was the necessary ‘structural’ counterpart to the ‘cultural’ SI in RM’s attempt to instil ‘order’ into its IR. Its main focus was the lower levels of the union. By contrast, SI de facto was intended to centre on the higher echelons. The two were designed to be mutually reinforcing. SI was most importantly aimed at union FTOs and lay officials at the divisional, regional and national levels, where RM assumed that by altering the bargaining agendas of these well-respected senior office-bearers, the bargaining agendas of those below them would similarly be moderated by dint of their argument, authority
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and status. NIRFA was intended to decentralise bargaining from the branch to the lowest level of operations, the unit (in the case of the delivery function, the local delivery office), to avoid the interference of oppositional branch officers. Without the industrially ‘politicised’ intervention of the branch officers, RM believed that the unit representatives would be more moderate and malleable. Agreements would thus be forthcoming as a result of negotiations in the workplace, where a form of internalism and company unionism could be established. Created by NIRFA were two new layers in the form of area representatives (of the delivery, distribution and processing functions) and divisional representatives. Both were intended to control and regulate the unit representatives and branch officers respectively. Alongside SI and NIRFA was the third prong, comprising attempts at cultural and work organisation change through human resource management (HRM) and total quality management (TQM). These took the form of team briefings and teamworking (Martínez Lucio et al. 2000a). To summarise, from the top downwards and the bottom upwards, recalcitrants and oppositionalists of various hues were intended to be marginalised in a pincer movement. Setting aside for the moment that SI was slow to get off the ground—as its terms of reference were debated and then it was not implemented uniformly across the business— for a short period of time, from its launch in 1992 to mid-1994, it appeared to be relatively meaningful and effective in ‘normalising’ IR in RM. The novelty of the process, that is being formally consulted and being party to previously undisclosed information was helpful to its establishment. But underlying these, were a number of other contextual factors, which more importantly explain the honeymoon period. Initially, collective bargaining was not threatened or marginalised by SI, as many potential critics within the union had anticipated, so the thrust of this criticism seemed misguided. Further, the UCW’s attention and energies were being directed away from largely focusing on day-to-day IR because of its major campaign against RM privatisation, through local community campaigning and lobbying of Conservative MPs in marginal seats. This campaign succeeded by late 1994 and was hailed as a model for progressive unionism (Sunday Times 6 November 1994). Finally, the Employment Act 1990 helped create a downward force on the level of strikes in RM, undermining postal workers’ combative spirit. Overwhelmingly, their strikes were unofficial walkouts.
The fate of ‘strategic involvement’ SI first foundered on the ‘rocks’ of increasing industrial conflict, the very phenomenon that it was designed to prevent. The first steps were important instances of unofficial action in 1994 in Bristol, Liverpool and Milton Keynes. In the latter case, the strike spread through walkouts in response to suspensions for refusing to handle mail diversions to 30,000 workers in south-east England. Although SI was not the cause of the strikes, RM assumed ‘partnership’ would not lead to these strikes and that the national union would do more to prevent and control them. Indeed, RM took the union to court on nine separate occasions between 1994 and 1995 seeking injunctions and damages for unofficial strikes. For lay officials, these actions dispelled the national union’s catastrophic predictions about the consequences of unofficial action under the Employment Act 1990 but also replenished postal workers’ industrial confidence after a
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period of industrial calm. Not only was sustained action taken at a time of declining strike activity in Britain, but it also was relatively successful. This revitalisation continued with a series of other high profile and relatively successful, and overwhelmingly unofficial, strikes in 1995 in London, Newcastle, Scotland and in 1996 in London and Edinburgh. All these strikes involved several thousand workers striking for around a week each. In parallel to these developments was the emergence of a network of key lay officials who took oppositional or left-inclined positions to those of the national union leadership (Gall 2001). Many cut their teeth in these strikes while most were involved in mobilising members in ballots in 1993 and 1994 against leadership-sponsored productivity deals and carrying rejection of leadership-recommended policies at consecutive annual union conferences from 1991. Two of the most important of these were the reorganisation of the union’s branch structure and the response of lay officers to NIRFA. The reduction in the number of branches from 900 to around 90 in 1992, partly in response to NIRFA, led to a greater cohesion and strength amongst postal workers by bringing them together into larger branches led by large city offices. The reduction in facility time paid by RM also meant that there was a clearing out of a lot of ‘dead wood’ amongst the layer of branch secretaries. Positions then often passed to a milieu of younger, more energetic and assertive officials who were prepared to undertake what was a more demanding role. At the base of the union, branch officials colonised the NIRFA structures by either becoming accredited NIRFA representatives, by centralising the branch structure so that no unit or area representatives were able to make decisions or sign agreements without their knowledge and consent, and by ensuring that the divisional representatives reflected the views of the dominant branches within the divisions. The latter was not an onerous task given that the divisional representatives came from the milieu of branch secretaries. Short of the growing preponderance of strikes, these developments manifested themselves within the structures of SI with lay officials using the meetings and documentation to aid and support their ‘militant’ bargaining objectives, both by alerting members to the coming issues and formulating responses, and by denigrating the partnership. Of particular note here is the role played by the divisional representatives. RM expected them to play the role of ‘firefighters’ but instead, generally speaking, they acted as transmission belts for, and organisers of, discontent at the base of the union. For those more ambivalent or pro-partnership FTOs and PEC members, who were involved with SI at the highest level, pursuing a supportive line towards and ‘compatible’ action within partnership became increasingly hard as members began responding in a combative way to RM’s agenda. Thus, by early 1996 partnership had become for many despised, pernicious or laughable. This account outlines the key contextual factors in explaining how SI became a ‘dead letter’ as the conflagration around the pay, conditions and work practices restructuring package called the ‘Employee Agenda’ (and eight one-day national strikes against it in 1996) developed apace from 1994. The ‘Employee Agenda’ was the key test of SI. The ‘Employee Agenda’ was renamed by many postal workers the ‘Employer Agenda’, indicating the hostile response it met. Comprising proposals to introduce teamworking and culture change in return for a largely self-financing pay deal, the ‘Employee Agenda’ became the touchstone for the conflict between RM and the CWU and within the CWU (see Martínez Lucio et al. 2000a, 2000b; Gall 2001). Although the national leadership
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believed the union’s long-standing bargaining goals (higher basic pay, shorter working week, five-day week) could be obtained in return for teamworking without using industrial action, it also believed that to a greater or lesser degree such changes were necessary for the future of the business. The argument was that the terms and conditions of employment, including job security, could be secured and protected by greater commercialisation in itself allowing the business to grow or by commercialisation fending off privatisation. This then reflected the partial influence of the ideology behind SI. That is, ‘commercial freedom’ for Royal Mail was used by RM management and the trade union leadership to find some basis for a common position on change. The problem, in essence for RM, was that SI’s influence did not extend further down the union. Reflecting membership unease over the ‘Employee Agenda’, as well as articulating and leading it, was the coalescing of a milieu of activists into a tighter organisational form. Eschewing traditional Broad Left organisation, these lay officials conducted a battle with their national leadership and successfully propelled the union into a national dispute. During the 1996 dispute the oppositional elements were in the ascendancy, leading to the departure of the incumbent general secretary. No longer could SI sit unaffected alongside and within the mechanisms of bargaining when the biggest conflict in Britain was taking place. The dramatic rise in the number of walkouts centred on cases of local management attempts to introduce ‘Employee Agenda’-type practices. The attitudes and perspectives of postal workers and their lay officials did not allow mutual gains bargaining to develop. This perspective was reified by the initial ‘Employee Agenda’ proposals that eliminated many bonuses and allowances to fund an increase in basic pay in return for agreement to teamworking.
The second coming of strategic involvement During the ‘Employee Agenda’ dispute, the Labour Party began making it clear that when it won the forthcoming general election, it would force the two sides to shift their IR culture away from one based on conflict. The strikes were a source of embarrassment and annoyance to Labour in the run up to the election, and afterwards. In government, Labour let both RM and the CWU know that it would not tolerate this behaviour any further and that if necessary it would lead to major changes led by the government. Thus, under pressure from the government, RM revived SI from late 1997, with a formal national re-launch in early 1998, to deal with the continuing and then growing levels of industrial conflict in the organisation. The potential drawback surrounded trying to resuscitate an already failed and stigmatised initiative in a worsening situation. However, SI took on a new significance as a result of the agreement negotiated by the CWU and government over the future of the PO/RM. The CWU successfully lobbied the government to move away from privatisation and allow, as an alternative, the PO to become a government-owned publicly limited company. This meant the PO would no longer pay the External Financing Limit, generating new monies for investment and expansion abroad. Moreover, the PO would have the ability to raise further money on the financial markets for these purposes (thus not borrowing under, and adding to, the Public Sector Borrowing Requirement). For the CWU, the PO/RM remaining in this form of public ownership was believed to be the surest way to safeguard jobs and conditions. In
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return for this compromise, the CWU was impressed upon that it must strongly control its membership in order to reduce the level of strikes so that the quality of service and efficiency could be enhanced. Participating in and giving commitment to SI was, thus, the price of agreeing this compromise. However, what the CWU had not bargained for was the creation of the Postal Services Commission (Postcomm) under the Postal Services Act 2000. This was the bargain the government struck with the business community: in return for remaining in the public sector, PO/RM would be further marketised. Postcomm is charged with ensuring competition exists within the sector by way of its licensing powers and ability to remove operating rights from RM. Clearly, the threat to the postal workers is that their continued striking makes this a prospect. In turn, such potential deregulation has provided another factor in postal workers’ proneness to striking. Examining the impact of these developments on IR and strike activity, it would be more accurate to characterise the fate of the revived SI as a ‘stillbirth’ as a result of continuing frictions and conflict over the impact of RM’s plans for commercialisation and marketisation. The winding up of the 1996 strike was achieved mainly through the establishment of two working parties on deliveries and on pay and conditions. These allowed the issues to remain unresolved until after the general election of 1997 without inducing further national industrial action. With agreement on deliveries relatively easier to achieve, priority was given to this in order to help pave the way for negotiations on the more difficult issues of pay and conditions. In spite of this, agreement on the former was not produced until late 1998, with substantial internal union opposition coming from branches in the south of England which retained second deliveries and had resisted parttime employment as a result of tighter labour markets than elsewhere. Nonetheless, the process was relatively smoother than ‘The Way Forward’ restructuring on pay and conditions. Proposals negotiated by the new deputy general secretary (postal), who led the opposition to the ‘Employee Agenda’, took nearly three years to come to a point where they could be put to members, reflecting internal union manoeuvring over determining the union’s position. When the agreement was put to members in 2000, it was rejected in the first ballot and very narrowly accepted (51/49 per cent) after revisions in the second. SI played little part in informing these two sets of negotiations. Rather, the negotiations were conducted within the normal bargaining framework and the spirit of partnership did not pervade this. The issues in the two working parties did not lend themselves to working out under SI because they were neither new nor fresh. SI could not shed further light on the existing proposals or issues in order to alter the union’s position (as determined by the interplay of intra-union forces which limited the national leadership’s room for manoeuvre) because the battles lines were not only drawn but already well rehearsed over the previous five years. An industrial culture something akin to ‘strike first, negotiate later’ had developed in some parts of the union. Where SI may have had some purchase was on issues of (a) closures of mechanised letter offices (MLOs), the upgrading and relocation of automated processing centres (APCs) and the building of new mail centres and hubs, and (b) the partial privatisation or contracting out of what RM termed ‘non-core’ activities. SI appeared to some degree successful in ameliorating widespread conflict, but this was largely as a result of the union dealing with closures and the like on a case-by-case basis. This strategy occasioned a campaign by some branches to compel the union to adopt a standardised national
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position. In the case of Liverpool, an eight-day unofficial strike indicated the limitations of SI on Merseyside on this issue. On the second issue, national union policy opposed the measures to shed or contract out non-core services but without any great vigour, reflecting the difficulty of activists in creating an alliance of opposed parties where the majority of postal workers were not so deleteriously affected. Table 9.1 indicates that although the number of strike days declines (disaggregating for the national strike) after 1996, this is not by a great deal, while the number of strikes reaches an all-time high in the four year period between 1997–98 and 2000–01. Compared with the 1988 strike, ‘peace did not break out’ after 1996. RM, in the face of protracted negotiations, pushed ahead at a local level with many of the ideas contained in the ‘Employee Agenda’ on flexible work practices and deliveries. This was met by a combative response from many postal workers. The same is true of the measures contained in The Way Forward’ and the deliveries agreement—rejected or as yet unagreed measures were implemented or enforced. However, more latterly the introduction of ‘The Way Forward’ allied closely to the Productivity Bonus Scheme has led to a significant increase in strike activity, either through aggressive implementation or through the opposition of local branches to the national agreement accepted in the ballot. Epitomising the period of heightened conflict were a number of high profile unofficial strikes, each involving thousands of workers, between 1998 and 2001 in such places as London, Glasgow, Liverpool and Cardiff. The attitudes and perspectives which informed the response from the middle and bottom of the union are based on hostility and suspicion to SI, suggesting elements of both quasi-ideological opposition and tactical bargaining pragmatism. A comment from a south-west divisional representative highlights this: [It] means very little. It means them coming to the more senior levels of the union with their business plans and saying, ‘What do you think about it?’ But precisely because they are their business plans, there’s not too much room for change. That’s totally different from both sides sitting down with a blank sheet of paper and starting from there. Managers are coming to us with plans that have been passed down to them from above. What the union here has done is to be careful and say that if it’s not had any part in that, it’s not signing it. It then reserves its right to oppose and take the issue into the normal collective bargaining channels. So it’s not that different from normal. We still have disputes and at the moment they could be picking up again. By contrast the national leadership and many FTOs gave a much more positive welcome to SI as a ‘third way’ in IR and as the necessary price of the bargain struck over preventing privatisation. Thus, as the Deputy General Secretary (postal) commented: There was a realisation on both sides that we could continue to fight each other on a number of issues and meanwhile business and jobs would be lost due to competition. Fortunately we have found another way round this and industrial relations at national level are now more positive than they have been for a long time… We’ve noticed a more open relationship,
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more dialogue, more discussion from RM towards us… The DTI have been a strong influence on this. They’ve said there’s been too much conflict in the past, it’s unacceptable and we must find a better way of dealing with our problems. We’re tuned into that. We recognise the importance of Strategic Involvement and how it allows us to have an early input into things. Although we haven’t quite got it right at the moment, we’re continuing to work on it. We see it as the way forward in the future but it won’t replace collective bargaining. At least we will know about potential problems in the future at an early stage. The impact upon strike activity of Postcomm’s power to award licences to competitors and its dire warnings about job losses if industrial unrest continues had no discernible effect until late 2001. Although Postcomm did not formally come into existence until early 2000, its creation, role and powers were widely heralded beforehand. Postcomm’s message has to some extent been indirectly sponsored by the national leadership in an attempt to dampen down and control the level of strike activity. By contrast, the impact at the base of the union appears to be a confirmation of the need to continue engaging in ‘self-defence’ through strike activity for two reasons. First, that the downward pressures on wages and conditions were intensified as a result of the new regime. Second, that the new regime is merely a continuation of the old under a new guise. The final nail in the coffin of SI was the quasi-national unofficial postal strike in May 2001. The strike escalated from an official strike in Watford to involve 50,000 postal workers in around 40 towns and cities because workers believed RM was trying to engage in a reforming conflict, that is to ‘take on and smash’ the union. The outcome represented a climb down by RM. However, what emerged from the process was an external inquiry into the IR in RM (Sawyer et al. 2001), which condemned both sides for IR practices deemed similar to those in the car industry in Britain during the 1960s. Under increasing political pressure, both sides agreed to be bound by the report’s recommendation. In essence, this consisted of a form of partnership working (although not envisaged as SI) and a no-strike agreement. The level of industrial action has fallen to a negligible level since September 2001, as a result of political pressure on the CWU leadership from the Labour government. In turn, the CWU leadership has convinced the organisers of discontent—the lay officials—that continued conflict is unsustainable in light of the postal regime. RM has been afflicted by widespread unrest and instability since 2001. Three licences were granted to competitors, Postcomm has launched its deregulation timetable and service delivery targets were not met. RM lost £1.5m per day while it proposed to abolish sick pay and a no-redundancies pledge, contract out of many internal services, sell off of its vehicle fleet and make 30,000–50,000 redundancies. In response to such actions, the CWU made nine threats of national strike action and balloted workers for national strike action on several occasions. None of the threats or mandates were implemented—the strategy appearing to be to use these tactics to secure concessions on, rather than withdrawal of, the proposals. The arena for battle has moved from the branch to national union. And an industrial-cum-political crisis engulfed RM, making the problems and fate of SI seem almost trivial and distant by comparison.
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The characterisation of SI can now be refined somewhat from one of being ‘stillborn’ to one of passing from being ineffectual to inoperative to moribund and then being resuscitated albeit in a different form and with a doubtful future. The local trial ‘partnership boards’ recommended by the Sawyer Report are an admission of the defeat of SI. In breaking SI, many of the postal workers, and particularly their lay representatives, have broken with any prospect of positive engagement with partnership. An indication of this was the election of the outsider and left-candidate, Billy Hayes, over the moderate, John Keggie, for general secretary of the CWU in 2001.
Strategic involvement: too little, too late The preceding discussion has given an explanatory account of the fate of SI. This section examines the deep-seated roots of why SI has been broken. First, the national union leadership, through a combination of a particular industrial perspective and membership pressure, has not allowed SI to develop into a mechanism that heavily influences or supplants collective bargaining. Schooled in and accustomed to a ‘strong’ and ‘free’ collective bargaining relationship, the leadership has been fully aware that the bargaining mechanism is the fulcrum around which it operates in terms of being a credible industrial partner and representing members’ interests. As importantly, the leadership recognises that the ultimate source of its bargaining power is the intricate configuration of membership density, lay officials, workplace unionism and industrial action. Second, the industrial prowess of the members, revolving around postal workers’ technical ability and organisational capacity to take effective action, has allowed them to resist managerial initiatives, SI amongst them. It has also allowed postal workers to further extend their autonomy from the national union so that the employment relationship is now trifurcated. Ability concerns the nature of the service and the mail system. The monopoly provision of an essential service to business and one valued by the public, the specificity of individual and often irreplaceable mail items, the fixed geographical location of deliveries, and the ‘just-in-time’ and integrated nature of processing, delivery and distribution all contribute to the immediate, discernible and visible impact of strikes. In short, postal workers’ strikes matter because they have a disproportionate influence. Capacity concerns postal workers’ capability to deploy this configuration to their advantage as a result of near total unionisation, strong workplace union organisation, high degree of labour intensity, workforce grade and culture homogeneity, dealing with a single employer and increased traffic volumes. The motivation to respond in combative ways to managerial initiatives by deploying the strike weapon is far from universal. But it has been sufficiently widespread and indicative of an underlying workplace oppositional culture to stymie and defeat partnership. This culture is influenced and constituted not merely by past branch traditions but also by current branch leaderships. Such a weak form of partnership was incapable of surviving within and against a culture of, and forces for, industrial conflict. In the context of a continuing drive for profit, particularly where the domestic base is used to finance overseas acquisitions, RM has striven to ratchet up work intensification and assert its managerial prerogative. Like much of the union, RM had become accustomed to operating in a conflict-ridden situation where its unilateralism and a ‘take it or leave it’ approach permeated both
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collective bargaining and SI. Within RM management, the ‘hawks’ had gained ascendancy over the ‘doves’ by the early 1990s. Union officials reported lower and middle level RM managers paying lip-service to SI. RM was thus unlikely to have proposed and implemented a more far-reaching and deep-seated form of power-sharing partnership, which may have had a greater prospect of ‘success’. Taking a different approach, SI was unlikely to have succeeded unless the ‘militancy’ and strength at the base of the union was broken. This could most easily be envisaged through a national strike confrontation over competition, regulation, job losses and work practices where RM inflicted a heavy defeat on the union. Without recourse to taking industrial action borne of an industrial confidence, postal workers would then be susceptible to accepting SI, albeit without enthusiasm. Those in the national leadership who sought to resist SI would be without an ally by which to do so. But such attempts failed and others were deemed too risky to undertake.
Drawing out wider lessons The fate to have befallen SI is a relatively surprising one given a number of specific contextual factors. First, the union has been a traditionally moderate, even right-wing, union whose past has included a de facto form of partnership (Batstone et al. 1984; Maksymiw et al. 1990; Grint 1993). The PO/RM as a company-cum-industry has traditionally operated in a particularly insular and introspective way. Second, the general secretaries (1992–2001), the deputy general secretary (postal), in alliance with all but one of the FTOs (Hayes) and most of the PEC members, took pro-partnership positions. Third, there was the marked reduction in industrial action from 1989 to 1994, a declining and fractured left and a strong and assertive Thatcherite and hawkish management. The explanation for the fate of SI is the revolt of a considerable section of the grassroots members against managerial initiatives within the interplay of internal union politics, an emerging culture of oppositionalism and the development of an unofficial alliance, cemented together on the foundation of strong workplace union organisation. In trying to understand the fate of SI and the levels of strike action and adversarialism, recognition of the specificity of the complex interplay of forces and phenomena that make up the political economy and IR of RM needs to be made. These, in nature and configuration, are not found elsewhere in any other industry or company in Britain. Thus, postal workers were, unlike other workers in this period, operating in conducive and particular social and political environments. In many ways, these approximate to those found in the car industry in the 1960s. Analytically, it highlights the need to contextualise the presence and absence of oppositionalism and adversarialism by reference to different layers of industry-specific factors. This can be seen with, for example, Kelly’s (1996, 1998) conceptualisations of militancy and mobilisation. With the former, particular attention needs to be given to intra-union processes and in the latter, to the resources (material and consciousness) needed for strike activity. The ‘militancy’ which broke partnership is of two sorts. The easiest to characterise is that of labour militancy; it denotes behaviour of a subnational nature over sub-national concerns that is largely but not exclusively workplace-based action and behaviour over workplace concerns; whereas worker militancy encompasses wider, more political, if still
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largely industrial-based, attitudes and actions. The former was most keenly displayed by a milieu of lower-level branch and NIRFA lay representatives while strains of the latter were to be found among the branch secretaries and divisional representatives who were players within the national union. In essence the latter saw more of the ‘big picture’ with regard to issues of control and accumulation, thus making connections between issues and events in a way the former did not. This reflected not just different political views but the differing constituencies of interest and representation. The articulation and organisation of opposition and resistance to RM and the CWU postal national leadership was heavily dependent upon this latter milieu. These representatives acted as advocates within the national union for a strong and relatively politicised workplace union organisation. What is significant here is that with the absence of field FTOs and with PEC members being headquarters-bound, these lay structures exerted considerable control and influence over the lower half of the union. The form of organisation this milieu took was the loose network following on from that around the ‘Employee Agenda’. This network is more akin to a combine committee than a Broad Left. But there is a heavy irony in the fate of this more politicised milieu. Their unity and willingness to act have been eroded as a result of disagreements over various industrial and political issues (see Gall 2001). Consequently, they have been unable to wield their former influence on national policy as they did in 1996. But more importantly, the context in which they operate at present is one that is much more difficult than before. The industrial-cum-political crisis of RM has been of such a magnitude as to undercut their tendency to self-organised militancy. These issues relate to broader matters concerning union structure and internal distribution of power. It is hard to contemplate quite the same processes of revolt and resistance taking place in other unions in the 1990s. The CWU postal side is relatively lay official-led because of the paucity of FTOs, the absence of FTOs in the field, the local and workplace industrial power bases of lay officials and their ability to organise horizontally across the union. Moreover, the members of the PEC are unable to act in such an independent manner. This configuration contrasts markedly with the TGWU, MSF, GMB or AEEU, which are marked by greater internal differentiation in terms of membership (industry, trade, skill) and structure (district, region, industry, trade). But this alone is insufficient to explain the behaviour of postal workers. Thus, unions which are strong through taking advantage of a particular configuration of market (e.g. monopoly) and organisational (e.g. sensitivity to strikes) factors and have engaged in a largely conflictual relationship over a considerable period of time are less likely to feel the need to participate in partnership. This is because it offers them relatively little that is new and useful—that is they are not forced by virtue of weakness to accept partnership—and they are ideologically less susceptible to cooperation with employers. Moreover, they can see a living alternative to partnership with ‘free’ and ‘traditional’ collective bargaining. But there is no permanency to such situations, which are formed by sets of social constructions and can be undone by other social constructions. The case of the postal workers since late 2001 may indicate that changes in the external environment lead to, and indeed force, moderation and demobilisation within the union. Looked at another way, those companies and industries where partnership agreements are pronounced indicate market pressures, refracted through management action, which reinforce union weakness and moderation or undermine union strength and militancy. With hindsight, the
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postal workers may be on the cusp of a significant and regressive transformation in their willingness and ability to enact extensive mobilisation for relatively ambitious aims. While strike activity may give rise to ‘radicalisation’(and vice versa), in periods of low levels of class struggle this is largely confined to matters of higher trade union industrial consciousness. Within the CWU postal side, a large number of lay officials have moved through the course of events from positions of ambivalence and agnosticism towards SI to those of opposition to and rejection of SI and partnership for their industry and union. They have come to endorse the position of the small minority who rejected partnership in any form at the outset. The ‘daily reality’ of facing aggressive managerialism where members have been willing through a combination of their own volition and oppositional local leadership to repel and repulse has shown an alternative to that of accepting partnership in whatever guise. However, this opposition and rejection is characterised by tactical considerations and pragmatism in that it emerged from a workplace and trade union basis rather than pre-conceived ideas or an existing political Weltanschauung and does not necessarily (indeed often does not) extend beyond the horizons of RM. Neither does it occasion many thoughts on what should be put in the place of partnership, other than falling back on the tradition of collective bargaining as it has existed previously in the industry but which has not resolved issues of low pay and long hours. This serves to emphasise the limits to which political generalisations may emerge from such a situation as well as the inability of the left in the union to significantly grow in these circumstances. The latter is attributable to the view that relative success of workplace unionism and the creation of ad hoc alliances obviate the need for formal left organisation and ideological clarity. In terms of ordinary members, there are faint echoes of this process of changing trade union consciousness. Some hold such views and others are prepared to endorse such views but in less forceful and deepseated ways. Should the echoes become stronger, these members are likely to cease being ordinary members and become activists and lay officials. But this, in turn, will depend on whether postal workers are on the cusp of a significant transformation in their industrial psychology. Partnership in RM has been rendered largely inoperable by union adversarialism, but this adversarialism has not led to dramatic improvements in postal workers’ terms and conditions (cf. Kelly’s (1996) argument on the efficacy of militancy). Postal workers nationally and locally have been able to prevent the introduction of new forms of work organisation and stop the intensification of work but they have not turned this mobilisation into a counter-offensive which has sought to win higher pay, a shorter working week and a five-day week. This indicates the continuation of the defensive battle being fought by the CWU postal side and, thus, the scale of the tasks facing other trade unionists and groups of workers in Britain who, in terms of strength, cohesion and confidence, are much further behind postal workers.
References Batstone, E., Ferner, A. and Terry, M. (1984) Consent and Efficiency: Labour Relations and Management Strategy in the State Enterprise. Oxford: Blackwell. Gall, G. (2001) ‘The organisation of organised discontent: the case of the postal workers in Britain’, British Journal of Industrial Relations, 39(2):393–410.
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Gall, G. (2003) The Meaning of Militancy? Postal Workers and Industrial Relations. Aldershot: Ashgate. GMB/UCW (1991) The New Agenda. London: GMB/UCW. Grint, K. (1993) ‘Japanisation? Some early lessons from the British Post Office’, Industrial Relations Journal, 24(1):14–27. Kelly, J. (1996) ‘Union militancy and social partnership’, in Ackers, P., Smith, C. and Smith, P. (eds) The New Workplace and Trade Unionism. London: Routledge, 77–109. Kelly, J. (1998) Rethinking Industrial Relations: Mobilization, Collectivism and Long Waves. London: Routledge. Maksymiw, W., Eaton, J. and Gill, C. (1990) The British Trade Union Directory. Harlow: Longman. Martínez Lucio, M. (1993) ‘The Post Office’, in Pendleton, A. and Winterton, J. (eds) Public Enterprise in Transition: Industrial Relations in State and Privatized Corporations. London: Routledge, 22–43. Martínez Lucio, M., Jenkins, S. and Noon, M. (2000a) ‘Management strategy, union identity and oppositionalism: team work in the Royal Mail’, in Procter, S. and Mueller, F. (eds) Teamworking. London: Macmillan, 262–279. Martínez Lucio, M., Noon, M. and Jenkins, S. (2000b) ‘The flexible-rigid paradox of employment relations at Royal Mail (UK)’, British Journal of Industrial Relations, 38 (2):277–298. Sawyer, T., Borkett, I. and Underhill, N. (2001) Independent Review of Industrial Relations between Royal Mail and the Communication Workers Union. London.
10 Seeking partnership for the contingent workforce Edmund Heery, Hazel Conley, Rick Delbridge and Paul Stewart
Introduction Partnership is a pervasive but imprecise term in contemporary employment relations, the meaning of which wanders from user to user and context to context. The focus of this chapter is on partnership as a strategy for the revitalisation of enterprise-based trade unionism. We are concerned, that is, with the use of partnership agreements by unions to secure or enhance recognition from individual employers and promote the interests of members within the confines of a single employing organisation. Such a strategy is likely to involve trade unions in three kinds of activity. First, identifying substantive interests that complement those of the employer, in order to strike a positive-sum or mutual gains bargain. Second, making use of the resources of the employer to secure union objectives, which might include employer support for the recruitment of new members or subsidy of union activism and workplace organisation. Third, developing a form of trade union organisation that complements the pursuit of partnership with the employer. It is often claimed that the relationships between unions and employers and unions and their members are correlated (Blyton and Turnbull 1998:110) and consequently the development of labour-management partnership may push enterprise trade unionism towards a particular form. The academic debate over partnership that has accompanied its elevation up the union policy agenda has considered each of these issues, with opponents and advocates offering divergent assessments of the partnership strategy. Thus, proponents of partnership have tended to argue that competitive pressure on companies to adopt high commitment practices provides fresh scope for shared interests in the employment relationship and a partnership based on mutual gains bargaining over employee security, flexibility, development and involvement (Kochan and Osterman 1994). Opponents, in contrast, claim that competitive pressures are narrowing the span of shared interests at work, as exposure to global competition undercuts employment standards and promotes work intensification and insecurity (Danford et al. 2002). A similar division is apparent in assessments of the effects of union dependence on employers. For Kelly (1996), reliance on the resources of employers promotes a compliant trade unionism, which is handicapped in its capacity to attract workers into membership. The alternative holds that militancy can alienate workers, particularly in sectors with a limited union tradition or in enterprises where workers identify closely with the employer or with the product and its users (Cohen and Hurd 1998). The offer of partnership in these contexts, the argument runs, may help build membership. A final division concerns the implications of a
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partnership strategy for trade union organisation. Critics have claimed that partnership agreements lead to the erosion of workplace organisation and transfer the prerogative of representation from activists to paid union officers (Taylor and Ramsay 1998; Kelly 1999). Geary and Roche (2003) have labelled this the ‘theory of the displaced activist’ and identified two component claims: that workplace partnership fosters the centralisation of decision-making around an elite corps of partnership adherents and that this, in turn, generates intraunion conflict as displaced activists mobilise against the partnership agreement. The contrary view is less clearly elaborated but initial research on partnership agreements has pointed to the recruitment of new activists and the strengthening of workplace organisation in at least some organisations with partnership agreements (Haynes and Allen 1999; IRS 1999). To the extent that partnerships multiply union interaction with managers, it might be argued, they are likely to draw a broader cross-section of members into representative activity. In what follows we address these three issues in a case study of the Transport and General Workers’ Union’s (T&GWU) pursuit of partnership with Manpower, one of the UK’s premier private recruitment bureaux. Thus, we examine the substance of this partnership, the extent and effects of union dependence on the employer and the kind of union organisation the union has tried to develop within the firm. The T&GWU has had a relationship with Manpower stretching back more than 30 years but in the period since the mid-1990s it has designated the recruitment and organising of agency workers one of its core objectives and sought to strengthen its relationship with the company. The union has invested in recruitment, developed a structure of representation for Manpower workers and tried to extend and broaden the terms of its recognition with the company. Throughout it has used the language of partnership to encompass these initiatives and opted for a deliberate strategy of identifying common interests with the employer as a means of promoting its position as a representative of Manpower workers. This culminated in 2001 in a successful joint bid for funding from the UK government’s Partnership Fund. We believe that the T&GWU’s search for partnership with Manpower is worthy of study for several reasons. The first is that agencies, like Manpower, form an important and growing component of the, largely non-union, business service sector. The DTI estimates that 500,000 work-seekers find employment each week through agencies and agency workers form an increasing proportion of the UK’s temporary workforce, which has itself grown since the early 1980s (Druker and Stanworth 2001:74). Second, until recently, the formal policy of much of the UK trade union movement towards private recruitment bureaux was one of unremitting hostility. The T&GWU 1985 Biennial Delegate Conference passed a motion (since rescinded) demanding the leadership break off its relationship with Manpower and in the 1960s and 1970s the TUC called repeatedly for the abolition of fee-charging employment agencies and instructed affiliates to withdraw from contact. The case allows us to explore why this position has been abandoned and why the T&GWU now believes there is scope for shared interests with at least some private recruitment bureaux. The third reason also relates to the distinctive nature of Manpower as a supplier of temporary labour. Most studies of labourmanagement partnership have stressed the exchange of employment security for more flexible working practices (Thomas and Wallis 1998; Haynes and Allen 1999). It remains to be seen whether a plausible and sustainable basis for co-operative exchange can be
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established where labour is contingent and the core feature of the employer’s business involves the supply of disposable labour. Research on the T&GWU and Manpower was conducted between 2000 and 2002 and assumed a number of forms. The primary method was semi-structured interviewing with a cross-section of T&GWU union officers and lay representatives. These interviews commenced with union head office staff and then fanned outwards to include local fulltime officers with responsibility for agency workers, shop stewards in client firms of Manpower and branch and other lay officers with responsibility for the Manpower workforce. The latter included two Agency Organisers, who were appointed from the Manpower workforce in 2001 to act as full-time union representatives, funded by the company. Further interviews were conducted with general managers and HR specialists in Manpower and one of its rival agencies, Adecco, which also has a recognition agreement with the T&GWU. The final set of interviews was conducted with officers of the TUC and other unions that had recognition agreements with Manpower or had tried to recruit agency workers. The purpose of these latter interviews was to secure an external trade union assessment of the T&GWU’s strategy. A total of 30 union representatives and managers were interviewed in the course of the project, several on more than one occasion. In addition, the T&GWU’s evolving strategy on agency labour was traced through the verbatim records of its Biennial Delegate Conference from the early 1980s. The conference has frequently debated agency labour and these debates provided an insight into the competing perspectives among activists who have supported or opposed the relationship with Manpower. Finally, the company also provided documentation, including an historical record of its relationship with the T&GWU, copies of collective agreements and the submission to the Partnership Fund1.
Identifying common interests Stripped of its rhetoric, the pursuit of partnership appears as the latest incarnation of a venerable trade union tactic, earlier manifestations of which include the Mond-Turner talks of the early 1930s, productivity bargaining in the 1960s and ‘new style’ agreements in the 1980s. At the heart of these and many contemporary partnership deals is the attempt to forge a ‘productivity coalition’ (Windolf 1989), in which active employer support for trade unionism and embrace of progressive personnel management are exchanged for union acceptance of new work practices and co-operation with change. Thus, reports of partnership deals stress the exchange of employment security, new entitlements to information, involvement, development and equal treatment and greater union access to business information in return for flexible working practices, including on occasion union acceptance of temporary agency workers (Tailby and Winchester 2000). To what extent has the attempt to strike this kind of deal characterised the T&GWU’s relationship with Manpower? The union’s earliest dealings with the company assumed a most narrow form and did not embody this kind of exchange. They consisted of the relaxation of closed shop provisions to allow Manpower workers access to unionised firms on condition that the workers joined the union or the employer paid their dues. A senior Manpower manager typified this early relationship as ‘a commercial arrangement
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that allowed our people to work’. As the relationship developed and the T&GWU negotiated its first substantial recognition agreement with the company in 1988 a rather limited productivity coalition was formed. The union accepted the legitimacy of agency working and the numerical flexibility it provided Manpower’s clients in return for the company’s adherence to a set of relatively progressive employment practices that approximated to, if they did not match, those found in conventional large businesses. The key practices included Manpower’s acceptance that it was the direct employer of its workforce, pay parity with similar workers in client firms, paid holidays and company sick pay, opportunities for personal development and a formal commitment to equal opportunities ‘before the vogue for such clauses’ (T&GWU interview). The agreement also supported union recruitment and representation of members and stated that Manpower workers would not be used as striker replacements. This deal related to Manpower’s ‘field staff’, employees who are deployed to work for client firms. More recently a similar agreement has been negotiated for Manpower drivers and, while there is as yet no formal recognition agreement, the company has accepted T&GWU recruitment and representation of its ‘operational staff’, principally office workers who recruit field staff and liaise with clients. Since the initial negotiation of the field staff agreement the two sides have spoken of broadening their exchange. Thus, the joint submission to the Partnership Fund identifies ‘a new vision for the flexible workforce’ based on a ‘twin core approach’. In other words, that Manpower will offer long-term, well-paid and attractive employment to workers who offer flexibility and commitment in return and accept deployment across a range of ‘temporary’ work assignments. In this vision, the company’s interests in raising the quality of its workforce and retaining trained workers for the longer term coincides with the union’s interests in raising the quality of agency employment and providing security and opportunities for development. The material basis for this developing exchange lies partly in the differentiation of the private recruitment industry into less and more sophisticated suppliers (Peck and Theodore 1998:656). It also lies in the changing relationship between agencies and their clients; an increasing volume of Manpower’s business consists of long-term contracts to provide and manage entire workforces on behalf of major corporate clients (Purcell and Purcell 1999). Issues of labour quality and reliability are important in winning and retaining these contracts and, in this regard, the company’s exchange with the T&GWU complements its competitive strategy. The substantive exchange between the T&GWU and Manpower approximates therefore to the kind of productivity coalition seen in conventional partnerships but it also has other elements that reflect the specific context of the labour supply industry. Central to the exchange is Manpower’s reliance on T&GWU endorsement as a means of winning contracts in the unionised segment of the UK economy. The union has also provided it with access to government and other European trade unions. Union recognition helps confer legitimacy on Manpower as a labour market intermediary and this, in turn, can serve directly as a source of competitive advantage and indirectly as a means of influencing the regulatory environment in which the firm operates. In return, the union hopes to benefit from the growth of the company by obtaining new opportunities to recruit. However, the T&GWU also wants to promote Manpower as a means of raising employment standards across the private recruitment industry. Endowing the company with competitive advantage is a means of squeezing less reputable agencies, a goal that
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has also been pursued by lobbying the government for stronger regulation of agency work. ‘The small agencies will lose out’, a T&GWU officer explained and spoke of, ‘raising the standards for this kind of worker by getting rid of cowboy firms that don’t have proper holidays and the like…and getting Manpower and Adecco to our [unionised] companies’. As the reference here to Adecco indicates, a further element of this strategy has been to use the Manpower agreement as a standard that can be extended to other recruitment bureaux. The T&GWU wants to build a ‘fair list’ of approved agencies and thereby provide for the broad regulation of employment conditions across the industry. In summary, the T&GWU’s pursuit of partnership with Manpower is based on the identification of a two-dimensional exchange. On the one hand, it seeks a conventional productivity coalition, in which flexibility is exchanged for progressive personnel management, while on the other it seeks to endow the company with competitive advantage as a means of promoting minimum standards for the sector. There is a seeming basis for a partnership strategy in the private recruitment industry, which rests on the specific competitive strategy pursued by Manpower. The company seeks to attract and retain good quality labour and secure long-term supply contracts with clients through union recognition and the adoption of relatively progressive personnel management. Nevertheless, on both dimensions the exchange to date has been limited and characterised by uncertainty. Building partnership in this as in other sectors has proved a rather fraught process and we encountered complaints from both parties that the other side was either not truly committed or was extracting greater benefit from the exchange. A fundamental problem that the union has faced on both dimensions of its exchange with Manpower is that while there may be a coincidence of interests there is no coalescence; the objectives of the union and the employer intersect but are not fully congruent. With regard to the internal productivity coalition, for instance, it remains that Manpower competes in a price sensitive market against other, mainly non-union, employment agencies and this imposes a constraint on its capacity to deliver ‘secure flexibility’ to its employees. Thus, in the late 1990s it withdrew from its commitment to parity wages and has resisted requests from the union to further enhance employment conditions through the provision of family-friendly benefits. ‘Before you (the T&GWU) squeeze us’, a Manpower manager remarked on the latter proposal, ‘go and do some work with the industry as a whole and level the playing field for us’. While competition from other agencies limits the scope for a positive-sum exchange, moreover, the labouruse strategies of Manpower’s clients can override the company’s own commitment to upgrade employment standards. Rather like a trade union, Manpower is a ‘secondary organisation’, in the sense that its relationship with its employees is shaped by the strategies of labour-use adopted by client firms. If these emphasise the use of agency labour to reduce labour costs (often by avoiding pension contributions and other forms of indirect pay) or secure numerical flexibility then limits are necessarily imposed on the company’s ability to pursue a ‘twin core’ strategy based on high labour standards. The amendment of the Manpower agreement in 1998 to replace the guarantee of parity pay with a weaker statement declaring this to be an aspiration originated in pressure from client companies seeking to use agency labour to reduce costs. ‘We have to be realistic’, a manager stated, ‘Some clients use us to have different rates of pay’. Tension was also apparent in the second dimension of the relationship; that oriented towards the external labour market. While Manpower (and Adecco) managers were
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adamant that union endorsement had helped the company to secure business, there was a tendency amongst some to play down the significance of the agreement as a source of competitive advantage. The deal was simply not relevant to much of the company’s business. It was further pointed out that being associated with a trade union could be problematic when seeking business from potential clients, particularly those with no experience of collective industrial relations. Even when bidding for work from unionised clients, the company sometimes chose to play down its T&GWU connection. One of the tasks of the newly appointed Agency Organisers has been to help the company secure new business in unionised companies but it was reported that managers negotiating contracts were ‘very wary of mentioning the T&GWU to clients’ (T&GWU interview). Union recognition, from the perspective of Manpower’s management, could be a source of competitive disadvantage as well as gain. A further contradiction was apparent between Manpower’s desire to use its relationship with the T&GWU to secure competitive advantage and the union’s objective of securing a broad regulation of the temporary labour market. While the company might welcome moves to eliminate undercutting by low-cost competitors, it was also conscious that a unique source of advantage could be lost through the extension of the agreement to other agencies. For this reason, the T&GWU’s agreement with Adecco, signed in 2000, had prompted an adverse reaction from at least a proportion of Manpower managers. Two principal objections were forthcoming: that the union had signed an agreement with a supplier that did not directly employ its workforce and that it was less generous in its provision of benefits. ‘They undercut us with the Adecco deal’, was how one manager put it, ‘so we’re losing business from it’. The company’s ‘bidding people’, who negotiate contracts with corporate clients, were said to be particularly hostile to the Adecco agreement, which had removed a unique selling point for Manpower with some of its unionised clients. The fact that the interests of Manpower and the T&GWU do not fully coincide has served to limit the substantive gains secured by the union through its agreement. Both of its principal objectives, to use the deal to secure improved conditions for Manpower workers and initiate a broad regulation of the temporary labour market, have been attained to a rather limited degree. The agreement establishes the entitlement of Manpower workers to a rather narrow set of employment benefits, albeit superior to those provided by other agencies. The union has not attempted or has not been successful in negotiating general clauses on employment security, guarantees of training or employee involvement that are reported features of partnership agreements elsewhere (Tailby and Winchester 2000). Neither has it secured regular discussion of business policy and, notwithstanding the company’s global presence, there has been no movement to establish a European Works Council. Beyond Manpower, the Adecco deal provides for similar but even lighter regulation of temporary labour and there is no evidence yet either of a further extension of union recognition or of the Manpower agreement acting as a general standard for the industry. It was also reported that the T&GWU has not had a great deal of success in using the agreement to extend trade unionism to truly greenfield sites, where there was no prior history of union recognition. A correct assessment is probably that the influence over the temporary labour market of the T&GWU, and the union movement more generally, remains modest. While the T&GWU has identified a plausible (and two-dimensional) positive-sum exchange with Manpower, therefore, the
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contradictions apparent in its relationship with the company have to date limited its full realisation. However, an important qualification must be entered to this record of modest achievement. The conditions of Manpower employees are not identical across the company and at a number of well-organised T&GWU sites the strength of domestic organisation in the client firm has been used to lever up the pay and benefits of agency workers. The result has been agreements that guarantee parity pay, equal access to benefits and, in one factory visited, the entitlement of agency workers to use the on-site learning centre. The primary purpose of these agreements has been to protect the core workforce from undercutting but they have nevertheless resulted in material improvements for agency workers. We return to these agreements below but it can be noted that they rest on bargaining power derived from local union organisation as much as on shared interests between the agency and the workers they supply.
Reliance on employer support A feature of many partnership agreements is that they guarantee or extend employer support for enterprise trade unionism. As such, they involve trade unions in deliberate use of the resources of the employer to secure institutional goals, such as security, membership growth and collective organisation. Employer support of this kind may be a prerequisite for establishing and maintaining a union presence amongst groups of workers whose level of skill, form of contract or precarious employment make them intrinsically difficult to organise. But the cost may be a compliant form of trade unionism that has limited appeal to workers or the neglect of other sources of power, such as industrial action or use of the law, for fear of alienating a supportive employer (Kelly 1996). The Manpower agreement provides a number of important supports for the T&GWU. With regard to security, the employer has maintained its backing for the union for more than 30 years, even when the policy of the TUC and T&GWU declared such a relationship illicit. Although the company has accepted other unions as representatives of specific groups amongst its workforce, it regards the T&GWU as its ‘senior union’ and has extended recognition to drivers and (albeit on a less formal basis) its operational employees. With regard to union membership, Manpower has a formal commitment to achieving a level of union density across its workforce that is equivalent to the national UK figure and encourages union joining among its employees. ‘Advisors’ among the company’s operational staff, who recruit and induct field workers, are required formally to explain the benefits of union membership to new entrants. Essentially, Manpower’s junior managers are designated union recruiters. Finally with regard to collective organisation, the company has agreed recently to fund a number of lay representative positions. As has been mentioned, two fulltime Agency Organisers were appointed in 2001 and three part-time representative positions for drivers were created in 2002. The holders of these posts are charged with recruiting Manpower workers into the union and representing them in company procedures in the manner of conventional workplace representatives. In addition, their role includes promoting Manpower within the T&GWU and to potential clients, reflecting the peculiar nature of the partnership.
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While the T&GWU has relied on Manpower’s formal backing, it has also acted to cultivate the support and trust of the company’s managers. This has led to its participation in a number of joint events and initiatives that have been designed at least in part to promote contact between union officers and representatives of the company. In 1999 the T&GWU and Manpower jointly hosted an international conference on ‘The Temporary and Agency Worker—their role in Europe’s workforce’. In 2001–02 the successful bid to the Partnership Fund led to a series of jointly convened workshops, attended by Manpower workers, union representatives and company managers, and designed to elicit ways of fostering worker identification with the company and increased union membership. In between these two initiatives a joint Partnership Forum was established at which groups of Manpower and T&GWU representatives could meet to review the agreement and discuss its further evolution. The kind of joint-working with the deliberate aim of fostering mutual trust, which has been seen in other partnership arrangements (Thomas and Wallis 1998; Knell 1999:25), has therefore also featured at Manpower. One of its explicit purposes has been to extend knowledge of and trust in the union beyond a supportive group of senior managers to more junior colleagues responsible for day-to-day operations. Another device for broadening management support for recognition has been to use union (and management) representatives to brief operations staff (potential T&GWU recruiters) on the business benefits of union recognition. Although the employer is committed to supporting the T&GWU, and several of its senior managers are themselves members, there are limits to the backing the union receives. There is a variable level of support across the organisation and, while managers in some regions have helped push up union membership, elsewhere there has been less encouragement for union joining. Union officers complained of managers failing to brief new recruits about the union and failing to provide information or assistance to union recruitment drives at particular work-sites. The two Agency Organisers, for instance, were said to have encountered ‘a lot of pushback [from local managers]…[who believed] there’s no business benefit’ (Manpower interview). Moreover, although there was formal acceptance by the company of the union’s right to recruit operations staff, there seemed to be particular resistance to the unionisation of this core group of employees. This suggests that Manpower’s management is keen to limit the scope of union influence and ensure that the presence of the T&GWU does not disrupt operations, a concern that is arguably ubiquitous amongst managers in unionised firms (Sisson 1987). This concern was also apparent in attempts to shape the form of union organisation within the enterprise. A key objective of managers appeared to be to prevent the relationship with the union compromising the more fundamental relationship with client firms. This led, in turn, to rejection of conventional workplace representation amongst field staff, which would effectively have been subsidised by clients, and a rejection, too of shop stewards employed by client companies representing Manpower employees. The research discovered instances of both of these patterns but the company’s preference was clearly to separate union organisation for its own workers from that of clients and to rely on ‘remote’ representatives, like the Agency Organisers, who were not connected to any client worksite. The ideal arrangement for Manpower was observed at a large manufacturing plant, where the client and Manpower workforces were allocated to
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separate branches and Agency Organisers or T&GWU District Officers provided representation to Manpower workers in the event of grievance or disciplinary cases. Reliance on the employer has therefore proved to be problematic for the T&GWU. There are real benefits, in terms of management backing and subsidy, but these are counterbalanced by uneven commitment amongst operational managers and the company’s preference for a form of unionism that does not impinge on its primary relationship with clients. These contradictions are apparent in a central outcome of the agreement for the T&GWU, membership growth. The support of the company has allowed it to build up a substantial body of members with Manpower. An accurate figure could not be provided because Manpower workers are allocated to a variety of T&GWU branches but both management and union representatives estimated that between 1,000 and 2,000 Manpower workers are union members. However, this is only a small percentage of a total workforce of about 60,000 at any one point in time and of 100,000 over the course of a year (a lower percentage is unionised in Adecco). Many of these workers work in non-union environments on short contracts and are intrinsically difficult to organise. According to one senior T&GWU officer there are about 10,000 employees within the company who could realistically be drawn into membership, most of whom work in client companies with an established T&GWU presence. Nevertheless, disappointment was expressed by the union, and by management, that the allocation of substantial resources to the recruitment of Manpower workers has not yielded a higher return. This disappointing return undoubtedly reflects the contingent employment relationship of much of the Manpower workforce; temporary workers generally have a low union density (Riley 1997:272–3). But there are other plausible explanations. In conventional employment, employees frequently join a union at their place of work and, if they are actively recruited, this is usually done by a colleague or workplace representative (Waddington and Whitston 1997:529–30). Reliance on the uneven commitment of Manpower advisors or external recruitment by union officers or Agency Organisers, often attempted in rest areas on the basis of offering individual consumer services, clearly does not match this pattern. The methods of union recruitment employed by the T&GWU in Manpower, and which derive from the employer’s support for the union, are not those that have proved most effective elsewhere. Indeed, this was acknowledged: the union has been overly reliant on ‘persuading managers to sign up members’, one T&GWU officer said, ‘it doesn’t take a brain surgeon to see that’s going to cause us problems’. It may also be that the nature of the T&GWU’s substantive exchange with Manpower has hindered membership growth. Psychological studies of union joining have repeatedly stressed ‘instrumentality’, the extent to which workers join unions to achieve extrinsic benefit (Hartley 1992). But the T&GWU agreement takes the form of an endorsement of acceptable minimum standards, which underpin but which are remote from the experience of working in any single client firm. It has also yielded only a modest set of basic terms and conditions, often inferior to those enjoyed by workers in client firms, and contains no provision for regular negotiations over the critical vector of wages. The limits to the union’s substantive exchange with Manpower at enterprise level, outlined above, arguably compound the effect of the methods of recruitment to produce an overall low level of membership.
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Although the T&GWU has relied on employer support, this is not the only resource it has used. It has challenged aspects of management practice through the Employment Tribunal system and, more generally, has continued to lobby government for tighter regulation of agencies as a means to gaining influence over their activities. The Adecco agreement ensued from the release of the Working Time Regulations: previously the company’s failure to provide paid holidays had prevented a deal. As was noted above, the union has also tried to make use of its remaining reservoirs of bargaining power amongst Manpower’s clients. In some cases this has not proved possible because the domestic union has decided to exclude agency workers from membership and ensure that their pay and conditions are inferior: a policy of reinforcing ‘class divisions in the working class’ (T&GWU interview). Elsewhere, however, local union organisation has been used to raise the terms and conditions of agency workers and promote their unionisation. ‘Where there is a position of strength there are good contracts’, one officer explained, while another said that recruitment was most effective where the union could ‘borrow a rep from the host company’. The T&GWU has enjoyed most success in unionising agency workers where it has been able to use an established steward organisation to extend membership to the new influx of agency labour.
Developing union organisation for partnership For much of the history of the T&GWU-Manpower relationship, union organisation approximated to the form identified by partnership critics. The relationship was initiated and sustained by union full-time officers, in the face of, often severe, criticism from sections of the membership who were threatened by agency labour. It was conducted at a rarefied level and rested on ties between senior union leaders and executive directors of the company. And it resulted in only the most rudimentary lay organisation amongst the Manpower workforce. The task of recruiting employees to the union and representing them in company procedures was assumed, almost completely, by two union officers, who covered the north and south of the country respectively. ‘We’re the shop steward, the convenor, the officer, the Mum and Dad, an ear on the end of the phone’, was how one of these officers described their role. As the relationship with the company has developed, however, and become infused with the language of partnership, so the T&GWU has tried to move beyond this state of affairs. An officer-dependent, passive form of trade unionism has been viewed as a constraint upon, and not a condition for, the development of a broader exchange with the company. ‘We need to look at structures [of lay representation]; this is the next phase’, the same officer stated and remarked that without the development of an activist tier amongst the Manpower workforce union membership was unlikely to increase significantly. Another officer stated the following: ‘you can only do so much in developing relations at senior levels. We got a bit trapped there. The Manpower agreement was in the hands of very senior officers and needs to be devolved as far as possible.’ Central to the union’s current position, therefore, has been an intention to use its partnership with Manpower to extend collective organisation amongst the workforce and build the kind of arrangements for member participation that are a feature of enterprise-based unionism in conventional firms.
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Two initiatives have so far been launched. The first is the creation of the Agency Organiser and equivalent driver positions. These have been filled by appointment in the first instance from candidates within the existing Manpower workforce. It is intended, however, that future incumbents will be elected and will act as the keystone of a more extended body of lay representatives and activists. The second initiative has been the creation of two dedicated branches for agency workers for the north and south of the country. These are to administer membership and other records but also provide a forum for the democratic participation of agency workers in union government. Both initiatives date from 2001 and are in their early stages. A problem encountered in each has been identifying suitable activists, reflecting the limited form of trade unionism that has existed hitherto. The two current branch secretaries, for example, are a Manpower manager and a retired road transport driver who is a member of the T&GWU executive. A distinguishing feature of these initiatives is that they separate lay organisation from the immediate workplace. The full-time lay representatives are equivalent to the ‘peripatetic key stewards’ seen in other sectors (Terry 1982), while the branches are geographical, multi-employer and very extensive in their potential coverage. To a degree this can be seen as a form of detachment congruent with the requirements of partnership: the employer, as has been pointed out, has been anxious to remove union organisation from clients’ premises. This is not the only explanation, however. The reliance on mobile representatives and geographical organisation also reflects the nature of the Manpower workforce, which is itself mobile and dispersed across hundreds of worksites. The arrangements can be viewed as an adjustment of the structure of worker representation to a situation of contingent work and in this respect are congruent with the T&GWU’s tradition of reliance on steward organisation to represent members. There was evidence of tension, moreover, between the desire of the T&GWU to build lay organisation and the sensitivity of the company to the disruption of relations with clients. ‘We’ve had a topdown approach and not matched it with bottom-up trade unionism’, a senior T&GWU officer stated, ‘We need to organise the field staff, not simply recruit them’. The union’s aspiration was that the newly appointed Agency Organisers would discharge this role, but the job description for the post mentions only recruitment and the company’s aspiration appears to be that they should confine their activities to building membership. The future vitality of enterprise trade unionism in Manpower could depend on which of these aspirations wins out. The union’s expressed position, however, is that the partnership should result in the deepening of lay organisation, with the appointment of peripatetic representatives representing an initial step towards this goal. In parts of Manpower there are already elements of workplace trade unionism. At one of the large vehicle manufacturers in the Midlands, for example, the T&GWU branch has pressed successfully for the election of stewards from amongst the agency workforce. There is evidence, again, therefore of local union strength being used to advance the position of ‘insourced’ temporary labour. This pattern was not encountered uniformly, however. At another Midlands manufacturing site visited there was a Manpower steward but he was largely excluded from the activities of the workplace branch and agency workers were employed on inferior conditions. Even at sites where the domestic organisation expressed solidarity, moreover, the separate and often subordinate interests of the agency workforce could become apparent. ‘They don’t want them in the branch’,
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was how one officer characterised a frequent steward response, ‘They’re the buffer when the redundancies hit and there’s resistance to recruitment’. Reflecting this position, the two newly appointed Agency Organisers said that they had encountered some resistance from local steward organisation to their entering workplaces to recruit or represent Manpower workers. There was a tension, therefore, between local union representatives and external representatives associated with the partnership strategy in Manpower. The basis of this tension, however, was not that identified in the theory of the ‘displaced activist’; that excluded junior representatives react against an inner circle of partnership adherents. Rather it arose from tension between alternative models of enterprise trade unionism; client-based on the one hand and agency-based on the other. For shop stewards in client firms, the primary focus is the domestic workforce and there is a likely concern to regulate agency labour to prevent undercutting and substitution of existing members. For the incipient organisation in Manpower, the primary focus is the agency workforce and the concern is to improve their conditions, perhaps by securing equivalent treatment with workers in client firms. These concerns can overlap but probably never to a complete degree and this can make domestic organisation in client firms an unreliable resource for promoting the needs of agency workers.
Conclusion This chapter has charted a middle path between the arguments of critics and advocates of labour-management partnership. The account of the T&GWU’s relationship with Manpower has provided a degree of support for partnership adherents. Manpower’s competitive strategy, with its attempt to seek contracts through labour quality and union endorsement, has provided the grounding for positive-sum exchange. Employer backing has allowed the union to become established in the company, build up a body of members and lay the foundation of lay organisation. The union’s commitment to partnership, moreover, has not prevented it from trying to build the kind of activist-based trade unionism that exists in conventional firms. The degree of success on each of these dimensions has been limited to date, however, and the findings also conform in part to the arguments of partnership critics. Thus, there are limits to the shared interests of union and agency, the substantive gains for members have been modest, collective bargaining remains underdeveloped, the company is cautious about the degree of support it offers for lay organisation and union membership remains confined to a minority of workers. What can be made of this mixed pattern of findings? One conclusion can be drawn from the impact of domestic organisation within client firms. Conditions for agency workers tended to be better, membership was higher and lay organisation more developed where the strength of trade unionism in client firms had been lent in support of the Manpower workforce. Where the union possessed independent bargaining power, therefore, it was able to secure a more satisfactory set of arrangements for its agency membership. The T&GWU’s goal has been to promote relatively high standards and the collective organisation of the agency workforce. The evidence from Manpower suggests that these objectives are unlikely to be realised solely on the basis of identifying common interests, relying on employer support and promoting positive, high-trust relations
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between managers and union officers. Given the limits to shared interests, unions need to develop or access additional resources of power if they are to push employers like Manpower towards higher standards in the temporary labour market. The kind of positive, co-operative exchange the T&GWU wants to secure, paradoxically, may require more powerful organisation. An effective partnership, in other words, needs stronger trade unionism (Heery 2002). Relying on union organisation in client firms, however, can prove problematic. This is partly because the interests of agency workers are always likely to be secondary for shop stewards whose primary accountability is to the host workforce. Partly, too, it is because the power of union organisation in individual client companies cannot easily be used to raise the terms and conditions of Manpower staff who work across the broad range of the UK economy. Diminishing islands of union strength are an unsatisfactory basis for regulating the temporary labour market at large. It is for this reason that the attempt by the T&GWU to build a form of enterprise-based unionism amongst the Manpower workforce is an interesting development. The outcome is as yet uncertain but could provide a model for unionising the private recruitment industry, and perhaps other organisations that rely heavily on contingent labour. A general advance in the condition of agency workers probably requires that they develop their own internal sources of strength based on higher union membership and collective organisation. Whether this can be achieved is a moot point. The T&GWU-Manpower agreement is one of a growing number of arrangements in the private service sector where an initial and rather rudimentary form of trade unionism has been established with employer support, often under the rubric of partnership. The test of these agreements lies in the longer term and hinges on whether dependent trade unionism can assume a more vital and influential form. They will repay further study.
Note 1 The research was funded by the Economic and Social Research Council (Award No. L212252023), as part of the Future of Work programme. We would like to thank all those trade union representatives and managers who agreed to be interviewed and who otherwise helped with the research project. Any errors of fact or interpretation are ours alone.
References Blyton, P. and Turnbull, P. (1998) The Dynamics of Employee Relations, 2nd edn. Basingstoke and London: Macmillan Business. Cohen, L. and Hurd, R.W. (1998) ‘Fear, conflict and union organising’, in Bronfenbrenner, K., Friedman, S., Hurd, R.W., Oswald, R.A. and Seeber, R.L. (eds) Organizing to Win: New Research on Union Strategies. Ithaca and London: ILR Press. Danford, A., Richardson, M. and Upchurch, M. (2002) ‘New unionism, organising and partnership: a comparative analysis of union renewal strategies in the public sector’, Capital and Class, 76:1–27. Druker, J. and Stanworth, C. (2001) ‘Partnerships and the private recruitment industry’, Human Resource Management Journal, 11(2):73–89. Geary, J.F. and Roche, W.K. (2003) ‘Workplace partnership and the theory of the displaced activist’, Industrial Relations Journal, 34(1):32–51.
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Hartley, J.F. (1992) ‘Joining a trade union’, in Hartley, J.F. and Stephenson, G.M. (eds) Employment Relations. Oxford: Blackwell. Haynes, P. and Allen, M. (1999) ‘Partnership unionism: a viable strategy?.’ Paper presented to the Annual Conference of the British Universities Industrial Relations Association, De Montfort University, Leicester, July. Heery, E. (2002) ‘Partnership versus organising: alternative futures for British trade unionism’, Industrial Relations Journal, 33(1):20–35. IRS (1999) ‘The new partnership at CSL’, IRS Employment Trends, 682:3. Kelly, J. (1996) ‘Union militancy and social partnership’, in Ackers, P., Smith, C. and Smith, P. (eds) The New Workplace and Trade Unionism: Critical Perspectives on Work and Organization. London: Routledge. Kelly, J. (1999) ‘Social partnership in Britain: good for profits, bad for jobs and unions’, Communist Review, 30:3–10. Knell, J. (1999) Partnership at Work, Employment Relations Research Series 7, London: Department of Trade and Industry. Kochan, T.A. and Osterman, P. (1994) The Mutual Gains Enterprise: Forging a Winning Partnership among Labor, Management and Government. Boston MA.: Harvard Business School Press. Peck, J. and Theodore, N. (1998) ‘The business of contingent work: growth and restructuring in Chicago’s temporary employment industry’, Work, Employment and Society, 12(4):655–674. Purcell, J. and Purcell, K. (1999) ‘Insourcing, outsourcing and the growth of contingent labour as evidence of flexible employment strategies’, Bulletin of Comparative Labour Relations, 35:163–181. Riley, N.-M. (1997) ‘Determinants of union membership: a review’, Labour, 11(2): 265–302. Sisson, K. (1987) The Management of Collective Bargaining: An International Comparison. Oxford: Blackwell. Tailby, S. and Winchester, D. (2000) ‘Management and trade unions: towards social partnership?’, in Bach, S. and Sisson, K. (eds) Personnel Management. Oxford: Blackwell. Taylor, P. and Ramsay, H. (1998) ‘Unions, partnership and HRM: sleeping with the enemy’, International Journal of Employment Studies, 6(2):115–143. Terry, M. (1982) ‘Organising a fragmented workforce: shop stewards in local government’, British Journal of Industrial Relations, 20(1):1–19. Thomas, C. and Wallis, B. (1998) ‘Dwr Cymru/Welsh Water: a case study in partnership’, in Sparrow, P. and Marchington, M. (eds) Human Resource Management: A New Agenda. London: Pitman. Waddington, J. and Whitston, C. (1997) ‘Why do people join unions in a period of membership decline?’, British Journal of Industrial Relations, 35(4):515–546. Windolf, P. (1989) ‘Productivity coalitions and the future of European corporatism’, Industrial Relations, 28(1):1–20.
11 Social partnership agreements in Britain John Kelly Formal co-operation between workers, unions and employers is hardly new. Yet it is apparent that during the past twenty years social partnership, as a form of labourmanagement co-operation, has acquired a new prominence both in industrial relations policy debates and in academic research. The term itself, as this collection demonstrates, is contentious on many different levels. Cutting across the various debates, however, is a way of thinking about partnership which rejects the assumption that the term has a single meaning, necessarily inscribed in some inner logic. Two kinds of analysis on partnership have emerged: the first is a typological approach where the prime aim of research is to classify different types of partnership and map different sets of outcomes. Oxenbridge and Brown’s (2002, and this volume) distinction between formal and informal partnership arrangements is a good example. The second approach claims that the concept of partnership, like any political category, is contested and that it necessarily acquires a variety of meanings, across different contexts and over time. Theoretically this line of argument can be traced back to the Gramscian work of Laclau and Mouffe (1985). From a union standpoint the attraction of this position is that it suggests the character of ‘partnership’ is fluid and open to debate: it can therefore be appropriated by labour and given a more unionate inflection so that it might then contribute to a process of union revitalization. One purpose of this chapter is to re-examine these debates and explore some of the gaps in the literature, suggesting new ways in which we can think about the partnership phenomenon in the light of historical and comparative analysis. The second objective is to present fresh evidence on the outcomes of partnership agreements. The third objective is to examine the potential for partnership agreements to help in the revitalization of British trade unionism. The chapter is divided into five parts, beginning with a brief review of the partnership literature. Parts two and three set partnership into its historical and comparative contexts respectively, exploring the different forms it has taken over time and the variety of forms it now takes across the advanced capitalist world. Against this background part four examines the impact of partnership agreements on a series of labour outcomes and part five examines the connection between social partnership and union revitalization through the prism of social movement theory.
The social partnership literature The literature on partnership in Britain is growing rapidly and has become increasingly diverse. There is a large and growing body of case studies, usually, though not always, of
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a single organization with a partnership agreement. Whilst some studies are rigorous, e.g. Marks et al. (1998) and Taylor and Ramsay (1998), there is also a substantial body of journalistic and uncritical cases heavily based on the views of a handful of partisan informants and seriously under-theorized (e.g. IPA 1996 on Blue Circle Cement; IRS 1999 on Tesco). Comparisons between matched pairs of partnership and non-partnership firms that could shed light on the mechanisms and outcomes of different forms of partnership arrangements are unknown. Second, there is a survey-based literature, both in Britain and the US, which has examined partnership practices and outcomes, either through employee and employer perceptions (e.g. Guest and Peccei 2001) or through cross-tabulating practices and outcomes (e.g. Appelbaum et al. 2000; Osterman 2000).1 Third, there is also an emerging literature on union activist and officer perceptions of partnership (e.g. Martínez Lucio and Stuart 2002a). Much of the literature is located in what has become a highly polarized political debate between protagonists and opponents of partnership. Whilst most writers have been critical of the outcomes of partnership schemes in Britain (e.g. Claydon 1998; Danford 1999; Kelly 1996, 2004; Tailby and Winchester 2000), others have been more positive (e.g. Ackers and Payne 1998; Coupar and Stevens 1998; Guest and Peccei 1998, 2001; Thomas and Wallis 1998; Haynes and Allen 2001). What is less clear are the theoretical orientations underpinning this literature. That is because much of the research is empirical evaluation of policy, testing the claims of partnership proponents against empirical evidence and passing judgement accordingly. Nonetheless it is possible to discern two broad underlying theoretical frameworks, which implicitly or otherwise, have informed and structured much of the British and US debates. The first of these could loosely be described as an institutionalist approach, while the second owes more to political economy. There are many varieties of institutional analysis, but one common element is a focus on enduring organizations and their patterns of interaction (Peters 1999). In the field of industrial relations this approach translates into analysis of collective bargaining outcomes and the policies of the main actors— employers, unions and the state. An institutionalist account of partnership would run as follows: collective bargaining traditionally constituted an economic exchange centred on wages and conditions, and sometimes on productivity. Within an adversarial and low trust relationship, unions respected ‘management’s right to manage’ and employers expected to have to raise wages most years. However in an era of intensified and global competition, these traditional institutions have become increasingly dysfunctional and need to be adapted to fit the new environment. Collective bargaining and union policy must become more closely aligned to the competitive success of the firm and relations between the parties must become more co-operative and more trusting if firms are to survive. Within what we might call a neo-pluralist framework, partnership agreements can therefore be understood as a development of collective bargaining, not its antithesis, and a maturation of union policy away from the irrelevant and damaging traditions of struggle and militancy. Critics of partnership have also engaged in debate about developments in collective bargaining and union policy but from an implicit political economy perspective centred on the conflicting interests of labour and capital and the balance of power between them. Intensified product market competition is refracted through individual units of capital, each of which is compelled to reduce unit labour costs in order to maintain the rate of
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profit. This drive in turn necessitates a variety of labour process measures, more or less damaging to worker interests, namely intensification of work, numerical flexibility and fragmentation and casualization of labour. Because British unions have been weakened by slack labour markets, product market competition and state policies, partnership tends to deliver employer gains rather than mutual gains. Despite the rhetoric of ‘co-operation’, the imbalance of power between labour and capital also means that union involvement in partnership is more likely to reflect the co-optation and compliance of a weakened and subordinate labour force. Each of these perspectives plays down variation in the forms of partnership and implicitly assumes that the meaning and significance of the phenomenon is constant over time and across different capitalist economies. Historical and comparative analysis suggests this assumption needs to be questioned.
History One of the most active and well-known organizations currently promoting partnership is the Involvement and Participation Association (IPA); the history of the IPA is perhaps less well-known. It was founded in June 1884, as the ‘Labour Association for Promoting Co-operative Production based on the Co-Partnership of the Workers’, or the CoParticipation Association for short. It emerged shortly after the upsurge of labour militancy across Europe in the late 1870s, a period that also witnessed the birth of the modern workers’ movement, symbolized most clearly by the creation of workers’ political parties. Predictably the mobilization of workers generated a reaction by the employers: on the one hand there were organi-zations of strike breakers (the so-called ‘free labour organizations’) and on the other there were bodies such as the Co-Partnership Association, designed to counteract Marxist ideas of class struggle with rival notions of profit sharing and labour-capital cooperation (Cronin 1989). As Martínez Lucio and Stuart (2002b) have noted, the search for co-operation between labour and capital is a recurring theme in the history of British industrial relations, from the Mond-Turner talks of the late 1920s through joint consultation in the middle of the century through the Donovan reforms of the late 1960s. More formally, Ramsay (1977) argued many years ago that employer interest in ‘co-operation’ rose and fell according to the balance of power between labour, capital and the state, peaking during periods of labour unrest. The most recent wave of British employer interest actually began in the early 1980s and has since evolved through a number of different forms. What we might call firstgeneration agreements mainly comprised single-union, ‘no strike’ deals. They were normally instigated by the employers, often Japanese electrical engineering companies operating on greenfield sites, e.g. Sanyo and Sony, and were designed to secure union support for flexible work practices and dispute avoidance. Always relatively few in number, these agreements died away after the late 1980s. Second-generation partnership agreements have involved core components such as labour flexibility, union rights to information and consultation and job or employment security. There now exist at least 50 and possibly as many as 80 of these agreements (depending on the definition adopted). Many have been concluded in heavily unionized firms in industries undergoing substantial restructuring and labour shedding. Another
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very important route into partnership agreements, sometimes co-existing with the first, has been triggered by acute industrial conflict which has led managers and some union leaders to try and construct new, more co-operative industrial relations, especially in banking and finance, e.g. Barclays Bank, Legal and General. Many of these agreements have arisen, therefore, in circumstances which may be helpful to the employer in radically changing existing patterns of industrial relations. On the other hand these same circumstances may limit the scope for mutual gains, as we shall see later. Third-generation agreements have begun to emerge since the late 1990s in previously non-union workplaces and firms in both manufacturing and services. They are union recognition agreements in which the union is confirmed as the bargaining agent for a designated bargaining unit whilst at the same time pledging to work in ‘partnership’ with the employer. They are normally signed in the wake of a union organizing drive where the union has built up membership and a cadre of activists under the legal protections afforded by the Employment Relations Act (1999). Arguably, therefore, the balance of power in these third-generation agreements may turn out, on average, very different from that found in the earlier ‘no strike’ and partnership agreements. In the light of these different types of agreement we can begin to think more formally about the balance of power in partnership agreements being ranged along a continuum. At one end there are what we might call employer dominant agreements marked by a balance of power favourable to the employer, an agenda that primarily reflects the employers’ interests and labour compliance rather than co-operation (cf. Heckscher 1996:116–17 on ‘false cooperation’). At the other end of the continuum we can argue there are labour parity agreements, where there is a more even balance of power. Consequently the agenda for discussion and the outcomes are more likely to reflect the interests of both parties (cf. Crouch 1992 from whom this distinction is adapted). A number of variables influence the power balance between the parties, in particular the tightness of labour markets, the degree of product market competition, the degree of employer dependency on labour co-operation in production and attributes of union organization such as membership density and mobilizing capacity. The logic of the power dimension is that we would predict different sets of outcomes, with mutual gains confined to labour parity schemes whilst employer dominant schemes would show more benefits for employers as compared with workers and unions (cf. Kelly 1996 where no such distinction was drawn). If the characteristics of partnership agreements can vary over time, what can we say about variations at a point in time, across the capitalist world? In particular what does comparative analysis tell us about the suitability of the British economic and political environment for the spread of partnership agreements?
British and American partnership agreements in comparative context One of the truisms of comparative employment relations is that the same institution, whether it be a union or a works council for example, can generate different effects in different national contexts. Equally, the impact of global market competition and of regional political institutions, such as those of the European Union, will be refracted through the prism of differing institutional arrangements across the capitalist world. The
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‘varieties of capitalism’ approach provides one of the more fruitful ways of thinking about these national differences. According to Hall and Soskice (2001), we can distinguish three different varieties of capitalist system based around clusters of the following variables: industrial relations institutions, especially bargaining and consultative structures; employee motivation practices; systems of training and education; patterns of corporate governance and types of inter-firm relations. Liberal market economies (LMEs) such as the UK and the US typically have decentralized bargaining, low bargaining coverage, high levels of workforce insecurity and flexibility, limited systems of work-related training, corporate governance systems geared to shortterm profit maximization and inter-firm relations regulated primarily by contracts and markets. These stand in contrast to the more Co-ordinated Market Economies (CMEs), such as Germany, which operate with more centralized or co-ordinated bargaining, greater employment protection, extensive systems of work-related training and trustbased networks of corporate governance. The Mediterranean economies (MEs), such as Spain, can be thought of as a hybrid form, characterized by co-ordinated bargaining but weak systems of work training. British union leaders have frequently equated ‘social partnership agreements’ in the UK with social partnership as practised in countries such as Germany. The equation however is misleading. Whilst it may be true that global competition is affecting industrial firms in all the major centres of capitalist production, it is not the case that they will respond in the same ways, e.g. by cutting labour costs through redundancy. Moreover, as Locke and Thelen (1995) have argued, even if they appear to respond in similar ways, through forms of labour-management co-operation for example, the content of these arrangements will vary significantly across the varieties of capitalism. An element of this argument has already appeared in the partnership literature in studies of the link between corporate governance structures and the viability of sustained enterprise partnership agreements (see Deakin et al., this volume). From the standpoint of the ‘varieties of capitalism’ approach, however, we can recognize that there is a broader point to be made. The structure of UK corporate governance is a particular instance of one type of institutional characteristic of the liberal market economy and not something peculiar to the UK. Its baleful effect on the incidence of partnership agreements, whether labour parity or employer dominant agreements, is only reinforced when we consider the other, supportive institutions that define the LME and differentiate it from the typical CME. Insofar as partnership agreements entail functional flexibility, that in turn requires investment in training. But in the decentralized and largely voluntarist training system that is the hallmark of the LME, firms have powerful incentives either to under-invest in the requisite training or to skew investment towards firm-specific skills (so as to avoid labour poaching by free-riding rivals) (this is clearly examined in Rainbird’s chapter). By contrast the tripartite training system in the German CME embraces such a high proportion of firms, organized through encompassing employers’ federations, that the free-rider problem is far less acute (Ashton and Felstead 2001). In similar vein, sectoral pay bargaining with high bargaining coverage, widespread throughout the CMEs, is designed to take wages out of competition between firms and close off the ‘low road’ of competitive success through wage reductions. By contrast, bargaining coverage in the UK, as in other LMEs, closely tracks union density and has declined from 70 per cent in 1980 to below 40 per cent in 2002.
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Moreover the dual system of representation through unions and works councils, common throughout the CMEs and MEs, provides workers with power resources at a number of different levels within the industrial relations system. However, it is also important to note that the links between these different resources and levels are often complex. Whilst works councils in Germany for instance are often dominated by union representatives (despite their nominal non-union status), they do not always work in tandem with higher level union bodies and have been known to enter agreements at variance with union policy. In Spain the union-dominated works’ committees have the right to negotiate and to call strike action but a growing shortage of union activists at workplace level means these rights cannot always be exercised (Hamann and Martínez Lucio 2003). Nonetheless, these types of resources are mostly unavailable to union representatives in the UK and the USA where union presence is largely and increasingly configured within the parameters of the individual capitalist enterprise and held in check there by stringent anti-strike laws which prohibit solidarity action (Human Rights Watch 2000; Smith and Morton 2001). The logic of this comparative framework is to reinforce the conclusions emerging from studies of corporate governance. The institutional arrangements characteristic of the LMEs are particularly inhospitable to partnership agreements in general and to labour parity agreements in particular. The next step in the argument is to see how far this expectation is borne out when we examine evidence on the outcomes of British partnership agreements.
Partnership as organizational practice In micro-level analysis we need to incorporate a number of points developed in the previous sections: first, given the methodological weakness of much of the case study literature it will be particularly important to try and establish a more rigorous type of analysis; second, we can use the institutionalist and political economy orientations discussed earlier to identify a set of outcome variables; third, given the variety of partnership agreements in recent years, varying from employer dominant to labour parity forms, we will need to specify which types of agreement we are examining in order to avoid over-generalization; and finally the analysis of ‘varieties of capitalism’ points to a number of factors beyond the enterprise that may prove essential in theorizing the outcomes of these agreements. The core of the methodology in this research was to compare a set of outcomes in partnership firms with the same outcomes from a control group of matched, nonpartnership firms. This type of comparison would allow us to control for the impact of variables such as size or technology and arrive at a more accurate estimate of the effect of partnership agreements.2 So far as outcome variables are concerned there are three questions that arise: which variables to examine; what predictions can be made; and how any given set of outcomes is to be explained. An institutionalist account of mutual gains would specify the following variables: first, the employment records of partnership firms should be superior to their non-partnership rivals because a pledge of employment security is a significant element in many partnership agreements. The reasoning is that if labour-management co-operation helps
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improve company performance, measured by profitability, then employers should be able to afford better employment protection. In addition, if unions do secure greater influence in business policymaking we would expect employment protection to be a priority. Second, improved company performance should also translate into higher wages and benefits for employees. This effect could reflect either an institutional gain-sharing agreement or the positive association between company profitability and pay settlements (Carruth and Oswald 1989). Third, union density might also be expected to increase in partnership firms, as non-union employees perceived the greater effectiveness of unions in protecting jobs, raising wages and benefits or influencing company decisions. A political economy perspective would offer a somewhat different set of predictions: employer dominant agreements will be widespread in Britain and through these agreements firms will exploit union weakness to secure compliance with labour shedding. The employment record of partnership firms would therefore be no better, and could be worse than, non-partnership rivals. By the same logic wage settlements would be inferior to those in non-partnership firms as employers exploited the subordination and quiescence of unions to increase the rate of profit at labour’s expense. If unions were then perceived by employees in partnership firms as relatively ineffective, there is no reason to expect any resultant increase in union density compared with non-partnership firms. An extensive literature search revealed partnership agreements in 12 private sector firms in both industry and services for which we could obtain consistent and reliable time-series data on these outcome variables. The control group of non-partnership firms comprised a set of privately-owned competitors operating in the same industrial sectors as their partnership rivals and matched for employment size, product range and union status at the time of the partnership agreement (see Table 11.1). All the firms were unionized and there was no attrition from, or entry to, the sample. If we assume the requirements for a labour parity agreement are a high level of product demand, a relatively tight labour market (with little labour shedding) at the level of the industry sector and a high level of union density within the firm, then three of these partnerships could be categorized as labour parity agreements: Borg Warner, Leyland Trucks and the Cooperative Bank; the rest would be categorized as employer dominant agreements. Turning to outcomes, employment was normally measured as the total number of manual employees, except in the banking and insurance and retail sectors where total employment was used because so few employees
Table 11.1 Partnership and matched nonpartnership firmsa Sector
Partnership firms
Non-partnership firms
Cement
Blue Circle (5,018)
Castle Cement (1,300) and Rugby Cement (850)
Water (total employees)
Hyder (formerly Welsh Water) (3,455)
Anglia, North West, Northumbrian, Severn Trent, South West, Southern, Thames, Wessex, Yorkshire (average employment 4,006)
Banking (total employees)
Barclay’s Bank (61,700), NatWest Bank (55,800) and the
HSBC (44,800), Halifax (24,300), Abbey National (20,300), and Nationwide (10,000)
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Co-operative Bank (3,900) Motor vehicles
Rover (34,960)
Ford UK (38,400)
Truck manufacture
Leyland Trucks (630)
AGCO (1,120) and ERF (708)
Vehicle components
Borg Warner (218)
Robert Bosch (1,098), Calsonic (219) and Holset Engineering (1,053)
Drinks
H.P.Bulmers (860) and United Distillers (3,292)
Tetley (370) and Greene King (370)
Food retail (total Tesco (155,000) and Asda employees) (86,000)
Sainsbury’s (107,000), Safeway (65,000) and Somerfield (45,000)
Note a Figures in brackets are the number of manual employees at the time of the partnership agreement.
are classified as manual. The wage measure chosen largely reflected data availability and was the union-negotiated, annual percentage increase in either manual or all-employee hourly wage rates. Work time was measured as the basic working week and holidays as the total days of paid leave per year excluding statutory days. Union density was used rather than membership to control for fluctuations in employment. In order to control for pre-partnership trends in these outcomes variables, changes in employment and wage rates in the partnership firms were examined for two to three years prior to the partnership agreement (reliable union density data were only available post-partnership). Evidence on post-partnership employment change (see Table 11.2) of each partnership firm compared with each of its matched non-partnership rivals (e.g. Blue Circle compared with Castle and Rugby Cement) shows that in 62 per cent (23 out of 37) of these paired compar-isons the partnership employment record was worse although the distribution was not significantly different from chance (χ2=2.19). For example, in the water industry, Hyder’s employment record is worse than all but one of the other non-partnership firms (Yorkshire Water) and in banking two of the three partnership firms have employment records that are worse than all of their nonpartnership rivals. Looking only at the nine employer dominant agreements, the partnership firm performed worse than its non-partnership rivals in 69 per cent (22 out of 32) of the paired company-by-company comparisons, a statistically significant difference (χ2=4.50, p<0.05). Just four partnership firms have outperformed their rivals on our employment measure: the small, niche manufacturing firms Leyland Trucks and Borg Warner (with labour parity agreements) and the retail firms Asda and Tesco. All four have expanded employment and have done so to a greater degree than their non-partnership rivals. Differences between the partnership and non-partnership firms did not reflect a prepartnership history of above average labour shedding. Nor were they related to the presence of an employment security agreement, pledging the firm to try and avoid compulsory redundancies. Job losses were recorded at six of the seven companies with such agreements, but at just one of the five companies without them (χ2=36.3, p<0.001). This finding is consistent with evidence which suggests that the main function of ‘job
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security’ agreements is to help companies jointly manage labour force reductions rather than avoid them (IRS 1997a; Cully et al. 1999:80). The evidence on wage settlements showed no significant differences in either prepartnership or post-partnership wage settlements with the exception of retail stores where wages increased faster in Tesco and Asda compared with three non-partnership rivals (t=2.39, p<0.05; full data in Kelly 2004). However data for 1995–97 show that the partnership stores were also recording higher wage rises than their competitors before they signed partnership agreements (t=3.35, p<0.01). Data on hours and holidays showed no significant differences between partnership and non-partnership firms (hours: t=0.64, holidays: t=0.89, see Kelly 2004). Table 11.3 shows figures for company profit margins, i.e. gross profits before tax as a percentage of turnover, for both pre- and post-partnership periods. Within each sector, annual data were then pooled so that in banking, for instance, annual pre-partnership figures from Barclays Bank and the Cooperative Bank were combined to produce a single set of pre-partnership banking data for partnership firms, and the same process was repeated for the comparators, Abbey National, Halifax and HSBC. Mean scores for partnership and non-partnership firms were compared before and after partnership agreements and the results of these comparisons are also shown in Table 11.3. The post-partnership data show that nine of the eleven partnership firms recorded profit margins that were no different from those of their
Table 11.2 Manual employment changes in partnership and non-partnership companies Companies Manual (partnership employment firms in bold) time 1 (prepartnership)
Manual employment time 2 (time of the agreement)
Manual employment time 3 (2001)
Cement
1985
2001
NA
% Change time 1–2 prepartnership
% Change time 2–3 postpartnership
Blue Circle Cement
–
5,018
1,580
–
−68.5
Castle Cement
–
1,300
600
–
−53.8
Rugby Cement
–
850
800
–
−5.9
Water
a
1988
1991
2001
Hyder (Welsh Water)
4,618
3,455
2,038
−25.2
−40.1
All nonpartnership water firms (means)
4,875
4,006
2,961
−17.8
−26.1
Anglian Water
5,102
3,629
4,000
−28.9
+10.2
North West
7,936
6,839
NA
−13.8
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Water Northumbrian Water
1,459
1,193
1,450
−18.2
+21.5
Severn Trent Water
8,174
7,054
4,580
−13.7
−35.1
South West Water
1,958
1,855
NA
−5.3
Southern Water
3,162
2,259
1,800
−28.6
−20.3
Thames Water
9,210
7,400
5,500
−19.7
−25.7
Wessex Water
1,891
1,755
1,100
−7.2
−37.3
Yorkshire Water
4,981
4,074
2,300
−18.2
−43.5
Bankinga,b
1996
1998
2000
All partnership banks (means)
40,633
40,467
36,000
−0.4
−11.0
Barclays Bank
60,300
61,700
56,500
+2.3
−8.4
4,000
3,900
4,000
−2.5
+2.6
NatWest Bank
57,600
55,800
47,500
−3.1
−14.9
All nonpartnership banks (means)
25,075
24,850
26,500
−0.9
+6.6
Abbey National
20,100
20,300
19,400
+1.0
−4.4
Halifax
27,000
24,300
26,100
−10.0
+7.4
HSBC
42,700
44,800
48,000
+4.9
+7.1
Co-operative Bank
Nationwide Motor vehicles
10,500 1991
10,000 1993
12,500
−4.8
+25.0
2001
Rover Cars
38,100
33,523
14,409
−12.0
−57.0
Ford UK
51,800
32,500
22,800
−37.3
−34.9
Vehicle components
1991
1993
2001
Borg Warner
209
218
452
+4.3
+107.3
Robert Bosch
847
1,098
1,877
+29.6
+70.9
Calsonic
136
219
556
+61.0
+153.9
1,157
1,053
738
−9.0
−29.9
Holset Engineering Truck manufacture
1990
1993
2001
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Leyland Trucks ERF AGCO Drinks
630
1,000
−72.6
+59.0
815
708
748
−13.1
+4.7
1,300
1,120
1,030
−13.8
−8.0
1994
Diageo (United Distillers) Tetley Greene King Retail
2,300
1992
HP Bulmers
a
174
2001
860
860
700
0.0
−18.6
3,799
3,292
2,803
−13.4
−14.9
382
370
300
−3.1
−18.9
430
370
500
−14.0
+35.1
1996
1998
2001
Asda
74,500
86,000
95,000
+15.4
+10.5
Tesco
125,000
155,000
172,000
+24.0
+11.0
Safeway
60,000
65,000
68,000
+8.3
+4.6
Salisbury’s
85,000
107,000
110,000
+25.9
+2.8
Somerfield
35,000
45,000
39,000
+28.6
−13.3
Sources: Cement and water: Company Annual Reports, 1985–2002; Banks: Annual Abstract of Banking Statistics, London: British Bankers’ Association, 2001, Table 5.01; Motor vehicles and vehicle components: Bureau van Dijk (BvD) database of British companies at http://www.fame.bvdep.com/, Individual company reports/Number of employees; Trucks, drinks and retail: Labour Research Department, Bargaining Report, September, 98 (1990), 109 (1991), 120 (1992), 131 (1993), 142 (1994), 153 (1995), 164 (1996), 175 (1997), 186 (1998), 197 (1999), 208 (2000), 219 (2001), London: LRD Notes a Figures refer to total employment, manual and non-manual, b Data beyond 2000 are seriously affected by banking mergers so time series comparisons beyond that date are unreliable.
Table 11.3 Annual average profit margins (gross profit as % of turnover) in partnership and nonpartnership companies Companies
Pre-partnership profit margin (annual average)
Post-partnership profit margin (annual average)
t statistic, partnership vs non-partnership, (preagreement) postagreement
Cementa
NA
1991–2001
3.29**
Blue Circle
NA
+11.08
Castle Cement
NA
+5.46
Rugby Cement
NA
+7.50
NA
1993–2000
Water
a,b
0.15
Social partnership agreements in Britain
Hyder (Welsh Water)
NA
+9.50
Anglian Water
NA
+9.48
North West Water
NA
+9.08
Northumbrian Water
NA
+12.98
Severn Trent Water
NA
+10.89
South West Water
NA
+10.01
Southern Water
NA
+8.59
Thames Water
NA
+11.00
Wessex Water
NA
+12.54
Yorkshire Water
NA
+9.61
1995–97
1998–2001
Barclays Bank
+13.51
+12.29
Co-operative Bank
+8.25
+20.44
Abbey National
+5.34
+5.42
Halifax
+53.31
+14.04
HSBC
+28.96
+15.30
Motor vehicles
1991–92
1993–2000
Rover Cars
−7.33
−3.76
Ford
−10.84
−2.73
Vehicle components
1991–93
1994–2000
Borg Warner
+6.31
+7.37
Robert Bosch
+2.09
+6.63
Calsonic
+3.98
+3.57
Holset Engineering
+1.1
+3.58
Truck manufacture
NA
1994–2000
Leyland Trucks
NA
+7.56
AGCO
NA
+2.51
Banking
b
175
(2.30*) 1.49
(0.82) 0.16
(2.30*) 1.17
4.41**
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ERF
NA
−0.86
Drinks
1992–93
1994–2001
HP Bulmers
+7.73
+7.37
Diageo (United Distillers)
−0.03
+6.71
Tetley
−2.36
+1.05
Greene King
+16.05
+13.36
Retail
1994–97
1998–2001
Asda
+3.82
+3.01
Tesco
+4.53
+4.37
Safeway
+5.85
+4.25
Somerfield
+1.98
+2.15
176
(1.04) 0.06
(0.99) 0.04
Sources: Water: OFWAT (Office of Water Services) (2000). Financial Performance and Expenditure of Water Companies in England and Wales: 1999–2000, London: OFWAT, Table 10. All other industries: BvD database of British companies at http://www.fame.bvdep.com/, Individual company reports/Profile/Profit margin (%), 31 December each year. Notes * p<0.05;**p<0.01 a Consistent pre-partnership figures were not available. b The measure used here was return on capital employed as profit margin figures were unavailable.
non-partnership rivals, the only exceptions being Blue Circle (with an employer dominant agreement) and Leyland Trucks (with a labour parity agreement) who outperformed their competitors. Pre-partnership comparisons also showed few significant and consistent differences. There was no clear and consistent link between profits and employment. Given the often poor employment record of partnership firms and the absence of any partnership effect on wages, hours of work and holidays, there is no theoretical reason to expect a partnership effect on union density, and this is what we find (Table 11.4). An overall comparison of the three partnership firms (Barclays Bank, Cooperative Bank and Tesco) with six non-partnership rivals shows no significant difference in union density trends between 1998 and 2001 (Mann-Whitney U statistic=2.00, ns). It is true that union membership increased in Tesco’s in the wake of its partnership agreement, but it is clear from the Safeway’s experience that successful organizing does not require a partnership agreement with the employer. Finally, and in line with the political economy perspective, it is worth pointing out that a number of partnership agreements have either been preceded or accompanied by various forms of coercion. Several employers considered de-unionization before opting for ‘partnership’, namely Legal and General, National Power and Tesco, whilst others threatened de-unionization or plant closure in order to secure union compliance with a ‘partnership’ agreement, namely Allied Domecq, Blue Circle, Bulmers, Hyder, Rover and United Distillers (Marks et al. 1998:213, 217; Bacon and Storey 2000:413–14; Haynes and Allen 2001:172).
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Table 11.4 Trade union density in partnership and non-partnership banks and retail stores 1998–2001 Companies Trade union density Trade union density Density change, (partnership firms in and membership 1998 and membership 2001 percentage points bold) Bankinga 79%, 48,521
68%, 38,580
−11
70%, 2,724
63%, 2,526
−7
NatWest Bank
81%, 45,224
83%, 39,630
+2
Abbey National
37%, 7,468
44%, 8,514
+7
47%, 20,837
45%, 21,455
−2
Tesco
50%, 77,500
50%, 86,000
0
Safeway
20%, 13,000
29%, 19,700
+9
Sainsbury’s
c.10%, 10,500
c.10%, 11,000
0
Somerfield
c.10%, 4,500
c.10%, 4,000
0
Barclay’s Bank Co-operative Bank
HSBC Retail
Sources: Banking: Employment data from British Bankers’ Association, Abstract of Banking Statistics, London: BBA, 2001, Table 5.01. Union membership data: written communication from John Earls, Head of Research, UNIFI and from Trades Union Congress, Annual Directory, London: TUC, 1999–2002 inclusive. Retail: Employment data from annual company reports at http://www.fame.bvdep.com./ Union membership data: written communication from Graham Markall, Head of Research, Union of Shop Distributive and Allied Workers. Note a Consistent time series employment data were not available for two non-partnership banks, the Halifax and Nationwide, owing to corporate mergers.
Overall, then, the evidence from controlled comparison between partnership and nonpartnership firms shows little support for the neo-pluralist institutionalist account of mutual gains, at least when measured by employment, wages and conditions, profit margins and union density. The only supportive evidence comes from employment trends in industries with stable or rising labour demand, where both employer dominant and labour parity partnership firms have a better job creation record than their nonpartnership rivals. The political economy approach can certainly account for the poorer employment record of most partnership firms and the absence of any positive effects on wages, conditions and union density, especially under employer dominant agreements. The fact that labour parity agreements produce somewhat better results is also consistent with this approach although the absence of any dramatic profits effect is a puzzle. More broadly the micro-level data are also fairly consistent with expectations derived from the analysis of variations in labour’s power resources across the different varieties of capitalism. Unions in liberal market economies such as the UK operate at the level of enterprises dominated by corporate boards and institutional investors who are only too willing to shed labour to cut costs and boost share prices. Deprived of access to power
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resources at other levels in the industrial relations system, unions have therefore entered employer dominant ‘partnership’ agreements from a position of relative weakness. In the light of this evidence and argument we can now consider what role partnership agreements might play in the revitalization of the union movement. In doing so, we can draw on social movement theory as a way of thinking about the preconditions for such a process.
Partnership as union policy in the light of social movement theory Unions in the CMEs and MEs can access a variety of power resources in order to secure influence over employers: membership and its willingness to act; centralized collective bargaining structures that are still supported by employer associations, notwithstanding their growing reservations and the signs of fragmentation, especially in Germany; access to central and local states, e.g. through social pacts, as in Spain; and a permissive legal environment. Unions in the LMEs of the UK and the US have few of these institutional supports and have consequently suffered a more severe decline in power than their counterparts elsewhere. One consequence is that union revitalization in the LMEs is necessarily more focused on raising membership and density levels than is the case in say Germany or Spain. The premium on boosting membership has led inter alia to a debate about whether it is possible to combine an organizing approach to employees with a partnership approach directed towards employers. Heery (2002), for instance, has acknowledged there is a clash between the ‘conflicting interests’ logic of organizing and the ‘shared interests’ logic of partnership. Nonetheless he also suggested there are ways in which the two can be articulated: for example by applying them to different sectors of the economy or to different types of employer; or by thinking of partnership as an attribute of the bargaining relationship that develops once organizing has secured union recognition. Social movement (or mobilization) theory provides another way of thinking about the link between partnership and union revitalization. The key assumption is that the trade union can usefully be thought of as a social movement, that is …a collective challenge by people with common purposes and solidarity in sustained interaction with elites, opponents and authorities. (Tarrow 1994:3–4) Some of the conditions required for a social movement to come into being, to sustain itself or to reverse a decline in its fortunes are by now reasonably well understood. As a body engaged in various forms of contending against opponents it must frame a set of demands that reflect shared interests which are currently not being met; it must identify an agency that can either be held responsible for whatever injustices the movement has identified or can take responsibility for their redress; it must identify an opportunity structure, a set of channels through which its demands can be effectively pressed; and in pursuit of these demands it must identify power resources that can be deployed in the face of resistance (Tarrow 1994; Kelly 1998). How do some of the principles and
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practices of partnership agreements in Britain measure up to these theoretical requirements? First, the content of many partnership agreements downplays conflicting interests and focuses quite explicitly on areas of shared interest. The agreement between Scottish Widows (now part of Lloyds-TSB) and MSF (now AMICUS) states that ‘pay and conditions will not be the subject of acrimonious debate and contest but will be jointly settled in a new pay and conditions committee….’ The same union signed a similar agreement with Legal and General which stated that ‘…formal joint negotiation is not an appropriate way of managing pay… Management therefore undertake, where relevant, to consult with MSF on markets, pay practices and related matters…’. In the utilities sector UNISON’s partnership agreement with Thames Water aimed to ‘convert some of the collective agreements into more flexible management policies on which the company would consult rather than negotiate with the unions’ (IRS 2000). Blue Circle Cement’s 1997 partnership agreement sought to replace traditional union-negotiated entitlements with managerial discretion. For example, the right to take compassionate leave in the event of family bereavement was replaced by the right to request leave and have management ‘view any such request with sympathy and consistency’ (IRS 1997b). These arrangements signify a shift in union definitions of interest, downplaying the theme of conflicting interests and promoting the idea of shared interests in competitive success. However, in the light of social movement theory, these arrangements are significant for another reason: they represent substantial redefinitions of opportunity structures, the channels through which unions pursue demands on the employer. A collective bargaining channel has always been valued by unions because it provides effective voice. The reason it does so is twofold: both sides, employer and union, commit to discussing issues with a view to reaching agreement and discussion normally occurs within the shadow of mutual sanctions, the mere knowledge of which is normally sufficient to induce an agreed settlement. Yet the partnership agreements we have just described appear to represent a breach of this principle; management no longer defines itself as part of an institution that generates rules binding on both parties but positions itself as an agency that is free to act unilaterally once it deems the process of consultation to be over. And whilst the union has committed itself in these, and other partnership agreements, to desist from collective action, there is rarely any equivalent restraint on the part of the employer in areas of hiring, firing and redundancy. Some commentators have tried to downplay the significance of a shift towards consultation and managerial discretion, arguing that in practice the distinction between consultation and negotiation is often blurred. Terry (2002) has cited the German case in support of this argument because it is clear that in some plants the works councils, which are nominally consultative bodies, do in fact discuss issues with management in a framework where both sides aim to reach agreement: in other words the parties are engaged in negotiations, de facto if not de jure. From the standpoint of social movement theory this argument is problematic. We can readily agree that in practice ‘negotiation’ and ‘consultation’ are sometimes difficult to distinguish. Moreover ‘strong’ consultation, German works council style, may generate as many positive outcomes for workers as ‘weak’ bargaining arrangements. But when we recast the argument in dynamic form and think through what is happening over time, a more complex picture emerges. Consultation and negotiation could become blurred
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through two very different routes reflecting different trajectories of union power. On the one hand, consultative processes and institutions could gradually be transformed into bargaining arrangements, signifying a shift in power towards unions. One example would be the devolution of issues from sectoral bargaining machinery to union-dominated works councils in parts of Germany in recent years so that the works council increasingly becomes a negotiating institution. Another would be the shift of issues out of unilateral regulation or consultative machinery into collective bargaining in Britain in the 1970s (Storey 1980). But the processes of consultation and negotiation could also become blurred as issues flow the other way, out of bargaining arrangements and into company councils, problem solving or consultative committees as has happened under a number of British partnership agreements. Movement in this direction does not necessarily signify a weakening of unions but it is far more likely to do so than movement in the opposite direction. It is easy to understand why employers and managerialist opponents of strong and independent trade unionism would favour such arrangements. It is more puzzling as to why advocates of unionism would see merit in these ideas.
Concluding remarks The analysis and evidence presented here suggests that partnership agreements in Britain have little potential either to transform the industrial relations system in the direction of far-reaching labour-management cooperation or to revitalize the trade union movement. The recent history of partnership and similar initiatives shows that many agreements were initiated under conditions of union weakness and consequently many of them would have taken an employer dominant form. Indeed in a number of cases the already powerful position of the employer, based on slack labour markets and competitive product markets, was reinforced by overt threats of union derecognition. Nor is this degree of coercion peculiar to the UK, because a similar pattern of ‘forced compliance’ was reported in nine of the 13 case studies of labour-management ‘co-operation’ in the US examined by Walton et al. (1994). There was only limited support for the institutionalist predictions of mutual gains but rather more for the political economy predictions of labour exploitation. In industries where there was significant labour shedding, employer-dominant partnership agreements were associated with a faster rate of job loss compared with non-partnership firms. On the other hand, in industries with stable or rising labour demand, both employer-dominant and labour-parity partnership firms had a better job creation record than non-partnership rivals. In line with the political economy approach, partnership had no discernible impact on wage settlements, weekly hours, annual holidays or union density. Institutional analysis of British capitalism, compared with other varieties of capitalism, underlines the extent to which the liberal market economy provides a deeply inhospitable environment for labour parity partnership. The absence of sectoral bargaining or extension clauses limits the degree to which unions can deploy centralized bargaining structures as a power resource. Both the shareholder-driven system of corporate governance and the voluntarist system of training seriously limit the capacity of employers to make long-term investments in order to secure committed and skilled labour and provide the preconditions for union involvement in partnership. But even if these
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institutional barriers were to be overcome there is a serious question mark about the willingness of British employers to engage in meaningful partnership with unions. The main employers’ federation, the CBI, lobbied vociferously and successfully to weaken the recognition provisions eventually legislated in the Employment Relations Act (1999). More recently it has lobbied with equal vigour on behalf of many of its members to resist the EU Information and Consultation Directive. If we turn from the outcomes of partnership agreements to their potential for union revitalization, the evidence is not very encouraging. Mobilization theory would emphasize the role of shared grievances, attribution of blame to the employer and effective opportunity structures as the pre-conditions for union revitalization. But the thrust of many employer dominant agreements in Britain has been to downplay conflicting interests between worker and employer and to constrict the bargaining channels through which unionized workers can exercise effective voice, displacing them with weaker consultative structures. Theoretically there is no reason to expect this set of practices and attributes to make any significant contribution to union revitalization, an expectation borne out by the lack of any positive impact on union density in the partnership firms. But what of unions with more substantial power resources, who may have been able to secure labour parity agreements, as at Borg Warner? And what of the ‘third generation’, union recognition agreements where there may be a significant proportion of labour parity partnerships? This is because the dominant approach to securing a new recognition agreement is to build up union membership and organization, two key power resources in collective bargaining (Heery et al. 2003). The airline pilots’ union BALPA signed a partnership agreement with British Airways in the late 1990s, but it was clear from Harvey’s (2001) research that union officials continued to pursue ‘traditional’ adversarial collective bargaining based on the power resources of union density, union control of labour supply and high membership commitment to the union (see also Roche and Geary 2001). The outcomes of these agreements should differ significantly from the employer dominant agreements that have prevailed so far in Britain. But the dynamics of the labour parity agreement lead to an interesting paradox. If the employer is obliged to engage in meaningful negotiations with the union because of labour’s power resources and if workers are able to secure better outcomes as a result, then in what way, if at all, does this process differ from conventional collective bargaining? In other words the labour parity partnership agreement may signify not only the transformation of partnership in Britain but its effective dissolution.
Notes 1 Some of the US literature is not directly comparable with the British as it covers the broader category of ‘transformed’ or ‘high performance’ workplaces. 2 A more detailed account of the research and its findings can be found in Kelly (2004).
References Ackers, P. and Payne, J. (1998) ‘British trade unions and social partnership: rhetoric, reality and strategy’, International Journal of Human Resource Management, 9(3):529–550.
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Appelbaum, E., Bailey, T., Berg, P. and Kalleberg, K.L. (2000) Manufacturing Advantage: Why High-Performance Work Systems Pay Off. Ithaca, NY: Cornell University Press. Ashton, D. and Felstead, A. (2001) ‘From training to lifelong learning: the birth of the knowledge society’, in Storey, J. (ed.) Human Resource Management: A Critical Text, 2nd edn. London: Thomson Learning. Bacon, N. and Storey, J. (2000) ‘New employee relations strategies in Britain: towards individualism or partnership?’, British Journal of Industrial Relations, 38(3):407–427. Carruth, A.A. and Oswald, A.J. (1989) Pay Determination and Industrial Prosperity. Oxford: Clarendon Press. Claydon, T. (1998) ‘Problematising partnership: the prospects for a co-operative bargaining agenda’, in Sparrow, P. and Marchington, M. (eds) Human Resource Management: The New Agenda. London: Financial Times Pitman Publishing. Coupar, W. and Stevens, B. (1998) ‘Towards a new model of industrial partnership: beyond the “HRM versus industrial relations” argument’, in Sparrow, P. and Marchington, M. (eds) Human Resource Management: The New Agenda. London: Financial Times Pitman Publishing. Cronin, J.E. (1989) ‘Strikes and power in Britain, 1870–1920’, in Haimson, L.H. and Tilly, C. (eds) Strikes, Wars and Revolutions in an International Perspective. Cambridge: Cambridge University Press. Crouch, C. (1992) ‘The fate of articulated industrial relations systems: a stock-taking after the neoliberal decade’, in Regini, M. (ed.) The Future of Labour Movements. London: Sage. Cully, M., Woodland, S., O’Reilly, A. and Dix, G. (1999) Britain at Work, as Depicted by the 1998 Workplace Employee Relations Survey. London: Routledge. Danford, A. (1999) Japanese Management Techniques and British Workers. London: Mansell. Guest, D.E. and Peccei, R. (1998) The Partnership Company. London: Involvement and Participation Association. Guest, D.E. and Peccei, R. (2001) ‘Partnership at work: mutuality and the balance of advantage’, British Journal of Industrial Relations, 39(2):207–236. Hall, P.A. and Soskice, D. (2001) ‘An introduction to the varieties of capitalism’, in Hall, P.A. and Soskice, D. (eds) Varieties of Capitalism: The Institutional Foundations of Comparative Advantage. New York: Oxford University Press. Hamann, K. and Martínez Lucio, M. (2003) ‘Strategies of labour union revitalization in Spain: negotiating change and fragmentation’, European Journal of Industrial Relations, 9(1):61–78. Harvey, G. (2001) ‘Militancy and partnership: the development of industrial relations at British Airways’, in Martínez Lucio, M. and Stuart, M. (eds) Assessing Partnership: The Prospects for and Challenges of ‘Modernisation’. Leeds: Leeds University Business School. Haynes, P. and Allen, M. (2001) ‘Partnership as union strategy: a preliminary evaluation’, Employee Relations, 23(2):164–187. Heckscher, C. (1996) The New Unionism: Employee Involvement in the Changing Corporation. Ithaca, NY: ILR Press. Heery, E. (2002) ‘Partnership versus organising: alternative futures for British trade unionism’, Industrial Relations Journal, 33(1):20–35. Heery, E., Kelly, J. and Waddington, J. (2003) ‘Union revitalization in Britain’, European Journal of Industrial Relations, 9(1):79–97. Human Rights Watch (2000) Unfair Advantage: Workers’ Freedom of Association in the United States under International Human Rights Standards. New York: Human Rights Watch. IPA (1996) Blue Circle Cement. London: Involvement and Participation Association, Study 5. IRS (1997a) ‘From here to security’, IRS Employment Trends, 631 (May): 6–12. IRS (1997b) ‘Cementing a new partnership at Blue Circle Cement’, IRS Employment Trends, 638 (August): 11–16. IRS (1999) ‘Partnership delivers the goods at Tesco’, IRS Employment Trends, 686 (August): 4–9. IRS (2000) ‘New partnership channels at Thames Water’, IRS Employment Trends, 715 (November): 6–12.
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Kelly, J. (1996) ‘Union militancy and social partnership’, in Ackers, P., Smith, C. and Smith, P. (eds) The New Workplace and Trade Unionism. London: Routledge. Kelly, J. (1998) Rethinking Industrial Relations: Mobilization, Collectivism and Long Waves. London: Routledge. Kelly, J. (2004) ‘Social partnership agreements in Britain: labor cooperation and compliance,’ Industrial relations, 43(1):267–292. Laclau, E. and Mouffe, C. (1985) Hegemony and Socialist Strategy. London: Verso. Locke, R.M. and Thelen, K. (1995) ‘Apples and oranges revisited: contextualized comparisons and the study of comparative labor politics’, Politics and Society, 23(3):337–367. Marks, A., Findlay, P., Hine, J., McKinlay, A. and Thompson, P. (1998) ‘The politics of partnership? Innovation in employment relations in the Scottish spirits industry’, British Journal of Industrial Relations, 36(2):209–226. Martínez Lucio, M. and Stuart, M. (2002a) ‘Assessing the principles of partnership: workplace trade union representatives’ attitudes and experiences’, Employee Relations, 24(3):305–320. Martínez Lucio, M. and Stuart, M. (2002b) ‘Assessing partnership: the prospects for, and challenges of, modernisation’, Employee Relations, 24(3):252–261. Osterman, P. (2000) ‘Work reorganization in an era of restructuring: trends in diffusion and effects on employee welfare’, Industrial and Labor Relations Review, 53 (2):179–196. Oxenbridge, S. and Brown, W. (2002) The two faces of partnership? An assessment of partnership and co-operative employer/trade union relationships’, Employee Relations, 24(3):262–276. Peters, B.G. (1999) Institutional Theory in Political Science: The ‘New Institutionalism’. London: Pinter. Ramsay, H. (1977) ‘Cycles of control: workers participation in sociological and historical context’, Sociology, 11(3):481–506. Roche, W. and Geary, J. (2001) ‘Advocates, critics and union involvement in workplace partnership: evidence from Irish Airports’, in Martínez Lucio, M. and Stuart, M. (eds) Assessing Partnership: The Prospects for and Challenges of ‘Modernisation’. Leeds: Leeds University Business School. Smith, P. and Morton, G. (2001) ‘New Labour’s reform of Britain’s employment law’, British Journal of Industrial Relations, 39(1):119–138. Storey, J. (1980) The Challenge to Management Control London: Routledge and Kegan Paul. Tailby, S. and Winchester, D. (2001) ‘Management and trade unions: towards social partnership?’, in Bach, S. and Sisson, K. (eds) Personnel Management: A Comprehensive Guide to Theory and Practice, 3rd edn. Oxford: Blackwell. Tarrow, S. (1994) Power in Movement: Social Movements, Collective Action and Politics. New York: Cambridge University Press. Taylor, P. and Ramsay, H. (1998) ‘Unions, partnership and HRM: sleeping with the enemy?’, International Journal of Employment Studies, 6 (October): 115–143. Terry, M. (2002) Partnership Uncovered: The Implications of Partnership for Trade Unions in the UK. London: Unions 21. Thomas, C. and Wallis, B. (1998) ‘Dwr Cymru/Welsh Water: a case study in partnership’, in Sparrow, P. and Marchington, M. (eds) Human Resource Management: The New Agenda. London: Financial Times Pitman. Walton, R.E., Cutcher-Gershenfeld, J.E. and McKersie, R.B. (1994) Strategic Negotiations: A Theory of Change in Labor-Management Relations. Boston, MA; Harvard Business School Press.
12 Employees’ experiences of workplace partnership in the private and public sector Mike Richardson, Paul Stewart, Andy Danford, Stephanie Tailby and Martin Upchurch
Introduction What can partnership mean for employees, employers and union organisation? The British Trade Union Congress (TUC) is keen to discover the formula to effective partnerships that leads to ‘win-win’ outcomes. For the employer, the strategic imperative is to develop a set of social and political conditions, or an ecology, that despite variable organisation and sector contexts nevertheless form the preconditions for a so-called High Performance Work Organisation (HPWO) (Applebaum et al. 2000). For us, it is in pursuit of the HPWO that management (and trade union) interest in partnership is to be understood. Common to those studies emphasising the correlates of HPWO systems and workplace partnership is that they provide mutual gains for employees (Kochan and Osterman 1994). While management techniques associated with HPWOs are not new and can be found in union and non-union workplaces, increasingly companies and organisations are assembling them together as coherent systems or bundles (Huselid 1995; Ramsay et al. 2000). Thus, rather than operating independently, and in a fragmented way, new opportunities are created to improve organisational performance by integrating practices such as continuous improvement schemes, teamworking, just-intime working and the like with total quality management, business process reengineering and so-called Japanese management practices. Some organisations have taken this programme a stage further. This has seemingly involved an ideological shift away from a Taylorist trajectory of low skilled, fragmented and routinised jobs under direct managerial control towards ‘enriched’, meaningful, multi-skilled and highly discretionary jobs. Often this model involves the adoption of ‘soft’ HRM systems to generate mutuality, commitment and cooperation, all features of workplace partnership, in an endeavour to bring about organisational transformation (Lawler et al. 1992; Wood 1999). These HPWOs seek to develop greater employee participation, influence and satisfaction as a means of nurturing a climate of trust and securing commitment—integral to workplace partnership. The philosophy is that the building of a more co-operative working environment should strengthen support for the restructuring of work and organisational flexibility. And it is this partnership principle of employers and unions working together to achieve common goals combined with the sharing of anticipated benefits that is the attraction for the TUC and many of its affiliate members. The fact that part of this process involves the encouragement of collective representation is also central in securing trade union backing.
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However, Kalleberg (2001:480) notes that if indeed ‘mutual gains’ or ‘win-win’ enterprises benefit from attaining functional flexibility, researchers have given little attention to investigating whether these organisations share such gains with their employees. He goes on to argue that it is non-standard employees in these enterprises who are most likely to be disadvantaged while regular full-time workers are more likely to be advantaged. Osterman (2000) too questions whether HPWO practices have had a positive impact on employees and found that between 1992 and 1997, in American establishments employing HPWO techniques, there was evidence of intensive restructuring and layoffs with no compensatory gains for employees. Similarly, Geddes’s (2001) initial assessment of Best Value pilots in UK local authorities reveals that they had a negative impact on staffing levels. These staff reductions have been achieved partly through the intensification of work and partly by the externalisation of public services. Yet for businesses the key part of the partnership agenda is achieving significant progress towards extending internal and external flexibility, as indicated by the British Fairness at Work white paper (HMSO 1998). Moreover, the European social model (1997) prioritised an action plan for employers and employees that included the development of flexible ways of working to reconcile security and flexibility (see Sisson 1999:451). The TUC are wedded to the view that support for increased flexibility under partnership and job security can be reconciled (TUC Partnership Institute 2002) but evidence from our case studies suggest that this verdict is questionable. For trade unions, the expectation of enhanced job security offers a highly important quid pro quo for forging partnership relations with employers. It is essentially on this basis that the TUC support employers in their pursuit of organisational efficiency and economic competitiveness through restructuring and the development of flexible work practices. This chapter explores whether partnership has indeed delivered greater job security in two organisations employing HPWO and partnership techniques and assesses the effects that they have had upon work intensification and stress in the pursuit of flexibility, efficiency and competitiveness. We utilise a case study analysis that draws from a mix of quantitative and qualitative data from a cross-section of managers, trade union representatives and employees. In contrast to the extant literature on partnership at work (inter alia, Ackers and Payne 1998; Guest and Peccei 2001), our focus is upon those who are subject to the protocol and imperatives associated with partnership, namely employees. Moreover, we are concerned more particularly with the notion of partnership as process, not ‘agreement’. The chapter begins with an outline of our research design. Next the context of partnership in our two case studies is set out, after which our empirical findings are presented. Finally, in our conclusion we argue that the evidence from our partnership case studies suggests that the price paid in terms of work intensification and stress has not resulted in employees feeling that their jobs are more secure. We contend that meanings of partnership are skewed more to fit the neo-liberal restructuring agenda than the long-term interests of union members. Our project is concerned to ground the idea of partnership at work in a broader social context than existing models of partnership and partnership discourse allow. Going beyond the focused institutional framework favoured by industrial relations theorists, our starting point is the workplace culture and social relations that constitute the space in which formal and informal understandings between employees, unions and management are made. In this respect, while making distinctions between agreements that are formal
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and informal, imposed and negotiated (Oxenbridge and Brown 2002 and this volume) we need to also fathom those determinate sociological relationships which define the pattern of any context-bound partnership agreement, or understanding. In other words, though partnership may well be framed by institutionalised agreements while in other circumstances being tacitly acknowledged, informal and constantly negotiable, our concern is with the dynamics of employee engagement with the interstices of the dynamics of partnership. What is the configuration of workplace employment relations and occupational identities out of which a particular partnership process (sometimes ending up as an agreement) arises? Further, what do employees themselves have to say about these—what is their interpretation of changes to management and union behaviour on the one hand, and the organisation of work and employment, including the labour process, which are heralded by the introduction of ‘partnership’? The latter must be seen to be crucial because it tells us about the employees’ predisposition to the idea of ‘partnership’—how is this constituted, what is the genealogy of management-employeeunion engagement? The question, in essence, is about partnership in practice, partnership at work, not merely, or only, partnership as ‘agreement’.
Research design Our analysis is drawn from two of our six case study organisations that together form the core of a project carried out under the auspices of the UK’s Economic and Social Research Council’s Future of Work programme. For comparative purposes we have chosen two cases, one from the private, the other from the public sector whose contrasting histories nevertheless allow us to make a number of, albeit limited, generalisations about the relationship between ‘partnership’ projects, employers, trade unions and employees. JetCo and CityCo provide informative case study examples of the contradictions inherent in the partnership at work agenda. The research design adopted a triangulation methodology involving intensive workplace case studies, employee surveys, documentary analysis and sectoral analysis. A diverse mix of research instruments was employed including survey questionnaires, nonparticipant observation, in-depth semi-structured interviews and focus group discussion. The case study at JetCo was based on one of its larger aerospace factories employing around 1,800 manual staff, represented by AMICUS-AEEU, and TGWU and 2,500 nonmanual staff, represented by AMICUS-MSF and GMB-APEX. Interviews were carried out at this site with 15 senior managers, line managers and cell leaders, 15 union representatives, and 21 manual and 21 nonmanual staff. In addition, 974 questionnaires were distributed of which 604 were returned, a response rate of 62 per cent. The case study at CityCo was of a large urban local authority employing 18,500 staff represented by GMB, UCATT, TGWU and UNISON. Interviews were conducted with 15 managers, five union representatives, and 28 manual and 41 non-manual staff. In all, 747 questionnaires were distributed across 11 departments, eliciting 389 responses, a response rate of 52 per cent. For this local authority case study we focus in particular on the Local Taxation and Payroll departments that had recently been put through the Best Value process.
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The context JetCo The cessation of the Cold War following the break up of the Warsaw Pact at the end of the 1980s brought about significant reductions in government military spending initiating a major restructuring of the British defence industry. Previous to this development, the British government had already begun to tighten its defence procurement policies. Competitive tendering was introduced in order to open up the industry to competition. JetCo was responsible for the design and manufacture of military engines. As elsewhere in the aerospace industry, the response of JetCo to reduced government support and exposure to market forces was to shed labour as it struggled to survive under new market conditions. A series of compulsory redundancy programmes in the 1990s commenced with 900 leaving the company in July 1990, 550 in 1991, 800 between 1992 and 1994, and a further 2,000 subsequently, including 1,000 at the time of the research. This reaction to competitive pressures was followed by the adoption of alternative work organisational design strategies, including HPWO practices. In particular, JetCo initiated a shift to core business activity, which involved sub-contracting and outsourcing the manufacture of major engine parts. This transformation from conventional manufacturing into a systems integrator was seen as critical for long-term survival. The development of this strategy enabled JetCo to search out the most effective cost and quality international supply network in order to improve its competitive edge. JetCo moved from manufacturing virtually 100 per cent of its component needs in-house in 1978 to approximately 35 per cent in 2001. By 2001, the total number employed on the JetCo site had fallen to around 4,300, compared with 8,000 in the late 1980s. In 1998 AMICUS-MSF struck a partnership agreement with the company management at the JetCo site. In return for a management policy of considering redundancies only as a last resort, AMICUS-MSF agreed to participate in a five-year programme addressing issues such as pay systems, reductions in engineering time, use of technology, use of subcontract labour and retention of engineering capability. No such agreement materialised in production areas as the policy of the Joint Shop Stewards’ Committee was to oppose partnership both for ideological reasons and because of the inherent contradiction of working with management’s agenda of labour rationalisation. However, the reality was that the drive to increase labour productivity through the use of high performance workplace practices such as lean production, flexible work organisation within a cellular working structure, continuous improvement initiatives and employee involvement had began in earnest in the mid-1990s. Informal partnership-type working was, in practice, evolving despite the resistance to a formal arrangement from the shopfloor unions. CityCo Driven by the ideology of the free market, neo-liberal Conservative governments in the 1980s and 1990s initiated and gradually extended the purview of compulsory competitive tendering (CCT) for local authority services. It was expected that the opening up of public services to competition would result in better services for less money. New Labour adapted this market philosophy to develop a ‘third way’ to deliver value-for-money quality services: Best Value was born. It was piloted in 1998 and incorporated into the
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1999 Local Government Act. One key area of difference between CCT and Best Value is the importance placed on securing service improvement by engaging, involving and striking partnerships with relevant stakeholders, including employees (Cmnd 4014 1998; Martin 2000). This development, in combination with the basic principles of Best Value, ‘economy, efficiency and effectiveness’, inherited from CCT, is beginning to have a bearing on the organisation of work and the nature of relations between management, employees and unions. This raises the question as to whether the ‘model employer’ image of local authority employers is being further eroded by the introduction of Best Value, particularly in respect to increases in workload and job insecurity. Best Value obligates local authorities to modernise and improve local services (whether this is achieved by externalising services or keeping them in-house is a secondary consideration). Central to Best Value practice is the setting of clear targets, utilisation of performance indicators, benchmarking, continuous improvement, training, monitoring and evaluation (Martin 2000). One of the main aspects of Best Value is the use of HPWO systems, which involves the promotion of more holistic ways of working, including teamworking, flexibility, responsibility and devolved decision-making. To achieve these goals, Best Value local authorities see workplace partnership with its emphasis on mutual respect and trust as the best way to secure employee commitment (Cmnd 4014 1998). Our local authority case study—CityCo—was a Labour-controlled authority located in the south west region, employing around 18,500 staff. Workplace partnership at CityCo grew partly from the pre-existing pattern of union co-option in local government and specifically from the employee relations imperatives of the government’s Best Value agenda. CityCo was one of the government’s pilot Best Value Local Authorities and our survey included two departments, Local Taxation and Payroll that had completed a Best Value review. The other departments researched had not, at the time, been subjected to any such review. Two of the guiding principles of CityCo’s pilot status were the development of partnership relations with employees and stable industrial relations based on negotiation and consultation with trade unions. These guiding principles were reemphasised in respect to the employee relations implications of Best Value in the National Joint Council Framework Agreement (2000) between local government employers and the recognised unions (GMB, TGWU and UNISON). This approach conferred some institutional legitimacy to union presence and activity in the Best Value process and provided the foundation for cementing a partnership relationship between management and unions based on mutual expectations and obligations (Kochan and Osterman 1994).
Partnership under the shadow of work intensification, work-related stress and job insecurity It is against the contextual backgrounds of JetCo and CityCo outlined above that we examine employees’ experiences of HPWO, Best Value and the partnership agenda in respect to their implications for the quality of working life and job security both in the private and public sectors.
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Flexibility and work intensification The indication from our case studies is that work intensification stems in no small part from increases in the degree of flexible working practices secured by the employer from their employees. Our survey revealed a significant increase in labour flexibility both at JetCo and CityCo. At JetCo, just over eight out of every ten respondents (82 per cent) reported that the degree of flexibility required in their jobs had increased. There was little variation between managerial, manual and non-manual respondents. At CityCo, the overall increase in flexibility at 60 per cent was less striking. Increases in labour flexibility were found to be more pervasive, however, in the Payroll (72 per cent) and Local Taxation (66 per cent) departments. Increasing levels of flexibility can have both a positive and negative impact on the quality of working life. Whilst the taking on of a wider range of functions can enhance job satisfaction, as work can seem less mundane, the evidence suggests that employees are working harder and experiencing more stress. The growth in multi-tasking in particular, and multi-skilling, can contribute to work intensification and workplace stress, as ‘what many workers experience is not so much the “vertical” but the “horizontal” loading of tasks’ (Hudson 2002:44) as employers seek to reduce the porosity of the working day. Intensive and extensive effort Some of our survey questions related directly to the change in work intensity and workplace stress experienced during the previous three years. The results are summarised in Tables 12.1 and 12.2. Work intensification can relate to either increases in the amount of work employees are expected to complete in a given period of time—‘intensive effort’—or increases in the hours of work employees put in over a given period—‘extensive effort’—(Green 2001). Overall, in both case
Table 12.1 Employees’ experiences of work intensification at JetCo by occupational class (%) Occupational group
Increased
Decreased
Unchanged
Change to the amount of work I am expected to complete each week All respondents
69
3
28
Manager
85
1
14
Non-manual (excluding managers)
74
2
24
Manual
58
4
38
Change to the number of hours I am expected to work each week All respondents
21
7
72
Manager
47
8
45
Non-manual (excluding managers)
17
5
78
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Manual
18
190
10
72
Note N=604.
Table 12.2 Employees’ experiences of work intensification at CityCo by occupational class and the Local Taxation and Payroll departments (%) Occupational group and Local Tax and Payroll departments
Increased Decreased Unchanged
Change to the amount of work I am expected to complete each week All respondents
66
3
31
Managers
87
0
13
Non-manual (excluding managers)
59
6
35
Manual
68
0
32
Local Taxation
73
3
24
Payroll
83
0
17
All respondents
25
5
70
Manager
45
0
55
Non-manual (excluding managers)
19
8
73
Manual
27
3
70
Local Taxation
14
3
83
Payroll
41
6
53
Change to the number of hours I am expected to work each week
Note N=386.
studies, employees believed that the intensive effort they put into their work had markedly increased in the last three years, 69 per cent in the case of JetCo and 66 per cent at CityCo. In respect to extensive effort, notable minorities, a fifth at JetCo and a quarter at CityCo, indicated an upward trend, although the majority (72 per cent and 70 per cent respectively) reported that the average number of hours they worked each week had not changed. The pattern of responses among employees at JetCo and CityCo indicated clear majorities of employees experiencing an intensification of effort. Significantly, given the implementation of Best Value, employees working in the Local Taxation and Payroll departments at CityCo registered higher than average degrees of intensive effort, compared with their counterparts in non-Best Value departments. In respect of extensive effort, whilst a minority of employees reported an increase in the number of hours they
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were expected to complete each week, these were much greater than those reporting decreases: three times as much at JetCo and five times as much at CityCo. At the Best Value review departments a high proportion of Payroll staff (41 per cent) reported increases in the length of their working, but the vast majority of Local Taxation staff reported that their hours were unchanged. This was a little surprising because in this department under Best Value there was a push to reduce overtime working. Interviews with staff at the two case study sites and initial analyses revealed the processes involved and the impact of and driving forces behind intensive and extensive work effort. It is to this we now turn. JetCo Non-manual staff interviewees at JetCo were particularly critical of the relentless increase in workloads. The main driver seemed to be tighter output targets in the context of staff rationalisation, as previously outlined. A supplies engineer described the effects of the new target-driven increases in intensive work effort on health and well being: The output or what is expected of you has also increased tremendously here… The stress can be lethal and everybody has had their fair share of it. I think the majority of my colleagues have been to occupational health and they have been off sick. A manufacturing engineer placed the increase in the pace of work and the continual push to close up the porosity of the working day in the context of exposure to global competition: They want more from you, they want it quicker, you need to work a little harder I think and smarter. We’ve got more responsibility but with less space, less gaps. It’s been brought about by the need to compete with the Third World and everything else. On the shop floor, experiences of greater workloads varied and overall were not deemed so intense. For example, one production employee in ‘engine development and test’ felt that intensive work effort was not likely to be as great as that experienced in a typical mass production operation because of the high-craft, small-batch nature of the aero engine production process: The nature of the job is one-offs, small volume, generally things that have not been made before… So you can only have improvement in work rates if you are in a production setting, you can’t really improve if you are in a test or one-off experimental setting, you can’t really do that. Nonetheless, a majority of JetCo manual staff, like some of their non-manual colleagues, also cited increases in the pace of work. Significantly, they linked intensive work effort to elements of HPWO systems and the partnership type approach as the company pursued lean production through job rationalisation, just-in-time working, teamwork, new production control technology systems and work performance monitoring.
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CityCo At CityCo increases in intensive work effort accelerated following a Best Value review of the Local Taxation department. This review had involved a market-testing process and for a period of time an explicit threat of service externalisation. In the event, a somewhat controversial decision was taken in partnership with the trade unions to retain the service in-house and to implement a service improvement plan. For Local Taxation staff, this involved continuing with a generic working policy that was first introduced in 1997 and asking staff to take on a wide range of specialist tax collection roles and to help roster a new ‘call centre’ for service users. For the Local Taxation management, the Best Value process catalysed a significant increase in workloads and work responsibilities. One manager commented: The difficulties and obstacles were so much change; huge change in very short periods of time; and very aggressive performance standards to achieve… The programme allows for a downsizing next year [2002] but there is huge preparation, which needs to be completed before we go into this. This preparation involved the introduction of a dedicated customer services team (i.e. telephone call centre), a new computer-based document management system and extended opening times. As Geddes (2001:503) notes, Best Value ‘expose[s] existing practices to critical appraisal by management…[and] also by service users and other “stakeholders”, including the local business community’. Thus, private sector HPWO practices were co-opted, pressurising staff through monitoring, performance testing and target setting. Local Taxation officers interviewed confirmed questionnaire findings that the amount of work they were expected to complete each week was growing: Certainly that is the trend you have to do more within the same amount of time, which is constant pressure. And I think one of the reasons is in the past there were areas of work, from what I understand, that haven’t been done and now the pressure is on to do those things that haven’t been done, to be more efficient and so we’re having to do those as well, even though we didn’t have the time to do them before. What this increase in work intensification indicates is that employees have little power or influence in relation to some other ‘stakeholders’ such as the government and the business community. The other local authority department to experience partnership working under Best Value was Payroll. Payroll staff were ill-informed of the Best Value process. According to one principal officer, Payroll staff were ‘very much kept in the dark’ about the Best Value review. An assistant payroll officer remarked, ‘we don’t get involved in it, not to be perfectly honest’. However, they were aware of its implications; downsizing, the use of temporary and agency staff and cost-cutting all precipitated increases in intensive and extensive work effort. One interviewee said that ‘they’ve just cut and cut staff and we just had to cope and do it’. Recruitment of new staff had been put on hold. Agency and temporary staff were increasingly utilised as permanent staff left—externalising job
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insecurity (Kalleberg 2001). This placed ever-greater pressure on the remaining staff. One principal payroll officer reported that she worked every weekend (unpaid). The only time she had off from her employment was ‘from lunch time on Saturday until lunch time on Sunday’. It was this sort of sacrifice that formed the backdrop to Payroll securing a ‘good’ Best Value review. Workplace stress Critical indicators of workplace stress were covered in our survey. A minority, though still significant proportion of staff stated that they ‘worry a lot about their work outside of working hours’. Overall, nearly a third of staff (30 per cent) either strongly agreed or agreed that this was the case. Managers and non-manual staff were more likely to indicate this. A principal payroll officer at CityCo perhaps sums up the feelings of stress, worry and isolation prevalent among some managers and non-manual staff: There’s never any slack times… So, you are chasing your tail all the time and, consequently, people can’t help, so you get a feeling you’re very much sort of on your own. And when things go wrong you do feel very vulnerable. Manual workers were less inclined to worry; although around one-fifth of manual workers at JetCo and just under a third at CityCo indicated that work played on their minds outside working hours. Some employees who had experienced these problems had taken corrective steps to reduce or eliminate their anxiety over work but found it difficult. One interviewee in Local Taxation, for instance, revealed that worry about work precipitated a stress-related illness, yet he still could not unburden his mind from workplace problems: I don’t mind people around the table knowing that in October ’97 when this all kicked in [Best Value review] I was worried to death and it certainly affected my health… It’s easy to say that [turn off and don’t worry] and I aim to do that, but sometimes I don’t. Finally, nearly two-thirds of all respondents at JetCo (64 per cent) and three-quarters at CityCo indicated that they ‘feel very tired at the end of the work day’. At CityCo, it was notable that a larger proportion (84 per cent) of payroll staff indicated that they were very tired at the end of the day compared with their counterparts in other departments. Job insecurity Our definition of job insecurity is based on Standing (1999: cited in Burchell 2002:63) and is taken to mean both employment insecurity (dismissal, lay off or short-time working) and job insecurity (threat to longterm job tenure). Findings from our case studies, presented in Tables 12.3 and 12.4, show that neither HPWO nor Best Value partnership case studies can be said to be strongly associated, in the minds of employees, with the feeling of job security.
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The data indicate marked variations between the two survey sites. JetCo provides striking occupational class differences in perceptions of job security, differences that were not apparent at CityCo. At JetCo, 54 per cent of managers and 52 per cent of nonmanual staff agreed or strongly agreed they felt that their job was secure. In sharp contrast, only 19 per cent of manual staff did so. At CityCo, however, manual staff respondents (69 per cent) indicated that they felt more secure than both non-manual staff (51 per cent) and managers (54 per cent). Significantly, the data also suggest a greater feeling of job insecurity at the Payroll and Local Taxation departments than the average for all respondents. In fact, Payroll (53 per cent) and Local Taxation employees (49 per cent) indicated higher feelings of job insecurity than almost any other department. Comments by one Local Taxation Officer illustrates the sense of job insecurity in many of these areas:
Table 12.3 JetCo’s employees’ views on job security by occupational class (%) Occupational group
Strongly agree
Agree Disagree
Strongly disagree
Undecided
I feel my job is secure in this workplace All respondents
4
35
39
16
7
Manager
8
46
33
7
7
Non-manual (excluding managers)
3
49
33
11
4
Manual
2
17
47
24
10
Very good
Good
Poor
Very poor
Undecided
How good are your managers at maintaining the job security of JetCo employees? All respondents
1
28
36
23
12
Manager
0
41
43
8
8
Non-manual (excluding managers)
1
35 34
18
12
Manual
1
17
34
12
36
Note N=604.
Table 12.4 CityCo’s employees’ views on job security by occupational class and Local Taxation and Payroll departments (%) Occupational group
Strongly agree
I feel my job is secure in this workplace
Agree Disagree
Strongly disagree
Undecided
Employees’ experiences of workplace partnership in the private
All respondents
195
8
49
25
8
10
10
44
31
10
5
6
45
24
11
14
10
59
24
3
4
Local Taxation
1
40
33
16
10
Payroll
5
26
53
0
16
Manager Non-manual (excluding managers) Manual
Very good
Good
Poor
Very poor
Undecided
How good are your managers at maintaining the job security of council employees? All respondents Manager Non-manual (excluding managers) Manual Local Taxation Payroll
8
46
19
7
20
15
46
21
5
13
6
42
16
9
27
10
52
22
6
10
3
37
26
9
25
11
26
5
11
47
Note N=386.
In the last ten years I’ve had five different jobs [Council jobs] and any one of them hasn’t been through choice. They’ve all been redeployments… It sort of demonstrates the tension that is going on. Now I got this job permanently in November 2000 and in June 2002 we’ll have another review and there’s going to be dramatic job cuts in the implementation of the service work plan. And another: We feel permanent insecurity because there’s reviews and various things that have happened under Best Value and we’ve got to perform.
Conclusion Employees’ experiences of intensive and extensive work effort, workplace-related stress and job insecurity are related to HPWO systems and workplace partnership. The evidence suggests that despite moves towards partnership working, significant numbers of employees still feel that their jobs are insecure. In the case of JetCo, job insecurity has been pervasive throughout the 1980s and 1990s, which provides the significant social and political context within which the subsequent partnership agreement was implemented.
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The managerialist assumption that the implementation of partnership can somehow abolish workers’ long experience of job insecurity makes little sense in the context of employers continuing retrenchment. This has perpetuated employment insecurity. Moreover, in the case of CityCo, ironically, employee experience of positive job security was part and parcel of the employment experience during the 1980s and 1990s and indeed only receded subsequent to the introduction of Best Value and partnership. If our findings were indicative of what is happening more generally then the implications for union organisation and the TUC in particular would be far reaching, raising questions as to the efficacy of partnerships for employees in the context of their concerns for work-life improvements. Yet part of the attraction of partnership to employers and the TUC seems to be its openness as a concept, allowing both parties to lay claim to support the notion of mutual benefits. This is certainly critical in respect to one essential support pillar of partnership, commitment to job security. Just what is meant by job security? Is an understanding of job security affected by what the parties concerned think is possible? And, as in the era of ‘new realism’ in the 1980s, are aspirations, including job security commitments, reduced to fit what is thought to be possible in the context of the spread of neo-liberalism and increasing exposure to globalisation? And what has to be sacrificed by the workforce in return? In short, are meanings of partnership managed in the context of neo-liberal restructuring and retrenchment? One view has it that without partnership job losses would be greater and working conditions poorer. For the TUC, the 1998 Workplace Employee Relations Survey (WERS) confirms a relationship between partnership organisations and fewer redundancies (TUC Partnership Institute 2002). Of course, apart from the fact that WERS does not operationalise partnership, other interpretations of WERS are possible. Our data suggest that the scope for organisational retrenchment and job reduction is in part linked to flexible working and increases to intensive and extensive work effort. One has to set these in the context of neo-liberal employment strategies in both the public and private sectors. Ironically, the project to sustain mutual benefits based on trust and commitment has too often ended in negotiations over the degree of flexibility and work intensification, to say nothing of a continuation in job rationalisation. While the relationship between the utilisation of ‘partnership’ to minimise employee and union opposition to restructuring is certainly significant, the assumption that partnership leads unambiguously to mutual gains is highly questionable.
Acknowledgements This chapter draws upon a research project funded under the ESRC Future of Work Programme (Grant number: L212252096).
References Ackers, P. and Payne, J. (1998) ‘British trade unions and social partnership: rhetoric, reality and strategy’, International Journal of Human Resource Management, 9(3):529–550.
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Appelbaum, E., Bailey, T., Berg, P. and Kalleberg, A.L. (2000) Manufacturing Advantage: Why High Performance Work Systems Pay Off. Ithaca, New York: Cornell University Press. Burchell, B. (2002) ‘The prevalence and redistribution of job insecurity and work intensification’, in Burchell, B., Ladipo, D. and Wilkinson, F. (eds) Job Insecurity and Work Intensification. London: Routledge. Cmnd 4014 (1998) Modern Local Government: In Touch with the People. London: The Stationery Office. Geddes, M. (2001) ‘What about the workers? Best Value, employment and work in local public services’, Policy and Politics, 29(4):497–508. Green, F. (2001) ‘It’s been a hard day’s night: the concentration and intensification of work in late twentieth-century Britain’, British Journal of Industrial Relations, 39(1):53–80. Guest, D. and Peccei, R. (2001) ‘Partnership at work: mutuality and the balance of advantage’, British Journal of Industrial Relations, 39(2):207–236. HMSO (1998) Fairness at Work White Paper: Employment relations Bill, Cm 3863, London: HMSO. Hudson, M. (2002) ‘Flexibility and the reorganisation of work’, in Burchell, B., Ladipo, D. and Wilkinson, F. (eds) Job Insecurity and Work Intensification. London: Routledge. Huselid, M.A. (1995) ‘The impact of human resource management practices on turnover, productivity, and corporate financial performance’, Academy of Management Journal, 38:635– 672. Kalleberg, A.L. (2001) ‘Organising flexibility: the flexible firm in a new century’, British Journal of Industrial Relations, 39(4):479–504.
Kochan, T. and Osterman, P. (1994) The Mutual Gains Enterprise: Forging a Winning Partnership Among Labor, Management and Government. Cambridge, Mass.: Harvard Business School Press. Lawler, E., Mohrman, S.A. and Ledford, G.E. Jr (1992) Employee Involvement and Total Quality Management: Practices and Results in Fortune 1000 Companies. San Francisco: Jossey-Bass. Martin, S. (2000) ‘Implementing “Best Value”: local services in transition’, Public Administration, 78(1):209–227. Osterman, P. (2000) ‘Work reorganisation in an era of restructuring: trends in diffusion and effects on employee welfare’, Industrial and Labor Relations Review, 53(2):179–197. Oxenbridge, S. and Brown, W. (2002) ‘Trade union organising, recognition and partnership strategies since 1999’, Paper presented at the joint Economic and Social Research Council Future of Work Programme/TUC Seminar held at the TUC, London, 27 May 2002. Ramsay, H., Scolarios, D. and Harley, B. (2000) ‘Employees and high-performance work systems: testing inside the black box’, British Journal of Industrial Relations, 38(4): 501–531. Sisson, K. (1999) ‘The “new” European social model: the end of the search for an orthodoxy or another false dawn?’, Employee Relations, 21 (4–5):445–462. Standing, G. (1999) Global Labour Flexibility: Seeking Distributive Justice. London: Macmillan. TUC Partnership Institute (2002) ‘Partnership, performance and employment: a review of the evidence’, TUC, www.tuc.org.uk/pi/research.htm. Wood, S. (1999) ‘Getting the measure of the transformed high-performance organisation’, British Journal of Industrial Relations, 37(3):391–417.
13 Workplace partnership and the search for dual commitment William K.Roche and John F.Geary
Introduction Can workplace partnership foster a high level of commitment simultaneously to the organization and the union among a substantial proportion or even a majority of a company’s workforce? The answer to this question goes to the heart of the contention that partnership can deliver mutual gains. Key employer objectives like higher productivity and better performance, appear more likely to be realized if partnership can increase employees’ commitment to the organization. The institutional security and representative capacity of unions is likely to be enhanced if partnership can contribute to increased commitment on the part of union members. Gains for employees, like better pay and conditions and more secure jobs, also appear more probable to the degree that both types of commitment arise and a better industrial relations climate is fostered. This chapter examines the concept of dual commitment and considers why on theoretical grounds we might expect it to be pronounced in organizations with formal partnership arrangements. Conceptual issues and problems that arise in the study of dual commitment are also considered. The chapter then outlines the institutional context of workplace partnership in Irish industrial relations, providing a backdrop for an examination of a major and radical initiative in workplace partnership in the Irish Airports Authority, Aer Rianta (hereafter AR). The methodology adopted to study partnership and dual commitment in AR is next outlined. The main research findings are then reported and show that, in spite of a significant investment by management and unions in the creation of partnership, high levels of dual commitment failed to materialize. This is explained in terms of the problems encountered in establishing partnership. While dual commitment is shown to have been thin on the ground, the evidence suggests that participation in partnership arrangements was associated with higher levels of commitment to the company and the unions. The findings as a whole are interpreted as indicating that exacting conditions must be satisfied if partnership arrangements are to transform attitudes and levels of commitment. In particular, the rhetoric of partnership needs to be matched by substantive changes in decisionmaking at all levels of the organization. Unless this occurs neutral attitudes to the company and unions, or contrasting attitudes to each, are likely to predominate.
Dual commitment and partnership
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Dual commitment is a long-established concern of US industrial relations research, where it arose originally around a concern that unions might detract from commitment to the corporation (Deery et al. 1994). During the past two decades the concept has become more closely tied in the international research literature to interest in the attitudinal and behavioural effects of ‘new industrial relations’ reforms of various kinds promoting management-union co-operation (see Guest and Dewe 1991; Deery et al. 1994; Guest 1995). The relevance of dual commitment to voluntary partnership is clear. New industrial relations initiatives in general and partnership initiatives specifically seek to promote commitment to the company by involving employees in decision-making both directly and through their trade unions. If commitment to the company comes at the expense of commitment to trade unions, serious short-term or long-term organizational problems might arise for unions from their involvement in new industrial relations and partnership arrangements. If, on the other hand, unions might actually strengthen their members’ commitment by involving themselves in organizational governance, by engaging management around new agendas beyond adversarial collective bargaining, by representing members in new and co-operative ways and by encouraging members to engage in various forms of direct participation, they too stand to benefit organizationally from partnership (Freeman and Rogers 1999; Kochan 2000). If such benefits can accrue to trade unions, it follows that they can promote partnership in the confidence that any advantages arising for the company, as well as for their members as employees, will not be at their organizational expense and could, on the contrary, strengthen unions’ capacity to represent and mobilize their members. International research findings The international research literature suggests that the idea that partnership-type arrangements might foster dual commitment is neither fanciful nor universally assured. US research has most commonly reported the existence of dual commitment and found links between dual commitment, task-participation, co-operative industrial relations programmes and positive industrial relations climates. It has also commonly marshalled these results to support arguments that both employers and unions can benefit from new industrial relations and partnership. Angle and Perry (1986), for example, found that employees in municipal bus companies were more committed to their companies and trade unions, the more cooperative they perceived industrial relations to be in their workplaces. Magenau et al. (1988) also found that job satisfaction and perceptions of a positive climate of management-union relations were related to company and union commitment among a sample of union members in a branch in the US Mid-West. Studies in other countries have produced more uneven or negative findings. Deery et al. (1994), for example, found no evidence of dual commitment among a sample of Australian white-collar workers. Positive perceptions of the industrial relations climate were shown to be positively associated with commitment to the company but negatively associated with commitment to the union. The implication of this finding was that union involvement in co-operative programmes might damage members’ involvement in trade union affairs (Deery et al. 1994:592–4). In the case of the UK, Guest and Dewe (1991) found that the level of dual commitment was low among a sample of employees in the
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electronics and electrical consumer industries. More prevalent was a pattern involving weak commitment to both company and union. Dually-committed employees, however, were more satisfied with the scope for involvement in the workplace, including the level of participation, communication and personal development (Guest and Dewe 1991:91–4). The same study also reported data from a comparative survey suggesting that dual commitment was more common in countries such as Germany, Sweden and Japan, where participative mechanisms—of different kinds—promoted integrative bargaining and a greater shared identity on the part of organizations and their employees. Of the countries studied, only Italy fell behind the UK in prevailing levels of dual commitment (Guest and Dewe 1991:82–3, 91–3). By way of a summary of existing findings and their implications, the following conclusions seem reasonable. Many partnership-related variables, like co-operative industrial relations arrangements, job influence or autonomy, positive relations with supervisors, a positive industrial relations climate and perceived union effectiveness have been shown to be positively associated with organizational commitment or union commitment, or sometimes with both types of commitment. But, on the whole, the pattern of research findings, certainly outside the US, is for organizational commitment and union commitment to have distinctive antecedents, and sometimes even divergent antecedents, in the sense, for example, that a positive industrial relations climate might be positively associated with organizational commitment and negatively associated with union commitment. It is thus an open and, it would seem, a highly pertinent question whether context may matter, in the sense that positive effects on organizational and union commitment—and thus dual commitment—might be more likely to be found where formal partnerships, agreed between management and unions, result in the ‘bundling’ of many partnership-type arrangements together in the context of joint gover-nance structures, supported by compatible competitive strategies and supportive sets of HR and industrial relations practices (employment security, training and development policies etc.). Arguably, this may be the question regarding the possible link between partnership and dual commitment, and it is this question that will be examined empirically below. First, however, it is necessary to consider conceptual concerns that arise in the study of dual commitment.
Conceptualizing and measuring dual commitment To some extent, the contrasting research results, discussed above, may also reflect differences in approaches to conceptualizing and measuring dual commitment. While scholars broadly agree as to the nature of commitment to the organization and commitment to the union, the same is not true with respect to dual commitment. Gordon and Ladd (1990) make an important distinction between ‘dimensional’ and ‘taxonomic’ approaches to the study of dual commitment. The dimensional approach involves separately measuring organizational and union commitment and identifying dual commitment as a positive association or correlation between employees’ scores on scales measuring each construct. Dual commitment is said to exist in instances where a positive correlation is found which cannot be attributed to chance or sampling error. A problem with this approach is that a positive correlation between variables measuring the
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constructs only shows that the two measures co-vary but not the extent of the presence of individuals characterized by high levels of commitment simultaneously to unions and their employing organization (see Gordon and Ladd 1990:51; Guest and Dewe 1991:83; Sverke and Sjoberg 1994:536–7). The taxonomic approach, on the other hand, identifies the extent of dual commitment in terms of the attributes of individuals themselves by allocating them to types or classes of commitment (e.g. dual commitment, union commitment, company commitment and dual non-commitment). This is usually done on the basis of their scores on separate scales of company and union commitment. Critical here is the choice of scale cutoff points, which determine how individuals are allocated to such categories. Researchers have chosen scale cut-off points in various ways. The first, uses absolute scale values to classify individuals. For example, those on average selecting response options expressing ‘very high’ or ‘high’ levels of commitment across the items on both the union and company commitment scales might be identified as showing dual commitment. Alternatively, those scoring on average at or above the mid-points on both scales are sometimes said to show dual commitment. A problem here is that the choice of cut-off points often appears theoretically arbitrary. If the cut-off point chosen is modest (e.g. ‘agree’, ‘neutral’), individuals might be classified as showing dual commitment to union and company, when in reality they may be largely indifferent or, at best, moderately positively inclined towards both the company and unions. A second variant of this approach uses the sample distributions of commitment levels—usually mean or median levels within the sample—to determine cut-off points to use in allocating individuals to commitment classes. This runs the risk that individuals expressing modest overall levels of commitment to union and company might be classified as showing dual commitment simply because their levels of commitment to both institutions are above average relative to the sample under study. A third variant uses cluster analysis to determine whether a series of classes of individuals with distinct commitment profiles appear to be ‘latent’ within the sample and, if so, whether some of the latent classes thus identified involve high scores on company and union commitment scales. What should be kept in mind, above all, we would suggest is the ultimate substantive concern of recent research on dual commitment in the context of new industrial relations: that is to examine whether partnership arrangements can engender high levels of commitment to both company and union among a significant proportion of employees and union members. This principle will guide our analysis of commitment to the company and unions in Irish airports later in the chapter. But next we outline the development of workplace partnership in the Irish industrial relations system, examine the evolution of workplace partnership in the Irish Airports’ Authority and describe the methods used to study partnership and dual commitment.
Workplace partnership in Irish industrial relations Since 1987, employers, unions and government have agreed a series of successive centralized wage agreements in Ireland. The last two agreements, Partnership 2000 (P2000) and the Programme for Prosperity and Fairness (PPF), included within them a
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framework agreement for the voluntary adoption of workplace partnership. In both instances, the agreed definition of partnership is broad and general, and allows for both representative participation and direct employee participation. The latter in particular was designed to meet the concerns of the employers’ organization, Irish Business and Employers’ Confederation (IBEC), whose varied membership, which includes unionized and non-unionized firms, had very different perceptions of the merits or otherwise of cultivating closer relations with unions. The Irish Congress of Trade Unions (ICTU), on the other hand, identified workplace partnership as a means for bolstering unions’ influence at the workplace and as a way of animating and maintaining rank-and-file support for trade union representation. Within the union movement there has been considerable concern and disquiet that the voice permitted to union representatives at national level has not been replicated at workplace level. Allegations of union avoidance and margin-alization have become commonplace. With this duality in union fortunes, observers have come to talk increasingly of a system of industrial relations which is represented by a ‘truncated partnership’. While the current administration, a Fianna Fail/Progressive Democrats Coalition, has been ostensibly sympathetic to trade union concerns, it has avoided adopting a directive posture in deference to employers’ reservations. The National Centre for Partnership which was established under P2000 and which was located within the Department of an Taoiseach (the Prime Minister), operated as a voluntary catalyst for partnership and employee involvement. The Centre was subsequently reconstituted under the PPF and retitled the National Centre for Partnership and Performance (NCPP), under the Chairmanship of former General Secretary of the ICTU, Peter Cassells. Research evidence suggests that there has been some significant experimentation with partnership-based approaches in Irish workplaces in recent years (O’Dowd 2002). It cannot be claimed, however, that, Ireland can be regarded by international standards as a leader with respect to the diffusion and depth of workplace partnership (Gill and Krieger 2000; Roche and Geary 2000). Where partnership approaches have been adopted they have been more commonly used to address issues of an operational nature rather than strategic concerns.
Partnership in Irish airports Aer Rianta (AR) is a state-owned company whose main activity involves the management of the main Irish airports at Dublin, Cork and Shannon. It currently employs 3,300 people, 2,400 in the Irish airports. A subsidiary company, AR International, manages duty-free outlets in a number of overseas airports. In 1988 provisions for the election of worker directors to the boards of State-owned companies were extended to AR and three worker directors were elected to the AR Board. During 1994–95, the Joint Union Company Group (JUCG) agreed a series of proposals for partnership in the Irish airports. These were outlined in two key documents, known as The Compact and The Requisite Arrangements. The Compact sets out a series of principles aimed at rebuilding employee-management and union-management relations in AR along partnership lines. The Requisite Arrangements identified a series of structures and measures to be put in place to facilitate the realization of partnership. The main proposals in these documents
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provided the framework for what came to be known in AR, as ‘constructive participation’ (CP). CP envisaged multi-level and multi-stranded partnership arrangements in which employees and unions would be accorded a role in decision-making, spanning task participation, department and business unit strategy and competitive strategy for the company as a whole. To support joint decision-making, the unions received guarantees of institutional security; employees were assured of employment security (the preservation of employment levels would be an agreed parameter of commercial strategy) and financial participation was espoused. The company received assurances from the unions that they would assist in improving the economic performance of each of its constituent units. The parties pledged that AR would seek to compete on the basis of service quality and workforce skill rather than on the basis of cost minimization and low pay. There was also a pledge to provide training covering all aspects of engagement with CP. The main unions in the company, operating under the aegis of the AR Group of Unions, supported CP. The exception, up to 1999, was the union representing middle managers, the Irish Airline Executive Staff Association (IAESA), now a branch of the public sector union, IMPACT. IAESA had not participated in the development of partnership and saw itself as effectively excluded from the process. CP envisaged a clearcut division of channels as between partnership and established industrial relations structures and processes. The parties involved in partnership structures were not enjoined to arrive at a single common position with respect to any problem or agenda. Even if they did, it was understood that management and unions retained their established rights under collective agreements, and that either party, or both, could dissent if they chose. Thus, partnership neither incorporated nor displaced established collective bargaining and industrial relations channels. Issues could be handled on a partnership basis, in which case it was ultimately open to unions and employers to accept or reject any proposals put forward. Alternatively, issues could be handled through established industrial relations channels. The JUCG was pivotal in the development of CP, acting as steering group and troubleshooter for the process. Comprising senior managers, union officials and activists, the JUCG sought to develop proposals on a consensus basis. The practical implementation of participative principles and structures began in 1997. This was overseen by the JUCG, which was increasingly drawn into the handling of operational problems. These included the reluctance of some managers to engage, attempts by others to use CP to push through changes on a unilateral basis, allegations that unions sometimes sought to use partnership to stall management proposals, and more generalized uncertainty and ambiguity concerning the relationship between partnership and established industrial relations processes. Where either party to partnership structures or projects claimed that the other party was acting in bad faith, the JUCG sought to preserve the integrity of the process by insisting that the parties either agree to engage on a genuine partnership basis, guided by the principles of The Compact, or proceed through established industrial relations processes. This was viewed as critical to the preservation of partnership and to preventing the partnership process from attenuating from within. Amongst the most significant partnership structures to be developed in AR were the so-called Strategy Groups (SGs) and Significant Issue Groups (SIGs). All were expected to address issues jointly, based on the collection, examination and validation of relevant
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data. Following such a joint process, proposals were to be presented to management and unions. SGs focused on single issues, such as the future viability of maintenance operations at Shannon airport, problems with the provision of the cleaning service at Dublin airport, and the future of Dublin duty-free shops. During 1997–98 some seven SGs were established at Dublin and Shannon. All SGs addressed issues of service cost, efficiency, viability and development in the context of the strategic commercial priorities outlined in The Compact, including employment security. Despite having been adopted as official policy by the company and Group of Unions, CP encountered significant obstacles. Senior management was divided on the merits of the approach. A minority supported CP—most of these occupied staff rather than line management roles. Most senior managers were sceptics, and the rest were overtly opposed. The chief executive in office up to 1998 was a supporter, but supported the process in a largely passive sense. A new CEO appointed at the implementation stage provided more active support and altered the balance in favour of CP at a time when the process began to engage major commercial issues. Many middle managers were apprehensive and insecure, a posture that hardened into formal opposition when their union instructed them at the implementation stage not to co-operate with CP. The largely stable commercial conditions faced by the company during the 1980s and much of the 1990s favoured deliberation and planning in the development of CP. The same conditions also encouraged inertia in prevailing structures and modes of decisionmaking. From about 1998, however, the company and the unions experienced change of a more disjunctive character: duty-free sales were abolished in mid-1999; increasing passenger numbers caused serious congestion in airport facilities, especially in Dublin; powerful external lobby groups sought the sell off of AR, while others, including Ryanair, lobbied for the building of a low-cost terminal at Dublin airport that would compete with AR; the part or wholesale privatization of AR looked increasingly likely in the near future, and plans were unveiled by the government for the appointment of an airport regulator to vet airport charges. Meanwhile, the Irish labour market tightened to near zero unemployment. Finally, at a time when its most profitable business line, dutyfree, was disappearing and airport charges remained tightly regulated, the company faced an acute need for access to capital to permit further physical and commercial development. As a consequence of these challenges, management’s need for co-operation from the unions increased substantially.
Research methods The authors were commissioned by the Department of Public Enterprise to examine CP in AR. The fieldwork spanned the period from 1997 to 2000. Complete access was permitted to all CP activities and to all those involved: company management, union officials and activists and the workforce. An invitation to join the Joint Union Company Group (JUCG) as ordinary members was accepted, and thus, in this limited sense, the research involved participant observation. A survey of a sample of the AR workforce was conducted between October 1998 and July 1999. Survey fieldwork was undertaken at a time when, as will be outlined below,
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CP initiatives were in operation at a number of levels. In particular, they had become integral to company and union responses to the imminent loss of duty-free sales and the future status of AR. Relatedly the survey was undertaken during a time of considerable, perhaps unprecedented, change and uncertainty for the workforce. Among other issues, the survey sought to explore levels of participation and involvement in work tasks and wider aspects of decisionmaking and governance; engagement with CP; perceptions of the effectiveness of CP and commitment to the company and to trade unions. The sample was drawn from the register of employees working for AR in 1998 (excluding seasonal workers). The effective sample, when non-available respondents were deleted from the target sample, comprised 1,184 employees. Initially the survey fieldwork was conducted by means of a postal questionnaire sent to respondents at their work address, accompanied by a return envelope addressed to the research team. Later, in order to increase the response rate for some categories and locations, the questionnaire was administered through direct contact with respondents. A disproportionate stratified probability sampling procedure was employed. Our concern was twofold. First, we wanted to ensure that the overall pattern of replies was representative of workforce attitudes. Second we wanted to obtain reliable data on the views of categories like senior managers and supervisors, present in the workforce in relatively modest numbers. To this end, the total population of managers/supervisors was selected for the survey and one in two of the non-managerial/supervisory population was selected. To adjust for this and for category-specific differences in response rates, the response sample of 612 employees was re-weighted to restore the numbers of respondents in these categories to their proper respective proportions in the workforce. The resulting weighted sample size is 643. Table 13.1 contains details of the sample, response rates and weighting. Unless otherwise specified, the data to be reported below and used as a basis for multivariate analysis comprise the re-weighted data.
Has partnership resulted in dual commitment? In this study organizational commitment is measured using the 15-item scale developed by Porter et al. (1974). Details of scale items, descriptive statistics and scale reliability statistics are outlined in Appendix 13.1.
Table 13.1 Workforce survey: population and sample distributions by job category and airport Population N
%
Effective sample N
%
Response sample N
%
Response rate %
Weighted sample N
%
Job category: Managers and supervisors All other employees
601
29
562
47
364
60
65
197
31
1,460
71
622
53
248
40
40
446
69
Partnership and Modernisation in Employment Relations
Total
2,061
1,184
612
206
52
643
Airport: Dublin
1,410
68
756
64
390
64
52
398
62
Shannon
536
26
350
30
164
27
47
186
29
Cork
115
6
78
7
55
9
71
55
9
3
1
4
1
No airport specified Total
2,061
1,184
612
52
643
Notes a At the time of the survey 186 of the population sampled (the target sample) were found to have left the company, either through retirement or having gained employment elsewhere, or were on vacation or long-term sick leave, leaving an effective sample of 1,184 employees, b The number of invalid questionnaires returned was 5.
Union commitment is measured using the 12-item version of the scale developed by Gordon et al. (1980). Scale details and associated scale statistics are outlined in Appendix 13.2. Both scales are comprehensive and reliable measures of each concept, as evidenced from the scale reliability statistics. We identified two approaches to the identification of dual commitment, the dimensional and taxonomic approaches. The former identifies dual commitment as a positive association between both types of commitment. Dual commitment is said to exist where there is a tendency for levels of commitment to the union and organization to co-vary: those with low commitment to the union also display low commitment to the organization, those with moderate commitment to the union are moderately committed to the organization and those with high commitment to the union are also highly committed to the organization. Figure 13.1 presents a scatterplot showing the relationship between union and organizational commitment and displays the correlation coefficient between the variables. The scatterplot suggests that little in the way of a linear relationship exists between the two types of commitment, and this is confirmed by the low and insignificant correlation coefficient (r=0.028; p=0.26). If anything, the scatterplot may suggest a ‘swarm’ of points around the middle of both commitment scales, pointing towards an underlying pattern in which a large proportion of people are characterized by moderate or neutral levels of commitment towards the company and their unions. As discussed, the taxonomic approach arguably conceives of dual commitment in an intuitively and theoretically more compelling way by examining whether a significant proportion of the sample demonstrates
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Figure 13.1 Scatterplot of union and organizational commitment. high levels of commitment to both union and organization, irrespective of any pattern of association that may exist between the variables across their entire range of values. The critical issue here though is how ‘high’ is to be defined. One approach often advanced is to use median or mean values on each scale to split the sample into four quadrants: ‘dual committed’ (equal to or above the means or medians on both scales), ‘union committed’ (equal to or above the mean or median on the union scale only), ‘company committed’ (equal to or above the mean or median on the organizational commitment scale only) and ‘dual non-committed’ (below the means or medians on both scales). A problem with such an approach can be seen from the scatterplot in Figure 13.1. While the use of medians or means will automatically split the sample into four quadrants, most of the actual values in the sample appear to cluster around the mid-points of both scales, suggesting moderate levels of commitment to both unions and the company. Using median or mean splits, therefore, may create four rather artificial categories, by forcing much of the scatter of points around the mid-values of both variables into four rather artificial quadrants. It seems preferable, therefore, to use the actual scale options presented to those sampled to identify ‘high’ commitment to both unions and the company. This amounts to privileging the actual responses of those surveyed above statistically-defined distributions within the sample. For every item on each of the union and company commitment scales outlined in Appendices 13.1 and 13.2, respondents were asked to indicate the degree to which they either agreed or disagreed with a statement. The response options, coded 1–5, were ‘strongly disagree’, ‘disagree’, ‘unsure’, ‘agree’ and ‘strongly agree’. Using the pattern of responses to the 15 company commitment items and 12 union commitment items, it is possible to identify as ‘highly committed’ those whose composite scores on each scale are consistent with an average overall pattern of response within the ‘agree’ to ‘strongly agree’ range; to identify as non-committed those with composite scores falling on average within the ‘disagree’ to ‘strongly disagree’ range; and to identify as ‘neutral’ those whose average scores fall between
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these two intervals. Following this approach and cross-tabulating total scores on each of the commitment scales, we derive the nine descriptive categories of commitment outlined in Table 13.2. What emerges is that the underlying level of dual commitment—here defined as the proportion affirming positive overall attitudes to the items on each scale— is very modest indeed. What also emerges is that the bulk of the sample is concentrated in and around the category of ‘neutral’ towards both the union and management or neutral towards one and committed to the other—a finding also suggested by the scatterplot in Figure 13.1. To cross-validate these findings, standard cluster analysis was undertaken on the union and organizational commitment scales. The objective was to determine whether distinct groups of cases could be identified and,
Table 13.2 Categories of commitment to the union and the company % High union and high company commitment (dual commitment)
1.6
High union and neutral company commitment
7.3
High union and low company commitment (union commitment)
0.4
Neutral union and high company commitment
15.5
Neutral union and neutral company commitment
72.4
Neutral union and low company commitment
1.2
Low union and high company commitment (company commitment)
0.0
Low union
1.4
Low union and low company commitment (dual non-commitment)
0.2
Notes a High union commitment=score from 48 to 60 on the 12-item union commitment scale; neutral commitment=score from 25 to 47 on the scale; low commitment=score from 12 to 24 on scale. b High company commitment=score of 60 to 75 on the 15-item organizational commitment scale; neutral commitment=score of 16 to 59 on the scale; low commitment=score of 13 to 15 on scale. c Results based on weighted sample data.
if they could, to consider what the nature of these groups might be with respect to their profiles on the commitment scales. Four- and nine-cluster solutions were specified a priori. The first solution was examined based on the premise guiding approaches using median and mean levels on scales that four commitment groups might be identifiable: ‘dual committed’, ‘union committed’, ‘company committed’ and ‘dual non-committed’. The second solution was examined in line with the nine categories identified in Table 13.2. The results are shown in Table 13.3. What emerges is that irrespective of whether a four- or nine-cluster solution is assessed, most clusters group cases around the ‘neutral’ values ranges on both scales. Finally, a series of latent class models was fitted to the union and company commitment scales. The results are presented in Table 13.4. A model proposing that only
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one class exists in the data provides a baseline by formalizing the hypothesis that the two commitment variables are mutually independent and provide no basis on which to assign people to separate classes or clusters. The L2 for this baseline model indicates that the one class model should not be rejected. Whether adopting a dimensional approach or a taxonomic approach of a defensible kind, we are led to conclude that dual commitment is not a feature of the workforce in AR. Before considering the reasons why this may be so, we will examine whether participation in workplace partnership may nevertheless incline employees towards higher levels of commitment to the company and unions. This we do by examining whether people’s experience of partnership and its effects can help account for the spread of opinion in the sample with respect both to union and organizational commitment.
Table 13.3 Cluster analysis of union and organizational commitment scalesa Cluster centroids Union commitment
% cases in clusters Organizational commitment
Four cluster solution: Cluster 1
34.45
46.64
23.5
Cluster 2
41.73
38.30
11.6
Cluster 3
44.62
55.55
38.2
Cluster 4
33.08
58.45
26.9
N (weighted)b
(510)
Nine cluster solution: Cluster 1
33.47
63.37
9.1
Cluster 2
29.03
42.28
0.1
Cluster 3
37.87
47.47
17.7
Cluster 4
34.60
45.23
0.0
Cluster 5
45.23
38.83
0.1
Cluster 6
46.58
61.88
0.1
Cluster 7
47.31
51.62
0.1
Cluster 8
39.95
55.79
23.2
Cluster 9
29.95
54.91
12.1
N (weighted)b Notes a Cluster analysis based on the K-Means algorithm. b Percentages are subject to rounding errors.
(504)
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An important strand of the recent literature on dual commitment suggests that a number of specific features commonly associated with new industrial relations and workplace partnership may encourage commitment to unions and employing organizations. These include job autonomy, the character of supervisory relations, a positive industrial relations climate, co-operative arrangements and the perceived effectiveness of unions. Other aspects of workplace partnership in AR might also be expected to be associated with higher levels commitment to the company
Table 13.4 Latent class cluster models fitted to union and company commitment scales Latent class models
L2
Df.
P Value
BIC
One class
1,079
1,680
1.00
−9,395
Two classes
1,073
1,677
1.00
−9,384
Three classes
1,074
1,674
1.00
−9,364
Four classes
1,074
1,671
1.00
−9,345
a
Note a The two-class model was ‘unidentifiable’, indicating that no unique computational solution could be found for model parameters.
and the unions, in particular participation in formal partnership groups, committees and initiatives, information sharing or ‘communicative involvement’ and the availability of multiple channels through which employees can assess, discuss and debate the functioning, progress and effects of co-operative initiatives. In order to examine the effects of these variables on commitment to the company and the unions, a series of scales were used to measure levels of involvement in partnershiprelated activities, as well as perceptions of the industrial relations climate and union effectiveness. Appendix 13.3 presents details of the scales used to measure engagement with different aspects of CP, and displays scale summary and reliability statistics. The first scale measures variations in the level of membership of formal CP groups and committees, as well as occupancy of support roles. This scale allows for an examination of the impact on attitudes of involvement in the formal arrangements set in place by CP initiatives. A second scale measures variations in more general engagement with CP. This scale is heavily focused around the exchange of information, feedback and discussion concerning CP issues and concerns. A third scale focuses on communicative involvement through the receipt of information regarding the deliberations of formal decision-making structures in the company. This scale measures the degree to which information on the activities of established formal aspects of company decision-making had been made available to staff—the sharing of valid information with staff being an important principle of CP. A work participation scale seeks to measure the degree to which employees experience scope for participation and autonomy at work. The various formal structures and roles established under CP and the various channels for wider engagement, discussion and feedback were all intended to be part of a systematic attempt to encourage management and employees to change the character of day-to-day work and decisionmaking in the company. The greater the degree to which this had been achieved, the more
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employees should have directly experienced the principles underlying CP in their day-today work. But what must also be recognized is that variations in work participation cannot be viewed in any strict sense as solely a reflection of CP. While CP initiatives and the CP philosophy overlap with people’s experiences of work autonomy, other factors may also be important such as pre-existing differences between departments in work organization and management styles, and indeed employees’ own search for autonomy in their day-to-day work. A variable measuring perceptions of the industrial relations climate is derived from four statements, each with five response options running from strongly disagree (1) to strongly agree (5). The listed statements were: ‘management in AR looks after the workers’; ‘management and workers do not get on in AR’ (this item was reverse coded to be consistent with the other items); ‘in general I find that management in AR treats workers fairly’, and ‘AR management makes enough effort to see the employees’ point of view’. The scale Alpha Coefficient is very satisfactory at 0.8351. Union effectiveness is measured in terms of replies to a single question asking respondents, ‘how good have AR unions or staff associations been in representing your interests over the last three years’. Attitudes are scored on a 5-point scale from 1 where unions are seen to be ‘very bad’ at representing members’ interests, to 5, where they are seen to be ‘very good’. Finally, a series of control variables were also incorporated into the analysis and these are detailed at the foot of Table 13.5. The critical question to be examined is whether partnership is associated with higher levels of commitment to the organization and commitment to the union, as proposed in the theoretical literature on new industrial relations and partnership. Table 13.5 investigates this question. The table reports results for two distinct sets of variables. First, and most straightforward, are the variables measuring degrees of involvement in partnership groups, activities, initiatives and ways of working. Second, are what might be understood, following the literature, as possible emergent features or outcomes of partnership: perceptions of the industrial relations climate and assessments of the effectiveness of unions in the company. In interpreting the results, the usual caveat needs to be borne in mind regarding the problem of inferring causal direction from crosssectional data. The results in equations 5.1 and 5.2 suggest that the more engaged people have become with CP, the more committed they are to the organization and the union. Engagement with CP, in the sense outlined above, thus represents a common and direct antecedent to both types of commitment. The results for equations 5.1 and 5.2 also show that the more positively people assess the industrial relations climate, the more committed they are to the organization. The more effective they believe unions to be, the more committed they are to unions. Because these variables, as noted, are commonly seen as emergent attributes of partnership, it is necessary to investigate whether they are indeed associated with involvement in partnership groups, activities, initiatives and ways of working. This is examined in equations 5.3 and 5.4. The results for equation 5.3 show that the industrial relations climate is positively affected by work participation and by perceptions of union effectiveness. These partnership-related variables can be said to influence organizational commitment indirectly through their effects on shaping perceptions of the industrial relations climate. Equation 5.3 also shows that the more involved people have been in formal partnership committees, groups and roles the less
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positively they perceive the industrial relations climate. This suggests that membership of formal partnership organs and occupancy of formal partnership roles (facilitator, mentor and observer) affects organizational commitment negatively through its association with a perception of a poorer industrial relations climate. Based in large measure on in-depth interviews we conducted with those active in formal CP committees, groups and roles, we would
Table 13.5 Partnership-related influences on organizational commitment, union commitment, industrial relations climate and perceived union effectiveness 5.1
5.2
5.3
5.4
Organizational commitment
Union commitment
Industrial relations climate
Union effectiveness
Betas
Betas
Betas
Betas
Work participation
0.06
−0.07
0.38***
0.17**
Membership of constructive participation groups etc.
−0.04
−0.01
−0.15***
0.07
Engagement with constructive participation
0.10*
0.21**
0.15
0.01
Communicative involvement
0.01
−0.08
0.19
0.03
Industrial relations climate
0.40***
−0.08
Union effectiveness
0.07
0.37***
0.14***
R2 (Adj.)
0.254***
0.278**
0.31***
0.072***
N (weigh ted)
329
329
348
348
Involvement in partnership activities:
Emergent effects of involvement in partnership: 0.19***
Note Control variables entered for staff category (senior managers, middle managers and supervisors compared with other workers), age-group (under 35s compared with older workers) and work location (Shannon and Cork Airports compared with Dublin Airport). Data confined to employees who are members of unions or staff associations.
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***
=Significant at the 0.001 level. =Significant at the 0.01 level. * =Significant at the 0.05 level. **
attribute this finding to the frustration commonly expressed by champions of partnership, especially on the union side, with the slow progress of CP in the company—a state of affairs for which management was held largely responsible (see Roche and Geary 2002). The results in equation 5.4 show that assessments of union effectiveness are also associated with aspects of partnership. The more autonomy members experience at work the more effective they judge their unions to be, and further the more positively they perceive the industrial relations climate, the more effective they believe unions to be. These findings suggest that two aspects of partnership, work participation and a positive industrial relations climate influence commitment to unions indirectly through their influence on shaping members’ perception of the effectiveness of their unions. That communicative involvement, as here defined, appears to have no direct or indirect effect on commitment to the company, or perhaps less surprisingly to unions, may indicate that partnership-based communication channels have displaced more formal organizational channels in their effects on employee attitudes. The implications of the findings can be summarized as follows. Engagement with CP—that is, the information flow emanating within CP—emerges as a common, direct and positive antecedent of each type of commitment. Industrial relations climate and union effectiveness emerge as direct and positive antecedents, but influence respectively organizational and union commitment in this way. Further investigation revealed that the effects of these variables were indeed related to involvement in partnership and that other aspects of partnership thus operated as indirect influences on either organizational or union commitment. The negative effect of membership of CP groups and committees and occupancy of formal CP roles on industrial relations climate we attribute to heightened expectations of partnership among its key champions and participants, leading those involved to blame management because these expectations had to some degree been frustrated by the slower than hoped for development of partnership.
Conclusions The literature on new industrial relations and workplace partnership has suggested that the involvement of employees and unions in organizational decision-making at various levels might engender high levels of commitment both to the employer and to the union. The results reported here show that workplace partnership in Irish airports, although multi-stranded and multi-level in ambition and format, has not resulted in dual commitment in any meaningful or robust sense among a significant proportion of the workforce. Most employees and union members appear to adopt a broadly neutral posture towards unions and the company. That dual commitment has not emerged in any robust or widespread sense we attribute to the obstacles faced by CP and to the nature of the mutual gains achieved. As outlined, the spread of CP across the company was uneven and contested at the time of the survey, notwithstanding that partnership was the declared official policy of
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both management and unions and involved a joint compact and agreed set of arrangements and supportive policies. Some supports to partnership, such as reward systems based on gains-sharing and financial participation, were subject to deliberation through partnership structures but had yet to materialize. The same was true of plans to revise industrial relations structures and procedures. The most concrete and tangible areas where CP had affected organizational decision-making to a significant degree concerned the handling of the duty-free crisis and the development of proposals on the future of the company. Important though these achievements may have been, they were most salient to senior union officials and managers, conscious of what might have happened had partnership not provided a channel for the handling of such critical issues. For employees and union members more generally what also shaped attitudes were the more day-to-day features of partnership in the company, and at these levels the effects of partnership were constrained by such things as the uneven diffusion of partnership principles, structures and practices, the opposition encountered from managers, the difficulty of identifying clear, systematic tangible benefits, and the modest progress in such areas as instituting mutual gains-based reward systems. The results also show that the failure of CP to lead to dual commitment cannot be explained in terms of partnership initiatives being immaterial to organizational or union commitment. Our findings suggest that levels of commitment to company and union may be shaped by a host of forces, including other facets of employment experience not connected with partnership, by external factors like socialization and probably by essentially random factors. But partnership also emerges clearly as an important influence. The results show that various aspects of partnership incline employees and union members towards higher levels of commitment to unions and the company. Industrial relations climate influenced organizational commitment; perceived union effectiveness influenced union commitment, and these influences were associated with work participation and with each other. It is noteworthy in the light of the partnership debate and some of the research findings reported earlier that both the company and the unions benefited from positive assessments of the industrial relations climate and that this was related to participation in partnership. Reaching beyond the AR case to the general import of our findings, a caveat should be entered. The evidence for this study, as for many other studies in the field, is derived from a single case organization. This need not present too many difficulties with respect to the generalizability of findings when, as here, research questions are theoretically derived and the findings set alongside those of existing research. This caveat aside, the following general conclusions appear reasonable. First, the AR case demonstrates that participation in workplace partnership arrangements and the perceptions that result can dispose employees to be more committed to the organization and to their trade unions. In this sense partnership can indeed involve a ‘positive-sum game’ as between the company and trade unions, as proposed in the new industrial relations and partnership literatures. Second, while partnership in AR was intended to bring about a fundamental recasting of management union relations, as of organizational decision-making in general, dual commitment was nevertheless not in evidence. This suggests that for attitudes to be transformed to the degree required to foster widespread dual commitment, partnership arrangements and partnership-based modes of decision-making would need to be institutionalized to a quite radical degree. This would require partnership arrangements
Workplace partnership and the search for dual commitment
215
and modes of decision-making to take root at multiple levels, to function in depth at all levels and to operate consistently over time. The possibility of partnership transforming the attitudes of the general body of employees would seem to depend critically on the extent to which partnership structures and processes engage with organizational decisionmaking at multiple levels and with decision-making in day-to-day work activity. The conflicts and strains encountered in establishing partnership in AR suggest that such a project will seldom be easy or straightforward. In the absence of a radical recasting of organizational routines and decision-making processes, commitment—certainly of a dual form—is likely to remain a feature of a very modest number of workers. Moreover, in seeking to establish partnership, half measures can have unintended consequences by raising and then frustrating expectations: as reflected in the AR case by the negative effects on attitudes of participation in formal partnership committees, groups and roles. Where partnership arrangements remain the preserve of elite groups (senior managers and union officials) at the apex of the organization and are focused on grand strategy formulation, or extend only to isolated work groups, or represent in practice ‘contested terrain’ between management and union, the benefits to the company and its unions are likely to remain partial and uncertain. In such circumstances indifference and neutral attitudinal postures might be anticipated as the norm.
Acknowledgements The authors would like to acknowledge the contribution to the Aer Rianta research project of Dr Alastair McPherson, Dr Teresa Brannick, Tony Dobbins, Claire Kenny and Enda Hannon. George O’Connor, Bernard Brown and Dan Miller were unstinting in sharing the benefits of their knowledge and experience of CP in Aer Rianta. The authors alone bear responsibility for the views expressed in the chapter. The financial support provided by the Department of Public Enterprise and the access provided by Aer Rianta’s management and unions are also gratefully acknowledged. The chapter was written while John Geary was Jean Monnet Fellow at the Department of Political and Social Sciences at the European University Institute, Florence.
Appendix 13.1: Organization commitment scale Composite organizational commitment scale
Mean S.D.
A 15–item scale, each item scored 1=strongly disagree to 5=strongly agree. Items marked with an asterisk are reverse coded for consistency, from 5=strongly disagree to 1=strongly agree.
52.6
8.0
1
I am willing to put in a great deal of effort beyond that normally expected in order to help this organization to be successful.
4.1
0.7
2
I talk up this organization to my friends as a great organization to work for.
3.7
1.0
*
3
I feel very little loyalty to this organization.
3.8
1.0
4
I would accept almost any type of job-assignment in order to keep working for this organization.
2.5
1.0
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5
I find that my values and the organization’s values are very similar.
3.3
0.9
6
I am proud to tell others that I am part of this organization.
3.9
0.7
7
I could just as well be working for a different organization as long as the type of work was similar.*
3.0
1.0
8
This organization really inspires the very best in me in the way of job performance.
3.0
1.1
9
It would take very little change in my present circumstances to cause me to leave this organization.*
3.5
1.0
10 I am extremely glad that I chose this organization to work for over others I was considering at the time I joined.
3.7
0.9
11 There’s not much to be gained by sticking with this organization indefinitely.*
3.5
1.0
12 Often I find it difficult to agree with this organization’s policies on important matters relating to its employees.*
2.9
1.0
13 I really care about the fate of this organization.
4.1
0.8
3.3
1.0
4.2
0.7
14 For me this is the best of all possible organizations for which to work. *
15 Deciding to work for this organization was a definite mistake on my part Cronbach Alpha=0.8567. Note Descriptive and scale statistics are based on weighted sample data.
Appendix 13.2: Union commitment scale Union commitment scale
Mean S.D.
A 12–item scale, each item scored 1=strongly disagree to 5=strongly agree. Items marked with an asterisk are reverse coded for consistency, from 1=strongly agree to 5=strongly disagree
39.0
6.9
1
I feel a sense of pride at being part of the union or staff association.
3.0
1.1
2
The record of my union or staff association is a good example of what dedicated people can get done.
3.0
1.0
3
My loyalty is to my work and not to my union or staff association.*
2.4
1.0
4
It’s every union or staff association member’s responsibility to see that management lives up to the terms of the ‘Awards and Agreements’.
3.9
0.8
5
As long as I’m doing the kind of work that I enjoy, it does not matter if I belong to a union or staff association.*
3.3
1.1
6
I am willing to put a great deal of effort in beyond that normally expected of me in order to make the union or staff association successful.
3.0
1.0
7
It’s every member’s duty to support or help another worker with his or her grievances.
3.9
0.8
8
There’s a lot to be gained from joining the union or staff association.
3.4
0.9
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I would not do special work to help the union or staff association.*
3.3
1.0
10 If asked, I would serve on a committee for the union or staff association.
3.1
1.0
11 Every union or staff association member must be prepared to take the time and risk of making a complaint.
3.8
0.8
12 I could just as well work in another organisation where there was no union or staff association, as long as the type of work was similar.*
3.0
1.2
9
Cronbach Alpha=0.8381. Note Descriptive and scale statistics are based on weighted sample data.
Appendix 13.3: Scales of involvement in constructive participation Mean S.D. 1 Membership of constructive participation groups and committees and occupancy of support roles 7–item scale; each item scored 1=yes; no/don’t know=0 Scale range: 0–7.
0.64
Member of a regular work group
0.26
Member of a departmental steering or work group
0.14
Member of a departmental strategy group
0.13
Member of a significant issues group
0.11
Observer of any of the above groups
0.17
Participation mentor with a department
0.06
Participation office facilitator
0.00
1.21
Cronbach Alpha=0.7225. 2 Engagement with constructive participation 9–item scale; each item scored 2=frequently; 1=occasionally; 0=never. Scale range: 0–18.
6.28
4.00
Have you ever attended departmental meetings or training sessions at which constructive participation was discussed?
0.76
0.68
Have you read departmental newsletters on constructive participation?
0.94
0.71
Have you read company/union newsletters on constructive participation?
1.04
0.68
Have you attended any staff seminars on constructive participation arranged by 0.75 the Joint Union Company Group?
0.69
Have you attended any exhibitions on constructive participation arranged by the 0.35 Joint Union Company Group?
0.59
Have you attended union meetings where constructive participation was discussed?
0.64
0.42
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Have you used the constructive participation library?
0.13
0.42
Have you discussed constructive participation with colleagues?
1.09
0.65
Have you received feedback from colleagues who are involved in constructive participation groups and committees?
0.89
0.74
3.50
3.00
Board meetings
0.77
0.82
Corporate senior management meetings
0.58
0.81
Airport senior management meetings
0.80
0.90
Local departmental meetings.
1.38
1.06
Cronbach Alpha=0.8590. 3 Communicative involvement 4–item scale; each item scored 3=a great deal; 2=a moderate amount; 1=only a little; 0=none. Scale range: 0–12. How much information do you usually get about what is going on at each of the following?
Cronbach Alpha=0.8351.
Mean S.D. 4 Work participation 9–item scale; 4 task participation items and 5 items relating to management/supervisory style as experienced by employees. The task participation items are scored 3=a great deal; 2=a moderate amount; 1=a little; 0=none. Scale range—0. The management/supervisory style items are scored 2=frequently; 1=occasionally; 0=never. To allow all items to exert equal influence on respondents’ overall scale scores, the scale scores for the management/ supervisory scale items were adjusted by multiplying the raw scores by 1.5. Scale range=0–27.
15.85
7.92
Planning your work
1.85
1.16
Improving work me thods
1.76
1.12
Setting work targets
1.53
1.23
Organizing workload
1.59
1.23
Task participation Thinking about your work, can you indicate the degree to which you have a say in the following activities?
Management/supervisory style We would like to ask about your experiences of decisionmaking and communication in Aer Rianta. How often are you consulted before decisions are taken that affect your work?
0.99* 0.73*
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If changes in your work occur, how often are you give the reason why?
1.15* 0.69*
Are you given the opportunity to make work decisions on your own?
1.15* 0.76*
If you have an opinion different from your supervisor, can you say so?
1.44* 0.65*
If you can say so, is any attention paid to it?
1.04* 0.70*
Cronbach Alpha=0.9273. *
Scale means and standard deviations calculated based on unadjusted scale scores (0–2).
Note All means, proportions and statistics presented in respect of the weighted sample.
Notes 1 In 2001 Aer Rianta received an award from the Involvement and Participation Association (IPA) for excellence in fostering workplace partnership. 2 The software used for estimating latent class models is the package, developed by Vermunt and Magidson. For details, see http://www.latentgold.com./
References Angle, H.L. and Perry, J.L. (1986) ‘Dual commitment and labor-management relationship climates’, Academy of Management Journal, 29:31–50. Deery, S., Iverson, R.D. and Erwin, P.J. (1994) ‘Predicting organizational and union commitment: the effect of industrial relations climate’, British Journal of Industrial Relations, 32:581–597. Freeman, R. and Rogers, J. (1999) What Workers Want. Ithaca, NY: Cornell University Press. Gill, C. and Krieger, H. (2000) ‘Recent survey evidence on participation in Europe: towards a European model?’, European Journal of Industrial Relations, 6: 109–112. Gordon, M.E. and Ladd, R.T. (1990) ‘Dual allegiance: renewal, reconsideration and recantation’, Personnel Psychology, 43:37–69. Gordon, M.E., Philpot, J.W., Burt, R.E., Thompson, C.A. and Spiller, W.E. (1980) ‘Commitment to the union: development of a measure and an examination of its correlates’, Journal of Applied Psychology Monograph, 65:479–499. Guest, D. (1995) ‘Human resource management, trade unions and industrial relations’, in Storey, J. (ed.) Human Resource Management: A Critical Text. London: Routledge, 110–141. Guest, D. and Dewe, P. (1991) ‘Company or trade union: which wins workers’ allegiance? A study of commitment in the UK electronics industry’, British Journal of Industrial Relations, 29:75– 96. Kochan, T. (2000) ‘A new social contract for a new economy’, in Gunnigle, P., Morley, M. and McDonnell, M. (eds) The John Lovett Memorial Lectures: A Decade of Developments in Human Resource Management. Dublin: The Liffey Press, 225–244. Magenau, J.M., Martin, J.E. and Peterson, M.M. (1988) ‘Dual and unilateral commitment among stewards and rank-and-file union members’, Academy of Management Journal, 31:359–376. O’Dowd, J (2002): ‘Workplace partnership—how does it affect industrial relations?’. Paper presented at the IRN Annual Conference, Facing Reality—Competitiveness, Partnership and Organisation Change in a Cool Climate, Dublin, February.
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Porter, L.W., Steers, R.M., Mowday, R. and Boulian, P.V. (1974) ‘Organizational commitment, job satisfaction and turnover among psychiatric technicians’, Journal of Applied Psychology, 59:599–608. Roche, W.K. and Geary, J.F. (2000) ‘Collaborative production and the Irish boom: work organization, partnership and direct involvement in Irish Workplaces’, Economic and Social Review, 31:1–36. Roche, W.K. and Geary, J.F. (2002) ‘Advocates, critics and union involvement in workplace partnership: evidence from Irish airports’, British Journal of Industrial Relations, 40(4): 659– 688. Sverke, M. and Sjoberg, A. (1994) ‘Dual commitment to company and union in Sweden: an examination of predictors and taxonomic split methods’, Economic and Industrial Democracy, 15:531–564. Vermunt, J. and Magidson (2001) ‘Latent class modelling as a probabilistic extension of k-means clustering’, http://www.statisticalinnovations.com/lg/kmeans/%20kmeans2a.htm.
14 Whose (social) partnership? Richard Hyman The editors have invited me to discuss, against the background of the evidence and arguments in the preceding chapters, how British experience of (social) partnership compares with that in continental Europe. In approaching this task I will address four intersecting themes. First, I will explore some of the linguistic, ideological and institutional foundations of what turn out to be rather different national understandings of partnership. Second, I will suggest that many of these differences parallel the debate which in often polarised fashion is central to the British literature on partnership: what is the balance (or imbalance) of advantage in partnership relationships; who benefits? Third, since so much academic analysis of the topic adopts the concept of employee voice, I will address some of the ambiguities inherent in Hirschman’s (1970) seminal work on exit, voice and loyalty. Finally I will consider whether partnership in times of stable markets and economic growth and stability has different implications from partnership in hard times.
Where does social partnership come from? The idea of partnership is widely regarded as a core element of the traditional ‘European social model’, and hence the latter is a point of reference for enthusiasts of partnership in Britain. There are three main problems with this belief. First, with the exception of a rather small number of countries, the concept is a relatively recent innovation. Second, there is a crucial distinction to be drawn between ‘social partnership’—the version which the Trades Union Congress (TUC) in particular has emphasised—and ‘partnership’ tout court—which is the version preferred by the present government, with its rhetoric of ‘partnership at work’ and ‘partnerships with people’. And third, it is a dangerous fiction to assume that continental ideas of ‘social partnership’ substitute consensus-based consultation for potentially conflictual bargaining. Where does the idea of ‘social partnership’ come from? This is a question I tried to address when I wrote Understanding European Trade Unionism (2001), and found a surprising dearth of clear answers. As Metcalf has argued (1999:176), it is an ‘elusive and slippery concept’. The origins can be understood in both ideological and geographical terms. Ideologically, it has its roots in catholic social doctrine with its emphasis on the functional interdependence (but by no means equal status) of employers and workers. In a more dilute sense, the desirability of cooperative—or at least, not aggressively conflictual—relations between capital and labour became part of the European ‘commonsense’ of the second half of the twentieth century, with the imperatives of post-
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war reconstruction and the cold war pressures to abandon ‘communist’ class struggle politics reinforcing this perspective. Hence mainstream social democracy found little embarrassment in embracing a concept with roots in a very different ideological tradition. Geographically (and linguistically), it is clear that the notion of ‘social partnership’ was a Germanic invention. Sozialpartnerschaft was the talisman with which unions and employers in Austria strove to exorcise the heritage of bloody interwar class confrontation and to cooperate in the reconstruction of a devastated economy. It matched the new practice of coalition government whereby ‘concerted, consociational policymaking became the guiding principle’ (Traxler 1992:272). In Germany—where conservatives held government power for the first two decades of the new Bundesrepublik—the process was slower, but the idea of social partnership also became firmly embedded. Though the context was in some ways very different, ‘concerted, consociational policy-making’ was also a distinctive feature of postwar reconstruction in the Netherlands, and here too the language of sociale partners was soon adopted. Yet does this amount to a European social tradition? Reading the pronouncements of the European Commission, or of the European Trade Union Confederation (ETUC), one might imagine so.1 However, the French variant—partenaires sociaux—which presumably inspired Delors in his pursuit of ‘social dialogue’, fits rather oddly against the confrontational realities of French industrial relations. The term seems to have been selfconsciously propagated in France after the near-revolutionary events of 1968, in order to symbolise the possibility of a more consensual industrial order. This attempted conceptual anaesthesia has been replicated in the past two decades at EU level, but its effect is far from complete. We may note that articles 138–9 of the Treaty refer to ‘social partners’ in just five of the eleven official languages: the three just noted, together with Greek and Portuguese. In the two latter cases, one may suspect that the term reflects wishful thinking on the part of some national policy-makers rather than the realities of local industrial relations. In the Nordic countries it is traditional to refer, much more prosaically, to the ‘labour market parties’. In the English-language version the phrase is simply ‘management and labour’.2 To deconstruct the concept, let us focus first on the ‘social’. In English the word tends to suggest relationships which are diffuse, open-ended, non-contractual (the literal translation of Rousseau’s contrat social has a somewhat contradictory ring). In many continental languages, by contrast, the term includes within its meanings a specific reference to industrial relations. Many countries have a ministry entitled labour and social affairs. In the EU, what used to be called DG V is now Employment and Social Affairs. National law often obliges employers wishing to impose redundancies to attempt to negotiate a social plan. Against this background, the most accurate translation of partenaires sociaux might well be the rather prosaic ‘industrial relations actors’ (which is certainly the best way to render the Italian term used in the Treaty, parti sociali). What is common to all the different nuances of continental usages of the term, at least in the sphere of employment regulation, is an unambiguous reference to collective representation. This crucially differentiates ‘social partnership’ from partnership without the qualifying adjective. The latter, as preceding authors have indicated, may well be compatible with (and perhaps designed to achieve) union exclusion. Ambiguities apply equally to the notion of partnership itself. We may note that the simple usage of the term ‘social partners’ occurs far more extensively in Europe than that
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of ‘social partnership’, which seems to contain a stronger consensual implication. Nevertheless the former concept also suggests a relationship of cooperation and perhaps common interests, a reason why it has often provoked suspicion on the left. ‘Je ne suis pas partenaire social, je suis interlocuteur social’, insisted Georges Dubunne, leader of the Belgian socialist trade union, when the term was first introduced in French.3 But the routinisation of the label has tended to empty it of normative content. The European Foundation’s glossary of French industrial relations defines partenaires sociaux as a ‘popularly used term which designates the employers’ organisations on the one hand and the trade unions on the other and indicates that, above and beyond their differing objectives, they also have some shared interests’. Even Fritz Verzetnisch, head of the Austrian union confederation and until recently president of the ETUC, could offer a similarly banal interpretation of social partnership: ‘for me [it] means the readiness to discuss things together’ (Hammerschmied et al. 1997:30). Here, the meaning is little more than institutionalised industrial relations, a readiness to negotiate, a recognition that parts of the bargaining agenda constitute a positive-sum game. This is indeed consistent with the assertion of Marx himself that ‘as long as the wage-worker is a wage-worker his lot depends upon capital’ (Marx and Engels 1977). Who, one might ask, are the parties to partnership? In one sense the obvious answer is that they are trade unions and employers (or their organisations). From this perspective, to call them partners is indeed to imply a cooperative bias in their relationship. But in another sense, the implication is that they are (perhaps antagonistic) partners with the state, organisations with a legitimate role in the formation and application of social and economic policy. Here again one may quote the European glossaries, this time in the Dutch context: this expression is not generally used in the Netherlands in the context of the settlement of terms and conditions of employment at enterprise level or industry level, but is restricted to contacts within the consultation system where agreements are reached at central or intermediate level. The focus is thus on organised tripartism or on centralised bipartite regulation (in the Dutch context, the institutions of the SER and the StAr). Turner, drawing on German experience, likewise defines social partnership as ‘regularised bargaining relationships throughout the political economy between strong and highly organised unions and employers’ (1999:509) and as ‘a method of market regulation in which strongly organised business and labor (the “social partners”) negotiate comprehensive agreements that frame the political economy from top to bottom’ (1998:18). Similarly, the vocabulary of the social partners at EU level has to be understood in the context of the efforts by the Commission to consolidate the status of interlocutors able to reinforce its own capacity to shape employment regulation. The difference between strong and weak understandings of social partnership has resonances with Therborn’s distinction between two variants of corporatism (1992:36). The stronger variant involves ‘an institutionalisation of partnership and consensus’; here, an ideological bias against conflict generates powerful normative pressures for industrial relations harmony. This may be contrasted with the second type, ‘an institutionalisation, one might perhaps even say ritualisation, of conflict’. Here, it is the experience of
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destructive combat between strongly organised parties which generates a pragmatic accommodation between the two sides in the interests of mutual survival (though pragmatism may with time acquire ideological reinforcement). This is Marin’s interpretation of the Austrian example (1985:92): ‘corporatist co-operation does not imply a common ideology of class harmony… Rather, it transforms class conflicts into a permanent war of manoeuvre between interest associations’. More prosaically, an Irish trade union report critical of that country’s discovery of social partnership has insisted that ‘despite the rhetoric, [it] is a glorified system of industrial relations with a universal wage cap’ (ATGWU 1999:29). Another way of understanding this distinction would be the contrast between ‘social partnership’ as an ideology of consensus or ‘culture of compromise’ (Katzenstein 1984:10 and 1985:32), and as a set of institutionalised relationships between opponents whose legal status and/or organisational strength make mutual destruction or mutual accommodation the only options (Thelen 1991:126–32; Turner 1998:2). An alternative way of viewing this weaker understanding can be traced back at least to the work of Sinzheimer (1916), who wrote of collective agreements as establishing a form of ‘social self-determination’. Here there are clear affinities with the British notion of ‘free collective bargaining’, or as academics have often termed it, ‘Voluntarism’ or ‘industrial self-government’. In this traditional perspective, unions had no illusions that their members’ interests and those of the employers were in harmony; but they preferred to seek a negotiated accommodation to one imposed by government. The merits of this preference are open to debate, of course, but it places the British trade union tradition far closer to continental social partnership (at least in its weaker sense) than is generally recognised.
The (im)balance of costs and benefits Trade unions may be viewed as ‘organised strategic actors [which] must constantly make choices about their identities, their goals, and who their opponents and allies are’ (Ross and Martin 1999:2). The debate about partnership can thus be understood as an interrogation of strategic options (which means, among other things, that any assessment is possible only in the light of a repertoire of strategic alternatives). Unions are not, however, monolithic strategic actors: strategic choices are the outcomes of internal power relations and in turn may reshape the internal dynamics of policy-making. It follows that any assessment of the costs and benefits of a partnership approach must be multi-layered. As noted above, it is difficult plausibly to deny that the employment relationship is in part a positive-sum game. Workers do not, in the main, wish their employer to go bankrupt, particularly when alternative employment opportunities are scarce. More generally, the old metaphor of the ‘bigger cake’ has real, albeit partial validity: without the Rehn-Meidner productivist strategy of the unions, Sweden’s high-wage economy and elaborate welfare state could scarcely have been possible. Nevertheless, a series of questions must still be considered. First, if it is conceded that industrial relations involves a combination of positive-sum and zero-sum aspects, what are the relative proportions? My reading of the evidence in the preceding chapters is that typically the area of conflicting interests remains predominant. And given the fact that the employment contract underwrites the authority
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of the employer and the subordination of the employee, what is at issue is (in a phrase coined, I think, by Ken Coates) the partnership of the horse and the rider. Second, if we revisit—as indeed we should—the classic analysis of Walton and McKersie, who distinguished analytically between ‘distributive’ and ‘integrative’ bargaining, we will note that they saw the latter, the pursuit ‘of objectives which are not in fundamental conflict with those of the other party and which therefore can be integrated to some degree’ (1965:5), as nevertheless potentially conflictual. Both sides might reasonably agree that a bigger cake would be to their mutual benefit; they still have to negotiate the size of their respective slices. In other words, conflict and cooperation interact. Third, there is an issue of what Walton and McKersie termed ‘attitudinal structuring’ and subsequent authors have referred to as ‘bargaining style’, or more simply ‘trust’. It used to be common to describe British industrial relations (as in ‘Anglo-Saxon’ countries more generally) as ‘adversarial’. The implication was that unions saw strikes and similar forms of action as appropriate at an earlier stage of bargaining than was the case in continental European countries. On the left, this was often celebrated as evidence of class-consciousness and of the capacity of unions to function, in Engels’ words, as ‘schools of war’. However, more often than not such militancy focused on relatively limited and parochial issues: ‘a scramble in the ash heaps of industrialism for piecework and bonuses’, as one of the leaders of the 1914–18 shop stewards’ movement described it (Hinton 1973:93). Yet industrial relations as ‘permanent revolution’ can all too easily provoke a determined and effective counter-attack: we need only consider Turin in 1920 (and again in 1980), or Longbridge in 1979. If at least some forms of ‘partnership’ agreement represent a ‘route out of an adversarial industrial relations climate’ (Knell 1999:17), could this enable unions to make a more strategic use of conflict? This is a difficult question to resolve a priori, and rests to an important degree on the consequences for the mobilisation capacity of the union, a topic considered further below. Fourth, some of the literature on partnership recalls the old adage of Flanders (1970:172): that ‘management…can only regain control by sharing it’. But in what circumstances does management need to regain control? And with whom do they share it? Though the world of industrial relations in which Flanders wrote his Donovan evidence is in many respects unrecognisable today, his thesis reflects an enduring contradiction in the employment relationship: employers need to reconcile their own control and surveillance with workers’ consent and initiative. Of course the relative importance of the two imperatives varies with different types of work and worker; but both are to some degree omnipresent. ‘Partnership’—whether ‘social’ or otherwise—may represent one means of sustaining (or regaining) management control while simultaneously enhancing managerial legitimacy. This may be part of an exchange through which the union gains institutional security; but as Wray demonstrates above, this may be independent (or even at the expense) of any benefit for employees themselves. Such is the more broadly-based conclusion of the study by Terry and Smith (2002:75–6): ‘the relationship between a company and its representative body…may constitute a mechanism through which trade unions may re-establish their institutional “centrality”’ within a ‘consensus-seeking’ process of ‘change management’; but ‘it was easier to find evidence of such outcomes as these than to find many that could clearly be classified as employee benefits’. Not surprisingly
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whilst senior union officers were able to build strong, constructive relationships with senior executives and senior HR managers based on trust, officers at local levels experienced many difficulties in committing both their members and themselves to mechanisms which appeared to them to lead to a loss of independence. (ibid: 82–3) Partnership, the evidence suggests, may be the framework for a two-level management game, involving a sweetheart deal with a favoured union, together with some form of manipulative ‘employee involvement’ with the workforce. A key issue then becomes: how to ensure the representativeness of representative institutions; in other words, the necessity of union democracy. Fifth, even where employees do derive material benefits from a partnership arrangement—and few would suggest that this never happens—the longer-term impact on power relations must also be brought into the equation. This is a point which Wright (1998) has stressed, in a different context: an institution may have beneficial outcomes in the short term, but shift the balance of power with unfavourable longer-term consequences. As was argued long ago, ‘the development of bargaining awareness and the exercise of power…reinforce one another’ (Brown 1973:145). If partnership is understood as replacing negotiating pressure by consultation and consensus, the result may be not a recovery but a further decline in trade union capacity. Ironically, this may make unions increasingly unattractive as partners for management. Also of vital significance is the ideological dimension to power relations: for unions to buy the rhetoric of partnership may seem a prudent adaptation to the reluctance on the part of many workers to confront the employer, but it reinforces the presumption that collective organisation with independent strength is no longer necessary. In terms of the agenda of partnership also—encompassed by the notion of ‘change management’—the basic premise that there is no alternative to employer-defined goals of flexibility and competitiveness is likewise underwritten (Peck 1996:136–7).
The ambiguities of voice The concept of voice, used by Hirschman in 1970 as a metaphor for attempts to redefine the terms of a social or economic relationship, pervades the literature on partnership: the latter, whether or not union-based, is viewed as a mechanism for employee influence over conditions of employment, and perhaps company policy more broadly. This perspective requires critical scrutiny, and here it is useful to begin by revisiting Hirschman. In his original model, an aggrieved customer, employee or member of an organisation had two main options: either to go elsewhere (exit) or to demand improvements (voice). The more committed an individual to a particular supplier, employer, political party or other organisation—in Hirschman’s terms, the stronger their loyalty—the greater the incentive to choose voice rather than exit. After more than 30 years, one is still struck by the perceptiveness of his analysis; but its limitations are also apparent. First, his discussion is clearest and most persuasive when exit and voice can be counterposed as simple alternatives. But as he concedes, they are not mutually exclusive: one may exit
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vocally; conversely, one may stay in an unsatisfactory relationship but remain silent (Birch 1975). Yet the interlinkages between exit and voice are only sketchily addressed in Hirschman’s book. With his focus on relatively banal choices within the framework of full-employment consumer capitalism, the available options could be seen as unconstrained. Later, in attempting to explain the collapse of the regimes in eastern and central Europe, he revisited this question (Hirschman 1993). Under these regimes, both exit and voice were suppressed; and it was in part because exit could be prevented that most potential dissidents kept their heads down. (Analogously, one might argue, workers may be inhibited from joining a union or going on strike when high unemployment limits alternative job opportunities.) It was when the iron curtain began to crack and East German citizens found a route to the west that the political opposition developed support and confidence. What this suggests, then, is that exit/voice cannot be analysed in a vacuum; it is necessary to explore the structural context which defines the costs and benefits of either option. A second problem is that Hirschman rather simplistically identifies exit with economics, voice with politics. This however is to conflate forms of response (exit and voice), arenas of action (market and polity) and modes of analysis (the disciplines of economics and politics). Yet there can (and should) be a political analysis of markets and an economic analysis of the political arena. Moreover, there is a distinction to be made between intent and outcome. Again, to take the East German case, most of those who left the country at the end of 1989 may have been motivated primarily by the higher wages and consumer choice of the west; if their ‘loyalty’ was low, so also perhaps was their explicitly political dissent. But the cumulative effect of a multiplicity of individual exit decisions was certainly profoundly political. A third issue involves collective action. Typically, an exit decision is individual, whereas voice is collective: it requires the existence of (usually institutionalised) channels. Hirschman is able to evade the question of the dynamics of collective organisation—how channels through which to express grievances and aspirations are constructed—because his main focus is on the individual consumer. Note that his few passing references to trade unions treat these not as vehicles of collective voice but as organisations with which members may be dissatisfied: in other words, as arenas within which exit/voice issues arise rather than as key institutions in constructing the exit/voice scenario. Fourth, exit and voice are treated explicitly as expressions of discontent. Voice is for Hirschman a vehicle of protest, which is typically troublesome for those towards whom it is directed (even though its effects may be ultimately benign, at least at macro level, if the response is to remedy the causes of complaint). Yet one may articulate voice, not because one feels that things are bad but because one perceives ways in which they might be better. Hence the rationale of articulating voice may be intentionally constructive. (Suggestion schemes, after all, are a long-established managerial instrument.) Moreover, if voice is institutionalised it may be a means of reducing or avoiding grievances and hence eliminating the need to protest. (Much the same is true of exit: one may switch jobs, or breakfast cereals, not because of dissatisfaction with the current choice but because a seemingly preferable alternative becomes available.) Finally, Hirschman treats exit as unidirectional: the employee is the analogue of the consumer, who may take their custom elsewhere; I can refuse to buy another Ford, but
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Ford cannot easily refuse to sell me another car (even if I have complained about defects in the previous model). But in the employment relationship, there is a more obvious reciprocity of options; or rather, it is not the worker but the employer who is more analogous to the ‘sovereign consumer’. For it is the latter who is the purchaser and who may also choose exit! (Note here a significant asymmetry: in the case of most commodities it is the seller who specifies a price, which may or may not be negotiable; with labour power it is normally the purchaser who does so.) Because his analytical point of entry is the implicit politics of ‘free’ market exchange relations, Hirschman simply fails to appreciate the distinctive character of employment and industrial relations. Since the relationship between employer and individual employee is essentially asymmetrical, what is at issue is a dynamic of power in the guise of one which is simply contractual. Employment is not a one-off exchange but an ongoing relationship of (unequal) interdependence. Whether to continue this relationship involves very different considerations—not least because the available alternatives are incommensurable—for the two parties.4 Some of these limitations are transcended by Freeman and Medoff (1984), who start from the vulnerability of the individual employee. ‘The danger of job loss makes expression of voice by an individual risky’ (1984:9). To avoid this risk, voice must be collective. In addition to the question of risk there is also an Olsonian collective action problem: no individual worker is likely to take the initiative to persuade fellow workers to articulate voice. Hence voice is unlikely to be an option—except in the context of extreme discontent—without pre-existing union organisation. A further issue to which Hirschman gives too little attention is what makes voice effective. There is a familiar, and chilling phrase: ‘I hear what you say’. The corollary is: ‘I will take absolutely no notice’. The issue is thus whether, and how, voice achieves a regulatory impact. Those who insist that participation should be understood as a process of consultation, not negotiation, are implicitly or explicitly insisting that the employer should retain the prerogative to ignore employees’ views. This presumption may indeed be qualified by the thesis that employers have an interest in taking workers’ opinions seriously since, as Freeman and Medoff insist, effective voice may reduce exit and hence the costs imposed by high labour turnover (in seeking replacements, providing training, absorbing the lower productivity normal with new employees because of learning curve effects). Yet Freeman and Medoff also argue that the economic benefits are most evident at aggregate level; whereas union counter-power (reflected, in the US context, in the size of the union wage mark-up) entails that for the individual employer, the costs may outweigh the benefits. Two conclusions follow. First, unless workers’ representative mechanisms possess independent resources, participation may well be ineffectual in advancing their interests. Streeck (1992:253–4), in a paper which Rain-bird cites in her chapter, makes this point very clearly: today, unions are again and again invited to ‘cooperate’ with management in restructuring, in rebuilding competitiveness, improving quality, increasing productivity, and so on. But typically such cooperation is not meant to entail more than union leaders explaining to their members why it is necessary to comply with whatever management determines is required.
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In a passage remarkably prescient of recent British developments, he continues that the rewards held out for such cooperation are improved economic performance, with an uncertain share of the benefits accruing to union members, and perhaps management abstention from trying to break unions and run the workplace unilaterally. Indeed, not a small number of union officials all over the Western world today pursue ‘cooperative’ policies for exactly these reasons, and for no others. By acting as ‘subordinate agents of management-determined economic necessities’, such unions ‘run the risk of being torn apart by identification of their members with the competitive needs and interests of their employers’. Only if unions sustain a conflictual capacity are they in a position to avoid this danger. This principle underlies the title, at first sight paradoxical, of Turner’s (1998) study of German industrial relations: Fighting for Partnership. Terry (2002:3) argues similarly: the clear lesson from all examples of continental partnership is that trade unions, to retain credibility and legitimacy, may from time to time need to demonstrate their continued capacity to act against employers. Partnership in the countries of mainland northern Europe does not eliminate the use of the strike weapon.5 Second, a favourable legal regime is probably necessary to underpin institutions of employee voice, obliging employers to adopt industrial relations procedures which may not be in their individual short-term interests though they may benefit them collectively in the long run. Streeck (1997a, b) has insisted that social peace in employment (in his case, as encouraged by the German mechanisms of workplace and board-level codetermination) is a collective good which individual employers may well consider an unreasonable burden; it can be sustained only through some degree of external coercion, for example strong rights of workplace trade union representation or works councils with a status and resources not dependent on employer goodwill. Do such rights exist in Britain today? Ackers et al., in their chapter, suggest that ‘union-centred partnership’ is a potential means to effective voice because of the ‘current policy environment… this new period of employee rights and employment regulation’. Others might consider that this strangely exaggerates the strength of the rights contained in the 1999 Employment Relations Act and that, as Kelly suggests, the institutional environment still exerts a ‘baleful effect’ on the practical outcome of partnership.
Partnership of growth, partnership of crisis As suggested in the opening section, the notion of social partnership became most strongly embedded in countries which established an institutionalised framework of worker representation in workplace management and in macroeconomic programmes of economic reconstruction. In both the Austrian and the Dutch cases, it encompassed early experiments in what would subsequently become known as (neo-)corporatism. Whether
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or not the vocabulary of partnership was embraced, the collaborative industrial relations which became consolidated in north-central Europe in the first postwar decades could reasonably be depicted as a genuine foundation for mutual gains within the framework of an expansionary Keynesian welfare state. The dilute British versions of the 1960s—a national policy of wage restraint redefined as the ‘planned growth of incomes’, and productivity bargaining at company and workplace level—were thus conceived as means of matching successful continental economic growth. Economic crisis from the early 1970s undermined the optimistic vision of corporatism/partnership. After a decade of conflictual transition, adaptation to an era of recession, restructuring and intensified economic internationalisation took the form of ‘social pacts’ at national level and ‘micro-corporatism’ at company level (Regini 1992, 1995). Now, the agenda was no longer one of sharing gain but rather of distributing pain. From one perspective, partnership could be presented as the route to the least-worst option: with continued adversarialism, the probability of declining competitiveness and job loss would be even greater. Partnership in hard times reflects what Burawoy (1985:150) has termed ‘hegemonic despotism’: ‘the “rational” tyranny of capital mobility over the collective worker’. The new global competitive regime (and the deliberate strategies of corporations which are increasingly transnational in character) magnifies the exit options (or imperatives?) for employers. Even in countries where ‘partnership’ was traditionally deep-rooted, the pressures to acquiescence may be intensified. As Kern and Schumann noted two decades ago (1984:312–13), we have identified a universally accommodative attitude towards rationalisation and innovation among workers and works councils in the core sectors of German industry. The fundamental source of this orientation is a judgment that the modernisation of their own workplace is the only safeguard against the abyss of unemployment. In effect, new possibilities for exit on the part of capital restrict the opportunities for effective and autonomous voice on the part of labour. At one level of analysis, acquiescence in ‘change management’ is a perfectly rational trade union strategy. But at another it is a divisive and destructive form of short-termism, encouraging a regime competition between firms and between segments of the labour force. One example is provided by Heery et al. in their chapter: ‘core’ workers in unionised establishments may view the use of external agency employees as a buffer against fluctuations in demand and may thus be reluctant to see the latter gaining job security rights which they themselves enjoy. In key respects, this might be interpreted as the Japanisation of British industrial relations: an increasing compartmentalisation of employment status, with those relatively protected perceiving their own continued benefits as dependent on the exclusion of the more disadvantaged. Both nationally and internationally, ‘partnership’ with the employer can mean workers engaged in a mutually destructive contest with one another: the negation of the solidarity which unions were created to foster. In the face of the suffocating hegemony of ‘globalisation’—the coercive material force of international (and indeed also intra-national) competition, and the ideology that insists
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that there is no alternative—is any form of counter-hegemony possible? The desperate efforts by local union representatives to find local solutions—in partnership with ‘their’ managements—to a global crisis evoke the sombre reflections of Panitch and Gindin (1999:5): ‘every progressive social movement must, sooner or later, confront the inescapable fact that capitalism cripples our capacities, stunts our dreams, and incorporates our politics’. No doubt none of us would want to start from here. But since here is where we are, what is to be done? If partnership primarily means pragmatic British collective bargaining suffused with continental rhetoric, a purely rejectionist stance is unrealistic. Every bargaining relationship is in a sense cooperative: permanent revolution in one workplace is not an option. Shop stewards and union officials have to get the best deal for their members available in the circumstances, and with the organisational resources—which include workers’ own conceptions of what is possible and desirable—which are available. But trade unions won, and win, workers’ allegiance through engaging in a battle of ideas: establishing their status, in Flanders’ terms, as a ‘sword of justice’, and representing a ‘moral economy’ (Thompson 1971) against the grain of the dominant political economy. As a corollary, any trade union engagement in ‘partnership’ should be conditional and critical. Even if in the short term, a factory or a national industry will survive only if it meets the dominant ‘shareholder-value’ criteria of competitiveness (though not always even then), unions’ task if they are to shape their members’ own vision of the world is to insist that ‘in practice the notion of “competitiveness” is flawed at every level. Ultimately it is a philosophy for war at the global level…’ (Munck 2002:181). As the Canadian Auto Workers declared two decades ago: ‘competitiveness is a constraint, but it is not our goal’ (quoted in Panitch 2000:374). The task of trade unions is not to bolster the idea that their members’ principal enemies are other workers in other workplaces, other companies, other countries. The future of labour movements depends on the creation of plural solidarities, the development of mutual understanding and mutual support despite—or better, because of—a recognition of and respect for the diversity of circumstances and of immediate interests. Such solidarities call for dialogue, debate, the difficult search for positive-sum solutions to conflicting interests within the constituencies of labour. This is particularly evident a need in the case of international solidarities—more than ever necessary in a ‘globalised’ world: internationalism is one of the hackneyed slogans of labour movements which all too often align their policies with ‘their’ national bourgeoisie and nation-state. Real cross-border solidarities cannot normally be achieved through labour organisations’ equivalent of international diplomacy: they require workers’ own understanding of their mutual dependence. Hence to conclude: trade unions should indeed embrace the principle of partnership. But its basis should be with other workers and trade unionists, nationally and internationally.
Notes 1 Though as Corinne Gobin has shown, the language of ‘social partners’ became firmly embedded in ETUC discourse only in the 1990s. 2 In the context of this volume it is worth noting that the same linguistic variations occur in article 5 of the information and consultation Directive. Some British commentators assume
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that this will enable a procedure whereby ‘management and labour’ at company level can agree an arrangement (or nonarrangement) without any collective intermediation. All other language versions clearly preclude this. Presumably the ECJ will construe ‘management and labour’ in the continental sense? 3 Interestingly, the Spanish version of the Treaty uses the term interlocutores sociales. 4 Another limitation in Hirschman’s model, emphasised by Mückenberger (2001), is that the analysis of exit needs to be complemented by attention to the possibilities of entry. 5 In this context it is interesting to note the reference in the German version of the industrial relations glossary to ‘Industrial Action’ (a slightly euphemistic rendering of the much stronger Arbeitskampf). ‘Such action is the means of coercion necessary to the conclusion of a collective agreement… The right to bargain collectively presupposes that the social partners can establish and maintain a balance of bargaining power.’ This echoes the comment of the union official cited by Oxenbridge and Brown in their chapter: ‘you don’t get real agreements unless the employer knows that you’re prepared to have a row with them’.
References ATGWU (1999) A New Agenda for Economic Power Sharing. Dublin: ATGWU. Birch, A.H. (1975) ‘Economic models in political science: the case of “exit, voice and loyalty”’, British Journal of Political Science, 6:463–482. Brown, W.A. (1973) Piecework Bargaining. London: Heinemann. Burawoy, M. (1985) The Politics of Production. London: Verso. Flanders, A. (1970) Management and Unions. London: Faber. Freeman, R.B. and Medoff, J.L. (1984) What Do Unions Do? New York: Basic Books. Hammerschmied, G., Jacobi, O. and Verzetnisch, F. (1997) ‘Sozialpartnerschaft: Auf dem Weg zu einem sozialen Europa’, in Juch, M. and Rosenberger, S. (eds) Global Change: Europa—Eine Antwort auf die Globalisierung. Vienna: Zukunfts- und Kulturwerkstätte, 8–31. Hinton, J. (1973) The First Shop Stewards’ Movement. London: Allen and Unwin. Hirschman, A.O. (1970) Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States. Cambridge: Harvard University Press. Hirschman, A.O. (1993) ‘Exit, voice, and the fate of the German Democratic Republic’, World Politics, 45:173–202. Hyman, R. (2001) Understanding European Trade Unionism: Between Market, Class and Society. London: Sage. Katzenstein, P.J. (1984) Corporatism and Change. Ithaca: Cornell University Press. Katzenstein, P.J. (1985) Small States in World Markets. Ithaca: Cornell University Press. Kern, H. and Schumann, M. (1984) Das Ende der Arbeitsteilung? Munich: Beck. Knell, J. (1999) Partnership at Work. DTI Employment Relations Research Series 7. London: DTI. Marin, B. (1985) ‘Austria—the paradigm case of liberal corporatism’, in Grant, W. (ed.) The Political Economy of Corporatism. London: Macmillan, 89–125. Marx, K. and Engels, F. (1977) Karl Marx/Fredrick Engels Collected Works, Volume 9. London: Lawrence and Wishart. Metcalf, D. (1999) ‘The British national minimum wage’, British Journal of Industrial Relations, 37(2): 171–201. Mückenberger, U. (2001) Alternative Mechanisms of Voice Representation Security. HWP Forschung Discussion Paper 10, Hamburg. Munck, R. (2002) Globalisation and Labour. London: Zed. Panitch, L. (2000) ‘Reflections on strategy for Labour’, Socialist Register 2001, 367–392.
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Panitch, L. and Gindin, S. (1999) ‘Transcending pessimism: rekindling socialist imagination’, Socialist Register 2000, 1–29. Peck, J. (1996) Work-place: The Social Regulation of Labor Markets. New York: Guilford. Regini, M. (1992) ‘Employers’ reactions to the productivity drive: the search for labour consensus’, Labour, 6:31–47. Regini, M. (1995) Uncertain Boundaries. Cambridge: Cambridge University Press. Ross, G. and Martin, A. (1999) ‘European unions face the millennium’, in Martin, A. and Ross, G. (eds) The Brave New World of European Labor. New York: Berghahn, 1–25. Sinzheimer, H. (1916) Ein Arbeitstarifgesetz. Die Idee der sozialen Selbstbestimmung im Recht. Munich: Duncker und Humblot. Streeck, W. (1992) ‘Training and the new industrial relations: a strategic role for unions?’, in Regini, M. (ed.) The Future of Labour Movements. London: Sage, 250–269. Streeck, W. (1997a) ‘German capitalism: does it exist? Can it survive?’, in Crouch, C. and Streeck, W. (eds) Political Economy of Modern Capitalism. London: Sage, 33–54. Streeck, W. (1997b) ‘Beneficial constraints: on the economic limits of rational voluntarism’, in Hollingsworth, J.R. and Boyer, R. (eds) Contemporary Capitalism: The Embeddedness of Institutions. Cambridge: Cambridge University Press, 197–219. Terry, M. (2002) Partnership Uncovered: The Implications of Partnership for Trade Unions in the UK. London: Unions 21. Terry, M. and Smith, J. (2002) Evaluation of the Partnership at Work Fund. DTI Employment Relations Research Series 17. London: DTI. Thelen, K.A. (1991) Union of Parts: Labor Politics in Postwar Germany. Ithaca: Cornell University Press. Therborn, G. (1992) ‘Lessons from “corporatist” theorizations’, in Pekkarinen, J., Pohjola, M. and Rowthorn, B. (eds) Social Corporatism: A Superior Economic System?. Oxford: Clarendon Press, 24–43. Thompson, E.P. (1971) ‘The moral economy of the English crowd in the eighteenth century’, Past and Present, 50:76–136. Traxler, F. (1992) ‘Austria: still the country of corporatism’, in Ferner, A. and Hyman, R. (eds) Industrial Relations in the New Europe. Oxford: Blackwell, 270–297. Turner, L. (1998) Fighting for Partnership. Ithaca: Cornell University Press. Turner, L. (1999) ‘Review of Kelly’, British Journal of Industrial Relations, 37(3): 507–509. Walton, R.E. and McKersie, R.B. (1965) A Behavioral Theory of Labor Negotiations. New York: McGraw Hill. Wright, E.O. (1998) ‘Beneficial constraints: beneficial for whom?’, http://www.ssc.%20wisc.edu/~wright/Streeck.html.
15 Where next for partnership? Mark Stuart and Miguel Martínez Lucio Taken as a whole, the chapters in this volume have generated a significant body of evidence by which to assess the partnership phenomenon. The chapters have examined the core assumptions that underpin the more normative and prescriptive positions on partnership. In most cases, the assumptions of partnership have been found wanting. The body of evidence in this book, which is drawn from leading research on the subject, suggest that: the basis for partnership is often uneven and fragile; there are significant impediments to the development of more co-operative and trust-based employment relations; there is little hard evidence on improvements in the practices of partnership, particularly in terms of increased levels of employee involvement and voice; and, mutual gains appear to be limited. In other words, there appears to be little empirical support for the concept of partnership in the context of the United Kingdom. So, where do we go from here? Do the findings suggest that we should ‘forget partnership’? Much depends on the initial point of departure. As many of the contributors were at pains to point out, the concept of partnership is itself vague, ill defined or ambiguous. At a basic level, therefore, it is perhaps unsurprising that the findings in this volume present an empirical reality that is starkly at odds with the more idealistic and prescriptive positions on partnership. Yet to simply accept this would be to limit the broader contribution of the book’s findings that tell us much about the contemporary state of British employment relations, experiences of work and the complex, and contradictory, strategies, tactics and choices open to, and played out by, trade unionists and management. At this level, a focus on partnership has enabled a broader set of insights to be drawn, on: the competing gains, losses and overall ‘balance of advantage’ (Guest and Peccei 2001) that are derived from ongoing processes of ‘modernisation’; the differential routes of labour-management cooperation that are available to trade unions and management; the changing regulatory dynamics of British employment relations; and not least the complex motivations behind the adoption of partnership strategies. In terms of the objectives and interests of trade unionists, there appears to be little evidence that partnership leads to mutual gain outcomes. Kelly’s contribution, for example, interrogates the performance of partnership and non-partnership firms and finds little on offer for trade unions (or firms in terms of higher levels of profit). Wages and conditions were no better in partnership firms and labour shedding appeared to have been more pronounced. The nature of engagement was considered important here; as in many of the cases partnership was enacted via employer-dominant agreements, whereby partnership arrangements sought to capitalise on union weakness to further employers’ interests. Potential gains for trade unions may be more likely where partnership is enacted via a ‘labour-parity agreement’, where the balance of power between the parties is more even and joint interests can be advanced. The recently introduced Statutory Trade Union
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Recognition procedure in the UK may offer one such route of achieving this (although as Kelly notes a broad set of variables will influence the ‘power balance between the parties’), but this is an area that requires further research. Of key concern here is the relationship under such arrangements between the union bargaining position and working in partnership with the employer. This issue of voice is also important to Wray’s study, which demonstrates that a right to union recognition is not in itself synonymous with representation. Given the obvious need for trade unions to increase membership, full-time union officials may feel under pressure to sign recognition agreements for the expediency of numbers and, in the process, provide management with so many concessions that there is little of benefit for workplace representatives, members and workers. Faced with such a case, Wray argues that all too often partnership at the workplace is conceived of as a ‘bilateral agreement’ between management and trade unions; whilst any understanding of mutual gains should be premised on a ‘trilateral relationship’ that also explicitly considers the benefits for employees. In this respect, partnership raises the issue of how gains and losses are to be understood and agreed on. Certainly, as Suff and Williams (2004:33) note, an over-emphasis on the perceived gains of partnership for management and trade unions has meant that ‘direct evidence on the implications of partnership for workers is remarkably scarce’. Drawing from survey and interview instruments the contributions of Richardson et al. and Roche and Geary provide such evidence. These studies show how the furtherance of high performance working practices in leading private and public sector organisations, through cooperative partnership arrangements, exacerbate workers’ experiences of job insecurity, work intensification and stress and have a negligible impact, on the surface at least, on workers’ levels of commitment to either their employer or trade union. However, as the analysis of Roche and Geary suggests, there may also be more to it than that. For they argue that ‘various aspects of partnership incline workers and union members towards higher levels of commitment to unions and the company’. This potentially ‘positive sum’ contribution is found to rest on involvement in decisionmaking structures and processes (at multiple levels), a finding that raises broader questions around the specific conditions under which partnership may be more mutually enhancing and effective. This takes us back to Kochan and Osterman’s assertion that employee involvement and voice must be institutionalised at all levels of the firm and even beyond. In asserting that partnership is more likely to impact positively on employee (dual) commitment, where partnership arrangements connect explicitly and concretely with decision-making structures and day-to-day activities, Roche and Geary reject strategies of partnerships that are the preserve of ‘elite groups’. Indeed, this is a charge frequently levelled at the development of partnership-based initiatives, which are often the result of high-level agreements between senior management and union representatives aimed at shoring up and legitimating critical processes of organisational change. That this poses certain risks, and costs, for trade union organisations was apparent in the case studies of the Royal Mail and Inland Revenue (Gall and Beale respectively). In both cases the moderate positions of the union leadership, and the codification of this via formal partnership-style agreements, generated a significant backlash by rank and file members and union activists, who considered partnership a prerequisite for further deteriorations in
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workplace conditions. The result, again in both cases, was the ultimate usurping of the moderate leadership with a leadership of a more militant hue. The contradictory forces that trade unions face in ‘working in partnership’ appear from these cases to be relatively straightforward: the pursuit of a position that appears distanced from the day-to-day realities and experiences of members, and that appears to offer little of benefit to working life (in terms of increased employee involvement, for example) lays itself open to a reversal from those advocating alternative positions. The complex reality of such political dynamics is however far from straightforward, and in this respect the cases raise a broader set of questions, not least in terms of the specific characteristics that enable such challenges to partnership to be advanced, co-ordinated and realised. The cases also raise broader questions about union strategy and choice. In the case of the Inland Revenue, the position of the union was such that it did not have to pursue a strategy of partnership: political resources and environmental conditions were such that alternatives to the partnership approach were ‘Viable’. In the case of the Royal Mail, the adversarial strategies that ‘broke’ partnership were not grounded in any alternative approaches to partnership, beyond recourse to the established traditions of collective bargaining: an apparatus which, as Gall notes, had ‘not resolved issues of low pay and long hours’. Is it therefore just a choice between partnership and collective bargaining, or is it possible to design and advance a variety of strategies for the furtherance of material and social concerns? Yet, despite the apparent risks of partnership to trade unions, there is no disputing the fact that the trade union movement has made concerted efforts to advocate and, in the case of the TUC’s six principles, lay down perceived guidelines, for working in partnership with employers. However, in part these have been a response to the risk of engaging in high-level consultation and discussion on strategic issues without clear guidelines, rules and principles for what are in effect new forms of negotiation. They are also a response to the highly discredited experiments with single-union arrangements, no-strike deals, and concession bargaining which marked the 1980s and early 1990s experience of industrial relations in the United Kingdom. This leads us to the question of employers and management, and their enthusiasm for partnership. The potential for management to use partnership working with trade unions to achieve its own, rather than mutual, interests has been well documented. But, according to Ackers et al., this does not mean that trade unions can simply reject it as a specific strategy of engagement, because ‘non-partnership, as a union strategy, threatens complete marginalisation’. In their view, given the intolerance of British management (and government) to more militant types of union behaviour, partnership with employees will be pursued by management ‘with or without trade unions’. They suggest that the current ‘planet’ of employment relations can be conceptualised in terms of four poles, two of which can result in relatively stable forms of partnership and two of which are unstable. Stable partnerships, it is argued, will either be based on strong (but nonadversarial) union forms of partnership or partnerships based around non-union consultative employment relations. This latter point is of particular relevance given the fact that the majority of British workplaces no longer recognise trade unions. But to the extent that research also shows that joint consultative arrangements tend to be more prevalent in unionised firms (Cully et al. 1998), much more research is needed to draw out the extent, characteristics and form of such non-union partnership arrangements (see Badigannavar and Kelly 2003 for a study on non-union partnerships). The unstable pole
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of partnership is delineated between weak forms of union partnership and (no partnership) union adversarialism. In the former case, there will be strong pressures from management to either sponsor the representative capacity of the union (into a stronger partnership) or to substitute the union with non-union arrangements. Significantly, then, weak union partnerships (such as in Wray’s case), where members are not in effect represented, are no more attractive to management than workers. Perhaps most contentiously, Ackers et al. regard adversarial union strategies as non-viable: with either some form of management incorporation or strategy of by-passing the union the likely outcomes. The question of whether such strategies are driven by a hardening of attitudes to trade unionism and industrial relations, or an ambivalent posture due to the pragmatic nature of British employers (see Terry 2003), is an important one especially in the light of the relatively unorganised and disinterested peak organisations within the British employer and management classes. Trade unions face not just hard micro-level choices in terms of whether partnership is an effective option to influencing decision-making within firms, but also a cognitive challenge in understanding and addressing the ambivalence and virtual silence of macro-level employer and management bodies on such matters. In the absence of such coherent dialogues trade union choice may be driven by faithless realism regardless of the real risks of engaging with partnership. Whilst Ackers et al. note that their typology will need further refinement in the light of workers’ experiences of partnership; it nevertheless presents a useful attempt to categorise the different routes to, and forms of, partnership that are present in contemporary British employment relations, given its regulatory context. This was also an intriguing dimension considered in a number of other chapters in the volume (Deakin et al.; Oxenbridge and Brown; Kelly; Wray), as analyses sought to differentiate, in Wray’s terms, between the ‘genuine’ and the ‘counterfeit’. Thus, it was noted that partnerships can either be ‘mature and enduring’ or ‘weak and disintegrating’, involving ‘proactive’ or ‘reactive’ union strategies (Deakin et al.). Where there are agreements around partnership these can take a number of forms, from (as discussed above) ‘labour parity agreements’ to ‘employer dominant agreements’. But partnership should not just be understood in terms of a static agreement. As Oxenbridge and Brown’s study demonstrated, partnership can also be understood in terms of the broader, historical and co-operative relations that have evolved between management and labour, and for them such relationships are often founded on a bedrock of strong unionism, established traditions of representation and negotiation and a ‘nurturing’ outlook amongst management towards the institutions of collective bargaining. In contrast, where partnership is defined principally in terms of the signature of a formal agreement, support for collective bargaining tends to be constrained, often ‘limiting wider union influence and increasing management discretion’. In both cases there is a strong emphasis on informal relations between management and unions, but in the former case relationships tend to evolve to the stage where they are ‘highly co-operative’ but still allow space for disagreement and dispute. Whether this qualifies as ‘genuine’ partnership, or even if such a thing is theoretically possible, is a matter of debate, and even where nurturing partnership relations have been forged they are still subject to potential problems. Nonetheless, this takes us to the very heart of the partnership debate: the issue of labour-management co-operation, the processes by which this is affected and the foundations upon which it is built. Virtually
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all the contributions, on close inspection, tend to be very concerned with the reality of partnership on the one hand, whilst on the other, emphasising the need for, and possibility of, better employment relations and ‘authentic’ relations of trust at work. They are concerned with the need for dignified and rational institutional relations at work, and the possibility of transparency and justice, even if some of them would question the longerterm prospects and potential stability of such relations given the nature of employment relations at work. This is a longstanding concern, even within institutional circles (let alone radical ones). The following quote, taken from a note to the Whitley Commission of 1918, presents the difficulties of ‘working together’ all too clearly: But while recognising that the more amicable relations thus established between capital and labour will afford an atmosphere generally favourable to industrial peace and progress, we desire to express our view that a complete identity of interests between capital and labour cannot be thus effected, and that such machinery (consultation procedures) cannot be expected to furnish a settlement for the more serious conflict of interest involved in the working of an economic system primarily governed and directed by motives of private profit. (Sheldrake 1988:22) Hence, whilst we started the chapter with a concern with the outcomes and risks of partnership, we end with a curious reference to the question of co-operation. As the chapters in this book have demonstrated, cooperation is a central and enduring concern of employment relations. Care must be taken, therefore, with conflating a more conceptually grounded understanding of cooperation with partnership per se. Partnership can be seen as a contemporary form of co-operation, but it is possible to develop a more multilayered conception of co-operation, which encompasses political co-operation, bargaining relations, or even workplace and social co-operation of an explicit and implicit manner. The question then becomes to understand partnership in terms of the way in which it manifests itself at these different levels; for example, the manner in which it is used as a political form of co-operation. This allows us to approach partnership as a historically contingent moment in the constant reformulation of co-operation. Such sensitivity to the realities of cooperation should form the basis of any future research. Any such research on partnership will have to bypass the rhetorical (and management guru-like) nature of the topic, and ground itself in a series of questions and issues that we need to be alert to (see Martínez Lucio and Stuart 2004). First, there is a need to understand the context of partnership. We must be alert to the regulatory and economic environment within which British companies operate, change strategies are pursued and employment decisions made. We cannot, as Hyman rightly points out, ignore the relationships between questions of voice and representation and broader issues of politics and economy. Correcting voice mechanisms, often alluded to as a pre-requisite for partnership, is not a mere technical exercise, as it requires social and cultural changes at a broader societal level. Moreover, we cannot assume a context where imperatives for change are considered straightforward, leaving the role of the observer to merely measure impacts. The complex issue of motives and drivers for change need to be mapped if the political context of partnership and its realities are to be understood.
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Second, there is the question of actors and their choices. The contributions point to a need for sensitivity to the way choices are made, how they are constructed, how alternatives are read (or not), and how they become the subject of debate and interventions not solely between trade unions, employers, management and the state but within them as well. Partnership is not just an attempt to modernise—whatever this is taken to mean—the form and content of employment relations: it is also about reestablishing the roles and direction of the actors involved. How partnership is woven into the internal political fabric of actors, and used for specific purposes, is an issue that has emerged in the current debate. Finally, we need to leave the term ‘partnership’ to the politicians. Many contributors draw attention to the constant lure of, and constant demand for, partnership-style arrangements in various instances, even when it had been discredited or become a focus of contention. Yet, the expectations (both in terms of hopes and fears) generated by the use of the term means that it has become all too easy to set it up as a ‘straw’ debate with the aim of knocking it down. In such an approach, outcomes are often easy to offset against unrealistic announcements and agreements (e.g. increasing transparency, enhancing training and development, creating a better quality of working life). Poor outcomes do not in themselves act as a simple basis for evaluating the processes. The truth is the pressures on employers and workers are not going to change: economic efficiencies and social justices are being sought simultaneously. Neither are the pressures on the systems of regulation that attempt to address these issues of economic and social distribution going to abate. The need to draw attention back to how autonomous and independent social actors interact at work is fundamental. Closing the door on partnership in terms of understanding it in its own terms is also vital, even when it is paramount in political and ideological terms, if we are to understand the real politics and processes of co-operation at work. Confusing a moment or method of co-operation with the broader dynamics of co-operation is a mistake that observers and practitioners cannot afford to make if we seek to understand and, dare one say it, build a democratic future for employment relations.
References Badigannavar, V. and Kelly, J. (2003) ‘Labour-management partnership in the non-union sector’, Paper for the 21st International Labour Process Conference, University of West of England, Bristol, 14–16 April. Cully, M., Woodland, S., O’Reilly, A. and Dix, G. (1999) Britain at Work, as Depicted by the 1998 Workplace Employee Relations Survey. London: Routledge. Guest, D. and Peccei, R. (2001) ‘Partnership at work: mutuality and the balance of advantage’, British Journal of Industrial Relations, 39(2):207–236. Martínez Lucio, M. and Stuart, M. (2004) ‘Swimming against the tide: social partnership, mutual gains and the revival of “tired” HRM’, International Journal of Human Resource Management, 15(2):404–418. Sheldrake, J. (1988) Origins of Public Sector Industrial Relations. Aldershot: Avebury. Suff, R. and Williams, S. (2004) ‘The myth of mutuality? Employee perceptions of partnership at Borg Warner’, Employee Relations, 26(1):30–43 Terry, M. (2003) ‘Can “partnership” reverse the decline of British trade unions?’, Work, Employment and Society, 17(3):459–472.
Index Abbey National 196t, 198t, 200t, 201t Ackers, P. 3, 6, 83, 84, 101, 189 Adecco 173, 175, 177, 178, 180, 181 Advisory, Conciliation and Arbitration Service (ACAS) 10, 83, 104, 130 AEEU see Amalgamated Engineering and Electrical Union Aer Rianta (AR) 231, 249n1; categories of commitment 237, 238t; change 233; cluster analysis 237, 238, 239t; conclusions 243–5; constructive participation (CP) 231–2, 233; dimensional approach to dual commitment 236, 236f, 238; Group of Unions 232, 233; latent class models 238, 239t; levels of involvement in CP 238, 239, 240, 242t, 243, 248–9; organisational commitment 234, 241–3, 242t, 246; research methods 233–4; Significant Issue Groups (SIGs) 232–3; Strategy Groups (SGs) 232–3; taxonomic approach to dual commitment 236, 236f, 237, 238; union commitment 236, 241–3, 242t, 247; workforce survey 234, 235t AGCO 196t, 199t, 200t Allen, M. 189 Amalgamated Engineering and Electrical Union (AEEU) 34, 84, 117n2, 168, 213 Amicus 117n2, 203, 213, 214 Angle, H.L. 227–8 Anglian Water 196t, 198t, 200t Appelbaum, E. et al. 189, 210 AR see Aer Rianta Asda 196t, 197, 199t, 200t ATGWU 254 attitude surveys 34–5 Australia 228 Austria 252, 253, 254, 261 ‘authorship’ 13 Bacon, N. 96, 138 Badigannavar, V. 36, 269 BALPA (British Airline Pilots’ Association) 206 Barclays Bank 191, 196t, 198t, 200t, 201t Bargaining for Skills 48, 49, 50, 56
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241
basic skills 52, 53, 56 Beale, D. 25–6 Belgium 253 Best Value 211, 214–15, 217, 218–19, 221, 223 Birch, A.H. 258 Black, B. 79 Blair, Tony 44n3, 65; see also Labour government Blue Circle Cement 1, 25, 196t, 198t, 200t, 201, 202, 203–4 Blunkett, David 52, 59 Blyton, P. 138 Borg Warner 195, 196t, 197, 199t, 200t BPR (Business Process Re-engineering) 33 British Airline Pilots’ Association (BALPA) 206 British Airways 25, 206 British Telecommunications plc 79 Brown, W. 99n3, 257 Bullock Report 8, 17 Burawoy, M. 262 Burchell, B. 221 Business Process Re-engineering (BPR) 33 Calsonic 196t, 199t, 200t Cambridge ESRC ‘Future of Collectivism’ research project 85 Campaign for Paid Educational Leave 46 Canadian Auto Workers 263 capitalism 192–3, 205, 262 case studies 69–80, 70–1t Cassells, Peter 231 Castle Cement 196t, 198t, 200t CBI see Confederation of British Industry CCT (compulsory competitive tendering) 214 change management 257, 262 Chartered Institute of Personnel and Development 11, 104 City Code on Takeovers and Mergers 67 Civil and Public Servants Association (CPSA) 139, 148 Civil Service 140, 141, 142, 146, 148, 151n5 Claydon, T. 189 CMEs see Co-ordinated Market Economies Coates, Ken 255 Coffee, C. 79 collective bargaining 46–7, 65–6, 95–9, 165, 168, 189–90, 204 communication 32–3, 94–5, 96, 110–13, 112t Communication Workers Union (CWU) 154, 155, 160, 161, 164, 165, 167, 168, 169; see also Union of Communication Workers (UCW) Compact, The 231, 232, 233 company magazines 32 competitiveness 263 compulsory competitive tendering (CCT) 214 Confederation of British Industry (CBI) 11, 31, 44n3, 206 consultation 204
Index
242
Conway, N. 27 Cooke, W.N. 6 co-operation 205, 271, 272 Co-operative Bank 195, 196t, 198t, 200t, 201t Co-ordinated Market Economies (CMEs) 193, 202 Co-Participation Association 190 Co-Partnership Association 191 corporate control, market for 75–6 corporate governance 63–4, 66, 67–9, 80–1, 194; institutional investor activism 78–80; product market 68–9; takeovers 67–8, 75–6, 77; UK 193 corporatism 254, 261 ‘counterfeit partnerships’ 15, 90, 104, 120–1, 131 Coupar, W. 189 CPSA see Civil and Public Servants Association Cronin, J.E. 191 Cully, M. et al. 54 Cutter, J. 48 CWU see Communication Workers Union Danford, A. 7, 189 de facto/de jure partnerships 35 Deakin, S. et al. 69 Deery, S. et al. 227, 228 Delors, J. 252 Department for Education and Employment (DfEE) 46, 50, 52, 59, 60n1 Department for Education and Skills (DfES) 46, 60n1 Department of Health 9, 53 Department of Trade and Industry (DTI) 51, 65; Company Law Review 78–9; Partnership Fund 9, 10, 51, 101 developing partnership relationships 84–5, 99nn1–3; antecedents and motives 86–8, 97; bypassing and choosing representatives 93–4, 96, 128, 136n4; containment of collective bargaining 95–7, 98–9; management control over communication 94–5, 96; net benefits 88–91, 99, 101; nurturing of collective bargaining 95, 96–8; strategies of control 91–5; union rights 91–3; see also Inland Revenue Dewe, P. 228 DfEE see Department for Education and Employment DfES see Department for Education and Skills Dharendorf, R. 16 Diageo 199t, 200t dispersed-shareholder ownership 66, 67 dominant block-holding model 66 Donaldson, L. 27
Index
243
Donovan Commission 8, 17, 191 DTI see Department of Trade and Industry dual commitment 226–7, 268; cluster analysis 230; context 228–9; dimensional approach 229, 236; international research findings 227–9; sample distributions 230; taxonomic approach 229–30, 236, 237; see also Aer Rianta (AR) Dubunne, Georges 253 East Germany 258 economic motives for participation 12–14 economics 258 Edwards, Paul 60n4 EEF see Engineering and Employers Federation efficacy principle 103, 115 Electrical, Engineering, Telecommunications and Plumbing Union (EETPU) 49 employability 55–6, 57 Employee Involvement (EI) 23, 24, 83; business environments 27–31, 28t, 30t; decline of techniques 31–4; Inland Revenue 143–4, 145; new approaches and techniques 34–9; patterns of diversity 27–31, 28t, 30t; and trade unions 25–7, 33–4, 35–8, 39–43, 84; types 27, 28t employee participation 65–6 Employee Relations Workshop (ERW) 36–7 employer dominant agreements 192, 195 Employment Act 1990 158, 159 Employment Relations Acts (ERA): 1999: 51, 57, 85, 88, 121, 132, 133, 191, 206, 261; 2002: 52, 57, 58 Employment Tribunals 181 Engels, F. 256 Engineering Employers Federation (EEF) 122, 125 ERF 196t, 199t, 200t ERW (Employee Relations Workshop) 36–7 ‘Escalation of Participation’ 26 European Commission 104, 252, 254 European social model 18, 211, 251 European Trade Union Confederation (ETUC) 252, 253, 263n1 European Union 17–18, 59; Employment and Social Affairs 253; Information and Consultation Directive 53, 206, 263–4n2 European Works Councils (EWC) 25, 26, 38–9, 113 exit 257, 258–9, 260, 262, 264n4 External Financing Limit 161
Index
244
Fairness at Work 65, 211 Fenton O’Creevy, M. 26 Financial Management Initiative 140 Finegold, D. 52 Finlayson, A. 16–17 fire-fighters’ dispute 43 Flanders, A. 256, 263 Ford EDAP scheme 47, 49 Ford UK 196t, 199t, 200t Fox, A. 41, 42 France 43, 66, 253, 263n1 free labour organisations 191 Freeman, R.B. 259, 260 Fryer, R. 50 Further and Higher Education Act 1999 51 future of parnership 266–72 Gall, G. 155 Geary, J.F. 7, 172, 206, 231, 243 Geddes, M. 211, 219 General and Municipal Boilermakers Union (GMB) 34, 168, 213, 215 General Motors (GM) 69 general purpose partnership agreements 47–8 ‘genuine partnerships’ 15, 90, 101, 104, 120, 121, 270 Germany: apprenticeship system 47; dual commitment 228; governance 67; industrial relations 202, 260, 261, 262; social partnership 252; training 193; works councils 194, 204 Gill, C. 231 Gindin, S. 262 globalisation 262, 263 GM (General Motors) 69 GMB see General and Municipal Boilermakers Union Gobin, Corinne 252 Gordon, M.E. 229, 236 GPMU (Graphical, Paper and Media Union) 56 Greece 252 Green, F. 216 Greene King 196t, 199t, 200t Guardian 52 Guest, D. 6, 27, 84, 105, 189, 228, 266 Halifax 196t, 198t, 200t Hall, M. et al. 53 Hall, P.A. 192 Hammerschmied, G. et al. 253 Hartley, J.F. 181
Index
245
Harvey, G. 206 Hayes, Billy 165, 167 Haynes, P. 189 health and safety 76 Heery, E. 185, 203 hegemonic despotism 262 Hermes Investment Management Ltd. 79–80 Heyes, J. 54 Higgins, S.H. 103, 115 High Performance Work Organisation (HPWO) 210–12, 215, 218, 219, 221 Hilmer, F.G. 27 Hinton, J. 256 Hirschman, A.O. 251, 257–9, 264n4 history of partnership 8–9, 24, 190–2 Holset Engineering 196t, 199t, 200t H.P.Bulmers 196t, 199t, 200t HPWO see High Performance Work Organisation HSBC 196t, 198t, 200t, 201t Hudson, M. 216 human resource management (HRM) 13, 40, 68, 69; ‘soft’ and ‘hard’ systems 83–4, 96, 210 Hyder (formerly Welsh Water) 1, 196t, 197, 198t, 200t, 202 IAESA (Irish Airline Executive Staff Association) 232 IBEC (Irish Business and Employers’ Confederation) 230 ICTU (Irish Congress of Trade Unions) 230–1 IMPACT 232 Individual Learning Accounts 51 individual performance-related pay (IPRP) schemes 140 industrial action 261; see also Royal Mail industrial democracy 24 industrial relations 8, 98, 105, 116, 253, 261 information technology 56, 140 Inland Revenue 137–8, 149–51, 268; Alternative Working Patterns 143; balance of power 147–8; employee involvement 143–4, 145; factors conducive to partnership 141–4, 149–50; function 138–9; history and development 139–41; Modernisation Agreement 142, 143; obstacles to partnership 144–6, 150; partnership: national focus 146–7; PCS members’ opinions of IR success 145–6, 146t; Performance Management 140, 141, 144–5; study methodology 138; Team Listening 140, 145; union history 139, 141; union policy 138, 151n2;
Index
246
Valuation Office 151n4 Inland Revenue Staff Federation (IRSF) 139, 140 Institute of Directors 11 investment funds 78–80 Investors in People 31, 50 Involvement and Participation Association (IPA) 6, 10, 26, 35, 84, 104–5, 111, 190, 249n1; see also Co-Participation Association IPRP (individual performance-related pay) schemes 140 Ireland 230–1, 254; see also Aer Rianta (AR) Irish Airline Executive Staff Association (IAESA) 232 Irish Business and Employers’ Confederation (IBEC) 230 Irish Congress of Trade unions (ICTU) 230–1 IRS Employment Trends 203, 204 IRSF see Inland Revenue Staff Federation Italy 228, 253, 256 Japan 67, 228 ‘Japanisation’ of industrial relations 262 job security 91, 221–2, 221–2t, 223 Joint Union Company Group (JUCG) (Ireland) 231, 232, 234 Kalleberg, A.L. 211, 220 Katzenstein, P.J. 254 Keggie, John 165 Kelly, J. 2, 7, 36, 43, 83, 137, 142, 151n1, 167, 171–2, 189, 269 Kennedy report 50 Kern, H. 262 key ingredients of partnership 104–6 Knell, J. 256 Kochan, T. 4–5, 5t, 65, 69, 103–4 Krieger, H. 231 Labour government 1, 9, 16–17, 25, 35, 46, 58, 104, 146, 150, 161, 214 labour parity agreements 192, 195, 267 labour supply industry see Manpower/T&GWU partnership Laclau, E. 188 Ladd, R.T. 229 Leadbetter, C. 13 ‘Learning Age, The’ 50, 59 Learning and Skills Councils 53 Left Unity 142, 146, 148, 149, 150 Legal and General 1, 6, 191, 201, 203 Legge, K. 83–4, 96 Leyland Trucks 195, 196t, 197, 199t, 200t, 201 liberal market economies (LMEs) 192–3, 194, 202, 205–6 lifelong learning: collective bargaining 46–7; concept 50; innovation 57; opportunities 54;
Index
247
paid educational leave 53, 57; policy 49–53, 59–60; resources 58–9; role of trade unions 46, 50, 51–2, 53, 54, 56, 57–60; single purpose partnerships 47, 48, 57; strategies of conflict 48–9; training for employee need 55, 56; training for employer need 55, 56; types of partnerships 49–50; workplace training committees 59 lifelong learning advisors 60n3 listed companies 66, 67–8 Lloyd-TSB 203 LMEs see liberal market economies Local Government Act 1999 214 Locke, R.M. 193 McBride, J. 107, 121, 132 McKersie, R.B. 255–6 Magenau, J.M. et al. 228 Manpower/T&GWU partnership: Advisors 179; Agency Organisers 177, 179, 180, 181, 183; background 172–3; common interests 174–6; conclusions 184–6; developing union organisation 182–4; employer support 178–81; and external labour market 177; field staff agreement 174–5; international conference 179; long-term contracts 175; Partnership Forum 179; Partnership Fund 172, 173, 175, 179; problems 176–8; productivity coalition 174, 175, 176; regulation of agency work 175, 177, 181–2; research methodology 173; union membership 180–1, 182; union recognition as legitimacy 175 Manufacturing, Science and Finance trade union (MSF) 46, 54, 101–2, 117n2, 168; AMICUS-MSF 213, 214; benefits of partnership 115, 115t, 117n4; involvement and communication 110–13, 111t, 112t; principles and practices of partnership 106–10, 108–9t, 203; risks 115, 115t; sectoral response 117t; survey conclusions 115–17; survey methodology 106, 117n3; working practices and conditions 113–14, 114t Marchington, M. et al. 24, 26, 28t, 43n2, 113
Index
248
Marin, B. 254 market for corporate control 75–6 Marks, A. et al. 84, 121, 189 Marks and Spencer 25 Martin, A. 255 Martínez Lucio, M. 35, 83, 84, 131, 189, 191 Marx and Marxism 36, 253 Mathews, J. 112 Mediterranean Economies (MEs) 193, 202 Medoff, J.L. 259, 260 Membership First 147, 148, 149 Metcalf, D. 251–2 mobilisation theory 203–5, 206 moderation vs. militancy 137, 151n1, 167, 172 Mond-Turner talks 174, 191 Moser report 50 Mouffe, C. 188 MSF see Manufacturing, Science and Finance trade union Mückenberger, U. 264n4 Munck, R. 263 Munro, A. et al. 58 mutual gains 1–2, 4–5, 5t, 13–14, 83–4, 120, 121, 210, 211, 261; see also dual commitment mutual trust 103, 115, 256 Myners, P. 79 National Advisory Committee on Continuing Education and Lifelong Learning 50 National Centre for Partnership and Performance (NCPP) (Ireland) 231 National Centre for Partnership (Ireland) 231 National Health Service (NHS) 76; Learning Accounts Scheme 53; Plan 53 National Joint Council Framework Agreement 2001 215 National Minimum Wage 29 National Moderate Group 147, 148, 149 National Power 201 National Training Agreement (print industry) 55 National Union of Civil and Public Servants 139 National Union of Public Employees 55–6; see also UNISON Nationwide 196t NatWest Bank 196t, 198t, 201t NCPP (National Centre for Partnership and Performance) (Ireland) 231 negotiating a partnership agreement 121–2; see also Turnhay Engineering: case study negotiation 204 Netherlands 252, 254, 261 New Industrial Relations Framework Agreement (NIRFA) 154, 155, 156, 157–8, 159, 167 New Labour see Labour government Next Steps programme 140, 151n5 NHS see National Health Service
Index
249
NIRFA see New Industrial Relations Framework Agreement non-union partnership arrangements 269 North West Water 196t, 198t, 200t Northumbrian Water 196t, 198t, 200t NVQs 50, 53, 56 O’Dowd, J. 231 organisational change 83 organisational motives for participation 12–14 organisational participation: UK 23–5, 41–3, 42f; see also Employee Involvement Osterman, P. 4–5, 5t, 103, 189, 211 ownership 66, 72–5 Oxenbridge, S. 99n3 P2000 see Partnership 2000 Panitch, L. 262, 263 paper-based techniques 32 partnership: advocates and critics 6–8, 189–90; assessment framework 12t; basic propositions 1; challenge from ‘broad left’ 148–9; characteristics 1; concept 3–4, 251, 272; key ingredients 104–6; labour-management partnerships 63, 270–1; literature on partnership 4, 189–90, 256–7; mature/enduring partnerships 72, 270; motives and dimensions 11–19, 12t; policy 9–11; preconditions 103–4; proactive partnerships 72; reactive partnerships 72; risks 103, 115, 115t; rules of engagement 6; two faces 95–7; types 36t; weak/disintegrating partnerships 72, 270; see also principles of partnership Partnership 2000 (P2000) 230, 231 partnership agreements 35, 130, 172, 174, 191–2, 193, 201, 201t; see also social partnership agreements (Britain); Turnhay Engineering: case study Partnership for a New Organisation of Work 18 Partnership Fund 172, 173, 175, 179 Partnership Institute (PI) 11, 117n1, 211 Partnership Working in the Civil Service 142, 143 Pateman, C. 26
Index
250
Payne, J. 3, 6, 83, 84, 101, 189 PCS see Public and Commercial Services Union PEC see Postal Executive Committee Peccei, R. 6, 84, 105, 189, 266 Peck, J. 257 pension funds 79 Performance and Innovation Unit (PIU) 52 Perry, J.L. 227–8 PFI see Private Finance Initiative PI see Partnership Institute Piore, M. 47 policy framework 64–9 politics of partnership 11, 16–18, 102, 148–9, 258 Porter, L.W. et al. 234 Portugal 252 Post Office 79, 161; see also Royal Mail Postal Executive Committee (PEC) 155, 160, 167, 168 Postal Services Act 2000 161 Postal Services Commission (Postcomm) 161–2, 164, 165 PPF see Programme for Prosperity and Fairness principles of partnership 6, 90, 104–6, 107–10, 108–9t; TUC 10–11, 101, 105, 106, 111, 269 Private Finance Initiative (PFI) 76, 77 privatisation 155–6 proactive partnerships 72 problem-solving groups 84 productivity bargaining 174 productivity coalition 174, 175, 176 Programme for Prosperity and Fairness (PPF) 230, 231 Public and Commercial Services Union (PCS) 139, 141, 142, 145–6, 148–9, 150 Public Services, Tax and Commerce Union (PTC) 139, 148 Purcell, J. 105 quality circles 32 Ramsay, H. 7, 9, 84, 189, 191 reactive partnerships 72 Reamsbottom, Barry 148, 149 recruitment bureaux 172–3; see also Adecco; Manpower Regini, M. 3–4, 261 regulation 76–8, 80, 102–3; see also Employment Relations Acts Requisite Arrangements, The 231 response of investment community 78–80 Return to Learn programme 56 rights 25, 41, 59, 91–3, 261 Robert Bosch 196t, 199t, 200t Roche, W.K. 7, 101, 172, 206, 231, 243
Index
251
Ross, G. 255 Rousseau, J.-J. 253 Rover Cars 196t, 199t, 200t, 202 Royal Mail: Strategic Involvement (SI) 154–5, 268; ability 165–6; automated processing centres (APCs) 162; capacity 166; collective bargaining 165; contracting out of non-core services 162, 163, 165; deliveries 162, 163, 165; divisional representatives 160; Employee Agenda 160, 161, 162, 163, 168; industrial action 155, 156t, 159–61, 162, 163–4, 165, 166, 167, 168–9; mechanised letter offices (MLOs) 162; NIRFA 154, 155, 156, 157–8, 159, 167; objectives 157, 158, 160; origins 155–7; pay and conditions 162, 163; privatisation 155–6, 157, 161; Productivity Bonus Scheme 163; revival of SI 161–5; Sawyer Report 164, 165; teamworking 158, 160; ‘The Way Forward’ 162, 163; too little too late 165–6; UCW/CWU 154, 155, 156–7, 158, 160, 161, 164, 165, 166, 167, 168, 169; wider lessons 166–9 Rubinstein, S. 5, 65, 69 Rugby Cement 196t, 198t, 200t Ryanair 233 Sabel, C. 47 Safeway 196t, 199t, 200t, 201t Sainsbury’s 196t, 199t, 201t Sanyo 191 Saturn 69 Sawyer Report 164, 165 Schumann, M. 262 Scottish Widows 203 Serwotka, Mark 149 Severn Trent Water 196t, 198t, 200t share ownership schemes 66 shareholder primacy norm 68 Sheldrake, J. 271 SI see Royal Mail: Strategic Involvement single purpose partnerships 47 Single Status Agreement 54–5 single-union, ‘no strike’ deals 191 Sinzheimer, H. 254–5
Index
252
Sisson, K. 18, 26 Smith, J. 6, 256–7 social dialogue 25 social exclusion 52 Social Exclusion Unit 51 social movement theory 203–5, 206 social partnership 23, 24, 25–7; concept 188, 251–5; costs and benefits 255–7; growth and crisis 261–3; voice 257–61 social partnership agreements (Britain) 193; company profit margins 197, 200t, 201; comparative context 192–4; conclusions 205–6; history 190–2; literature 189–90; as organisational practice 194–202; outcomes 195, 196–202, 198–200t, 201t, 205–6; partnership firms 195, 196t; post-partnership employment change 196–7, 198–9t; research methodology 194–5; social movement theory 203–5, 206 Somerfield 196t, 199t, 200t, 201t Sony 191 Soskice, D. 52, 192 South West Water 196t, 198t, 200t Southern Water 196t, 198t, 200t Spain 193, 194, 202, 264n3 stakeholder debate 68, 81 Standing, G. 221 Statutory Trade Union Recognition 15, 267 Stevens, B. 189 Stirling, J. 107, 121, 132 Storey, J. 13, 26, 59, 96 Streeck, W. 49, 260, 261 Stuart, M. 35, 47, 54, 55, 83, 84, 107, 131, 189, 191 Suff, R. 267 Sunday Times 158 SVQs 50 Sweden 228, 255 Tailby, S. 189 Tarrow, S. 203 Taylor, P. 7, 84, 189 teamworking 84, 96, 158, 160 TEC see Training and Enterprise Councils Terry, M. 6, 103, 183, 204, 256–7, 260–1 Tesco 6, 25, 37, 196t, 197, 199t, 200t, 201, 201t Tetley 196t, 199t, 200t T&GWU see Transport and General Workers’ Union
Index
253
Thames Water 196t, 198t, 200t, 203 Thatcher governments 141, 147, 155–6, 214 The Industrial Society 10; see also Work Foundation Thelen, K. 193 Thelen, K.A. 254 ‘theory of the displaced activist’ 172 Therborn, G. 254 Thomas, C. 189 Thompson, E.P. 263 time horizons 64, 76–8 Towers, B. 24, 113 trade union perceptions of partnership: benefits 90–1, 115, 115t, 117n4, 168; involvement and communication 110–13, 111t, 112t; principles and practices 90, 106–10, 108–9t; risks 103, 115, 115t; sectoral response 117t; survey conclusions 115–17; survey methodology 106, 117n3; working practices and conditions 113–14, 114t trade unions: bypassing and choosing representatives 93–4, 96, 128, 136n4; collective bargaining 46–7, 65–6, 95–9, 165, 168, 204; communication 94–5, 96; economic and organisational utility 13, 14; effect of partnership on 83; and Employee Involvement 25–7, 33–4, 35–8, 39–43, 84; enterprise-based 171–2; exit and voice 258–60; future of partnership 266–70; joining 181; lifelong learning 46, 50, 51–2, 53, 54, 56, 57–60; partnership and role of unions 14–16, 23, 102; as social movement 203; strategies of conflict 48–9; strategies of control 91–5; training and development 46–8, 112; union rights 91–3, 261; workplace learning representatives 52, 57–8, 60n3; see also developing partnership relationships; trade union perceptions of partnership Trades Union Congress (TUC) 26, 49, 56, 101, 104, 133, 210; benefits of partnership 84; Learning Services 48; principles of partnership 10–11, 101, 105, 106, 111, 269; and recruitment bureaux 173; terminology 251; union-employer relationships 85; WERS 223 training and development 192, 193; see also lifelong learning
Index
254
Training and Enterprise Councils (TEC) 49, 56 Transco 6 Transport and General Workers’ Union (T&GWU) 168, 172, 213, 215; see also Adecco; Manpower/T&GWU partnership Traxler, F. 252 Treasury 52–3 trilateral relationships 130 TUC see Trades Union Congress Turnbull report 78 Turner, L. 254, 260 Turnhay Engineering: case study: aims of agreement 125; background 122–3, 136n1; ‘banked hours’ system 123, 124, 125, 130, 131; discussion 131–4; FTO view of agreement 127; ideology 132; management views of agreement 126–7; methodology 122; negotiating the partnership 123–6, 136n2; outcomes 132–3; partnership agreement 134–5; partnership in operation 128–31; process 132; redundancy 128–9, 136n4; shift changes 130; wage negotiations 129, 130; workers’ views of agreement 127–8, 130–1 UAW (United Auto Workers union) 69 UCATT (Union of Construction, Allied Trades, and Technicians) 213 UCW see Union of Communication Workers UK 23–5, 41–3, 42f, 192–3, 193, 202, 205–6; see also social partnership agreements (Britain) UK Focus Funds 79 Union Learning Fund (ULF) 46, 48, 50–1, 56, 57, 58, 60n1 Union of Communication Workers (UCW) 154, 156–7, 158; see also Communication Workers Union (CWU) Union of Construction, Allied Trades, and Technicians (UCATT) 213 union recognition agreements 191 UNISON 56, 213, 215; UNISON/employer partnerships 48, 49, 56, 60n3 United Auto Workers (UAW) union 69 United Distillers 196t, 199t, 200t, 202 University for Industry 51 USA 4, 67, 69, 192–3, 202, 205, 227–8 USDAW 37 utility regulation 77–8
Index
255
Valuation Office 151n4 Verzetnisch, Fritz 253 vocational training 47 voice 14–16, 24, 35, 40, 43n2, 120, 121, 130, 131, 257–61, 267–8, 271–2 voluntarism 103 Wallis, B. 189 Walton, R.E. 205, 255–6 Welsh Water see Hyder WERS see Workplace Employee Relations Survey Wessex Water 196t, 198t, 200t Whitley Commission 8, 17, 271 Wicks, Malcolm 51 Wilkinson, A. 113 Williams, S. 267 Winchester, D. 189 Windolf, P. 174 Wood, S. 26, 65 Work Foundation 10 work intensification 215–16 Working Time Directive 29, 181 Workplace Employee Relations Survey (WERS) 54, 60n4, 223 workplace stress 220, 221–2 works councils 193–4 Wright, E.O. 257 Yorkshire Water 196t, 198t, 200t
