Trade unions and the Social Dialogue in the UK A story of decline and change The levels of collective bargaining, and consequently collective bargaining structures, in the United Kingdom continue to decline. There is a growing distinction between the public and the private sector in terms of the proportion of workers who are members of trade unions and in terms of those covered by national sectoral agreements rather than at a more local level. There are indications, however, that the pace of this decline has been reduced in recent years. This will be for a number of reasons, including perhaps a greater intervention of the law and state regulation both at national and perhaps at EU level in reinforcing the collective and other rights of workers. The decline in trade union influence and the limiting of social dialogue can be traced back to 1979 with the election of a Conservative Government led By Margaret Thatcher MP. This Government was determined to weaken collective rights and strengthen individual ones. There was to be strict regulation of trade union rules and activities. To achieve this the Government introduced the Employment Act 1980, the Employment Act 1982, the Trade Union Act 1984, the Employment Act 1998, the Employment Act 1990, the Trade Union Reform and Employment Rights Act 1993,. Some of the results of this legislation were (i) to introduce secret ballots into voting on industrial action and other matters; (ii) ended the pre-entry and post entry closed shop (iii) made secondary picketing illegal (iv) introduced a Commissioner on the Rights of Trade Union Members (v) introduced detailed rules on the election of officials (vi) introduced rules on ballots and notice periods prior to industrial action, effectively outlawing unofficial action (vii) imposed tighter rules on political funds used by unions. Many of these measures have been continued by subsequent governments. In some ways attitudes to trade unions have changed significantly over the last 30 plus years and the fact that few people regard them as having too much power today, in contrast to the past, may be a reflection of the government’s success in neutering them. In September 1979 some 80 per cent of adults agreed with the statement that ‘trade unions have too much power in Britain today’. Even 69 per cent of trade union members agreed with the statement. By 1989 the figures agreeing with the statement were 41 per cent of adults interviewed and just 26 per cent of trade union members. In 2014 the figure had dropped to some 29 per cent of adults who thought that trade unions had too much power. On the other hand some 77 per cent agreed with the statement that ‘trade unions are essential to protect workers’ interests.1 I would briefly like to go through some of the characteristics of this decline: firstly, bargaining structures, secondly, what I call the retreat to the public sector, thirdly, the dramatic decline in trade union memberships and, finally, the changing characteristics of trade union members. 1 Ipsos Mori Attitudes to trade unions 1975-2014; http://www.ipsos- mori.com/researchpublications/researcharchive/94/Attitudes-to-Trade-Unions-19752011.aspx 1 Bargaining structures By far the most common form of pay determination is unilateral pay setting by management. Some 70 per cent of workplaces set pay for at least some of their employees using this method. Figures from the Department for Business show that in 2012 only 29.3 per cent of employees were covered by collective bargaining.2 However, collective bargaining coverage is not even across the economy. In the public sector 63.7 per cent of employees are covered by collective bargaining compared with only 16.1 per cent in the private sector. There is a high correlation between union membership and coverage by collective agreement with over 70 per cent of trade union members covered by such an agreement. Larger employers, those with 50 or more employees, were also much more likely to have entered into collective agreements. Some 41.6 per cent of employees in these larger enterprises were covered by collective agreements, compared to some 15.9 per cent of smaller workplaces. This decline began with the election of the Thatcher Government in 1979 when an attitude of hostility towards trade unions and collective bargaining began. This continued throughout the 1980s and 1990s, so in 1992 the Secretary of State for Employment was able to say that ‘traditional patterns of industrial relations, based on collective bargaining and collective agreements, seem increasingly inappropriate and are in decline’.3 Interestingly the decline is even greater in new enterprises set up during this period.4 When bargaining occurs in the private sector, it is usually at the company or plant level. National agreements are very much the exception. In the public sector industry wide agreements are more common, although in some parts there is more localised bargaining, such as in the devolution given to different civil service departments to arrange their own pay rates and agreements.5 Collective agreements do not have to run for a specific period although the most common pattern is that they run for a year. It is reported that figures from the Labour Research Department database of collective agreements indicate that as at March 2013, 91 per cent of the agreements were for 12 months, 4 per cent for 24 months and 1 per cent for 36 months, with the remaining 4 per cent lasting for other periods.6 The retreat to the public sector As a result of government policy and measures taken to tackle the debt burden, the size of the public sector in the UK has been decreasing. Public sector employment represents some 19 per cent of total employment (some 5.7 million workers),7 yet it contains some 3.886 million trade union members compared to some 2.572 million in the much bigger private sector. Some 56.3 per 2 Trade Union Membership 2012 Statistical Bulletin May 2013 Department for Business, Innovation and Skills. 3 William Brown (1993) The contraction of collective bargaining in Britain BJIR 31:2 June 4 Stephen Machin (2000) Union decline in Britain BJIR 38:4 December 631-645 5 L. Fulton (2013) Worker representation in Europe. Labour Research Department and ETUI; http://www.worker-participation.eu/National-Industrial-Relations 6 See http://www.worker-participation.eu/National-Industrial-Relations/Countries/United- Kingdom/Collective-Bargaining 7 In June 2005 it was just over 20 per cent with 5.8 million workers. 2 cent of public sector employees are members of a trade union compared to 14.4 per cent in the private sector. In the public sector 86.4 per cent of workplaces had a trade union presence with almost two thirds of employees’ (63.7 per cent) pay affected by collective agreement. The overwhelming numbers of agreements are set at the national, usually sectoral, level. In contrast, in the private sector only in some 16.1 per cent of workplaces was employees’ pay influenced by collective agreements even though over a quarter of workplaces had a trade union presence (28.5 per cent) Also in contrast to the public sector the overwhelming majority of these agreements are set at company or enterprise level.8 So we can say that the great majority of pay settlements in the public sector are through nationally negotiated collective agreements. In the private sector the norm is for pay to be set unilaterally by management. Of the 10 biggest trade unions in the UK, 5 operate almost exclusively within the public sector and a proportion of the membership of the other biggest 5 unions will also work in this sector. Trade union recognition is the necessary precursor to collective bargaining. The figures are somewhat alarming in that only 16.1 per cent of workplaces in the private sector have a trade union present compared to some 86.4 per cent in the public sector.9 The decline in trade union membership In the United Kingdom there has been a consistent decline in the size and number of trade unions, resulting in a continuing reduction in the numbers of workplaces and workers who are covered by any collective bargaining structures. Trade unions in the United Kingdom have been declining in both membership and numbers for some considerable time. Membership reached its highest level in 1979 when trade union membership was 13.212 million people. Within 15 years, by 1994, this figure had fallen to 8.231 million. The decline has continued, although it does seem to have stabilised in the very recent past with the figure for 2011 being slightly more than 7.2 million members.10 This decline is even more startling when one looks at how the workforce has increased and changed during the same period. In 1979 the employed workforce consisted of some 25.2 million people, so trade union membership represented a figure of more than 50 per cent. In 2014 the employed workforce had increased to around 30.1 million, so trade union membership now represents less than 25 per cent of the workforce, having been reduced by more than one half in this period. Almost two thirds of workplaces did not have any trade union members (64%). This comprised some 77% of workplaces in the private sector compared to only 7% in the public sector.11 8 Sonia Pereira (2004) Collective agreements and wages in the New earnings Survey Economic Trends 612 p35 Office for National Statistics 9 All the figures come from Trade Union Membership 2012 Statistical Bulletin May 2013 Department for Business, Innovation and Skills. 10 See annual reports of the Certification Officer 11 See Kersley et al 3 Partly in response to this decline in numbers and, I think, partly because of the structural changes that have taken place, trade unions themselves have been going through a process of consolidation.12 Figures published by the statutory body show that, for example, there were 344 trade unions in 1988.