Finding the middle ground

The two largest unions in manufacturing, Amicus and T&G, are to merge, forming the UK's biggest trade union with a joint membership of around two million members. It will also cover sectors as diverse as transport, aviation, food and farming and some public services. The implications of this will probably be felt more keenly by Unison (at only 1.3 million members), the government and, not least, a potentially marginalised TUC than by the majority of manufacturers. Certainly, two giants will dominate the union scene: Unison in the public services and the as yet unnamed entity in manufacturing. 'Dominate' is, however, a rather misleading word. Let's take a look at the reality behind the numbers. If you are a union member today, you are likely to be white, middle-aged, male - and in the minority among the working population. Just one in 20 union members is under 24 and less than 7% are non-white. In manufacturing, the situation is even more acute (or encouraging, according to your point of view). In 1995, 32.7% of those working in manufacturing belonged to a trade union. In 2005, it was down to 24.8%. Compare this with the 57% membership in public administration. Despite the relative numbers, which union is Gordon Brown likely to be inviting to Number 10 first? Shrinking membership is not just caused by the flow of manufacturing jobs overseas. Young blood is simply not signing up. Recruitment is high on all union agendas but there is no guarantee of their workplace welcome. David Yeandle, deputy director of employment policy at EEF, points out: "The whole structure today is very different. While private sector companies do have unions, membership is low in comparison with the public sector and the offshoots of old industries like rail and utilities. In today's labour market, 50% of people have never been union members and I suspect many under 40s have had no exposure to them." Amicus's director of research Roger Jeary accepts that membership has fallen not just by loss of jobs but also by "the newer industries not engaging as much as we would wish". But he says combined resources will let the new union tackle "challenging areas" head on. Yeandle is not convinced that potential recruits will see the value of joining since the Labour government arguably has given employees so many of the basic rights the unions once fought for: a national minimum wage, the Working Time Directive, legislation against discrimination and family-friendly policies. "It's more difficult for them to articulate what they can deliver for people and they have to be more innovative to recruit members." This is not an argument likely to play well in places like Ryton or Treorchy as the Peugeot and Burberry jobs disappear overseas. In the past, membership grew when people felt betrayed. But all the unions' angry protests and demonstrations did not avert the closures this time although they may, behind the curtains, have improved the redundancy terms. But that's still not a great incentive for someone early in their working life. Naturally, unions don't share this view. Jeary is adamant the union still has a vital role at both local and national level in stopping the exodus of jobs. He reiterates the view that our labour laws are too flexible and our government slower to defend our manufacturing in comparison with other countries. But he also feels the union has a role at employer level: "We have to get them on board to think positively about skills and training. There's a lot of talk and quangos thinking up strategies, but we still don't have employers putting the money where it's needed. And unless we do provide these higher skills, it is going to be difficult to compete for jobs." He points to the recent national partnership agreements signed with the printing industry as an example of how employers and unions can find common ground, given the chance. "It's not just a standard pay and holidays agreement. It covers the whole area of work: how we manage change and skills needs; and how we work together with companies to keep them competitive and therefore keep jobs in this country." Jeary says he would like to see this approach in more sectors. But how practical a proposition is this when it can only be achieved by co-operation and, to some degree, trust between the negotiating partners? Certainly, the omens aren't great. On one side, Jeary says ownership overseas or by private equity firms means the other side is more interested in financial than human capital: "Frankly, when unions meet employers today, it's as often a finance director as an HR one." On the other side, Yeandle says many younger managers today have never had any practical experience, only 'historical' examples like the winter of discontent. "Newspaper reports tend to focus on the slightly acerbic remarks of the big union secretaries who are, frankly, often making these noises to get publicity. In many respects, they are not nearly reflective of the wider union movement but, if that's all people base their opinions on, then it's not surprising unions haven't got a very good reputation among employers." Let's keep some perspective here. It's irrelevant if you are one of Thatcher's Children or a firm believer in unions as a force for workplace fairness and safety. If enough employees want a union, you must recognise it and find a way of working with its officials. So it's worth taking a look at how the union/management relationship appears today to a truly impartial observer, Acas (Advisory, Conciliation and Arbitration Service). Steve Hodder, director and national conciliator, has been with Acas for 30 years, 15 of them in management/union negotiations. In his view, recession and globalisation are the dominant influences. Today, Acas is more likely to be involved in the wider issues around restructuring and redundancy and less on straight pay talks. It's an intrinsic part of helping to prevent disputes. As such, it provides training (often jointly with managers and reps) as well as independent advice. Today, Hodder says you are as likely to find an Acas officer taking a training course as conciliating a dispute. In general, job losses have reduced expectations, although he has recent evidence that employees are now starting to look for inflation-plus settlements. "The unions have been in defensive mode for some years now as they try to minimise the effect of redundancies and pension losses." Although a few of the old warriors are still around, Hodder sees some significant changes in both the personalities and approaches today: "New managers come in with little or no experience of working with trade unions and have grown up in an era of low inflation and relative industrial peace." Although new blood can bring a fresh perspective, it can also lead to misunderstandings and stereotyping of the trade unions' role in the workplace. On the management side, turnover of both operational and HR staff can cause real problems of continuity, especially as the local union reps tend to have far longer service. "It is difficult to build up a constructive relationship if the managers all change every couple of years." New generation On the union side, he is seeing a new generation of full-time union officers who have a lot more to deal with than simply wage negotiations, including recruitment, discipline and grievance procedures and, in many cases, employment tribunals. Hodder points out that although there has been a dramatic decrease in the number of national disputes, there has been a huge increase in individual litigation. "I think it's a tougher job for both managers and union reps than it was only a few years ago. The pressures on both are considerable and their constituents are getting more demanding." Overseas competition has changed the climate of negotiation. Hodder often sees employers using the prospect of lost jobs as a reason for refusing pay claims. Union reps inevitably point out that experienced, well-motivated staff can make the difference between success and failure, and you won't retain them without paying a decent wage. From the union perspective, however, the fact that manufacturers can just close down the UK operation produces a real imbalance in power. "Talking to sister unions locally or overseas is not really equalising that balance," he adds. Hodder does, however, feel that full-time union officers can bring a sense of realism where the expectations of local stewards and their members are unreasonably high. "I really do get the sense that industrial action is the last option that people want to take." Foreign ownership certainly doesn't make things easier. "It brings a very different flavour to the negotiations," he explains. "Local managers may not have been given much flexibility and have to keep referring to somebody outside the country. It can build delay in, it can be seen as a delaying tactic by the union and it can be frustrating for everyone. The owner may also not understand UK culture and legal systems, and that can put some strains on the process." He spots major changes in content, with much more talk about training and flexible working. Training is rarely contentious although getting time off can be difficult, but demands for flexible working can cause problems, usually centred around the price of introducing such changes rather than intrinsic objections to family-friendly policies. There is one notable addition to the mix that he would never have expected to become a major employment relations issue 10 years ago - pensions. Although most of the news coverage has been about ending company schemes, he feels real progress has been made. But it has led the unions to become far more sophisticated in their approach. It is now common for them to employ experts from the financial community to deal with pensions negotiations. Negotiating climate So how does Hodder see the negotiating climate panning out in the future? Frankly, he feels the pressure will still be on both parties to meet or better inflation. He cites last year's sudden rise in fuel costs that hit both sides. "Employees wanted linked pay rises even though employers' profits were hit by the same outside pressures. "Globalisation of production capacity will not be going away. Employers will continue to look for pay rises to be funded through greater efficiencies and these will be increasingly difficult to achieve." Hodder does, however, see progress as well as change. Like Jeary, he highlights the partnership agreements in print and papermaking, as well as specific examples of joint working and problem solving in other sectors. "This can succeed in moving away from traditional working practices in return for greater reward and job security. Of course, take away the security by mentioning redundancy or reduced pension provision and the sense of grievance and 'betrayal' is all the greater." An increasing number of manufacturers can vouch for the efficacy of this shared approach. Some, indeed, would be hard put to understand the edginess that characterises union/management relations at national level. Take the Llanelli plant of automotive components supplier Schaeffler (UK). Its local branch of Amicus was its firm ally throughout a successful three-year change programme aimed at averting the threat of losing production to Eastern Europe (the cover story in our February issue). Adrian Roberts, director of HR, says that change couldn't just come from management; it needed to happen right through the organisation so, obviously, the union had a part to play. Roberts says the management/union relationship was good and supportive throughout, but he expected nothing less: "I have worked in both unionised and non-unionised companies, and I much prefer working in the former. It's much more productive to deal with a good body of representation than everyone at once."