HRM 603 – COMPARATIVE STUDIES

IN INDUSTRIAL & EMPLOYMENT

RELATIONS

Topic 2:
EMPLOYMENT RELATIONS IN
THE UNITED KINGDOM
 LECTURE OUTLINE

• Context and key themes

• The role of the state and shifts in UK IR policy
• The union movement
• The employers and employers’ associations
• UK styles of human resource management (HRM)
• Collective bargaining
• Employee involvement and participation
• Fairness at work
• European Union (EU) membership and consequences
• Conclusions
 Context of UK Industrial Relations
• Population of approximately 62 million (UK), 72% employment
rate
• Most men work full time; more than 40% of women work part time
• Major shifts in the sectoral division of workers – about 80% of
British employees work in the service sector
• Growth in foreign direct investment and related employment
practices
• Membership of European Union (EU) influences labour practices
and standards
• Increasing number of migrant workers, particularly amongst low-
wage earners
• In 2014 the unemployment rate was c.7% of the labour force
 The Role of the State

• Industrial relations have in the past been characterised

UK IR as ‘voluntarist’ because of the comparatively
low level of legal regulation

• Yet this characterisation is increasingly misleading:

“The British state has in fact been a central actor in
the construction, maintenance and reconstruction of
industrial relations institutions”
(Howell, 2005: 3)
 Key Themes

• Especially since 1979, the UK system has been radically

reformed by interventionist legislation characterised by labour
market re-regulation and attempts to foster a competitive
‘enterprise culture’
• Reforms were initiated by Conservative Governments between
1979 and 1997. Many were maintained by the 1997-2010 New
Labour Governments and the Conservative-Liberal Democrat
coalition government of 2010-2015
• Combined with broader macro-economic trends and shifts in
the labour market, such reforms have had profound effects on
UK industrial relations
 The ‘Voluntarist’ System

• Voluntarism arose out of trade union immunity

legislation such as the Trade Disputes Act 1906
• Principal features of voluntarism included:
1) non-legally binding collective agreements
2) voluntary union recognition by employers
3) low level of formalisation of industrial relations structures
4) voluntary framework of state-provided dispute resolution
facilities (no power of the State to arbitrate)
• This voluntarist system was supported by employers
and unions
 The State:
From Voluntarist To Interventionist

• In an attempt to reverse economic decline,

governments from the 1970s onwards legislated
industrial relations reform
• The most radical of these reforms were those of the
Conservative Thatcher Government (1979-1990)
which aimed to reduce the power of the unions
• Some have characterised this point in British history
as the shift from a voluntarist to a neo-liberal
interventionist state
• Initial signs are that the Conservative Government
elected in 2015 will further restrict union influence
 Broad Shifts in State Economic Policy

• Economic policy:
• 1945-1979: Keynesian consensus on state-directed income
redistribution and full employment
• 1979-1997: Radical shift to neo-liberal reform including
deregulation, flexibilisation of the labour market and control
of inflation
• 1997-Current: Continued focused on inflation control; recent
challenge of the Global Financial Crisis and the subsequent
challenge to recover from and cut the deficit. Austerity
policies supported by the electorate (excluding Scotland) in
2015 General election
 Dispute Settlement

• The state has long provided conciliation and arbitration

services to supplement voluntary collective bargaining and
dispute procedures
• Since 1975 these services have been offered by the independent
Advisory, Conciliation and Arbitration Service (ACAS) under
the Employment Protection Act
• ACAS is a governmental agency governed by a tripartite
council, of employer and union nominees with a balance of
independent members e.g. academics
• ACAS offers industrial relations advice as well as conciliation
and non-compulsory and non-binding arbitration services to the
parties to individual and collective agreement disputes
 Broad Shifts in State Public Sector Policy

• Following the election of the Conservative Thatcher

government in 1979, there was a decisive shift in public sector
policy as neo-liberal reforms aimed to limit public expenditure
and the size and role of the state
• Privatisation of major parts of the public sector between 1979-
1997 reduced the size of the public sector from 30% to 20% of
the labour force, while public sector pay was restrained
• Privatisation and deregulation of the public sector had profound
effects on employment relations, including the fragmentation of
work across organisational boundaries
 History of Early UK Unionism

• As the UK was the first country to industrialise, it

probably has the longest history of unionism
• Early unions were formed by and were exclusive to
skilled craft workers; some began before in the
nineteenth century
• Widespread unionism of semi-skilled, unskilled and
female manual workers began in the late nineteenth
century
• Prior to World War II, the majority of unionised white-
collar workers were in the public sector
• After 1960, substantial numbers of private sector
white-collar workers were also unionised
 Unionism Since WWII

The level and density of unionisation has fluctuated

since the end of World War II
Three post-war phases can be identified:
1) 1948-1968: Membership grew from 9.3 million to 10.2
million; union density moved between c.42% and 50%
during this time
2) 1970s: Membership grew markedly as ‘white-collar’
workers unionised. Total union membership reached an
all all-time high of 12.6 million in 1979, with density
peaking at about 56%
3) 1979-: Between 1979 and 2013 union membership fell
by more than 5 million members to 7.2 million, with
union density falling from c.56% to c.23%
 Decline In Strikes

• Along with the decline in unionisation there has been a decline

in strike activity
• From a peak of 3,906 strikes with almost 11 million working
days lost in 1970, the number of strikes fell to 122 in 2013,
resulting in only 410,000 working days lost
• In the twenty-first century, a greater proportion of strikes are
‘defensive strikes’
• Decline of strike action in Britain may be steeper than
elsewhere due to the restrictive legislation introduced by the
Conservative Thatcher government
 How Can We Explain The Fall In UK Union
Density?
• There is no agreement on the relative effects of factors that
have contributed to the fall in UK unionism, yet it is generally
accepted that they include:
— macro-economic context
— changing composition employment and of the labour force
— management resistance and workplace practices
— state labour policies
— issues internal to unionism
• Although the 1997-2010 Labour Governments enacted
legislation for a formal recognition procedure, the legislation
did not allow these trends to be reversed
 Contemporary Unionism

• In 2013, there were only 167 unions (a massive decrease from 1,348 unions in
1920 – a result of both union mergers and falling union density)
• Union membership is concentrated in 13 unions accounting for 84% of total
union membership
• There are marked variations in union density:
• Unionism in the public sector is 56%, whilst union density in the private sector is only 14%*
• Non-manual workers are more likely to be unionised than manual workers
• Unionism is slightly higher amongst women (27%) than among men (20%)
• Full-time workers are more likely to be unionised (27%) than their part-time counterparts
(12%)
• Workers over the age of 50 are more likely to be unionised (33%) than workers aged under
25 years (8%)
--------
* 2012 data.
 Trade Union Congress (TUC)

• The TUC was established in 1868 and is Britain’s one main

union confederation
• 54 unions representing almost 5.9 million workers are affiliated
with the TUC (2013)
• The TUC is not directly involved in collective bargaining but
instead primarily:
• lobbies governments on union issues
• provides services to affiliated unions
• adjudicates disputes between affiliated unions
• In response to declining membership, the TUC has focused on
organising strategies in recent years, but with only limited
success
 The Union Movement and The Labour Party

• Unions were instrumental in the establishment of the

Labour Party in 1906
• Since the mid-1980s the Labour Party has increasingly
distanced itself from unions, as it increasingly secured
funding from the business sector and elsewhere
• Individual unions choose whether to affiliate with the
Labour Party; some unions do not affiliate
 Employers’ Associations

• The Confederation of British Industry (CBI) was formed in

1965; it is the peak organisation of employers in Britain
• The CBI does not participate in collective bargaining, but
lobbies the government and EU on employer-related issues and
claims to represent the views of 200,000 employers, who
employ approximately half of the UK workforce
• There are 80 employers’ associations in the CBI. They typically
offer one or more sets of services to their members including
IR advice, training and lobbying services
• Whilst once prominent in the voluntarist system of industrial
relations, employers’ associations no longer play a central role
due to the enhanced power and autonomy of individual
employers
 Employers

• Since the 1980s, British employers have exercised

greater managerial power driven by higher levels of
competition in product markets and reductions in
unionism
• There is diversity in the mix and balance of employer
strategies to achieve control, productivity increases and
cost reduction, for example:
• pragmatic/opportunistic approach (cost-driven strategy), vs.
• high-commitment approach (flexibility and employee
commitment)
 Human Resource (HR) Management
• Just over 20% of workplaces with more than 5 employees have a
personnel or HR specialist
• The principle responsibilities of UK HR managers are concerned
with grievance and dispute handling, recruitment and selection,
staffing and employee consultation
• Membership of the relevant professional organisation, the
Chartered Institute of Personnel and Development (CIPD), has
risen nearly tenfold since the 1970s. Internationally, the CIPD is the
second biggest organisation of this sort. (Only the equivalent US
organisation is larger)
• There is an increasing focus on the ‘business partner’/strategy role
of HR managers. There are threats to their role from the increasing
role of line managers, specialist consultants, outsourcing and
shared services arrangements
 History of Collective Bargaining

• UK Collective bargaining has a long history. By the end of

WWI, multi-employer bargaining for manual workers was well
established and industry-level negotiations were encouraged by
the state
• Before WWII, there were centralised negotiations across entire
industries (there were some exceptions); this left little room for
workplace bargaining
• A shift occurred after WWII with the rise of single-employer
bargaining and by the mid-1970s collective bargaining was
decentralised throughout much of the private sector
 Changing Collective Bargaining

• In 1970, collective bargaining covered around 70% of the UK

workforce. By 2013, coverage had declined to around 23%
• There are variations between sectors; the public sector has the
highest coverage and the private sector the lowest
• The scope of collective bargaining has contracted alongside
coverage with the consequence that most of the UK workforce
have their terms and conditions of employment set unilaterally by
management
• Little multi-employer bargaining remains. Single unionism and
‘single-table’ bargaining (where all unions negotiate together) has
increased since 1990
 Employee Involvement And Participation (EIP)

• The nature and extent of EIP programs has fluctuated

over the past century
• The current form of EIP which gained momentum in the
1980s differs substantially from earlier variants as it is:
• individualist and direct (as opposed to collective and through
representatives)
• initiated unilaterally by management (not through consultation)
• directed at securing individual employee commitment to and
identification with the employer
 Fairness at Work

• A national minimum wage was first introduced in 1999, as a

positive contribution to fairness in the workplace
• Relative pay inequality has not been addressed and has been
institutionalised in the form of bonuses and performance-
related pay
• Gender inequality remains evident; only a little progress has
been made on this front beyond some redress in the form of
the national minimum wage
• Increased immigration raises challenges in preventing and
resolving disputes over racial discrimination at work
• Workplace bullying and harassment generally is an issue of
increasing importance
 European Union (EU) Membership
• The UK joined the European Economic Community (EEC), as it was
then, in 1973
• Then the move was generally favoured by employers on the grounds
of market benefits, and resisted by the unions
• Unions shifted their position after the Conservative Thatcher
government implemented anti-union laws, which were less favourable
to workers and unions than the EEC’s social policy measures
• The subsequent faltering progress of European social policy and the
increasing prominence of neo-liberal policy objectives in the European
Commission has led many unionists to reassess their view of the EU
• The Conservative Government elected in 2015 is committed to an ‘in-
out’ referendum on EU membership by December 2017
 Consequences of European Union Membership

• Legislation originating from the EU influences UK labour law

and industrial relations in two main fields:
• individual employment rights
• information and consultation rights
• Since the reversal of the UK opt-out from the EU Social
Chapter in 1997, a range of new rights have been enacted in
UK legislation, including the regulation of working time, a
right to urgent family leave, a right to parental leave, a right to
equal treatment for part-time workers and protection for fixed-
contract workers
• Provisions for information and consultation, including works
councils, are yet to have much practical effect
 Conclusions

• Since 1979, the IR system has experienced substantial

change from a voluntarist system to one of increased state
intervention
• Despite increased jurisdification, there is still not a strong
and centrally regulated IR system. This has resulted in
employer autonomy to pursue either a:
• low-road/contract approach of cost-minimisation (majority approach)
• high-road/status approach of high-commitment
• Union density fell to half of its peak in 1979 and unions
are struggling to find a clear identity and new roles
• EU membership continues to influence domestic IR
legislation
 REFERENCE

• Bamber, G., Lansbury, R., Wailes, N & Wright C (2015). International and
Comparative Employment Relations: National Regulation, Global Changes (6th ed.).
UK, London: Sage Publications Ltd.
• Kaufman, Bruce E. (2004). The Global Evolution of Industrial Relations: Events,
Ideas, and the IIRA. International Labour Office. 
• Ackers, Peter; Wilkinson, Adrian (2003). Understanding Work and Employment:
Industrial Relations in Transition. Oxford University Press