Concession Bargaining: The British Experience
| Date | 01 May 1983 |
| DOI | https://doi.org/10.1108/eb055020 |
| Published date | 01 May 1983 |
| Pages | 13-16 |
| Author | P.B. Beaumont |
| Subject Matter | HR & organizational behaviour |
Concession
Bargaining:
The British
Experience*
by P. B. Beaumont
Department of Social and Economic
Research, University of Glasgow
Introduction
In the United States, the phenomenon of "concession
bargaining", whereby management seeks to obtain wage
freezes or actual cuts in wages, is being widely discussed
by both researchers and practitioners. In contrast, in
Bri-
tain,
it has been little discussed, although considerable
media attention has been given to the case of the Hyster
forklift truck factory in Scotland where management were
seeking to cut the pay bill by some 9.8 per cent and
eliminate attendance and time-keeping bonuses.
In this article, we draw together some evidence of other at-
tempts at concession bargaining in Britain, and in par-
ticular highlight an attempt at concession bargaining over
procedural, as opposed to substantive, matters in one of
the leading sectors of potential union growth in Britain,
namely that in the banking, insurance and finance sector.
This particular example of concession bargaining appears
to be quite different from anything that has occurred in the
United States. Accordingly, in what follows, we briefly
review the American experience of concession bargaining,
"I am grateful to Margaret
Ford,
Scottish organising officer of
BIFU,
and
John Robertson of Incomes Data Services, for the provision of much
helpful information.
outline some selective examples of concession bargaining
over substantive matters in Britain, and then turn to the
rather special, but important, experience in the banking,
insurance and finance sector.
Concession Bargaining in the United States
A useful examination of this subject was undertaken by
Mitchell who examined the period 1979 to early 1982[1].
For the purposes of his study concessions were defined as
including wage cuts, wage freezes, early renegotiation of
existing contracts, an easing of work rule restrictions likely
to result in reduced labour costs and "a miscellaneous
category of other notable breaks from past practice".
Forty-six such situations were identified: 21 involved wage
cuts,
13 wage freezes, 11 cases involved the relaxation of
work rules and at least 26 of the concessions involved the
early renegotiation of existing contracts. A variety of in-
dustries were involved, with the concessions estimated to
cover rather less than two million employees. The conces-
sions were seen to be very much motivated by the strong
likelihood of plant closures or large-scale redundancies.
A more specific illustration of the nature of concession
bargaining is provided by the contents of the UAW-Ford
Agreement of 1982[2]. This agreement froze base wages
until September 1984, deferred some cost of living
allowance increases and eliminated paid personal holidays.
However, some important quid pro quos for the union
were contained in this agreement, most notably with
regard to job security, profit sharing and training. A larger
study by Cappelli[3] also documented the existence of
quid pro quos in some instances of concession bargaining.
In his study of 210 identified cases of concession bargain-
ing between 1981 and 1982, fifty-two cases were found to
involve quid pro quos for the unions in return for the wage
concessions; 60 per cent involved employment
guarantees, 35 per cent future wage and benefit im-
provements, 10 per cent additional information on firm
performance and eight per cent some involvement in com-
pany decisions.
Here, we look at attempts
at concession bargaining
over procedural as well as
substantive matters
In addition to the specific quid pro quos to do with "some
involvement in company decisions", there is more general
evidence of increased labour-management co-operation
arrangements under the impact of the recession in the US.
A recent survey of some 530 employment organisations,
for example, found that 58 per cent reported employee
participation programmes of one sort or another, com-
pared with only 33 per cent the previous year[4]. The major
area of increase concerned "quality circles" activities. The
increase in quality circles is also evidenced by the substan-
ER 5,5 1983 13
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